Western District of Missouri
Press releases recorded for this federal judicial district.
Lenexa Man Pleads Guilty to Child ExploitationRead the Press Release
Human Trafficking Rescue Project
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Lenexa, Kan., man pleaded guilty in federal court today to attempting to entice a 12-year-old child to engage in prostitution and criminal sexual activity after being caught in an undercover sting operation.
John J. McCarthy, 24, of Lenexa, pleaded guilty before U.S. District Judge Gary A. Fenner to one count of attempting to entice a minor over the Internet for prostitution and criminal sexual activity.
By pleading guilty today, McCarthy admitted that he communicated with a woman he believed to be the mother of two minor females, ages 12 and 16, and expressed interest in having sex with her daughters. While he was in the state of Kansas, McCarthy sent messages through a social networking site and subsequent e-mail and text messages to make arrangements with this woman (who was, in fact, an undercover detective with the Kansas City, Mo., Police Department) to meet and discuss the opportunity to have sex with her children.
On July 29, 2013, McCarthy traveled to Missouri and met with the undercover detective. He told her that he wanted the 12-year-old girl first and described all of the sex acts he desired to perform on and with her. McCarthy agreed to pay $50.
The next day, McCarthy traveled to Missouri again, to a location where he believed the woman and her daughters lived. McCarthy gave the undercover detective $60, and the undercover detective restated the sex acts that McCarthy had previously said he desired to perform with the 12-year-old girl. When McCarthy attempted to enter the bedroom where he believed the 12-year-old girl was located, he was placed under arrest.
Under federal statutes, McCarthy is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated by the Kansas City, Mo., Police Department and the FBI in conjunction with the Human Trafficking Rescue Project.KC Man Pleads Guilty to Illegal Firearms Following Fatal Collision, Faces 10 Years in PrisonRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to illegally possessing firearms, following a high-speed car chase that ended with a collision that killed an employee of the Kansas City Police Crime Laboratory.
Larneal D. Davis, 29, of Kansas City, pleaded guilty before U.S. District Judge Howard F. Sachs to being a felon in possession of firearms. Under the terms of today’s plea agreement, the government and the defendant agree to request a sentence of 10 years in federal prison without parole, which is the statutory maximum. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
By pleading guilty today, Davis admitted that he possessed two firearms in the vehicle he was driving on July 6, 2013. The two firearms – a Taurus .40-caliber semi-automatic pistol and a Ruger, .380-caliber semi-automatic pistol – were discovered in Davis’s wrecked vehicle following its collision with another vehicle at 65th Street and Troost in Kansas City.
Michael Chou, a crime scene technician at the Kansas City Police Crime Laboratory, was killed when his vehicle was broadsided by Davis’s vehicle while Davis was fleeing from Kansas City police officers. Davis was arrested a short distance from the accident scene after a brief pursuit on foot.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Davis has prior felony convictions for possession of crack cocaine with intent to distribute, carrying a firearm in connection with a drug offense and distribution of a controlled substance.
This case is being prosecuted by Assistant U.S. Attorney D. Michael Green. It was investigated by the Kansas City, Mo., Police Department.Former Los Angeles Sheriff's Deputy Sentenced for Mortgage FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former deputy of the Los Angeles County, Calif., Sheriff’s Department has been sentenced in federal court for his role in an $11 million mortgage fraud scheme.
James Arthur Nash, Jr., 44, of Corona, Calif., was sentenced by U.S. District Judge Greg Kays to three years and six months in federal prison without parole. The court also ordered Nash to pay $446,641 in restitution.
Nash was convicted at trial on Dec. 6, 2013, of conspiracy to commit wire fraud and four counts of wire fraud related to fax transmissions and emails that were sent across state lines during the mortgage application process.
Co-defendant Arman Nshanian, 38, also a former sheriff’s deputy from Corona, Calif., was sentenced on July 8, 2014, to three years and six months in federal prison without parole and ordered to pay $785,926 in restitution. Nshanian was also convicted at trial of his role in the criminal conspiracy, as well as two counts of wire fraud.
Nash and Nshanian are among nine defendants who participated in a mortgage fraud scheme from early 2005 through Aug. 4, 2006. Mortgage lenders made loans of approximately $11,092,886 on 16 residential properties in Lee’s Summit, Liberty, Blue Springs, Parkville, Independence and Oak Grove, Mo. From that total, unbeknownst to the lenders, buyers received approximately $2,006,845 in secret illegal kickbacks from the loan proceeds. The scheme resulted in a financial loss to mortgage lenders of nearly $5 million.
Nash fraudulently purchased two residential properties on South Brittany in Blue Springs, Mo., for $540,647 (inflated by $140,747) and for $520,047 (inflated by $160,147). He received a $100,000 kickback from each property. Two months later, he unsuccessfully attempted to sell the properties to another person, using a similar fraud scheme. Nash’s loans for the properties went into default shortly after the purchases and the loans were foreclosed.
Nash attempted unsuccessfully to purchase a third property for $649,930. He also obtained a fraudulent $53,300 home improvement loan for a swimming pool at his California home.
Seven co-defendants have pleaded guilty and been sentenced. Leann Raejeana Turner, 44, of Blue Springs, was a real estate agent working for a series of real estate companies during the conspiracy. Carole L. Colson, 71, formerly doing business as Carole Colson Real Estate in Blue Springs, now of Lake Worth, Fla., was a real estate agent. Bruce Q. Williams, 44, of Kansas City, Kan., and Anthony E. Hicks, 42, of Little Rock, Ark., were loan officers at mortgage brokerage companies. Other co-defendants were “home buyers” who conspired to defraud mortgage lenders.
The scheme involved buying and selling homes at inflated prices, obtaining mortgage loans at the inflated prices, then kicking back $100,000 of the excess loan proceeds to each of the home buyers without the lenders’ knowledge. The scheme financially benefitted all of the conspirators. Turner (the real estate agent for 15 of the 16 transactions) received commissions and sometimes hidden payments and assets; Colson (another real estate agent), Williams and Hicks (the loan officers) received commissions from the transactions. The home buyers received illegal secret kickbacks.
Turner and Colson listed and arranged for the sale of the homes at inflated prices and solicited buyers. Misrepresentations and omissions of material facts were made to mortgage lenders in order to obtain the loans. In order to obtain the loan proceeds without the lenders’ knowledge, the buyers created fictitious businesses that issued false invoices that claimed the businesses had provided work and services for which they were entitled to receive loan proceeds.
This case was prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI and IRS-Criminal Investigation.Camden County Man Pleads Guilty to Forced Sex Trafficking,Read the Press Release
Human Trafficking Rescue Project
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Camden County, Mo., man pleaded guilty in federal court today to charges related to the forced sex trafficking of two women.
Joshua Kain Smith, 36, of Camden County, pleaded guilty before U.S. District Judge Gary A. Fenner to one count of sex trafficking and one count of attempted sex trafficking. Under the terms of today’s plea agreement, Smith will be sentenced to 20 years in federal prison without parole and will be required to pay restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
By pleading guilty today, Smith admitted that he used force, threats of force, fraud and coercion to cause a person (identified in court documents as “FV1” – Female Victim 1) to engage in prostitution, from which he benefitted financially, between Nov. 15, 2011, and March 15, 2012. Smith also admitted that he used force, threats of force, fraud and coercion in an attempt to cause another person (identified in court documents as “FV2” – Female Victim 2) to engage in prostitution between Dec. 1, 2010, and Nov. 15, 2011.
Smith met FV1 on a dating Web site in 2011. Shortly after they began dating Smith became physically abusive. Smith was possessive and wanted FV1 around him at all times. When FV1 first met Smith she had a job at a hotel but lost the job when Smith forced her to stop working. Smith arranged for FV1 to have sexual activity with other men and told her she did not have a choice but to participate. Smith demanded the money FV1 received in exchange for sexual activity.
Smith physically abused FV1 and threatened to kill her and her family if she left him. In December 2011 Smith threatened to kill FV1 if she did not travel to Florida with him. Smith also threatened to harm his own family members if she ever contacted authorities for help. Smith threatened her with a knife and tied her up on one occasion. While in Florida, Smith forced FV1 to commit commercial sex acts with customers to support him and his drug habit. After FV1 was raped by a group of men while purchasing drugs for Smith, she was able to get away with the help of one of Smith’s family members. FV1 has since obtained an order of protection against Smith.
Smith met FV2 through an Internet dating service and they began dating in December 2010. The day after FV2 initially met Smith she bailed him out of jail in Eldon, Mo., and attempted to break up with him at that time. Smith became enraged, threatened to kill FV2 and tore all of FV2’s clothing off. For the next year FV2 was in a physically, emotionally and sexually abusive relationship with Smith. FV2 stated that Smith physically assaulted her on numerous occasions, and on at least two occasions wrapped a belt around her neck until she passed out. FV2 estimated Smith threatened to kill her and her family at least 100 times. Smith attempted to convince FV2 to have sex with other men. Smith solicited FV2 to help him open an escort service but she refused.
FV2 subsequently obtained an order of protection against Smith, which he violated on numerous occasions. FV2 maintained many of the threatening texts and e-mails she received from Smith to assist the police in the event she was murdered. Smith posted Craigslist advertisements without her knowledge or consent, advertising FV2 for sexual activity. FV2 received well over 100 telephone calls from men responding to the advertisements.
This case is being prosecuted by Assistant U.S. Attorney Teresa Moore. It was investigated by the FBI in conjunction with the Human Trafficking Rescue Project.California Prison Inmate Pleads GuiltyRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former California prison inmate, incarcerated for state sex offenses, pleaded guilty in federal court today to using a smuggled cell phone to distribute child pornography over the Internet.
Eric Lee Bederson, 37, an inmate at the California Medical Facility in Vacaville, Calif., pleaded guilty before U.S. Chief District Judge Greg Kays to two counts of distributing child pornography. At the time he committed these offenses, Bederson was serving a 16-year state sentence in California for a charge involving the aggravated sexual abuse, sexual abuse, and abusive sexual conduct of a minor.
By pleading guilty today, Bederson admitted that he used smuggled cell phones to distribute numerous images and videos of child pornography to an undercover federal agent. Between Sept. 29 and Oct. 8, 2011, he sent six e-mails to an undercover agent with U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), which included a total of 164 images and 10 videos of child pornography. Bederson sent this child pornography with the hope and expectation that the undercover HSI agent (and others) would reciprocate in sending child pornography back to him in return. Bederson also admitted that his e-mail accounts contained multiple gigabytes of emails and attachments of child pornography.
For example, on Sept. 29, 2011, Bederson sent an e-mail with 24 attached images of child pornography to the undercover federal agent. On Oct. 1, 2011, Bederson sent another e-mail to the undercover federal agent, which contained a video of child pornography.
Under federal statutes, Bederson is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 80 years in federal prison without parole, plus a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the California State Prison security office.Kirbyville Man Sentenced to 7 Years in Prison for $1.3 Million K2 ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kirbyville, Mo., man was sentenced in federal court today for his role in a conspiracy to distribute synthetic marijuana, commonly referred to as K2.
Michael J. Saguto, 44, of Kirbyville, was sentenced by U.S. District Judge Brian C. Wimes to seven years in federal prison without parole. The court also ordered Saguto to forfeit to the government $1,354,034, which represents the proceeds of the mail fraud conspiracy and for which Saguto is jointly and severally liable with his co-defendants.
On March 20, 2014, Saguto pleaded guilty to participating in a conspiracy to commit mail fraud and to participating in a conspiracy to commit money laundering. Saguto admitted that he conspired with others between March 1, 2011, and June 24, 2013, to defraud the Food and Drug Administration and to defraud the public by falsely representing that a number of synthetic cannabinoid products were “incense” or “potpourri” and “not for human consumption.” In reality, Saguto admitted, these substances contained compounds that were intended for human consumption as a drug.
Based upon the invoices, ledgers, and product seizures by law enforcement, this conspiracy was responsible for the manufacture and/or distribution of at least 188.14038 kilograms of synthetic cannabinoid products.
Co-defendant Travis E. Butchee, also known as “Donkey,” 38, of Springfield, also pleaded guilty to the same two conspiracy charges and awaits sentencing. Butchee’s wife, Victoria A. Butchee, also known as Victoria A. Wohlin, 29, of Springfield, also has pleaded guilty to her role in the mail fraud conspiracy and awaits sentencing. Co-defendant Christian L. Turner, 46, of Kirbyville, was sentenced on Monday, Aug. 4, 2014, to nine years in federal prison without parole. Turner pleaded guilty to possession with intent to distribute a controlled substance analogue and to being a felon in possession of firearms.
Travis Butchee opened The Man Cave, a retail business at 1927 S.Glenstone in Springfield, in February 2013. Travis Butchee and Saguto are the owners of Southern Spice, LLC and Saguto is the owner of Blues Away, a head shop and novelty store in Memphis, Tenn. Turner was employed by Saguto at Blues Away.
Saguto’s plea agreement cites a number of transactions in which materials used to manufacture and distribute synthetic cannabinoids were shipped via UPS or FedEx to members of the conspiracy – including controlled substance analogues (synthetic chemical compounds similar to THC, the psychoactive ingredient in marijuana), green leafy substances which served as carrier media, labels that were affixed to packages of “Donkey Punch,” “Jolly Grape Giant,” “South of the Tracks,” “Baby Face,” “Scarface,” “Hillbilly Hay,” and other synthetic cannabinoid products, and foil and plastic packaging bags.
Travis Butchee and Saguto also admitted that they conducted financial transactions that involved the proceeds of the unlawful mail fraud conspiracy. They conspired to wire funds to the People’s Republic of China in order to carry out the conspiracy.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the U.S. Postal Inspection Service, IRS-Criminal Investigation, the Missouri State Highway Patrol, COMET (Combined Ozarks Multi-jurisdictional Enforcement Team) and the Springfield, Mo., Police Department.KC Man Sentenced to 10 Years in Prison for Child PornRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for attempting to distribute child pornography over the Internet.
James A. Rhea, 32, of Kansas City, was sentenced by U.S. District Judge Gary A. Fenner to ten years in federal prison without parole.
On Nov. 25, 2013, Rhea pleaded guilty to attempting to distribute child pornography over the Internet.
