Eastern District of North Carolina
Press releases recorded for this federal judicial district.
Man Sentenced to Life in Kidnapping CaseRead the Press Release
RALEIGH – The United States Attorney’s Office announced that yesterday, Senior United States District Judge W. Earl Britt sentenced GEORGE LINCOLN STANLEY IV, 47, of Durham, North Carolina, to life imprisonment for kidnapping and conspiracy to commit kidnapping.
GEORGE LINCOLN STANLEY IV was convicted on December 8, 2015 by a jury following a trial in federal court before Senior United States District Judge W. Earl Britt.
The investigation showed that the victim had been kidnapped from his home after returning from attending a boxing match in Las Vegas. The kidnappers lay in wait at the victim’s house and, after beating him badly, took him to a storage unit where he was held and tortured. Crime scene technicians recovered the kidnappers’ fingerprints, as well as the victim’s blood, within the storage unit. Zip ties were still attached to a chair within the storage unit and the victim’s personal identification was located on a nearby table. The victim, who was severely injured with a swollen eye, broken leg, ligature marks on his wrists and ankles, and duct tape still on his face and neck, was located by law enforcement on a rural dirt road in neighboring Nash County, North Carolina.
At trial, the evidence showed an elaborate scheme to target and kidnap the victim in order to steal money from him. The defendant, along with his co-defendants, broke into the victim’s house when they knew the victim would be out of town. The defendants waited in the victim’s home and attacked the victim when he returned. The defendants ransacked the victim’s home looking for money. The defendants demanded money of the victim, kidnapped him, and took him to the storage unit where they assaulted him and demanded more money. A large sum of cash was taken from the victim. At the time of his arrest, STANLEY had over $21,000.00 cash in his pocket.
The investigation was handled by the Raleigh Police Department, Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Raleigh/Wake City-County Bureau of Identification, State Bureau of Investigation, Wake County Sheriff’s Office and Johnston County Sheriff’s Office. Assistant U.S. Attorney Dena King and Special Assistant U.S. Attorney Jonathan Holbrook represented the government. Mr. Holbrook is a prosecutor with the Wake County District Attorney’s Office. Wake County District Attorney Lorrin Freeman has assigned Mr. Holbrook to the United States Attorney’s Office through a grant program which allows him to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.
Bald Head Island Attorney and Real Estate Developer Pleads Guilty to Bank FraudRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court, JOSEPH HAL KINLAW, JR., 63, of Bald Head Island, North Carolina, pled guilty to Bank Fraud.
Based upon the Criminal Information and evidence offered at the time of KINLAW’s guilty plea, KINLAW was a licensed North Carolina attorney who operated various alleged real estate investment and development entities on behalf of investors. KINLAW used the entities to obtain real estate development loans from Branch Banking and Trust (BB&T), and First Citizens Bank. BB&T and First Citizens Bank extended loans to these entities under the auspices that the entities would be engaged in the development of residential real estate in various subdivisions in the area of Camp Lejeune in Onslow County.
Between January of 2011 and April of 2013, KINLAW used the real estate development entities to defraud BB&T and First Citizens Bank by falsifying the legal descriptions of the loan collateral, and by falsifying releases of the collateral. By drafting a false legal description of the property, KINLAW was able to use the collateral for other real estate investment activities and loans. By fraudulently releasing the banks’ collateral before the banks’ loans had been satisfied, KINLAW was able, in several instances, to convey the collateral to third parties for value and continue the scheme.
To perpetuate the scheme and prevent its discovery, KINLAW also used outside funds, that is, funds unrelated to the real estate development activity that was the subject of each loan, to make ongoing loan interest payments to BB&T and First Citizens Bank. In some instances, KINLAW used loan proceeds on one transaction to make loan interest payments on another transaction. In other instances, KINLAW fraudulently extracted funds from other investors and their business interests to make payments on the loans.
Ultimately, banks stopped loaning money to KINLAW and his related companies and investors. As a result, the existing loans went into default. Because KINLAW had substituted false legal descriptions of bank collateral, and fraudulently conveyed bank collateral, BB&T and First Citizens Bank were unable to capture their loan losses in foreclosure. Various title insurance companies and investors also lost substantial funds due to the scheme. While the exact amount of the loss remains the subject of investigation, losses are presently anticipated to exceed $18 Million.
At sentencing, KINLAW faces up to 30 years in prison and 5 years of supervise release. The defendant also faces a fine of up to $1 Million, and an order of restitution to victims.
The investigation of this case was conducted by the Federal Bureau of Investigation, with assistance of the United States Postal Inspection Service. Assistant United States Attorney William M. Gilmore of the Economic Crimes Section represents the United States.
Rocky Mount Man Sentenced for Robbery and Firearm OffenseRead the Press Release
RALEIGH – The United States Attorney’s Office announced that on Thursday, May 26, 2016 in federal court, Chief United States District Judge James C. Dever III sentenced CHRISTOPHER LEE SILVER, 33, of Rocky Mount, North Carolina to 144 months imprisonment for robbery and brandishing a firearm, followed by 5 years of supervised release.
SILVER was named in a two count Indictment filed on January 7, 2015 charging him with interference with commerce by robbery; and use, carry and brandish of a firearm in furtherance of a crime of violence. On February 22, 2016, SILVER pleaded guilty to both charges.
According to the investigation, on May 12, 2013, SILVER entered a gas station in Battleboro, North Carolina and directed a customer not to move at gunpoint. SILVER then approached the cashier, brandished the handgun and demanded money and cigarettes. SILVER removed the drawer from the cash register looking for additional money. SILVER’s fingerprint was recovered from the cash register drawer.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rocky Mount Police Department. Assistant United States Attorney Dena King represented the government.
Raleigh Convenient Store Owner Sentenced to 78-Months for Food Stamp FraudRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, Chief United States District Judge James C. Dever III sentenced Ali Dhaher al-darajy, age 47, of Raleigh, North Carolina, to 78 months imprisonment, followed by three years of supervised release. AL-DARAJY was also ordered to pay restitution in the amount of $2,305,630 to the United States Department of Agriculture and to forfeit his interest in money seized during the investigation and five pieces of real property in Wake County.
al-darajy was named in Criminal Information filed on November 13, 2015 charging him with Theft of Government Property and Engaging in Unlawful Monetary Transactions. On November 23 2015, pursuant to a plea agreement, AL-DARAJY pled guilty to those charges.
Karen Citizen-Wilcox, Special-Agent-in-Charge of the Southeast Region for the U.S. Department of Agriculture’s Office of Inspector General, confirmed the Inspector General’s commitment to investigating and prosecuting “individuals who fraudulently obtain food stamp benefits.”
al-darajy owned and operated three convenient stores in Raleigh under the name Hannah Stop n’ Shop or Hannah Stop n’Drink. One of the stores was downtown on Wilmington Street and the other two in the same building on Western Boulevard. Beginning in December 2010, al-darajy was authorized to accept Federal Supplemental Nutritional Assistance Program (SNAP) benefits in return for eligible items as prescribed by the United States Department of Agriculture’s Food and Nutrition Service (FNS). The SNAP prohibits the sale of ineligible food items, including alcoholic beverages, tobacco products, pet food, household supplies, vitamins, and prepared foods in exchange for benefits, which are typically electronically transmitted through point of sale terminals. SNAP benefits may not, under any circumstances, be exchanged for cash.
Between January 11, 2013 and January 7, 2014, nine undercover operations were conducted at these stores. In total, $6,465.68 was fraudulently obtained in SNAP benefits. On March 26, 2013, AL-DARAJY charged $1,019.74 to the SNAP card presented by the undercover who received $472 in cash, a carton of Newport cigarettes and a 12-pack of Bud beer. Again, on June 4, 2013, AL-DARAJY fraudulently charged $486.12 to a SNAP card and gave the undercover $211 in cash.
By comparing the amount of SNAP benefits received by AL-DARAJY’s stores with comparable stores in North Carolina, USDA determined AL-DARAJY had stolen approximately $2,305,630. AL-DARAJY used these stolen SNAP funds to, among other things, pay down the mortgage on his personal residence, repay his business partner for the 2010 purchase of the Western Avenue building, pay monthly American Express bills, purchase three pieces of real property, and purchase four automobiles. There were 11 transactions that exceeded $10,000.
Investigation of this case was jointly conducted by the Office of the Inspector General for the United States Department of Agriculture, the Internal Revenue Service, Criminal Investigations, and the Raleigh Police Department. Assistant United States Attorney Susan B. Menzer represented the government.
Greenville Man Sentenced for Heroin and Cocaine ConspiracyRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, Chief United States District Judge James C. Dever, III, sentenced JOEY OSCAR AUSTIN, JR., 31, of Greenville, North Carolina, to 110 months in prison and 3 years of supervised release for conspiracy to distribute and possess with the intent to distribute heroin and cocaine. AUSTIN previously pled guilty to this charge on February 26, 2016.
In January 2015, the Greenville Regional Drug Task Force began an investigation into AUSTIN’S heroin and cocaine trafficking activities as a result of information gathered during multiple ongoing narcotics investigations. Investigators learned that AUSTIN would travel to Philadelphia, PA, several times a month in rental cars to buy heroin that he would sell in Pitt County. On February 3, 2015, as AUSTIN was traveling from Philadelphia, investigators stopped the rental car in which AUSTIN was the passenger. During the traffic stop, AUSTIN emptied a plastic bag containing an unknown amount of heroin out of the front passenger window. Investigators located 10 boxes of glassine bags in the rental car. The investigation revealed that from 2013 through February 3, 2015, AUSTIN was accountable for the distribution of 367 grams of heroin and 793 grams of cocaine.