On Aug. 17, 2010, Rhea took his laptop computer to a Northland Best Buy store for repairs. After a repair person discovered apparent child pornography on the computer, a report was made to the Kansas City, Mo., Police Department. A search of the computer revealed that it contained more than 400 images and more than 40 videos of child pornography. The computer search also turned up emails which contained child pornography being sent and received by Rhea. Rhea was questioned by police detectives and admitted to receiving child pornography through email and Web chats. Rhea also admitted to having an online profile in which he portrayed himself as an 18-year-old female.
According to court documents, Rhea resumed downloading child pornography on his cell phone after he was questioned by police detectives and his laptop was confiscated. When Rhea was later arrested, he was in possession of a cell phone that contained an email, which showed images of child pornography.
This case was prosecuted by Assistant U.S. Attorney Katharine Fincham. It was investigated by the Kansas City, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Carl Junction Man Pleads Guilty to Failed Attempt to Receive Tornado BenefitsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Carl Junction, Mo., man pleaded guilty in federal court today to making false statements to the Federal Emergency Management Agency (FEMA) in a failed attempt to fraudulently receive federal disaster benefits following the tornado that struck the city of Joplin, Mo., on May 22, 2011, killing 158 people and causing more than $2.9 billion in damage.
Gary L. Mitchell, Jr., 35, of Carl Junction, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of making false statements to FEMA.
By pleading guilty today, Mitchell admitted that he claimed on a FEMA application for disaster assistance that his primary residence in Joplin had been damaged by the tornado. On May 26, 2011, Mitchell met with a FEMA-contracted inspector to discuss his claim and repeated his claim to have lived at 1905 Missouri Avenue. However, 1905 Missouri Avenue was not Mitchell’s residence at the time of the tornado. Mitchell owned that property, but had been renting it to another person for approximately nine years and did not live there.
FEMA denied Mitchell’s claim and he appealed. As proof of residency at that address, Mitchell provided a copy of his driver’s license (which he had obtained after the tornado) and a copy of a past due tax statement for the residence (which had been mailed to Mitchell at his Carl Junction residence). Mitchell’s appeal was also denied. However, if FEMA had believed his false claim to have resided at 1905 Missouri Avenue, the agency would have determined he was entitled to receive disaster assistance funds.
Under federal statutes, Mitchell is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the U.S. Department of Homeland Security – Office of Inspector General, the FBI and the Joplin, Mo., Police Department.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin office at 417-206-5700.Webb City Man Pleads Guilty to Failed Attempt to Receive Tornado BenefitsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Webb City, Mo., man pleaded guilty in federal court today to making false statements to the Federal Emergency Management Agency (FEMA) in a failed attempt to fraudulently receive federal disaster benefits following the tornado that struck the city of Joplin, Mo., on May 22, 2011, killing 158 people and causing more than $2.9 billion in damage.
Russell Lamar Green, 35, of Webb City, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of making false statements to FEMA.
By pleading guilty today, Green admitted that he claimed on a July 5, 2011, FEMA application for disaster assistance that his primary residence in Joplin had been damaged by the tornado. When he met with a FEMA-contracted inspector to discuss his claim, Green also claimed that he lost a television, radio, portable space heater, microwave, humidifier, electric fan and clothing as a result of the tornado.
However, Green admitted today that he was not living at the apartment at the time of the tornado. Green’s girlfriend had rented the apartment prior to the Joplin tornado, but she moved out before the tornado struck. There was no financial loss to FEMA, because Green’s fraud was detected before the false claim was paid.
Under federal statutes, Green is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the U.S. Department of Homeland Security – Office of Inspector General, the FBI and the Joplin, Mo., Police Department.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin office at 417-206-5700.
Two Buffalo Women Plead Guilty to Identity TheftRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Buffalo, Mo., women have pleaded guilty in federal court to stealing the identities of 20 victims to obtain unauthorized credit cards in the victims’ names.
Kelly Marie Lockhart, also known as Kelly Marie Wilson, 35, of Buffalo, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges her with one count of aggravated identity theft. In a separate but related case, Stacy R. Rosa, also known as Stacy R. Webbe, 40, of Buffalo, waived her right to a grand jury and pleaded guilty on Wednesday, Aug. 6, 2014, to a federal information that charges her with one count of aggravated identity theft.
Lockhart and Rosa admitted that they aided and abetted one another to obtain unauthorized credit cards by stealing the identity information of approximately 20 victims between April 12, 2012, and Jan. 17, 2014. They used the credit cards to make approximately $60,655 in purchases.
Lockhart and Rosa used stolen personally identifying information (including individuals’ names, dates of birth, Social Security numbers, driver’s license numbers and bank account information) to gain access to the identity theft victims’ bank and credit card accounts via telephone and the Internet, and to open new credit card accounts. Lockhart and Rosa obtained unauthorized credit cards issued in the victims’ names, and utilized those cards to purchase merchandise and gift cards and to obtain cash advances.
The plea agreements each cite a specific example in which they impersonated a North Carolina victim during a telephone call and obtained a secondary credit card in the name of Kelly Wilson (Lockhart’s alias). On April 22, 2013, Lockhart used the unauthorized credit card in Bolivar, Mo., to obtain a $3,600 cash advance. On April 30, 2013, Rosa used the unauthorized credit card to pay $96 for her visit to a hair salon in Buffalo.
Under federal statutes, Lockhart and Rosa are each subject to a mandatory minimum sentence of two years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
These cases are being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. They were investigated by the U.S. Secret Service, the U.S. Postal Inspection Service, the Buffalo, Mo., Police Department and the Bolivar, Mo., Police Department.Joplin Man Charged with Attempting to Entice a Minor for SexRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man was charged in federal court today with attempting to entice a minor for illicit sexual activity.
Erik Leroy Clark, 35, of Joplin, was charged in a criminal complaint filed in the U.S. District Court in Springfield, Mo. Clark remains in federal custody pending a detention hearing on Tuesday, Aug. 12, 2014.
According to an affidavit filed in support of today’s criminal complaint, a Jasper County, Mo., Sheriff’s Department detective assumed an undercover identity and posted an advertisement on an online social networking Web site on July 14, 2014. The ad was titled “Looking for someone into incest/taboo things –w4m-40.” The ad included a narrative, which read: “Looking for someone who is practicing incest or is interested in incest. Mother daughter. No spammers put incest in subject line so I know you are serious. Disease free.”
Clark allegedly responded to the ad on July 20, 2014. According to the affidavit, the undercover detective told Clark that the ad was for someone to teach her 10-year-old daughter about sex. Very quickly, the affidavit says, Clark started suggesting a meeting and said he was willing to help, but that the 10-year old girl’s mother needed to be present.
In subsequent emails, according to the affidavit, Clark offered to engage in various sexual activities with the 10-year-old girl and suggested meetings on several occasions. The undercover detective repeatedly told Clark no to each meeting request, the affidavit says, but finally agreed to meet Clark at a park located in Joplin.
On Wednesday, Aug. 6, 2014, law enforcement officers identified Clark as he drove through the park, using a photo he had e-mailed to the undercover detective. Officers stopped Clark and arrested him. Upon initial contact, Clark immediately stated, “I knew it, I knew it, I knew I was going to get in trouble.” Officers searched his car and found a “Hello Kitty” ball, Durex tropical-flavored condoms and a bottle of Equate warming liquid personal lubricant.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Southwest Missouri Cyber Crimes Task Force, the Jasper County, Mo., Sheriff’s Department and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."KC Man Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to his role in a conspiracy to steal taxpayers’ identity information in order to receive fraudulent tax refunds.
Michael J. Moore, 27, of Kansas City, Mo., pleaded guilty before U.S. District Judge Howard F. Sachs to the charge contained in a March 18, 2014, federal indictment.
Moore’s girlfriend and co-defendant, Taylor S. Knight, 32, of Kansas City, Mo., pleaded guilty on July 25, 2014, to leading the fraud conspiracy. Knight worked as employee of the Internal Revenue Service at the office at 333 W. Pershing Rd., Kansas City. Knight admitted that she abused her position of trust when she inappropriately accessed the information of three taxpayers as part of a conspiracy to defraud the United States by using the stolen identity information to fraudulently induce the IRS into issuing tax refund payments.
On Sept. 30, 2011, Knight used the information from two of the victim taxpayers (who were married) to submit a bogus online application for three prepaid debit cards. These debit cards were issued and mailed to the residence of Moore’s grandmother. Moore monitored the mail sent to his grandmother’s address and retrieved the three prepaid debit cards. They agreed to use the grandmother’s address rather than use an address associated with Knight in an effort to conceal her role in this conspiracy to defraud the United States.
On Oct. 17, 2011, Knight submitted a 2010 tax return for the same two married victim taxpayers. The IRS approved a $46,572 refund, of which $5,000 was deposited on a debit card that had been obtained by Knight; this amount was spent by Moore and Knight. The IRS attempted to deposit the remaining $41,572 refund on the other debit cards obtained by Knight, but the receiving banks rejected the deposits.
Moore telephoned the IRS and falsely claimed to be the victim taxpayer. He provided the IRS representative with pertinent personal identification information for both victims and requested the IRS to send the remaining tax refund to a new address located in Independence, Mo. He identified this address because it was his former residence and he knew it was unoccupied.
In August 2011, the victim taxpayers filed legitimate amended tax returns. A $46,734 refund check was sent to the Independence address and was obtained by Moore and Knight. Knight admitted that she paid a third co-conspirator $500 to help her cash the refund check. Knight obtained false identification documents – including Social Security cards, credit cards and driver’s licenses – so that they could assume the identity of the victim taxpayers. They attempted to cash the stolen Treasury check at a local convenience store. The clerk was concerned about cashing such a large check and he went to his immediate supervisor for guidance. They told the clerk and his supervisor that, if they would cash the check, they could keep $6,000 of the proceeds. The supervisor decided not to cash the check, but he told them to come back later. When Knight and her co-conspirator returned, the owner reported the incident to law enforcement. Police officers arrived about 10 minutes later and they were arrested.
Knight also admitted that she submitted a bogus online application for a prepaid debit card in the name of another victim taxpayer. The debit card was approved and mailed to an address in Oak Grove, Mo.; this debit card was never used. Knight admitted that she submitted this false online application to test whether her scheme to defraud the IRS was viable.
Under federal statutes, Moore and Knight are each subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Treasury Inspector General for Tax Administration.Kearney Residents Among Five Indicted for $2.6 Million Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Kearney, Mo., residents are among five defendants who have been indicted for their roles in a $2.6 million conspiracy to distribute methamphetamine.
Sabrena Lynn Morgan, 37, and Elgin Eugene Dothage, also known as “Butch,” 38, both of Kearney, Steven Lee Schreier, Jr., of Excelsior Springs, Mo., Ronald Louis Roberts, 51, of Lathrop, Mo., and Franklin Charles Carter, also known as “Frankie,” 25, of Grandview, Mo., were charged in a five-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on July 29, 2014. That indictment has been unsealed and made public following the arrests and initial court appearances of several defendants.
The federal indictment alleges that all five defendants participated in a conspiracy to distribute methamphetamine between Jan. 1, 2010, and July 29, 2014. According to the indictment, the drug-trafficking conspiracy was responsible for the distribution of more than 50 kilograms of methamphetamine. Based on a conservative street price of $1,500 per ounce, the indictment says, the conspiracy took in $2,650,000.
The indictment also alleges that all five defendants participated in a money-laundering conspiracy during the same time period. According to the indictment, conspirators conducted financial transactions that involved the proceeds of illegal drug trafficking. Conspirators allegedly obtained cash from illegal methamphetamine sales and used those proceeds to further promote the buying and selling of additional methamphetamine. Conspirators allegedly used items of value they obtained from methamphetamine distribution as collateral for various purposes, including drug debt reduction and obtaining additional methamphetamine for use and distribution.
In addition to the drug-trafficking and money-laundering conspiracies, the indictment charges Morgan and Dothage together with one count of possessing firearms in furtherance of a drug-trafficking crime. The indictment alleges that Morgan and Dothage were in possession of a pink pump-action shotgun, a loaded 9mm Hi Point pistol and a loaded Smith & Wesson .22-caliber pistol.
Morgan and Dothage are also charged together in one count of maintaining their residence in Kearney as a place for distributing and using methamphetamine.
Dothage is also charged with one count of being a felon in possession of a firearm. The indictment alleges that Dothage, having been convicted of a felony, was in possession of firearms and ammunition during the time of the conspiracies. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition.
The federal indictment also contains a forfeiture allegation, which would require the defendants to forfeit any property derived from the proceeds of the alleged violations, including a money judgment of $2,650,000, which was received in exchange for the unlawful distribution of methamphetamine.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Buchanan County Drug Strike Force, the Drug Enforcement Administration, the Clay County Sheriff’s Department and the Clay County Drug Task Force.Kirbyville Man Sentenced for Distributing K2, Illegally Possessing FirearmsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced a Kirbyville, Mo., man was sentenced in federal court today for his role in the distribution of synthetic marijuana, commonly referred to as K2, and for illegally possessing several firearms.
Christian L. Turner, 46, of Kirbyville, was sentenced by U.S. District Judge Brian C. Wimes to nine years in federal prison without parole.
On Nov. 14, 2013, Turner pleaded guilty to possessing a controlled substance analogue with the intent to distribute and to being a felon in possession of firearms.
Turner admitted that he aided and abetted co-defendants Travis E. Butchee, also known as “Donkey,” 38, of Springfield, and Michael J. Saguto, 44, of Kirbyville, to possess a controlled substance analogue with the intent to distribute. Saguto is scheduled to be sentenced on Aug. 11, 2014. A sentencing date has not been scheduled for Butchee.
Turner, who has been convicted of a felony, also admitted that he was in possession of a Ruger .22-caliber rifle, a Marlin 30-30 caliber rifle, a Rossi .243-caliber rifle with an interchangeable 20-gauge barrel, a Remington 12-gauge shotgun and a Remington .270-caliber rifle. Taney County sheriff’s deputies seized those firearms when they responded to an assault call on March 15, 2013. Turner was arrested and a search warrant was served on his residence. The following items were seized: the seven long guns and associated ammunition, drug paraphernalia, including 242 smoking pipes, and three bags of synthetic cannabinoids.