The investigation of this case was conducted by the Greenville Regional Drug Task Force. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Former Chief Financial Officer of Company Receiving Federal Funds and Contractor for That Company Charged with Bribery, Fraud, and Other Offenses in 47-Count IndictmentRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that a federal grand jury in Wilmington returned a 47 count Indictment on Tuesday, May 24, 2016.
The superseding Indictment charged WILLIAM ROBERT CANUPP, the Chief Financial Officer for a company that is the local manager of the public sector behavioral health system for several counties in eastern North Carolina, and RONNIE L DAVIS, a contractor, with Conspiracy, Bribery, Organization Fraud, and Wire Fraud. It also charged CANUPP with money laundering.
If convicted of Count 1 (Conspiracy), the defendants face a maximum imprisonment of 5 years. Each of counts 2-37 and count 47 carries a maximum imprisonment term of 10 years. Each of counts 38-46 carries a maximum imprisonment term of 20 years. The Indictment also seeks forfeiture of proceeds traceable to the offenses charged, including gross proceeds of $577,595.
The charges and allegations contained in the indictment are merely accusations. The defendants are considered innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service - Criminal Investigation (IRS-CI), the United States of Department of Health and Human Services, Office of Inspector General (HHS-OIG), and the United States Department of Housing and Urban Development, Office of Inspector General (HUD-OIG).
"These allegations are serious because people trusted with the resources to care for others should not use that access to defraud the healthcare system. The FBI will work tirelessly to ensure federal funding is spent in an appropriate and legal manner,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
"As alleged, embezzling hundreds of thousands of taxpayer dollars meant for crucial federal and state programs to include care for mentally ill and developmentally disabled patients just to enrich yourself is a serious betrayal of trust," said Special Agent in Charge Derrick L. Jackson. "HHS/OIG is dedicated to ensuring the integrity of taxpayer-funded programs and we will aggressively pursue executives who steal from vulnerable beneficiaries."
“The theft and subsequent concealment allegedly perpetrated by Canupp and Davis are prime examples of the extraordinary lengths individuals go to in order to steal and launder their ill-gotten gains,” said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. “This indictment contains serious allegations, and IRS Criminal Investigation is committed to the pursuit of such criminal activity, that would harm any business, but in this case one that provides valuable service for those in need.”
“At such a critical time for a Department with programs that are vital to the well-being of the less fortunate in our nation, it is all the more important that those entrusted to public service are completely committed to those in need,” said Nadine E. Gurley, Special Agent in Charge of the Department of Housing and Urban Development Office of Inspector General. “The recipients of our funding deserve honest and efficient service and, in this case, have allegedly been let down by individuals who were supposed to be devoted to their best interests.”
B. Braun Medical Inc. Agrees to Resolve Criminal Liability Relating to Its Sale of Contaminated SyringesRead the Press Release
The Contaminated Syringes That Infected Patients Were the Subject of a Recall
WASHINGTON - Drug and medical device company B. Braun Medical Inc. (B. Braun) has agreed to pay $4.8 million in penalties and forfeiture and up to an additional $3 million in restitution to resolve its criminal liability for selling contaminated B. Braun pre-filled saline flush syringes in 2007, the Department of Justice announced today.
The B. Braun saline syringes had a B. Braun label but were manufactured by another company. Today’s resolution includes a non-prosecution agreement that requires B. Braun to implement additional practices designed to increase its oversight of its product suppliers to prevent future sales of contaminated products. B. Braun, a medical device manufacturer, has global headquarters in Melsungen, Germany, and corporate headquarters in Bethlehem, Pennsylvania, with primary manufacturing facilities in Allentown, Pennsylvania, and Irvine, California.
“The Federal Food, Drug and Cosmetic Act (FDCA) prohibits companies from selling contaminated products, even when the company did not make the product itself,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Companies must take reasonable steps to ensure that their suppliers are making quality products that help rather than harm patients. Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.”
"Patients were infected by adulterated syringes distributed by B. Braun,” said Acting U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina. “This agreement helps to provide justice for the victims and to deter such future conduct by distributors of medical devices.”
According to the agreed upon statement of facts that accompany the non-prosecution agreement, in March 2006, B. Braun started buying B. Braun saline syringes from AM2PAT, Inc. (AM2PAT), which manufactured the syringes at a small facility in North Carolina. The saline solution in pre-filled saline flush syringes must be sterile because it can enter a patient’s bloodstream when the syringes are used to flush out or clean medical devices that provide access to a patient’s veins, such as central lines, ports and short peripheral catheters.