Butchee and Saguto have each pleaded guilty to participating in a conspiracy to commit mail fraud and to participating in a conspiracy to commit money laundering.
Butchee and Saguto conspired with others between March 1, 2011, and June 24, 2013, to defraud the Food and Drug Administration and to defraud the public by falsely representing that a number of synthetic cannabinoid products were “incense” or “potpourri” and “not for human consumption.” In reality, these substances contained compounds that were intended for human consumption as a drug. Butchee’s wife, Victoria A. Butchee, also known as Victoria A. Wohlin, 29, of Springfield, also has pleaded guilty to her role in the mail fraud conspiracy.
Travis Butchee and Saguto also admitted that they conducted financial transactions that involved the proceeds of the unlawful mail fraud conspiracy. They conspired to wire funds to the People’s Republic of China in order to carry out the money laundering conspiracy.
Based upon the invoices, ledgers, and product seizures by law enforcement, this conspiracy was responsible for the manufacture and/or distribution of at least 188.14038 kilograms of synthetic cannabinoid products.
Travis Butchee opened The Man Cave, a retail business at 1927 S.Glenstone in Springfield, in February 2013. Travis Butchee and Saguto are the owners of Southern Spice, LLC and Saguto is the owner of Blues Away, a head shop and novelty store in Memphis, Tenn. Turner was employed by Saguto at Blues Away.
Materials used to manufacture and distribute synthetic cannabinoids were shipped via UPS or FedEx to members of the conspiracy – including controlled substance analogues (synthetic chemical compounds similar to THC, the psychoactive ingredient in marijuana), green leafy substances which served as carrier media, labels that were affixed to packages of “Donkey Punch,” “Jolly Grape Giant,” “South of the Tracks,” “Baby Face,” “Scarface,” “Hillbilly Hay,” and other synthetic cannabinoid products, and foil and plastic packaging bags.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the U.S. Postal Inspection Service, IRS-Criminal Investigation, the Missouri State Highway Patrol, COMET (Combined Ozarks Multi-jurisdictional Enforcement Team) and the Springfield, Mo., Police Department.Former Grandview Mayor Sentenced for $35,000 Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former mayor of Grandview, Mo., was sentenced in federal court today for a wire fraud scheme in which he used a bogus charity to steal $35,000 in contributions from International House of Prayer, a local nonprofit organization.
Stephen S. Dennis, 51, of Grandview, was sentenced by U.S. Senior District Judge Howard F. Sachs to one year and one day in federal prison without parole. The court also ordered Dennis to pay a $5,000 fine; International House of Prayer requested that no restitution should be ordered. Dennis will surrender to begin serving his prison term on Sept. 15, 2014.
On Feb. 11, 2014, Dennis pleaded guilty to the felony offense of wire fraud. Dennis resigned as mayor of Grandview on Jan. 10, 2014.
Dennis admitted that he engaged in a scheme from Dec. 12, 2011, to Nov. 29, 2013, to solicit donations for a corporation called Matters of the Heart. Dennis incorporated Matters of the Heart as a nonprofit corporation and falsely claimed it was a federally tax-exempt 501(c)(3) corporation. Dennis never applied for 501(c)(3) status with the IRS for Matters of the Heart, even though application instructions were given to him in December 2011 by an attorney from whom he sought legal advice.
Dennis received two checks totaling $35,000 from International House of Prayer Forerunner Christian Fellowship, a nonprofit organization in Grandview, in 2012. After obtaining the $35,000, Dennis used these funds for his own personal benefit, including his immediate family’s living expenses, rather than for any charitable purpose.
Matters of the Heart, which is now dissolved, was purportedly organized “to be a local community outreach to the poor and disadvantaged,” according to its articles of incorporation, and to “administer funds and property of any kind for … religious, charitable, cultural, scientific, literary and education purposes.”
In the organization’s articles of incorporation, Dennis listed himself as incorporator, registered agent, and one of the three directors of the board. He listed two persons, identified as “B.S.” and “J.M.” as the other two directors. B.S. and J.M. had no knowledge that they were listed as directors, and at no time gave Dennis permission or authority to claim them as such. B.S. and J.M. have never served as directors on the Matters of the Heart board of directors.
This case was prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by the FBI.
Public Corruption Hotline
The FBI has established a toll-free public corruption hotline, 1-855-KCPCTIP, and email [email protected]. Details regarding the various types of public corruption investigated by the FBI can be found online: http://www.fbi.gov/about-us/investigate/corruption.Independence Man Indicted on Charges Related to Producing Child PornographyRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that an Independence, Mo., man has been indicted on charges related to producing child pornography by secretly recording videos of unsuspecting victims in restrooms and changing rooms, as well as downloading child pornography over the Internet.
Nicholas A. Braile, 25, of Independence, was charged in a five-count indictment returned under seal by a federal grand jury on Tuesday, Aug. 26, 2014. That indictment was unsealed and made public following Braile’s arrest and initial court appearance. Braile remains in federal custody pending the court’s ruling on a motion for detention. A detention hearing was held on Tuesday, Sept. 2, 2014, and the court has taken the government’s motion under advisement.
The federal indictment charges Braile with two counts of attempting to produce child pornography, two counts of receiving child pornography over the Internet and one count of possessing child pornography.
Braile was arrested at a Walmart store in Independence on May 15, 2014, when he was caught taking an “up skirt” photo of a female customer with his cell phone.
A forensic examination of Braile’s cell phone and computer located approximately 2,600 images of child pornography, according to court documents, as well as 138 video files of child pornography or child erotica on Braile’s computer. Investigators also located video files of women and girls changing in store dressing rooms, videos taken in the restroom at Braile’s work place, Harbor Freight Tools in Independence, and “up skirt” video files.
According to court documents, the store manager at Harbor Freight Tools identified photographs of two teenage victims that had been located on a computer at Braile’s home as store employees. The photographs were taken from videos that depicted the teens using the restroom and changing clothes at Harbor Freight Tools. Detectives also observed the restroom where the videos had been produced. There was a small section of the ceiling where the ceiling tile was missing. This restroom was next to a janitor closet. Located in the ceiling of the janitor closet was a paint roller, without the brush, that was positioned over the hole in the ceiling tile in the restroom. Detectives surmised that the paint roller was used to hold Braile’s cell phone over the hole in the ceiling tile so that he could film the teens in the restroom without their knowledge.
One of the teen employees, identified in the indictment as “Jane Doe #1,” identified a photo of herself that was taken in the store restroom. The second teen was 18 years old at the time the videos were produced and is not included as a victim in the indictment. In addition, the defendant filmed customers who used the restroom, including adults and small children.
Detectives determined that a victim in one of the “up-skirt” videos located on Braile’s computer worked at a store in Independence Center. The store manager identified the 16-year-old victim, who is identified in the indictment as “Jane Doe #2.” The video depicts Braile asking Jane Doe #2 for assistance and then, because of his close proximity to the victim, Braile is able to maneuver his phone into a position to film up the victim’s skirt.
The forensic examination of Braile’s computers and phone also located approximately 468 photographs he had taken of prepubescent female children. These images were taken at Braile’s work place and at Independence Center. The images depict children shopping with their parents. There is no nudity in the images.
Under Department of Justice guidelines, the attempted production of child pornography is ordinarily charged in cases that involve surreptitious recordings. The statutory penalties for producing child pornography are the same as the penalties for attempting to produce child pornography.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Teresa A. Moore. It was investigated by the Independence, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Springfield Man Sentenced for Scheme to Sell Thousands of Counterfeit DVDsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Springfield, Mo., man has been sentenced in federal court for a scheme to sell thousands of counterfeit DVDs over the Internet.
Matthew Cerullo, 42, of Springfield, was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to one year and one month in federal prison without parole. The court also ordered Cerullo to forfeit to the government a desktop computer, a laptop computer, various computer media, two cameras, an iPhone, two additional cell phones, 15 gold coins, 240 silver coins, four baseball cards, all of the counterfeit DVDs and $5,300, all of which was used to commit the offenses or was obtained from the proceeds of the offenses.
Cerullo pleaded guilty on Oct. 28, 2013, to mail fraud, trafficking in counterfeit labels, trafficking in counterfeit goods and making false statements to federal agents.
Based on records obtained from the U.S. Postal Service, the United Parcel Service (UPS), DHL, EBay and Amazon.com, federal agents determined that Cerullo purchased and received more than 22,000 counterfeit DVDs from a distributor in Hong Kong, China between Feb. 13, 2013 and Sept. 10, 2013.
According to court documents, the federal investigation began when a shipment of counterfeit DVDs from Hong Kong was seized by Customs and Border Protection agents at JFK Airport. The counterfeit DVDs were being shipped to a UPS store located in Springfield under the name of a business owned by Cerullo.
Federal agents interviewed Cerullo at his residence on May 2, 2013. Cerullo told agents that he had not receive a seizure notice from Customs and Border Protection. Cerullo also told agents that he orders toys and jewelry from China to resell on EBay or to local venders, but does not buy DVDs. Cerullo claimed that he owns only one business, C3 Wholesale, LLC.
During the course of the investigation, however, agents learned that Cerullo’s statement contained false and fraudulent information that was designed to mislead them and their investigation. Agents determined that Cerullo had in fact received four prior seizure notices from Customers and Border Protection; these notices were discovered in his desk during the execution of a search warrant at his residence. Agents also learned that Cerullo owned, operated and sold counterfeit DVDs through four different businesses: C3 Wholesale, LLC; EJC Supply, LLC; Midwest Wholesale and Capital Sierra, LLC; and EJC Supply Company.
On Sept. 3, 2013, agents observed Cerullo mail a large quantity of packages at a local post office. Postal Inspectors inspected the contents of these packages and discovered that Cerullo had mailed 165 packages of counterfeit DVDs to various individuals around the country. Inspectors also noted that the return address on each package was fictitious.
The next day, federal agents executed a search warrant on Cerullo’s residence and a storage locker that Cerullo rented. Agents discovered nearly 23,000 counterfeit DVDs between those locations.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).KC Man Sentenced to 60 Years in Prison for Drug-trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for drug-trafficking and illegally possessing firearms after shooting at pursuing police officers during a foot chase that ended in his arrest.
Antonio M. Taylor, 30, of Kansas City, was sentenced by U.S. District Judge Beth Phillips to 60 years in federal prison without parole.
On Feb. 26, 2014, Taylor was found guilty at trial of two counts of possessing crack cocaine with the intent to distribute and one count of possessing crack cocaine, marijuana and PCP with the intent to distribute. He was found guilty of three counts of possessing firearms in furtherance of drug-trafficking crimes and three counts of being a felon in possession of a firearm.
According to evidence presented during the trial, law enforcement officers were conducting surveillance on Taylor’s residence on July 2, 2012. Taylor, who had an active Jackson County warrant for a violation of felony probation, left the apartment and walked toward a vehicle in the parking lot. When police officers approached him, Taylor ran away and the officers pursued him on foot.
During the pursuit, Taylor changed directions and began running toward a pursuing officer. Taylor was holding an FNH 9mm semi-automatic handgun and he fired at least one round at the officer, who returned fire. The officer saw Taylor drop a large bag of crack cocaine (later determined to be 32.9 grams) as he ran. The officer took cover near a residence but continued to engage in the foot pursuit. When the officer rounded the edge of the residence, he saw Taylor attempting to climb a fence near the rear of the residence. Taylor fired his handgun again at the officer, who again returned fire. Taylor jumped the fence and stumbled and fell as he attempted to get to his feet. Taylor again turned toward the officer with the firearm still in his hand. The officer fired his firearm two more times at Taylor, at which time Taylor dropped his firearm. Taylor, who suffered several gun-shot wounds, was taken into custody and transported to the emergency room. The officer was not injured.
Prior to this incident, police officers saw Taylor conducting a drug transaction on March 7, 2012. Officers approached Taylor’s car and Taylor drove off. A high speed chase ensued and Taylor committed numerous traffic violations during the chase. Taylor jumped out of the Jeep in the area of 81st and Brooklyn and ran. Officers searched for Taylor and found him hiding in a storm drainage area. Officers found a loaded Glock .40-caliber pistol on the ground nearby. When they searched Taylor’s vehicle, officers found a plastic baggie that contained 20.62 grams of crack cocaine.
On June 5, 2012, police officers were called to a vacant house in response to a report of a suspicious vehicle. They contacted Taylor, the driver and sole occupant of the vehicle. When officers asked Taylor to step out of the vehicle, he put the vehicle in drive and drove into the back yard of a residence. Taylor crashed the vehicle head-on into a cinder block wall and ran from the scene. Officers found 80 grams of marijuana, a brown bottle containing PCP, .8 gram of crack cocaine, 12 unknown pills, and a Glock .40-caliber pistol in the vehicle.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Taylor has a prior felony conviction for shooting from a vehicle, four prior convictions for assault and five prior convictions for armed criminal action.
This case was prosecuted by Assistant U.S. Attorneys Brent Venneman and Patrick C. Edwards. It was investigated by the Kansas City, Mo., Police Department, the U.S. Postal Inspection Service and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Jefferson City Man Indicted for MethRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., man was indicted by a federal grand jury today for possessing methamphetamine with the intent to distribute.
Christopher Eugene Ronimous, also known as “Rodney,” 38, of Jefferson City, was charged in an indictment returned by a federal grand jury in Jefferson City. Today’s indictment replaces a federal criminal complaint that was filed against Ronimous on July 8, 2014.
The federal indictment alleges that Ronimous was in possession of 50 grams or more of methamphetamine with the intent to distribute on July 7, 2014.
According to an affidavit filed in support of the original criminal complaint, Jefferson City police officers stopped a vehicle for improper registration. Ronimous, a passenger in the vehicle, got out of the car while officers conducted a search. While standing outside the vehicle, the affidavit says, an Altoids can fell from Ronimous’s shorts. Inside the can was approximately five grams of methamphetamine and three “hits” of LSD.
Ronimous was arrested and transported to the police station, according to the affidavit, where he was observed reaching into his crotch area while inside an interview room. An officer conducted a more thorough search of Ronimous and discovered two bags containing approximately 50 additional grams of methamphetamine.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration and the Jefferson City, Mo., Police Department.Greenleaf Co-owner Sentenced for Multi-million-dollar Mortgage Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Nixa, Mo., man who was a co-owner of Greenleaf Companies has been sentenced in federal court for aiding and abetting a bank fraud conspiracy that was part of a multi-million-dollar mortgage investment scheme.
Eric Gagnepain, 41, of Nixa, was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to four years in federal prison without parole. The court also ordered Gagnepain to pay $2,911,214 restitution.
On Jan. 9, 2014, Gagnepain pleaded guilty to conspiracy to commit bank fraud. Gagnepain co-owned and operated Greenleaf Companies and all of its subsidiaries, along with Scott Dasal, 47, of Republic, Mo., from 2006 through May 2008. During this time, Greenleaf sponsored real estate investment seminars that were designed to recruit potential investors to apply for mortgage loans for the construction and sale of residential homes in southwest Missouri and northwest Arkansas.
Gagnepain admitted that he aided and abetted others in the creation and submission of fraudulent mortgage loan documents. These mortgage loan documents contained false statements regarding the true source of monies provided at the time of closing, as well as fraudulently omitting the payment of monies obtained from the sale of the real estate properties.
Dasal was sentenced on Nov. 21, 2013, to three years in federal prison without parole and ordered to pay $2,911,209 in restitution. Dasal pleaded guilty to aiding and abetting a bank fraud.
Gagnepain derived more than $1 million in gross receipts from his criminal conduct. The total loss amount resulting from the bank fraud conspiracy is between $2.5 million and $7 million.
Gagnepain’s plea agreement cites a specific instance of such fraud that occurred on March 12, 2008. Gagnepain and others created false mortgage loan documents that were submitted to Flagstar Bank. The loan documents fraudulently stated that the borrower had provided their own monies at the time of the closing; in reality, however, Greenleaf provided monies that were falsely identified as “cash from borrower.” Additionally, the loan documents omitted the fact that Greenleaf would receive monies from the sale of the real estate property from the seller. If Flagstar Bank had known the true source of the monies provided on behalf of the borrower, or that Greenleaf was receiving monies from the sale of this real estate property, the bank would have denied the mortgage loan application.
Under the terms of his plea agreement, Gagnepain was required to also plead guilty to state charges (State of Missouri vs. Eric Christian Gagnepain). The sentence in the state case will be served concurrently with the federal sentence.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.Former Postmaster Sentenced for Robbery ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former Eagle Rock, Mo., postmaster was sentenced in federal court today for conspiring to rob or burglarize a convenience store.
Michael Joe Stubblefield, 51, of Cassville, Mo., sentenced by U.S. District Judge Gary A. Fenner to three years and eight months in federal prison without parole.
On Dec. 18, 2013, Stubblefield pleaded guilty to participating in a conspiracy to commit robbery and to transporting stolen goods.
On multiple occasions in March 2012, Stubblefield – who was then employed as the postmaster at the U.S. Postal Service office in Eagle Rock – met with confidential informants, who were cooperating with law enforcement, to coordinate a staged robbery or burglary at Uncle Roy’s Convenience Store. Several of those conversations were recorded.
Stubblefield asked one of the informants, who was an employee of the store, to provide detailed information about the location of cameras, closing operations and employee schedules, location of storage areas for valuable liquor, and other specific details regarding the operation of the store. Both confidential informants believed the purpose of Stubblefield’s inquiries were his desire to conduct a robbery when the confidential informant was on duty at the convenience store or possibly a burglary of the facility, utilizing the employee’s access information to carry out the plan after the store was closed.
When that employee was terminated from the store, Stubblefield abandoned the plan of a staged robbery and turned his attention toward a possible take-over robbery. In addition to discussing the planned robbery, Stubblefield also described how those taking part in the robbery could place cash, masks and other items related to the robbery in Postal Service packaging that Stubblefield would provide. After the robbery, co-conspirators would drop these items at the USPS drop box in front of the USPS facility in Eagle Rock. As Stubblefield was the only individual with access to this box, he would be able to retrieve the cash and other items from the drop box.
Stubblefield planned to create a diversion for law enforcement officers by having co-conspirators make a false 911 call while other co-conspirators robbed the store.
During the continuing investigation, it was determined that Stubblefield had also intercepted and stole at least two shipments of precious metals bound for THR Associates, a company that buys gold and silver items. Stubblefield referred to these thefts during his contact with the confidential informants. The gold and silver items were sold for a total of $6,480.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael Oliver and Assistant U.S. Attorney James Kelleher. It was investigated by the FBI, the United States Postal Service – Office of Inspector General, and the Barry County, Mo., Sheriff’s Department.Former Bank Branch Manager Sentenced for Bank Fraud, False Tax ReturnRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former bank branch manager has been sentenced in federal court for stealing more than $316,000 from several elderly customers’ accounts and failing to report the embezzled income on her taxes.
Jennifer A. Gunter, 34, of Republic, Mo., was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to three years and 10 months in federal prison without parole. The court also ordered Gunter to pay a total of $547,897 in restitution.
Gunter pleaded guilty on Sept. 12, 2013, to bank fraud and filing a false tax return. Gunter was the branch manager at the Guaranty Bank at 291 Highway CC in Nixa, Mo., (and earlier at the Guaranty Bank at 1341 W. Battlefield, Springfield, Mo.) from August 2005 until her termination in November 2012.
Gunter’s fraud was detected when she issued and authorized three checks on the bank account of a victim who had died the previous day. Gunter admitted that, from December 2006 until November 2012, she repeatedly accessed the bank accounts of four elderly bank customers. Gunter embezzled a total of $316,598 from those accounts.
Gunter submitted transaction tickets, withdrawal slips, and cashier’s checks on which she forged the names of the account holders in order to withdraw money from the bank accounts. She used the money for personal matters and expenses. Gunter set the customer accounts to “do not mail” status in order to keep the customers from receiving their bank statements and detecting the theft from their bank accounts.
Gunter failed to report this embezzled income on her Form 1040, U.S. Individual Income Tax Return. Gunter did not report the additional income of $45,002 for 2009, $70,481 for 2010, $107,119 for 2011, and $35,000 for 2012. Gunter’s actions resulted in an additional tax due and owing of $7,642 in 2009, $13,305 in 2010, $22,935 in 2011, and $6,258 in 2012. The total tax loss is $50,140.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service, FDIC – Office of Inspector General, IRS-Criminal Investigation and the Christian County, Mo., Sheriff’s Department.
St. Louis Man Indicted for Drug TraffickingRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Louis, Mo., man was indicted by a federal grand jury today for drug trafficking after he suffered a heroin overdose in a Columbia, Mo., hotel room.
Gustavo Ruvalcaba, 43, of St. Louis, was charged in a four-count indictment returned by a federal grand jury in Jefferson City, Mo. Today’s indictment replaces a federal criminal complaint that was filed against Ruvalcaba on July 15, 2014.
Today’s indictment alleges that Ruvalcaba was in possession of heroin, crack cocaine, powder cocaine and methamphetamine, all with the intent to distribute, on July 14, 2014.
According to an affidavit filed in support of the original criminal complaint, Columbia police officers were dispatched to a room at the Super 8 Motel in response to a drug overdose. Ruvalcaba was lying on the floor and being treated by EMS and fire personnel when officers arrived.
Officers executed a search warrant for the hotel room and seized 18 grams of black tar heroin, seven grams of crack cocaine, 39 grams of powder cocaine, 13 grams of methamphetamine, drug paraphernalia and $74,525.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration and the Columbia, Mo., Police Department.
Nixa Man Pleads Guilty to Producing Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today a Nixa, Mo., man has pleaded guilty in federal court to producing child pornography.
Michael John Kinney, 40, of Nixa, pleaded guilty before U.S. Magistrate Judge David P Rush on Tuesday, July 29, 2014, to one count of producing child pornography and one count of possessing child pornography. Kinney was taken into federal custody at the conclusion of yesterday’s plea hearing.
By pleading guilty, Kinney admitted that he used a minor victim to produce child pornography between Jan. 27, 2007, and Jan. 26, 2009. Kinney also admitted that he was in possession of child pornography on April 29, 2011.
Federal agents executed search warrants at Kinney’s home and business addresses and seized two laptop computers from his home. Investigators discovered 10 videos of child pornography that were made from a hidden camera in Kinney’s home and additional videos and images of child pornography, including children under the age of six engaged in acts of sexual intercourse with adults or other children. Investigators also discovered numerous images of child erotica, including a child victim in various stages of undress. Kinney must forfeit those computers to the government.
Under the terms of Kinney’s plea agreement, the government will recommend a sentence of 15 years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by the FBI, IRS-Criminal Investigation and the Christian County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Lee's Summit Soccer Coach pleads Guilty to Attempting to Produce Child PornRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. B Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Lee’s Summit, Mo., youth soccer coach pleaded guilty in federal court today to attempting to produce child pornography by secretly videotaping members of his soccer team.
Joel D. White, 40, of Lee’s Summit, pleaded guilty before U.S. District Judge Dean Whipple to three counts of attempting to produce child pornography.
White, who coached a girls under-12 soccer team and a girls under-15 soccer team through the Lee’s Summit Soccer Association, remains in federal custody. The Lee’s Summit Soccer Association has cooperated fully with law enforcement officers during this investigation.
White admitted that he videotaped 11 child victims without their consent while they were changing clothes in his daughter’s bedroom at his residence. White videotaped the child victims 10 to 15 times without their consent from approximately May 2012 until October 2012, when the victims were between 11 and 12 years of age. White also admitted that he touched one of the child victims on the breast with his hand and mouth while she was sleeping at his residence, and that he recorded this touching.
White is clearly identified in the videos setting up the camera and recovering the camera after the child victims leave the room. In one video, as White recovers the camera, he looks into the camera and gives himself two “thumbs up.”
Under Department of Justice guidelines, the attempted production of child pornography is ordinarily charged in cases that involve surreptitious recordings. The statutory penalties for producing child pornography are the same as the penalties for attempting to produce child pornography.
The investigation began when White was arrested for stealing in Commerce City, Colo. In March 2013 the soccer stadium in Commerce City was hosting a world cup qualifying game. Colorado authorities contacted White at the stadium when he was accused of stealing soccer-related items and merchandise from the stadium. Officers searched White as well as his backpack, camera, vehicle and hotel room. Officers located stolen items in White’s possession and in his hotel room and White was arrested for felony stealing. White’s cameras, computer and computer media were recovered during the course of the stealing investigation.
Detectives wanted to investigate the possibility that White was placing advertisements on sites such as “Craigslist” to sell the stolen items. They began reviewing the cameras and computer media and observed a video of a minor female changing clothes in what appeared to be White’s Lee’s Summit residence. Commerce City police officials then contacted the Lee’s Summit, Mo., Police Department to take the lead on the child pornography investigation.
Under federal statutes, White is subject to a mandatory minimum sentence of 15 years in federal prison without parole on each of the three counts of conviction, up to a sentence of 30 years in federal prison without parole on each of the three counts, plus a fine up to $250,000 on each count and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Teresa A. Moore. It was investigated by the Lee’s Summit, Mo., Police Department and the Commerce City, Colo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Buffalo Man Sentenced to 20 years for Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Buffalo, Mo., man was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Emilio R. Haro, 30, of Buffalo, was sentenced by U.S. District Judge Greg Kays to 20 years in federal prison without parole. Haro pleaded guilty on Dec. 19, 2013. The court also sentenced Haro to spend the rest of his life on supervised release following his prison term.
Law enforcement officers from two separate agencies independently identified Haro’s computer during their investigations into the sharing of child pornography over peer-to-peer file-sharing networks during the summer of 2012. Officers executed a search warrant at Haro’s residence and seized two laptop computers and an external hard drive, which contained hundreds of videos and images of child pornography.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cybercrimes Task Force, the Republic, Mo., Police Department, the Nixa, Mo., Police Department and the Dallas County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Bolivar Man Sentenced to 10 Years for Possessing Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Bolivar, Mo., man was sentenced in federal court today for possessing child pornography.
Leland Wallace Crull, 44, of Bolivar, was sentenced by U.S. District Judge Greg Kays to 10 years in federal prison without parole. Crull pleaded guilty on Feb. 3, 2014. The court also sentenced Crull to spend the rest of his life on supervised release following his prison term.
Law enforcement investigators with the Southwest Missouri Cyber Crimes Task Force were investigating child pornography images and/or videos being shared on a peer-to-peer file-sharing network in April 2012. Crull’s computer was identified as sharing child pornography over the Internet. Officers executed a search warrant at Crull’s apartment on Aug. 9, 2012. He initially refused to answer the door and then attempted to exit the back of the residence, but was detained by law enforcement officers. Investigators seized Crull’s laptop computer, an external hard drive and his cellular phone, which contained hundreds of images and videos of child pornography.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cybercrimes Task Force and the Polk County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."KC Man Charged with Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was charged in federal court today with the robbery of Commerce Bank.
David E. Clark, 35, of Kansas City, was charged in a criminal complaint filed in the U.S. District Court in Kansas City, Mo.
Today’s complaint alleges that Clark stole $3,037 from Commerce Bank, 118 W. 47th Street, Kansas City, Mo., on Monday, July 28, 2014.
According to an affidavit filed in support of the federal criminal complaint, Clark entered the bank at about 1:25 p.m. He walked to a teller station, the affidavit says, and grabbed a note from his pocket. The teller refused to look at the note and asked if Clark needed help. Clark allegedly told the teller to pull out his drawers. When the teller told Clark his teller drawers were locked, the affidavit says, Clark instructed him to get the keys. As the teller turned to get the keys, Clark told him not to move and reached back into his pocket. According to the affidavit, the teller was frightened because he believed Clark might be reaching for a gun. Clark allegedly told the teller to “give me 100’s, 50’s and 20’s.” The teller grabbed the money from his teller drawer and gave it to him.