As noted in the statement of facts, B. Braun was aware of manufacturing problems at AM2PAT, even before it began purchasing syringes from AM2PAT. In separate audits, both the U.S. Food and Drug Administration (FDA) and B. Braun had found that AM2PAT was having problems complying with current good manufacturing practices. Although AM2PAT addressed some of these initial problems, additional problems persisted. In the spring of 2007, AM2PAT notified B. Braun that AM2PAT intended to move to a new manufacturing facility and change the company that would sterilize the B. Braun saline syringes through a new radiation sterilization process. Sterilization, a vital step in the manufacture of these syringes, can be complex. Before B. Braun’s quality department approved either of these changes, B. Braun began selling B. Braun saline syringes made at AM2PAT’s new facility and sterilized by the new sterilization company. B. Braun later approved both of these changes even though B. Braun had already received complaints about the syringes changing colors and information from AM2PAT that it was making changes to its radiation process to avoid “overcooking” the syringes. B. Braun approved AM2PAT’s facility move without ever seeing AM2PAT’s operations at its new facility or confirming AM2PAT’s representations that it had properly validated its clean room and equipment after the move.
Less than two months after B. Braun started selling syringes that AM2PAT made at its new facility with the new sterilization company, B. Braun recalled all of them because the radiation sterilization process caused dangerous white particles to develop in the saline inside the syringes.
After the recall, AM2PAT told B. Braun that it gave B. Braun incorrect information about its new radiation sterilization process. It also sent B. Braun information showing that AM2PAT moved manufacturing equipment to its new facility without validating that the equipment worked as expected after the move. As explained in the statement of facts, even with this new information, B. Braun resumed buying B. Braun saline syringes from AM2PAT without going to AM2PAT’s new facility.
Less than a month after B. Braun resumed buying syringes from AM2PAT, AM2PAT manufactured B. Braun saline syringes contaminated with Serratia marcescens bacteria. S. marcescens can cause blood infections. These contaminated syringes infected patients in California, Texas, New York and Nebraska. The syringes were recalled.
In the government’s non-prosecution agreement with B. Braun, B. Braun admits that it distributed B. Braun-labeled syringes that were adulterated under the FDCA. Under the terms of the agreement, B. Braun will increase oversight of its product suppliers by conducting on-site audits of companies that design and make finished products that bear the B. Braun name on the label or logo and testing such products for sterility, identity and purity, as appropriate, on a periodic basis. B. Braun will also be monitored by an independent compliance auditor during the term of the agreement. The auditor will assess B. Braun’s implementation and maintenance of the enhanced compliance measures through on-site audits of B. Braun. B. Braun’s chief executive officer and board of directors will also review and certify B. Braun’s compliance efforts on an annual basis.
“Americans expect and deserve medical devices that are safe, effective, and that meet appropriate standards for quality,” said Director George M. Karavetsos of FDA’s Office of Criminal Investigations. “Today’s announcement should serve as a reminder of the FDA’s continued focus on companies that put profits ahead of the public health.”
Today’s settlement with B. Braun follows the earlier, related prosecution in the Eastern District of North Carolina of AM2PAT and three individuals who worked at AM2PAT. In 2008, Ravindra Kumar Sharma, AM2PAT’s quality control director and Aniruddha Patel, AM2PAT’s plant manager, both pleaded guilty to criminal informations charging conspiracy to commit a number of federal offenses including felony violations of the FDCA. Both were sentenced in 2009 to 54 months in prison. AM2PAT and its former president, Dushyant Patel, were indicted on similar charges in 2009. Patel fled the country and is currently on FDA’s Office of Criminal Investigations’ “Most Wanted” list.
Principal Deputy Assistant Attorney General Mizer and Acting U.S. Attorney Bruce commended the efforts of the FDA’s Office of Criminal Investigations and its Special Agent Paul Pierce for their work on this matter. The matter was also handled by Assistant U.S. Attorney Evan Rikhye of the U.S. Attorney’s Office for the Eastern District of North Carolina and Senior Litigation Counsel Allan Gordus and Trial Attorney Shannon Pedersen of the Department’s Consumer Protection Branch.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
For more information about the U.S. Attorney’s Office for the Eastern District of North Carolina, visit its website at https://www.justice.gov/usao-ednc.
Littleton Man Sentenced for Shipping Heroin Through MailRead the Press Release
WILMINGTON – The United States Attorney’s Office announced that on Friday, May 13, 2016 in federal court, Senior United States District Judge James C. Fox sentenced JASON BRIAN BUNCH, 42, of Littleton, North Carolina to 81 months imprisonment, followed by 5 years of supervised release.