According to the affidavit, Clark walked swiftly out of the bank’s front door then ran up Wyandotte Street. Another bank employee saw Clark exit a parking garage in a white truck. At about 1:56 p.m., Clark’s vehicle was spotted by Kansas City police officers. Clark was arrested after a car chase and utilization of their K9 unit dog.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney D. Michael Green. It was investigated by the FBI and the Kansas City, Mo., Police Department.Bates City Man Sentenced to 21 Years in PrisonRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that five defendants were sentenced in federal court today for their roles in a conspiracy to use identity documents, checks and credit cards that were either found in stolen vehicles or pilfered from vehicles to make fraudulent purchases and to obtain methamphetamine.
Jason Rockwell Thompson, 30, of Bates City, Mo., was sentenced by U.S. District Judge Dean Whipple to 21 years and 10 months in federal prison without parole. The court also ordered Thompson to pay $45,012 in restitution.
Co-defendants Christopher Lee Curd, 29, and his brother Robert Alva Curd, 30, both of Kansas City, Mo., Roberta Anne Welty, 28, of Blue Springs, Mo., and Brandi Nicole Neely, 32, of Arnold, Mo., were also sentenced today. Christopher Curd was sentenced to one year and one day in federal prison without parole and ordered to pay $3,584 in restitution. Robert Curd was sentenced to 15 months in federal prison without parole and ordered to pay $3,560 in restitution. Roberta Welte was sentenced to 18 months in federal prison without parole and ordered to pay $4,271 in restitution. Neely was sentenced to 14 months in federal prison without parole and ordered to pay $7,055 in restitution.
On Feb. 7, 2014, Thompson pleaded guilty to leading the conspiracy to illegally transport stolen vehicles and to commit bank fraud, access device fraud, identity theft and wire fraud between Oct. 19, 2007, and Jan. 10, 2008. Thompson also pleaded guilty to one count of bank fraud.
Thompson admitted that he stole 10 vehicles in November and December 2007. Thompson also admitted that he was in possession and transported several more stolen vehicles, and that he stole numerous checks, credit cards and other identity documents from several other vehicles.
For example, on Dec. 23, 2007, Thompson stole two vehicles in Independence, pilfered a vehicle in Lee’s Summit, stole a vehicle in Lee’s Summit and transported it to Overland Park, Kan.; stole two vehicles in Overland Park, pilfered two vehicles in Overland Park, possessed and operated a stolen vehicle, and transported one of the stolen vehicles from Overland Park to Missouri. On Dec. 24, 2007, Thompson stole a vehicle in Lenexa, Kan., and transported it to Independence, Mo. He also pilfered nine vehicles in Lenexa on that day.
Thompson admitted that he attempted to purchase $1,201 worth of merchandise at a Kohl’s store in Independence with a stolen credit card on Oct. 19, 2007. On that day, he also possessed a stolen Social Security card and stolen credit cards belonging to another person whose vehicle had been stolen; a driver’s license from another person whose vehicle had been stolen; a stolen Social Security card from another victim; and stolen personal checks from four additional victims.
Thompson admitted that he purchased (or attempted to purchase) hundreds of dollars worth of merchandise at various retail businesses using numerous identify documents and credit cards that had been stolen from various vehicles.
Co-defendants Jennifer J. Leone, 34, and Nicholas E. Dobbins, 24, both of Kansas City, Mo., have also pleaded guilty and been sentenced. Co-defendant Melinda R. Kermer, 27, of Raytown, Mo., pleaded guilty and awaits sentencing.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the Overland Park, Kan., Police Department.Former IRS Employee Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former employee of the Internal Revenue Service pleaded guilty in federal court today to leading a conspiracy to steal taxpayers’ identity information in order to receive fraudulent tax refunds.
Taylor S. Knight, 32, of Kansas City, Mo., pleaded guilty before U.S. District Judge Howard F. Sachs to the charge contained in a March 18, 2014, federal indictment.
Knight worked as an employee of the IRS at the office at 333 W. Pershing Rd., Kansas City, from March 2009 to January 2012. Taylor admitted that she abused her position of trust when she inappropriately accessed the information of three taxpayers as part of a conspiracy to defraud the United States by using the stolen identity information to fraudulently induce the IRS into issuing tax refund payments.
For one of the victim taxpayers, Knight submitted a bogus online application for a prepaid debit card that was approved and mailed to an address in Oak Grove, Mo.; this debit card was never used. Knight admitted that she submitted this false online application to test whether her scheme to defraud the IRS was viable.
On Sept. 30, 2011, Knight used the information from two of the victim taxpayers (who were married) to submit a bogus online application for three prepaid debit cards. These debit cards were issued and mailed to the residence of the grandmother of her boyfriend and co-conspirator. According to her plea agreement, Knight admitted that her boyfriend monitored the mail sent to his grandmother’s address and retrieved the three prepaid debit cards. They agreed to use the grandmother’s address rather than use an address associated with Knight in an effort to conceal her role in this conspiracy to defraud the United States.
On Oct. 17, 2011, Knight submitted a 2010 tax return for the same two married victim taxpayers. The IRS approved a $46,572 refund, of which $5,000 was deposited on a debit card that had been obtained by Knight. The IRS attempted to deposit the remaining $41,572 refund on the other debit cards obtained by Knight, but the receiving banks rejected the deposits.
Knight admitted that, at her request, her boyfriend telephoned the IRS and falsely claimed to be the victim taxpayer. He allegedly provided the IRS representative with pertinent personal identification information for both victims and requested the IRS to send the remaining tax refund to a new address located in Independence, Mo. He identified this address because it was his former residence and he knew it was unoccupied.
In August 2011, the victim taxpayers filed legitimate amended tax returns. A $46,734 refund check was sent to the Independence address and was obtained by Knight. Knight admitted that she paid a second co-conspirator $500 to help her cash the refund check. Knight obtained false identification documents – including Social Security cards, credit cards and driver’s licenses – so that they could assume the identity of the victim taxpayers. They attempted to cash the stolen Treasury check at a local convenience store. The clerk was concerned about cashing such a large check and he went to his immediate supervisor for guidance. They told the clerk and his supervisor that, if they would cash the check, they could keep $6,000 of the proceeds. The supervisor decided not to cash the check, but he told them to come back later. When Knight and her co-conspirator returned, the owner reported the incident to law enforcement. Police officers arrived about 10 minutes later and they were arrested.
Under federal statutes, Knight is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Treasury Inspector General for Tax Administration.Springfield Businessman Indicted for Bankruptcy Fraud in addition to $3.3 Million Fraud SchemesRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Springfield, Mo., businessman has been indicted by a federal grand jury for additional bankruptcy fraud, after being indicted last year for a series of bank fraud and wire fraud schemes that totaled more than $3.3 million in losses.
Richard Thomas Gregg, 59, of Springfield, was charged in a 25-count indictment returned by a federal grand jury on Wednesday, July 24, 2014. This superseding indictment replaces the original indictment returned on Feb. 28, 2013, and adds eight additional counts of bankruptcy fraud.
Gregg is charged with four counts of bank fraud, 10 counts of money laundering, two counts of wire fraud and nine counts of bankruptcy fraud.
Gregg was the principal shareholder and director of Southwest Community Bank in Springfield, which failed in May 2010. He and his wife were majority shareholders in Glasgow Savings Bank in Glasgow, Mo., which failed in 2012. Prior to Glasgow Savings Bank’s failure, it was one of the oldest operating banks west of the Mississippi River. Gregg was also a real estate developer, an investor and a licensed insurance agent for the Shelter Mutual Insurance Company. Gregg had ownership interest in and controlled a number of business entities.
More Than $180 Million in Debt
According to the indictment, Gregg and his business entities accumulated substantial debt. On the May 14, 2013, statement of financial affairs Gregg filed in his personal bankruptcy case, he reported owning assets valued at $145,030,779 and total debts of $325,512,798, reflecting a deficiency of $180,482,019. As of Feb. 28, 2013, the indictment says, approximately $14.6 million of the known debt attributable to Gregg and his business entities had been “charged off” by the creditor financial institutions, meaning they had defaulted and the financial institution had “written off” part or all of the loan because it determined the debt was not collectable.
Bankruptcy Fraud
Gregg was a managing member of and decision maker for 1717 Market Place, LLC. He was also designated as the tax matter partner for 1717 Market Place and provided the information to accountants who prepared tax returns for 1717 Market Place. On July 17, 2012, 1717 Market Place filed a Chapter 11 voluntary bankruptcy petition, which was dismissed on March 12, 2013.
Gregg was charged in the original indictment with one count of bankruptcy fraud. On Aug. 14, 2012, Gregg allegedly made false declarations by submitting false Schedules of Assets and Liabilities and a false Statement of Financial Affairs (SOFA) in his bankruptcy proceedings. Gregg stated that the bankruptcy debtor, 1717 Marketplace, LLC, owed him $868,000 for a “personal loan,” and owed another person $801,000 for a “personal loan.” In fact, as Gregg knew, neither he nor the other person had lent 1717 Marketplace, LLC funds in those amounts.
Four of the additional eight counts of bankruptcy fraud also relate to the false statements made by Gregg in the same bankruptcy proceedings.
In submitting the company’s schedules and SOFA, Gregg allegedly omitted any reference to substantial amounts (in excess of $9 million) that he and others owed to 1717 Marketplace. He also allegedly omitted any reference to the company’s payments, totaling approximately $151,000, to himself and another person within the year immediately preceding the date of the bankruptcy filing. Gregg allegedly omitted any reference to his transfer by warranty deed of his interest in two parcels of real estate, a 97.2-acre tract and a 6.4-acre tract, both in Nixa, Mo.
Four of the additional counts of bankruptcy fraud relate to the allegedly fraudulent transfer of property in Gregg’s personal bankruptcy case, which he filed after having been indicted last year for, among other crimes, bankruptcy fraud.
The indictment alleges that Gregg, in contemplation of his bankruptcy case and with the intent to defeat the provisions of Title 11, transferred his interest in two parcels of real estate, the 97.2-acre tract and the 6.4-acre tract in Nixa. The indictment also alleges that Gregg, with the intent to defeat the provisions of Title 11, fraudulently transferred property of the bankruptcy estate when he filed a document with the Christian County Recorder of Deeds that purported to place $250 million in liens on the real and personal property of Gregg and the entities he owned and controlled.
The indictment also alleges that Gregg, with the intent to defeat the provisions of Title 11, fraudulently transferred property of the bankruptcy estate when he signed an offer that purported to place liens on the real and personal property of Gregg and the entities he owned and controlled. On May 24, 2013, after his personal Chapter 11 bankruptcy case was converted to Chapter 7 and a trustee was appointed, Gregg accepted an offer on behalf of FRS, LLC, and 1717 Market Place, of $40 million “in the form of Property Tax Abatement based on a certain lien recording against this subject property.” According to the indictment, however, Gregg’s interests in those companies and in his personal property had become the property of the bankruptcy estate upon the commencement of his personal case on March 19, 2013.
The remaining charges contained in the superseding indictment remain unchanged from the original indictment.
Fremont Property
The federal indictment alleges that Gregg engaged in a scheme to defraud Southwest Community Bank in 2008. As a part of this bank fraud scheme, the indictment says, Gregg sold the bank a piece of commercial real estate at 2814 S. Fremont in Springfield for $1,551,944. Gregg allegedly knew that amount was significantly above fair market value.
Gregg, who was Southwest Community Bank’s principal shareholder and was on its Board of Directors, did not disclose to the bank that he had purchased that property for $775,000 a few months earlier, the indictment says, nor did he disclose to the bank that two appraisals had been conducted on the property in recent months. One appraisal valued the property at $762,000. The second appraisal was cancelled when Gregg disagreed with the preliminary work. After Gregg cancelled the appraisal, the indictment says, his son (who worked at Southwest Community Bank) ordered an appraisal of the Fremont property by another appraiser, who valued the property at $1,580,000. Gregg allegedly did not disclose to the bank that this appraisal was not an independent valuation of the property, but rather was something Gregg had, in essence, directed.
The indictment charges Gregg with four counts of money laundering related to this bank fraud scheme.
Stock Shares
In February 2009 Gregg borrowed $2 million from Great Southern Bank, using 160,000 shares of stock for First Bancshares, Inc. (FBSI), the holding company for First Homes Savings Bank, as collateral. Gregg physically deposited the stock certificate with Great Southern Bank.
According to the indictment, on May 6, 2009, with a $1.5 million balance remaining on the loan from Great Southern Bank, Gregg checked out the original FBSI stock certificate from Great Southern Bank, using as a pretext the stated purpose of separating the large certificate into multiple smaller certificates. He signed a trust receipt promising to return to the certificate to the bank within 30 days. Instead, the indictment says, Gregg deposited the collateralized FBSI shares into his account at Scottrade, a privately-owned retail brokerage firm located in St. Louis, Mo. On May 28, 2009, Gregg allegedly borrowed $440,000 from Scottrade, from the margin account on which the defendant used the FBSI stock as collateral. Gregg chose not to return the FBSI certificate or any proceeds he received to Great Southern Bank, according to the indictment, and instead used the funds for other purposes.
Collectible Cars
The federal indictment charges Gregg with two counts of bank fraud related to schemes to use collectible automobiles as collateral to obtain loans, then sell the automobiles without paying back the loans. In January and February 2010 Gregg allegedly executed separate but related schemes to defraud Great Southern Bank, Metropolitan National Bank and People’s Bank of the Ozarks. As a part of these schemes, the indictment says, Gregg sold seven collectible automobiles at the Barrett-Jackson Auto Auction in Scottsdale, Ariz. Five of the automobiles were encumbered at the three banks.
According to the indictment, Gregg borrowed $400,000 from Great Southern Bank in October 2007, which he secured with four collectible automobiles, including a 2006 Ford GT. Gregg consigned the 2006 Ford GT with the Barrett-Jackson Auto Auction in Scottsdale, Ariz., where on Jan. 23, 2010, the vehicle was sold at auction for approximately $150,000. Gregg allegedly chose to not return the proceeds of the sale of the Ford GT ($138,000 after deducting the auctioneer’s fee) to Great Southern Bank and instead used the funds for other purposes. When Gregg defaulted on the loan, Great Southern Bank realized a $129,644 loss.