BUNCH was named in a Criminal Information filed on January 25, 2016 charging him with conspiracy to distribute and possession with intent to distribute 100 grams or more of heroin and a quantity of marijuana. On February 16, 2016, BUNCH pleaded guilty to that charge.
Between September and October 2014, BUNCH shipped 117 grams of black tar heroin through the mail. BUNCH lived in Mendocino, California at the time and shipped the heroin to a confidential informant located in Nashville, North Carolina. While in North Carolina on January 30, 2015, BUNCH was arrested by the Drug Enforcement Administration and Nash County Sheriff’s Office. Agents executed a search warrant at BUNCH’s North Carolina home and seized cocaine, heroin, marijuana and money during the search.
Investigation of this case was conducted by the Drug Enforcement Administration, United States Postal Service, United States Marshals Service, Internal Revenue Service, and the Nash County Sheriff’s Office. Assistant United States Attorney Dena King represented the government.
Rocky Mount Man Sentenced to 240 Months for Firearm and Drug ChargesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court, United States District Judge Terrence W. Boyle sentenced DARION DEVON JOHNSON, 35, to 240 months imprisonment, followed by 3 years of supervised release.
DARION DEVON JOHNSON was named in a seven count Indictment filed on May 20, 2015 charging him with various firearm and drug offenses. On October 29, 2015, JOHNSON pled guilty to Possession of a Firearm by a Felon and Distribution of a quantity of Cocaine Base (Crack).
According to the investigation, On April 11, 2013, JOHNSON made a sale of a .22 caliber rifle and a quantity of cocaine base which was captured on audio and video surveillance. Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Carrie Randa represented the government.
Mother and Son Sentenced to Prison for Tax Return Preparer Fraud in Farmville and TarboroRead the Press Release
RALEIGH – The United States Attorney’s Office announced that in Federal court on Monday, May 9, 2016, Senior United States District Judge W. Earl Britt sentenced SherrY D. WILLIAMS, 43, of Greenville, North Carolina to 75 months imprisonment, 3 years of supervised release, and ordered to pay $1,050,976 in restitution. Her co-defendant, THADDEUS L. WILLIAMS, 28, of Durham, North Carolina, and the son of SHERRY D. WILLIAMS, was sentenced to 33 months imprisonment, 3 years of supervised release, and and ordered to pay $60,007 in restitution.
SHERRY D. WILLIAMS and THADDEUS L. WILLIAMS were named in a 38-count Indictment filed in the Eastern District of North Carolina on May 20, 2015. On November 2, 2015, the WILLIAMS’ entered separate guilty pleas to making and presenting false tax refund claims to the Internal Revenue Service (“IRS”), in violation of 18 U.S.C. § 287. SHERRY D. WILLIAMS also pleaded guilty to the additional charge of aggravated identity theft, in violation of 18 U.S.C. § 1028A.
According to the charging instrument, other court filings, and the sentencing proceedings, SHERRY D. WILLIAMS worked from approximately May, 2012, to January, 2013, as a manager and tax return preparer at the Farmville, North Carolina, office of Hill’s Tax Service (HTS), a now-defunct, fraudulent tax return preparation business that maintained various offices throughout the Eastern District of North Carolina from 2009 through 2013. HTS was owned and operated by Larry D. Hill, SHERRY D. WILLIAMS’ cousin. Hill was separately charged and convicted of Federal tax crimes relating to his involvement with HTS. On February 4, 2014, Senior United States District Judge W. Earl Britt sentenced Hill to 100 months imprisonment, among other terms of the judgment.
Between approximately May, 2012, and October, 2012, SHERRY D. WILLIAMS organized, deployed, and managed a scheme at HTS’s Farmville office involving the systematic preparation and filing of nearly 400 false Federal income tax returns for tax year 2011. The personal identifiying information (“PII”) used on the fraudulent returns, including names and Social Security numbers, was provided by individuals who were falsely told they could receive “federal program money,” a “stimulus check,” or similar government funds if they had been unemployed and had not filed a tax return for a certain time period. Many of the individuals lured by the scheme were older, unemployed, and receiving disability income. The individuals were told to contact SHERRY D. WILLIAMS, who would determine their “eligibility” for the sham program. If the individual “qualified,” he/she was directed to fax their PII to SHERRY D. WILLIAMS. In turn, SHERRY D. WILLIAMS, aided and assisted by others, prepared and filed false 2011 Forms 1040 in the names of the individuals who had provided their PII. Each fraudulent refund check that resulted from the scheme was typically in excess of $4,000. A small fraction of the refund (e.g., $400-$500) would be wired the individual whose PII was used on the offending return. The remainder of the refund proceeds were distributed among SHERRY D. WILLIAMS and her co-conspirators. According to the investigation, the individuals were never told that a Federal income tax return would be filed in their name, or that the $400-$500 payment they received was, in fact, the proceeds of fraudulent refund checks worth thousands more.
In December, 2012, while still working at HTS, SHERRY D. WILLIAMS, took steps to form her own fraudulent return mill in downtown Tarboro, North Carolina – Best Choice Financial Services (“Best Choice”). By February, 2013, SHERRY D. WILLIAMS had left HTS and was exclusively operating Best Choice with her son, THADDEUS L. WILLIAMS. From that date until approximately July, 2013, SHERRY D. WILLIAMS and THADDEUS L. WILLIAMS prepared and electronically filed nearly 200 false Federal income tax returns for tax year 2012 through Best Choice. The returns reported false household help or “HSH” income and other materially false items. Many of the taxpayers named on the returns included individuals whose PII had been used on returns previously filed by SHERRY D. WILLIAMS at HTS in connection with the “federal program money” scheme.
The investigation of this case was conducted by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Adam F. Hulbig prosecuted the case for the government.
Violent Gang Members Sentenced in Drug Conspiracy in Bladen and Columbus CountiesRead the Press Release
RALEIGH – The United States Attorney’s Office announced that in federal court today SHAWN SCHENCK, of Clarkton, North Carolina, was sentenced by Senior United States District Judge Malcolm J. Howard, to 276 months after having pled guilty to Continuing Criminal Enterprise, in violation of Title 21, United States Code Section 848. Schenck was subject to a mandatory minimum sentence of twenty (20) years for his crimes.
SCHENCK was the leader of the PIRU MOB gang operating within Columbus and Bladen Counties. He was charged along with seven other co-defendnats, who also pled guilty and were sentenced by Judge Howard. ANTHONY JEROME MCLEAN pled guilty to Continuing Criminal Enterprise, in violation of Title 21, United States Code, Section 848, and was sentenced to 168 months in federal prison; JAMES CALVIN QUINN, ORLANDO RASHAUD CHILDRESS and HASKELL TURER WILLIAMS all pled guilty to possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(a), and were sententeced to terms of imprisonment of eighty-four (84) months each; MALCOLM HARVEY pled guilty to conspiracy to distribute heroin, in violation of Title 21, United States Code, Section 846, distribution of heroin, in violation of Title 21, United States Code, Section 841(a)(1), and possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(a), and was sentenced to a term of imprisonment of sixty-two (62) months; HARRY LANE HARDIE, JR., pled guilty to possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(a), and was sentenced to a term of imprisonment of sixty (60) months; and COREY SCOTT ALFORD pled guilty to conspiracy to distribute heroin, in violation of Title 21, United States Code, Section 841(a)(1), and possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(a), and was sentenced to a term of imprisonment of forty-six (46) months imprisonment in federal prison.
The PIRU MOB, a set of the United Blood Nation operating in Columbus and Bladen Counties, had a large distribution operation, supplying heroin, cocaine, and and prescription opioids in the Clarkton, North Carolina area. This drug distribution was often accompanied by violent shootings and retaliatory acts against rival gang members. SCHENCK and MCLEAN both ordered multiple hits on individuals who affected their drug distribution operation. These orders resulted in the shooting of at least one individual and the attempted shooting of several others. Gang members were initially arrested after making a drug run to Kannapolis, North Carolina, when investigators learned that they were bringing back a gang enforcer to finish a hit on a local rival.
“This type of gang violence is intolerable,” said Acting U.S. Attorney John Stuart Bruce. “The United States Attorney’s Office is committed to dismantling drug trafficking organizations such as this one, and ensuring that their members cannot perpetrate violent acts that jeopardize the safety of our communities.”
Columbus County Sheriff’s Office greatly appreciates the assistance provided by Bladen County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Federal Bureau of Investigation; and the United States Attorney’s Office in getting these gang members off of Columbus County streets. Utilizing mutual aid optimizes the results of any investigation. Sheriff Hatcher is committed to ensuring that Columbus County residents feel safe and secure in their own environment. Sheriff Hatcher added, “Gang violence will not be tolerated in Columbus County.”
“This is a perfect example of when multiple agenies work together to combat the gang and drug problems in our two counties. I would like to extend my greatest appreciation to the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Columbus County Sheriff’s Office,” stated Bladen County Sheriff Jim McVicker.
Investigation of this case was conducted by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Columbus County Sheriff’s Office, and the Bladen County Sheriff’s Office. Assistant United States Attorney Leslie K. Cooley prosecuted the case for the United States.