According to the indictment, Gregg borrowed $400,000 from Metropolitan National Bank in 2005. He secured this loan with a “floor plan” financing, meaning the loan was a revolving line of credit made against specific pieces of collateral, in this case automobiles. When each vehicle on the floor plan was sold, the loan advanced against that piece of collateral was to be repaid. This loan was renewed in December 2009. In January 2010, the collateral included a 1971 Chevy Cheyenne Pickup. The portion of the loan’s balance collateralized by the 1971 Chevy Cheyenne Pickup was $17,221. Gregg also consigned the 1971 Chevy Cheyenne Pickup with the Barrett-Jackson Auto Auction, the indictment says, and it was sold for approximately $29,000. Gregg allegedly chose to not return the proceeds of the sale ($26,680 after deducting the auctioneer’s fees) to Metropolitan National Bank and instead used the funds for other purposes. When Gregg defaulted on the loan, Metropolitan National Bank realized a $17,221 loss.
The indictment charges Gregg with six counts of money laundering related to these bank fraud schemes.
Oklahoma Casinos
The federal indictment charges Gregg with two counts of wire fraud related to bounced checks at two Oklahoma casinos.
On Jan. 3,2012 Gregg allegedly presented five checks, payable to Buffalo Run Casino in Miami, Okla., each in the amount of $10,000. Gregg allegedly knew his credit union account contained insufficient funds to cover those checks.
Between Feb. 16 and March 1, 2012, Gregg allegedly presented five checks payable to Downstream Casino and Resort in Quapaw, Okla., in the total amount of $60,000. Gregg allegedly knew his bank account contained insufficient funds to cover those checks.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FDIC Office of Inspector General and IRS-Criminal Investigation.Former Federal Employee Sentenced for $113,000 Scheme to Steal from Co-workersRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former IT specialist for the U.S. Department of Agriculture was sentenced in federal court today for a scheme to steal $113,000 from three co-workers, one of whom is blind.
Paula M. Steen, 50, of Overland Park, Kan., was sentenced by U.S. District Judge Gary A. Fenner to two years in federal prison without parole. The court also ordered Steen to pay $96,012 in restitution.
Steen was employed as an IT specialist for the USDA Farm Service Agency at the USDA facility at 6501 Beacon Drive, Kansas City, Mo.
On Dec. 18, 2013, Steen pleaded guilty to wire fraud. Steen admitted that she engaged in a wire fraud and identity theft scheme to steal from her co-workers at USDA over a four-year period, from Dec. 30, 2008, to Dec. 29, 2012. Steen attempted to steal at least $113,282; the actual loss totaled $103,682.
Steen admitted that she charged $57,693 on the credit accounts of one co-worker (identified in court documents as “S.S.”), who is legally blind. Steen later repaid $18,278 of that amount to creditors. Steen also secured four personal loans from this co-worker totaling $48,171, which she did not repay. Steen attempted to borrow $2,600 in the co-worker’s name, but after submitting the personal loan application to a financial institution, she later withdrew it.
Steen admitted that she illegally transferred $16,096 from another co-worker’s credit union account to her own creditors and to her own bank account. (This co-worker is identified in court documents as “R.H.”) Steen also attempted to illegally transfer another $2,000.
Steen attempted to open a joint credit card account in the name of a third co-worker (identified in court documents as “J.S.”), using his Social Security number and date of birth without his authorization.
This case was prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Department of Agriculture, Officer of Inspector General.Tennessee Man Indicted for Illicit Sex with a MinorRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Tennessee man was indicted by a federal grand jury today for enticing a minor victim to engage in illicit sexual activity in Lawrence County, Mo.
Dylan Wade Garcia, 28, of Huntingdon, Tenn., was charged in a three-count indictment returned by a federal grand jury in Springfield, Mo.
Today’s indictment alleges that Garcia used the Internet and a cell phone between June 9 and 26, 2014, to entice a minor under the age of 17 to engage in illicit sexual activity in Lawrence County. Garcia is also charged with one count of crossing state lines for the purpose of engaging in illicit sexual activity and one count of possessing child pornography.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Aurora-Marionville, Mo., Police Department and the Southwest Missouri Cyber Crimes Task Force.
Rogersville Business Owners Indicted for Selling $1 Million Worth of K2Read the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Rogersville, Mo., couple has been indicted by a federal grand jury for selling $1 million worth of synthetic marijuana, also known as K2, from their store.
Doy R. Case, 79, and his wife, Tressie L. Case, 67, both of Rogersville, were charged in a nine-count indictment returned under seal by a federal grand jury in Springfield, Mo., on Tuesday, July 22, 2014. That indictment was unsealed and made public today upon the arrests and initial court appearances of Doy and Tressie Case. They remain in federal custody pending a detention hearing on Friday, July 25, 2014.
The Cases own a business called Magic Dragon, 382 Redbud Street, Rogersville. According to court documents, the Cases received delivery of approximately 101,861 grams of synthetic cannabinoids between Sept. 15, 2010, and Nov. 13, 2012. They allegedly charged an average price of $10 per gram of synthetic cannabinoids; therefore, it appears they grossed approximately $1 million during this time frame. They allegedly deposited approximately $672,349 into bank accounts that they controlled.
The Cases were contacted by federal agents in August 2012, according to court documents, and told that the sale of synthetic cannabinoids was illegal. Agents gave the Cases the opportunity to voluntarily cease and desist, but they did not.
Court documents also allege that the Cases advertised their products to minor children. On at least seven occasions, they allegedly placed advertisements in high school yearbooks or with student organizations.
The federal indictment alleges that Doy and Tressie Case participated in a conspiracy between Sept. 15, 2010, and Nov. 13, 2012, to defraud the Food and Drug Administration and to defraud the public by falsely representing that a number of synthetic cannabinoid products were “herbal aromas,” “natural fragrances” or “incense” and “not for human consumption.” In reality, the indictment alleges, these substances were synthetic cannabinoids that contained compounds that were intended for human consumption as a drug. The Cases allegedly sent payments through the mail to purchase the illegal substances from several sources, which shipped their orders through a commercial carrier.
In addition to the mail fraud conspiracy, Doy and Tressie Case are charged together with participating in a conspiracy to distribute a controlled substance, three counts related to possessing a controlled substance with the intent to distribute and one count of maintaining a place for the purpose of storing and distributing a controlled substance.
The federal indictment also alleges that Doy and Tressie Case participated in a money-laundering conspiracy. According to the indictment, the Cases conspired to conduct financial transactions which involved the proceeds of unlawful activity (the mail fraud and drug-trafficking conspiracies). In addition to the conspiracy, Doy and Tressie Case are charged together in two counts of money laundering.
The indictment also contains a forfeiture allegation, which would require the Cases to forfeit to the government any property derived from the proceeds of the alleged offenses, including a money judgment of $672,349 related to the mail fraud conspiracy and a money judgment of $639,662 related to the drug-trafficking conspiracy.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Rogersville, Mo., Police Department, the Webster County, Mo., Sheriff’s Department, the Missouri State Highway Patrol, the Drug Enforcement Administration and IRS-Criminal Investigation.Joplin Man Indicted for Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man was indicted by a federal grand jury today for receiving and distributing child pornography over the Internet.
Frank Edwin Ness, 44, of Joplin, was charged in an indictment returned by a federal grand jury in Springfield, Mo. Today’s indictment replaces a federal criminal complaint that was filed against Ness on July 17, 2014.
Today’s indictment alleges that Ness received and distributed child pornography over the Internet between Jan. 1, 2004, and July 16, 2014.
According to an affidavit filed in support of the original criminal complaint, law enforcement officers executed a search warrant at Ness’s residence on July 16, 2014, and seized his desktop computer. Investigators found at least 124 videos containing child pornography when they previewed the computer, the affidavit says.
The indictment also contains a forfeiture allegation, which would require Ness to forfeit to the government any property used to commit the alleged offense, including a desktop computer.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cyber Crimes Task Force and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Joplin Couple Indicted for Sexual Exploitation of Another Child VictimRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the wife of a Joplin, Mo., man who was previously indicted on child pornography charges was indicted along with her husband by a federal grand jury today for the sexual exploitation of a second child victim.
James Hajny, 49, and his wife, Gina Hajny, 39, both of Joplin, were charged in a four-count indictment returned by a federal grand jury in Springfield, Mo. Today’s superseding indictment replaces the original indictment returned on June 10, 2014. The superseding indictment adds Gina Hajny as a co-defendant and charges both defendants with an additional count of sexual exploitation of a minor.
James and Gina Hajny are each charged in the additional count. Today’s indictment alleges that they used a minor, identified as Jane Doe #2, to produce child pornography.
Today’s superseding indictment also contains three counts from the original indictment. The indictment alleges that James Hajny used a minor victim, identified as “Jane Doe #1,” to produce child pornography in May 2014. James Hajny is also charged with distributing pornographic images of Jane Doe #1 over the Internet between Dec. 12, 2013, and May 12, 2014. The indictment also charges James Hajny with possessing child pornography on May 19, 2014.
The indictment contains a forfeiture allegation, which would require James and Gina Hajny to forfeit to the government any property used to commit the alleged offenses, including a laptop computer, two tablet computers, two cell phones, an iPod and a digital camera.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Joplin, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."St. Joseph Woman Sentenced for $1 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Joseph, Mo., woman was sentenced in federal court today for a wire fraud scheme in which she stole nearly $1 million from two companies in which she was a part owner.
Vicky Diane McDonell, 63, of St. Joseph, was sentenced by U.S. District Judge Gary A. Fenner to five years in federal prison without parole. The court also ordered McDonell to pay $940,410 in restitution to Max Pro Consultants, Inc., and MPC Billboards, Inc. This restitution encompasses both the $906,415 she stole from the companies as well as legal fees paid by the victims in a civil suit against McDonell in an attempt to recover the money she stole. The victims dropped the suit before they recouped any of their losses because they could no longer afford to pursue it.
On Oct. 18, 2013, McDonell pleaded guilty to one count of wire fraud for using a business credit card to pay $201 in personal expenses at The Elms Resort & Spa in Excelsior Springs, Mo. According to court documents, McDonell’s fraud scheme lasted for nearly 12 years, from June 13, 1997, to March 15, 2009. During that time, she committed more than 2,440 acts of theft – including an act of theft every single week – and stole a total of $906,415 from Max Pro and MPC Billboards.
Max Pro is a real estate company that manages properties upon which billboards are affixed. In 1997, MPC Billboards was formed and incorporated as a sister company to Max Pro. MPC is a billboard sales company. In addition to her duties as office manager, in 1999 McDonell was granted a 10 percent interest in both companies, making her a partner. McDonell also became treasurer of both companies, which included management of the companies’ day-to-day financial matters.
According to court documents, McDonell involved her children in her crimes. McDonell embezzled by paying thousands of dollars from company accounts to her son and teenage daughter for unauthorized work; she never filed 1099s for this supposed employment. McDonell also gave her daughter a company credit card and allowed her to charge to it. McDonell also used her mother in her fraud scheme. McDonell wrote a $5,000 business check to her mother for “contract cleaning,” despite the fact that her mother never cleaned and never received any money from MPC or Max Pro.
When the partners first discovered McDonell’s embezzlement, court documents say, they allowed her to continue her employment on her promise that she would stop embezzling. However, after her victims showed her this mercy on Feb. 10, 2009, McDonell continued to embezzle at a steady clip, charging hundreds of dollars for personal meals at bars and restaurants to company credit cards.
Court documents report on McDonell’s conduct after being caught. McDonell continued to steal from the victims. After her employment was terminated, McDonell took her company car, obtained a loan against the company car, traded in the company car for a personal vehicle, and wrote a company check for a payment on her personal vehicle. McDonell also violated the victims’ privacy rights by hiding a voice-activated digital recorder in the victims’ office to listen to private conversations of the victims, in violation of federal law.
McDonell sabotaged the victims’ business records, according to court documents. In addition to making thousands of false entries in the companies’ books, McDonell stole more than four years of bank records and retained nearly all the check registers from her tenure, making the full extent of her theft nearly impossible to ascertain. McDonell also sabotaged the victims’ computer records. McDonell enlisted her son to erase records and password-protect them, making them inaccessible to the victims. To this day, the companies’ partners are unable to access many of their corporate records due to McDonell’s actions.
The court found that McDonell obstructed the investigation by providing investigators with false statements about the scope of her embezzlement. McDonell also erased data off the computers at the businesses she defrauded. McDonell’s sentence therefore includes an enhancement for obstruction of justice.
This case was prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by the FBI.
Springfield Sex Offender Indicted for Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a registered sex offender in Springfield, Mo., was indicted by a federal grand jury today for receiving and distributing child pornography over the Internet.
Anthony Richard Salois, 47, of Springfield, was charged in a two-count indictment returned by a federal grand jury in Springfield.
Today’s indictment alleges that Salois received and distributed child pornography over the Internet between Sept. 16 and 20, 2013. Because Salois has a prior state conviction for sexual abuse involving a minor, upon conviction he would be subject to a mandatory minimum sentence of 15 years in federal prison without parole.
The indictment also charges Salois with being in possession of child pornography on Oct. 10, 2013. Due to his prior state conviction, this count carries a mandatory minimum sentence upon conviction of 10 years in federal prison without parole.
The federal indictment also contains a forfeiture allegation, which would require Salois to forfeit to the government two desktop computers and 121 optical media.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the FBI and the Southwest Missouri Cyber Crime Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Jury Convicts KC Man of Firearms ViolationsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was convicted in federal court today of illegally possessing a Street Sweeper shotgun and a stolen handgun.
Ronald F. White, Jr., 32, of Kansas City, was found guilty of both counts of a Dec. 11, 2013, federal indictment.
White was convicted of possessing a Street Sweeper semiautomatic, drum-fed, 12-gauge shotgun that was not registered to him, and of possessing a Romarm/Cugir 7.62x39-caliber semiautomatic handgun that he knew had been stolen. The firearms were discovered by police officers when they executed a search warrant at the residence of White’s parents, where he sometimes stayed, on Oct. 31, 2013.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about an hour before returning the guilty verdicts to U.S. District Judge Dean Whipple, ending a trial that began Monday, July 21, 2014.