Five Sentenced for Cocaine Trafficking Conspiracy in Eastern North CarolinaRead the Press Release
WILMINGTON – The United States Attorney’s Office announces that five individuals were sentenced for their involvement in a cocaine trafficking conspiracy. All five were part of the same drug trafficking organization operating in the Rocky Mount area.
The following individuals were indicted on October 22, 2015. Count 1 charged conspiracy possess with the intent to distribute cocaine from August 2015 to October 22, 2015. Counts 2, 4, & 5 charged carrying and using a firearm during and in relation to a drug-trafficking crime and possession of such firearm in furtherance of a drug trafficking crime on August 26, 2015. Count 3 charged possession of a firearm by a felon on August 26, 2015. DERRICK PITTMAN, GUILLERMO ESPINOSA, RAMIRO CALIXTRO, and ALEXIS CALIXTRO-CASAS pled guilty and were sentenced to the following. JORGE ESPINOSA was convicted after a jury trial and was sentenced to the following. The count(s) of the indictment in which each defendant was convicted is shown below:
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Derek Pittman, 32, of Battleboro, NC – Counts 1 & 4, 197 months imprisonment; 5 years supervised release
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Guillermo Monge Espinosa, 44, of Tarboro, NC – Count 1, 236 months imprisonment; 5 years supervised release
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Ramiro Calixtro, 43, of Rocky Mount, NC – Count 1, 60 monthsimprisonment; 5 years supervised release
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Alexis Calixtro-Casas, 21, of Rocky Mount, NC – Counts 1 & 5, 81 months imprisonment; 3 years supervised release
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Jorge Espinosa, 23, of Greenville, NC – Count 1, 188 months imprisonment; 5 years supervised release
In August 2015, federal and local law enforcement agencies utilized a confidential informant (CI) to arrange a two-kilogram purchase of cocaine from ALEXIS CALIXTRO-CASAS. CALIXTRO-CASAS contacted his uncle, RAMIRO CALIXTRO, a drug associate of GUILLERMO ESPINOSA, to supply the two kilograms of cocaine for the transaction. On August 26, 2015, while under the surveillance of several law enforcement agencies, CALIXTRO-CASAS and the CI met in the Wal-Mart parking lot in Rocky Mount to complete the transaction. Shortly thereafter, GUILLERMO ESPINOSA and RAMIRO CALIXTRO arrived in the parking lot. GUILLERMO ESPINOSA led the CI to the residence of DERRICK PITTMAN in the Battleboro community of Rocky Mount. GUILLERMO ESPINOSA telephoned his son, JORGE ESPINOSA, who, along with an unidentified and unindicted coconspirator, soon arrived at the PITTMAN residence with one kilogram of cocaine for the CI to inspect for quality. When they arrived, GUILLERMO ESPINOSA received a handgun and the cocaine from either the unidentified/unindicted coconspirator or from PITTMAN. After the CI was satisfied with the quality of the cocaine, the CI left PITTMAN’S residence with the intent to return with cash to purchase two kilograms of cocaine from GUILLERMO ESPINOSA. Because the number of participants involved in this transaction was much greater than law enforcement officers anticipated, the officers decided to execute simultaneous traffic stops of the vehicles driven by GUILLERMO ESPINOSA and CALIXTRO-CASAS.
Within minutes of these stops, officers raided PITTMAN’S residence and PITTMAN was apprehended. Officers seized 993.74 grams of cocaine and a loaded handgun from PITTMAN’S property. Approximately $2,000 in cash was seized from PITTMAN’S person.
Around this time, officers established surveillance at a residence on Deer Run Road in Rocky Mount where ROSA HERNANDEZ (who was initially indicted but passed away from an illness while awaiting disposition) and her daughter, GLORIA SOLANO (awaiting sentencing), were staying. Through the investigation, law enforcement linked HERNANDEZ to GUILLERMO ESPINOSA. While conducting surveillance at the Deer Run Road residence, law enforcement observed ADAN ESPINO, II (awaiting sentencing) driving the GMC onto the property. GLORIA SOLANO and ROSA HERNANDEZ also arrived at the property in a separate vehicle. Hernandez went inside the house and returned to place a bag inside the GMC. ESPINO left the property in the GMC and was stopped by officers. Numerous packages containing $141,014 in cash were seized from inside the GMC. Seven packages containing a total of $139,580 were located inside the hidden compartment.
A search of the Deer Run Road property yielded a ledger, a money-counting machine, money-packaging materials, and $8,000 in cash were seized. The investigation revealed that they packaged and delivered approximately $140,000 in cash to ESPINO at GUILLERMO ESPINOSA’S residence on August 25, 2015. Examination of the ledger revealed that 26 kilograms of cocaine were received in Rocky Mount from Texas on August 24, 2015, and that $910,000 in cash was to be transported to Texas as payment for the cocaine.