Under federal statutes, White is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $260,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez and Special Assistant U.S. Attorney Jeff Q. McCarther. It was investigated by the Kansas City, Mo., Police Department, the Independence, Mo., Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Former St. Clair County Sheriff Indicted for Stealing Recovered PropertyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former sheriff of St. Clair County, Mo., was indicted by a federal grand jury today for stealing property recovered in criminal cases and for selling a stolen firearm.
“Today’s indictment alleges that the former sheriff treated the county’s evidence room like his personal tool shed, cheating the taxpayers and citizens of St. Clair County,” Dickinson said. “No one is above the law. When the county’s chief law enforcement officer violates the very law he took an oath to uphold, he will be held accountable.”
Ronald E. Snodgrass, 46, of El Dorado, Mo., was charged in a three-count indictment returned by a federal grand jury in Springfield, Mo. Snodgrass served three terms as the elected sheriff in St. Clair County, from Jan. 1, 2001, through Dec. 31, 2012. He lost his bid for reelection in 2012.
Under state law, any property seized by the sheriff’s department must be disposed of by a court order that authorizes the return of the property to a claimant. If property is unclaimed, it must be disposed of through a public sale (with the proceeds deposited in the county treasury), destroyed, or forfeited to the state. State law did not authorize Snodgrass to convert unclaimed property seized in criminal cases to his own personal use.
Today’s indictment charges Snodgrass with two counts of theft concerning programs that receive federal funds. (During Snodgrass’s tenure as sheriff, the U.S. Marshals Service contracted with St. Clair County to house federal inmates at the St. Clair County Jail.) Snodgrass allegedly stole a John Deere zero turn mower on Sept. 8, 2009. Snodgrass allegedly stole a 2009 Polaris Ranger UTV on Sept. 29, 2012.
The federal indictment also charges Snodgrass with selling a stolen firearm. Between Aug. 7, 2012, and Dec. 31, 2012, Snodgrass allegedly sold a Remington .22-caliber rifle that he knew had been stolen.
The indictment also contains a forfeiture allegation, which would require Snodgrass to forfeit to the government any property derived from the proceeds of the alleged offenses, including a money judgment of $16,000.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the FBI, the Missouri State Highway Patrol and the St. Clair, Mo., Sheriff’s Department.
El Dorado Man Sentenced to 17 Years in Prison for Sexual Exploitation of a MinorRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an El Dorado Springs, Mo., man was sentenced in federal court today for sexually exploiting a minor.
Bryan Lee Courtney, 24, of El Dorado Springs, was sentenced by U.S. District Judge Beth Phillips to 17 years in federal prison without parole. The court also ordered Courtney to pay $1,494 in restitution to the victim for counseling.
On Feb. 7, 2014, Courtney pleaded guilty to using a minor to produce child pornography. Courtney admitted that he used his cell phone to make a video recording of himself having sex with a 15-year-old minor.
Police officers executed a search warrant at Courtney’s residence on Jan. 8, 2013. Officers seized several cell phones, iPods and other digital media. Investigators found two videos on one of the cell phones of Courtney and the minor victim having sex. Investigators also found several nude or partially nude photographs of the minor victim.
According to court documents, Courtney actively tried to isolate the victim from both her family and friends through physical and psychological intimidation. He took pictures and video of his sexual exploitation to both brag about his sexual conquest and to isolate the victim from her friends and family. Courtney displayed these videos and pictures to his friends and co-workers and to the victim’s friends. Courtney sent an image of the naked child to her father after he had been charged in state court with statutory rape.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Southwest Missouri Cyber Crime Task Force and the FBI.Liberty Man Sentenced for Social Security FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Liberty, Mo., man was sentenced in federal court today for stealing $84,137 by spending his deceased mother’s Social Security benefits.
Jeffery Schwed, 40, of Liberty, was sentenced by U.S. Chief District Judge Greg Kays to five years in federal prison without parole. The court also ordered Schwed to pay $84,137 in restitution to the government.
On Feb. 11, 2014 Schwed pleaded guilty to theft of government money. Schwed was a joint owner of his mother’s bank account, where her monthly Social Security payments were deposited. Schwed’s mother died on March 16, 2007, but her monthly disabled divorced widow’s insurance benefits continued to be deposited into the bank account for approximately five more years, through April 2012. Schwed admitted that he converted at least some of these payments for his own personal use.
Schwed admitted that he knowingly and intentionally concealed his mother’s death from the Social Security Administration in order to fraudulently obtain Social Security payments that he knew he was not entitled to receive. Schwed was incarcerated when the Social Security Administration made some of its deposits. Approximately $18,000 in ATM withdrawals were made by unknown persons during the periods while Schwed was incarcerated.
This case was prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Social Security Administration, Office of Inspector General.KC Woman Pleads Guilty to Tax Fraud Scheme, Stealing Clients' RefundsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., woman pleaded guilty in federal court today to a tax fraud scheme in which she stole portions of her client’s inflated tax refunds.
Dinette Kay Cadenhead, also known as Kay Taylor, 46, of Kansas City, pleaded guilty before U.S. Chief District Judge Greg Kays to the theft of public money.
By pleading guilty today, Cadenhead admitted that she prepared federal income tax returns for clients containing material false and fraudulent claims. Cadenhead, working at her office in Raytown, Mo., or from her residence, assisted at least 12 individuals to file at least 29 false and fraudulent income tax returns for the tax years 2008 through 2010. The tax loss associated with those false returns is $109,627. The aggregate tax loss, including relevant conduct is $134,237.
Cadenhead admitted that she utilized false deductions to increase her clients’ refunds without the clients’ knowledge. The false entries included fraudulent charitable deductions, medical expenses, accounting expenses, attorney expenses, unreimbursed employee expenses and other expenses. She also included false IRA deductions on 18 of the returns without the clients’ knowledge. She reported net business losses, false energy credits and fraudulent dependents for some clients, all without their knowledge. Cadenhead electronically filed returns and indicated the returns were self-prepared.
Cadenhead charged her clients a return preparation fee of between $65 and $600 per return. However, without the knowledge of her clients, Cadenhead diverted a portion of the fraudulent refund into her own bank account, which increased the amount she actually received for each return. She fraudulently received up to $2,600 for preparing a return. Cadenhead directed over $14,000 into her bank accounts by splitting her clients’ refunds without their knowledge or permission.
The specific charge to which Cadenhead pleaded guilty today is related to her unauthorized splitting of her clients’ refunds without their knowledge or permission. Cadenhead admitted that she stole portions of her clients’ inflated tax refunds, totaling $14,082, between Feb. 12 and March 14, 2012.
Under federal statutes, Cadenhead is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by IRS-Criminal Investigation and the Missouri Department of Revenue Criminal Tax Investigation Bureau.Independence Man Sentenced for Illegal FirearmRead the Press Release
Project Ceasefire
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., man was sentenced in federal court today for illegally possessing a firearm.
Edward L. Garlock, Jr., 47, of Independence, was sentenced by U.S. District Judge Dean Whipple to 16 years and eight months in federal prison without parole. Garlock was sentenced as an armed career criminal due to his prior felony convictions.
On April 25, 2014, Garlock pleaded guilty to being a felon in possession of a firearm. Garlock admitted that he was in possession of a Phoenix Arms .22-caliber pistol on June 28, 2013.
According to court documents, Garlock was arrested on June 28, 2013, after a stand-off with police officers that lasted more than seven hours. The stand-off occurred after Independence police officers arrived at Garlock’s residence to arrest him for several outstanding warrants. Garlock’s girlfriend, who was questioned outside the residence, told officers that Garlock was inside the residence and that he was armed with a pistol. She said that he was hiding under a pile of dirty clothes in the laundry room in the basement. She also told officers that Garlock was becoming increasingly paranoid about going back to prison and had made statements he would not be taken peacefully and would “shoot it out” with the police if he were cornered.
Officers attempted to order Garlock out of the residence without success. Believing Garlock was a threat to officers and the public, the Special Response Team was deployed to the residence initiating a stand-off that lasted more than seven hours. At about 2:18 a.m., officers forced entry into the residence after deploying multiple canisters of CS gas and diversionary devices. Garlock was taken into custody without further incident.
When police officers searched the residence, they found the loaded pistol in a closet adjacent to the laundry room in the basement. According to court documents, Garlock later told police officers that he purchased the pistol for $50 about a month earlier and he attempted to hide the pistol before police officers entered his residence. Garlock admitted he was a habitual drug user and he was addicted to methamphetamine.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Garlock has three prior felony convictions for tampering, as well as prior felony convictions for burglary, resisting arrest, stealing and distributing a controlled substance.
This case was prosecuted by Assistant U.S. Attorney Bruce E. Clark. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Ceasefire
Project Ceasefire, launched in October 1999, is a cooperative initiative by federal and local law enforcement and the Kansas City Crime Commission that targets for federal prosecution persons who unlawfully use or possess firearms.Tennessee Business Owner Pleads Guilty to Cargo Theft SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Memphis, Tenn., business owner pleaded guilty in federal court today to his role in a cargo theft scheme that included a theft in West Plains, Mo.
Earl Stanley Nunn, 59, pleaded guilty before U.S. Magistrate Judge David P. Rush to theft of an interstate shipment.
Nunn, the owner of Nu World Trucking, LLC, was the leader of a cargo theft ring that used the resources of Nu World Trucking to steal cargo in various states. They did so by “bob-tailing” (meaning they traveled in a road tractor truck, without a semi-trailer attached) through truck stops and service stations located on or near interstate highways, looking for semi-trailers that had been left parked and unattended, and were not coupled to road tractors. When they located a semi-trailer that appeared to be unattended, they would steal the semi-trailer and the goods it contained by coupling their road tractor truck to it and driving off. After having stolen a semi-trailer and its contents, they usually transported the stolen goods to the Chicago, Ill., and Detroit, Mich., areas to be “fenced” or sold.
Nunn’s co-conspirators included his nephew, Michael Lee Sherley, 49, of Memphis, Tenn. (who pleaded guilty on March 19, 2014), his son, Roderick Nunn (who pleaded guilty in a related case in the Western District of Michigan) and others.
The government plans to establish that co-conspirators committed thefts in various states, including Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Missouri, Nebraska, Ohio, Tennessee, Texas, and Virginia.
The specific charge to which both Nunn and Sherley pleaded guilty involves a theft that occurred on May 11, 2013, at the Snappy Mart Truck Stop in West Plains. Nunn and Sherley stole a 2000 Wabash trailer (valued at $7,500), which contained a load of Green Giant canned corn (valued at $73,008). The trailer, owned by Bryant Freight, LLC, was in transit from Minnesota to a food bank in Arkansas. Nunn and Sherley admitted that they traveled through Missouri and Indiana with the stolen cargo before being apprehended in Michigan.
Under federal statutes, Nunn and Sherley are each subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI’s Memphis Cargo Theft Task Force, the U.S. Marshal’s Service, the West Plains, Mo., Police Department and the Michigan State Highway Patrol.Joplin Man Pleads Guilty to Disaster Fraud Related to Tornado BenefitsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., man pleaded guilty in federal court today for fraudulently receiving federal disaster benefits following the tornado that struck the city of Joplin on May 22, 2011, killing 158 people and causing more than $2.9 billion in damage.
Fred Lewis Pickett, Jr., 34, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of disaster fraud.
By pleading guilty today, Pickett admitted that he fraudulently received disaster benefits by claiming that he relocated from one primary residence to another primary residence in Joplin because of damage from the tornado. To substantiate his claim of relocation, Pickett submitted several leases and rent receipts bearing the signature of his purported landlord, Dustin Showalter, 36, of Joplin.
On the basis of Pickett’s representations, the Federal Emergency Management Agency (FEMA) authorized four rental assistance payments totaling $5,147. However, Pickett’s claim was false. Pickett did not relocate and Showalter was not his landlord. In fact, Showalter had been banned from the residence, which had been occupied by Showalter’s mother before she was relocated to a nursing home. Pickett and Showalter fabricated the documents Pickett used to substantiate his claim.
Showalter has pleaded guilty, in a separate case, to one count of disaster fraud. Showalter admitted that he committed disaster fraud by making false statements to FEMA in an application for disaster benefits. Showalter fraudulently received disaster benefits by claiming to have lived at a residence in Joplin at the time of the May 22, 2011, tornado, when in fact he did not live at that residence. On the basis of his application to FEMA, Showalter received $938 to which he was not entitled.
Under federal statutes, Pickett and Showalter are each subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the U.S. Department of Homeland Security – Office of Inspector General, the FBI and the Joplin, Mo., Police Department.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin office at 417-206-5700.Former Administrator Sentenced for Embezzling from Jackson County CourtRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former court administrator for the Jackson County Circuit Court was sentenced in federal court today for a fraud scheme in which she embezzled more than $140,000 from the circuit court.
“This highly paid public official abused her position of trust and authority to steal from the court month after month, year after year, and did not stop until she was caught,” Dickinson said. “She lavished public money on personal luxuries and secretly enriched her boyfriend. Now she is being held accountable for breaking the laws she was sworn to uphold.”
Teresa L. York, 59, of Blue Springs, was sentenced by U.S. District Judge Howard F. Sachs to two years in federal prison without parole. The court also ordered York to pay $139,536 in restitution.
York was appointed as the court administrator for the Jackson County Circuit Court in 2003. She was placed on administrative leave on June 4, 2012, after her embezzlement was discovered, and resigned on July 2, 2012. York pleaded guilty to mail fraud on Nov. 21, 2013.
York admitted that she engaged in a scheme to defraud the court between January 2009 and June 4, 2012. York used court-paid credit cards for her own personal use and purchased gift cards paid for by the court for her own personal use. York also entered into a fraudulent contract for which no services were ever provided and which primarily benefited a person with whom she had a romantic relationship.
As a result of York’s fraudulent actions, the total loss to the court was $142,278. After being confronted with her embezzlement scheme and placed on leave, York reimbursed the court $2,742, resulting in a total loss of $139,536.
Credit Card Scheme
The Jackson County Circuit Court used credit cards to pay for court business, such as judicial travel and Missouri Bar expenses. These credit cards were collectively referred to as purchasing cards, or “P-cards.” As court administrator, York was an authorized user of the P-cards.
York admitted that, from 2009 to 2012, she used the court’s P-card to purchase:
- $2,252 for gas for her personal driving, even though the court used mileage reimbursement forms to reimburse business driving;
- $9,532 for personal items and gift cards from Amazon;
- $6,446 for personal items such as clothing and make-up;
- $8,350 for personal meals;
- $487 for U.S. postal stamps for her personal use (the court uses metered postage for its mail, rather than stamps);
- $46,535 for Apple computer products (the court did not use a system compatible with Apple computers);
- $35,356 for gift cards. (York kept most of the gift cards, in the amount of $29,371, for her personal use and distributed $5,985 of these gift cards to court staff, on a merit system determined by her, as a type of bonus. The amounts of the cards were more than the Internal Revenue Service de minimis requirements for income reporting, however, the cards were not ever tracked or reported as income.)
York also sold some computers owned by the court and kept the proceeds of the sales for her personal use.
The loss to the court from York’s credit card scheme was $79,438.
Contract Scheme
York also engaged in a fraudulent contract scheme. On Sept. 30, 2010, York entered into a contract with CBDM Services, LLC, on behalf of the court, purportedly for workflow analysis (a business process review, a customer service evaluation and an organizational redesign). The amount to be paid was originally $68,000, although it was later increased to $69,500.
CBDM was not organized as a company at the time the contract was signed. CBDM and its owner, identified in court documents as “N.D.,” were actually a front used to conceal the true contracting party, identified in court documents as “B.V.” York did not disclose to the court that B.V. would be receiving more than 90 percent of the payments made to CBDM or that she had a romantic relationship with B.V.
At York’s direction, the court paid CBDM a total of $64,500, although no usable work product or report was produced. Of the $64,500 paid by the court, the owner and only principal of CBDM (identified in court documents as “N.D.”) kept approximately $2,000 plus banking fees and sent the remainder, approximately $62,000, to B.V.
This case was prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the FBI.
Public Corruption Hotline
The FBI has established a toll-free public corruption hotline, 1-855-KCPCTIP, and email [email protected]. Details regarding the various types of public corruption investigated by the FBI can be found online: http://www.fbi.gov/about-us/investigate/corruption.Former Los Angeles Sheriff's Deputy Sentenced for Mortgage FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former deputy of the Los Angeles County, Calif., Sheriff’s Department has been sentenced in federal court for his role in an $11 million mortgage fraud scheme.
Arman Nshanian, 38, of Corona, Calif., was sentenced by U.S. District Judge Greg Kays on Monday, July 7, 2014, to three years and six months in federal prison without parole. The court also ordered Nshanian to pay $785,926 in restitution.
Nshanian was convicted at trial on Dec. 6, 2013, of conspiracy to commit wire fraud and two counts of wire fraud related to fax transmissions and emails that were sent across state lines during the mortgage application process. During the trial, Nshanian committed perjury when he testified in his own defense. As a result of Nshanian’s false testimony, the court ruled that he obstructed justice, which warranted an enhanced sentence.
Co-defendant James Arthur Nash, Jr., 44, also of Corona and also formerly a sheriff’s deputy, was also convicted at trial of his role in the criminal conspiracy. Nash also was found guilty of four counts of wire fraud. He is scheduled to be sentenced on Aug. 12, 2014.
Nshanian and Nash are among nine defendants who participated in a mortgage fraud scheme from early 2005 through Aug. 4, 2006. Mortgage lenders made loans of approximately $11,092,886 on 16 residential properties in Lee’s Summit, Liberty, Blue Springs, Parkville, Independence and Oak Grove, Mo. From that total, unbeknownst to the lenders, buyers received approximately $2,006,845 in secret illegal kickbacks from the loan proceeds. The scheme resulted in a financial loss to mortgage lenders of nearly $5 million.
Nshanian fraudulently purchased a residential property in Lee’s Summit, Mo., for $750,000 and received an illegal kickback of $100,000. In loan applications, Nshanian provided false information about his employment and inflated his income. He falsely represented that he would live in the residence. Nshanian would not have qualified financially for the loans if he had been truthful, as his debt to income ratio would have been 91 percent. The loans soon went into default and were foreclosed. Nshanian never saw the property, never received the keys, and never lived in it. Nshanian created a shell company that received the $100,000 payment for work purportedly done by the company, but which in reality was only used to conceal the illegal kickback Nshanian received.
A week after closing on the Lee’s Summit property, Nshanian signed a contract to purchase a $798,000 residential property in Leawood, Kan., but the purchase did not occur. He also introduced his sister, Anahit Nshanian, to the scheme. She purchased two properties in Lee’s Summit for $520,000 and $657,500; she was charged in a separate case and pleaded guilty to those fraudulent purchases. Anahit Nshanian received a total of $169,307 in kickbacks and paid $22,000 to Arman Nshanian from the proceeds. Her loans quickly went into default and were foreclosed.
According to court documents, less than three months after purchasing the Lee’s Summit property, Arman Nshanian purchased a residential property in Corona for $631,000. In the loan applications for the first and second loans, he once again made false representations to get the loans.
Nash fraudulently purchased two residential properties in Blue Springs, Mo. He received $100,000 in secret kickbacks from each property.
Seven co-defendants have pleaded guilty and been sentenced. Leann Raejeana Turner, 44, of Blue Springs, was a real estate agent working for a series of real estate companies during the conspiracy. Carole L. Colson, 71, formerly doing business as Carole Colson Real Estate in Blue Springs, now of Lake Worth, Fla., was a real estate agent. Bruce Q. Williams, 44, of Kansas City, Kan., and Anthony E. Hicks, 42, of Little Rock, Ark., were loan officers at mortgage brokerage companies. Other co-defendants were “home buyers” who conspired to defraud mortgage lenders.
The scheme involved buying and selling homes at inflated prices, obtaining mortgage loans at the inflated prices, then kicking back $100,000 of the excess loan proceeds to each of the home buyers without the lenders’ knowledge. The scheme financially benefitted all of the conspirators. Turner (the real estate agent for 15 of the 16 transactions) received commissions and sometimes hidden payments and assets; Williams and Hicks (the loan officers) received commissions from the transactions. The home buyers received illegal secret kickbacks.
Turner and Colson listed and arranged for the sale of the homes at inflated prices and solicited buyers. Misrepresentations and omissions of material facts were made to mortgage lenders in order to obtain the loans. In order to obtain the loan proceeds without the lenders’ knowledge, the buyers created fictitious businesses that issued false invoices that claimed the businesses had provided work and services for which they were entitled to receive loan proceeds.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI and IRS-Criminal Investigation.KCK Man Pleads Guilty to Drug-trafficking Conspiracy, Fatal Shooting of Independence ManRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Kan., man pleaded guilty in federal court today to his role in a drug-trafficking conspiracy that resulted in the shooting deaths of three persons during a home invasion in Independence, Mo., and the shooting of a 12-year-old boy in the home.
Victims of the fatal shootings were Maria Hernandez, her son, Antonio Hernandez, and her boyfriend, Martin “Tomas” Dominguez-Gregorio. Maria Hernandez’s then-12–year-old son, Miguel Hernandez, was wounded in the shooting.
Raul Soto, also known as “Choch,” 23, of Kansas City, Kan., pleaded guilty before U.S. District Judge Beth Phillips to one count of participating in a conspiracy to possess 50 grams or more of methamphetamine with the intent to distribute, and one count of using a firearm during the drug-trafficking conspiracy, resulting in the death of Antonio Hernandez.
Soto admitted that he and several coconspirators planned to rob Dominguez-Gregorio of as much as three pounds of methamphetamine. They traveled to his apartment in Independence in the early morning hours of Nov. 16, 2012. Soto carried a 9mm pistol. He and a coconspirator entered a shed behind the house and bound and beat two occupants inside the shed, one of whom was Antonio Hernandez. They dragged Antonio Hernandez into the main house. They demanded drugs and money from the occupants, but the victims denied having any drugs or money. Soto admitted that he shot and killed Antonio Hernandez.
Soto also admitted that conspirators removed a motorcycle and a TV from the apartment.
Four of Soto’s co-defendants have pleaded guilty: Paula K. Deardorff, 32, of Kansas City, Mo.; Clayton J. Deardorff, 36, of Columbia, Mo., and Ryan J. Clayton, 31, and Stephanie K. Allinder, 21, addresses unknown.
Under the terms of today’s plea agreement, the government and Soto agree that an appropriate sentence is 27 years in federal prison without parole. A sentencing hearing is scheduled for Nov. 18, 2014.
This case is being prosecuted by Assistant U.S. Attorneys Charles E. Ambrose and Patrick C. Edwards. It was investigated by the Independence, Mo., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Kansas City, Mo., Police Department.KC Woman Indicted for $3 Million Fraud Scheme that Forced Employer into BankruptcyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., woman has been indicted by a federal grand jury for a nearly $3 million fraud scheme that forced her employer into bankruptcy.
Irene Marie Brooner, 52, of Kansas City, was charged in an 11-count indictment returned under seal by a federal grand jury in Kansas City on Friday, June 27, 2014. That indictment was unsealed and made public today upon Brooner’s arrest and initial court appearance.
Brooner, a certified public accountant, worked at Galvmet, Inc., a sheet metal fabrication facility and steel service center located in Kansas City, from 2001 until her termination in February 2014. At its peak in 2008, the company had 26 employees and $14 million in annual sales. Galvmet filed for bankruptcy and ceased operations in 2014. At the time of closing, the company had 18 to 20 employees and $10 million in annual sales.
Brooner’s duties as controller included managing payroll, accounts receivable and payable, and maintaining the ledger at Galvmet.
According to the federal indictment, for approximately 10 years (January 2004 until February 2014) Brooner created unauthorized Automated Clearing House (ACH) transactions from Galvmet’s bank account. An ACH is a batch-oriented funds transfer system that includes direct deposits of payroll from companies. Brooner allegedly deposited these funds into her personal bank accounts. Brooner also manipulated ACH transactions to inflate her salary, the indictment says, by increasing her bi-weekly payments without the knowledge or authorization of her employer. She allegedly deposited these funds into her bank accounts.
As a result of Brooner’s fraud scheme, the indictment says, Galvmet lost at least $1,863,914. As a result, Galvmet declared bankruptcy, and was forced to cease operations. To keep the scheme going, Brooner allegedly falsified documents to support Galvmet’s operating loan with Missouri Bank & Trust, causing a loss to the bank of $1.1 million. Brooner allegedly converted the embezzled funds for her personal enrichment. The total loss from Brooner’s alleged fraud scheme was at least $2,963,914.
Brooner allegedly spent the embezzled funds on personal items. According to the indictment, Brooner spent some of the proceeds to remodel, stock, furnish and decorate the basement bar of her new home. The bar, which she called “the Dirty Duck,” includes seating for approximately 15, a granite bar top, four or five tap lines, a refrigeration system, three flat-screen televisions, a smoke machine at the entrance, two couches and stained wainscoting around the room approximately eight feet tall. Mannequins, positioned throughout the bar, are outfitted with authentic U.S. and German uniforms and weaponry from the World War II era, including a Thompson sub-machine gun and multiple M-1 Garands with attached bayonets. Brooner told FBI agents that her husband, a carpenter, remodeled the bar in 2003 and 2004. From 2004 to 2014, Brooner spent $18,383 on alcohol.
According to the indictment, Brooner’s spending included paying off her mortgage for $289,290, buying $81,686 in jewelry, and spending at least $400,392 on clothing and other retail, $97,180 on restaurants, $78,439 on vehicles, $169,389 on furniture and home decor, $62,003 on travel, $38,317 on electronics, $21,346 in ATM withdrawals, $59,571 on spa visits and beauty items, $68,745 on tuition for her children, $18,383 on alcohol, $104,060 to her children, $216,377 in assorted checks under $500, $64,557 in donations, $254,168 in other credit cards, and by purchasing other items.
Brooner purchased a 2004 Lexus R33 sport utility vehicle, the indictment says, on which she made 64 payments totaling $51,813. Brooner also bought 69 pieces of jewelry and accessories from Meierotto’s Midwest Jewelers totaling approximately $29,701 and 82 pieces of jewelry and accessories from Tivol Jewelers totaling approximately $51,984.
The federal indictment charges Brooner with three counts of bank fraud, five counts of wire fraud and three counts of money laundering.
Wire Fraud Scheme
Brooner allegedly sent approximately 148 unauthorized ACH transactions from Galvmet’s bank account to her personal checking account, resulting in $1,144,113 in loss to Galvmet. In addition, Brooner allegedly set up a second payroll payment that was sent via ACH to her personal savings account. Brooner allegedly sent about 133 unauthorized ACH payments to her savings account, resulting in $560,230 in loss to Galvmet. She allegedly transferred the funds to her checking account and spent the money on personal items. Brooner also manipulated the payroll account to increase her net pay on approximately 108 payroll checks, the indictment says, resulting in loss to Galvmet of $159,570.
Bank Fraud Scheme
Brooner prepared borrowing base certificates on behalf of Galvmet for the purpose of obtaining and maintaining a corporate line of credit for business operations from Missouri Bank & Trust. A corporate line of credit, issued to a business entity by a financial institution, allows the business to draw on the credit when needed, rather than receiving the entire amount at one time.
Brooner allegedly falsified borrowing base certificates. According to the indictment, the statements contained false entries concerning the accounts receivable and inventory numbers. The statements allegedly included customers shown as outstanding who, in fact, had already sent payments to Galvmet. By failing to post the payments received, the indictment says, Brooner made the accounts receivable appear to be greater in value than they really were. Brooner also allegedly misrepresented Galvmet’s inventory on the borrowing base certificate. Brooner reported inventory even if it had not been sent in-transit to Galvmet, the indictment says, which inflated the amounts on the balances to ensure Galvmet would continue receiving loan proceeds on the line of credit. This allowed the company to continue operations, the indictment says, which enabled Brooner to both conceal her embezzlement and continue to embezzle more money.
Forfeiture Allegation
The indictment also contains a forfeiture allegation, which would require Brooner to forfeit to the government any property derived from proceeds of the alleged offenses, including her personal residence, a 2004 Lexus, numerous assorted jewelry and a money judgment of at least $2,963,914.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the FBI.