The case was investigated by the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Edgecombe County Sheriff’s Office; the Nash County Sheriff’s Office; the Rocky Mount Police Department; the Tarboro Police Department; and the Pine Tops Police Department. Special Assistant U.S. Attorney Patrick B. Weede and Assistant United States Attorney Toby Lathan prosecuted the case for the government.
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Former Santa Claus & Magician for Kid’s Parties Charged with the Manufacturing of Child Pornography Pleads GuiltyRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court yesterday, LEANDER DEWEY JONES, 64, of Raleigh, North Carolina, pled guilty before Senior United States District Judge James C. Fox, to one count of manufacturing child pornography (CP).
JONES, who was employed as a Santa Claus and magician for kids’ parties, was discovered producing CP of his two grandchildren while in his care. On May 29, 2015, Jones brought his desktop computer in for repair to a store in Raleigh, and while examining the computer hard drive for viruses and malware, a computer technician located a folder containing CP. He alerted the store owner who in turn contacted the Raleigh Police Department regarding the CP.
A state search warrant was obtained and a subsequent computer forensics examination of items seized from JONES revealed approximately 4,000 images of CP on the computer and external hard drives. Further, on the CDs and floppy discs, revealed approximately 1,000 images of CP.
At sentencing, scheduled for the court’s August 1, 2016 term, JONES faces up to 30 years imprisonment.
The criminal investigation of this case was conducted by the Raleigh Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Henderson Man Sentenced to 68 Months for Being A Felon in Possession of A FirearmRead the Press Release
NEW BERN – The United States Attorney’s Office announced that yesterday in federal court, United States District Judge Louise W. Flanagan sentenced CADARIUS RHASHA CALDWELL, 25, of Henderson to 68 months imprisonment, followed by 3 years of supervised release.
CALDWELL was named in an Indictment filed on December 16, 2015, charging him with being a Felon in Possession of a Firearm and Ammunition. On February 18, 2016, CALDWELL pled guilty to the charge.
On April 16, 2015, an officer with the Oxford Police Department initiated a traffic stop on a vehicle driven by CALDWELL after he failed to stop at a stop sign. CALDWELL told the officer that he did not have a driver’s license. CALDWELL, and a passenger, were removed from the vehicle. A subsequent search of the vehicle yielded an extended magazine underneath the driver’s seat. Officers then located a Glock 9mm handgun on the ground a few feet from the passenger side of the vehicle. The magazine in the car was a match to the firearm outside the car.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Oxford Police Department, the Henderson Police Department, and the Bureau of Alcohol Tobacco Firearms and Explosives. Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Former Marine Corps Contracting Officer Sentenced to 37 Months for ConspiracyRead the Press Release
NEW BERN – The United States Attorney’s Office announced that today in Federal court, United States District Judge Louise W. Flanagan sentenced DAVID G. LIU, 41, of Monterey, California to 37 months imprisonment, followed by 3 years of supervised release.
LIU was named in a Criminal Information filed on November 30, 2015, charging him with Conspiracy to Violate the Procurement Integrity Act. On January 13, 2016, LIU pled guilty to the charge.
John F. Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service (DCIS), stated, "Mr. Liu abandoned his obligations in a position of trust with the U.S. Marine Corps and undermined the integrity of the Federal procurement process. DCIS, in concert with our law enforcement partners, will use all available law enforcement resources to bring violators to justice to combat fraud and corruption affecting Defense programs."
"David Liu put personal profit ahead of his responsibilities to Department of the Navy and the country. NCIS will continue to assertively investigate fraud, to ensure our warfighters have every resource rightfully entitled to them and to hold accountable those who perpetrate economic crime." said Acting Special Agent in Charge Todd Battaglia, NCIS Carolinas Field Office.
Acting U.S. Attorney John Stuart Bruce remarked, “It’s disappointing that Captain David Liu abused the trust placed in him and put personal profit ahead of his duty to his country. This prosecution was the product of great work by the NCIS, DCIS, and FBI.”
During the offense period, LIU was a captain in the Marine Corps posted to the Combined Joint Task Force-Horn of Africa (CJTF-HOA) in Djibouti, Africa. As a contracting officer, LIU was entrusted to evaluate bid proposals from potential suppliers and to award government contracts that were the most appropriate and advantageous for the needs of CJTF-HOA.
A Federal investigation into LIU’s activities revealed that from September 2012 until January 2013, LIU and two government contractors conspired to exchange and use protected procurement information of competitors for the purpose of mounting successful bids for a $495,000 Blanket Purchase Agreement (BPA). The BPA was established by the United States Navy for the procurement of multimedia services in Somalia.
The investigation revealed that LIU was closely associated with the contractors and sought to abuse his position of trust as a Marine Corps contracting officer for his and their personal gain. In furtherance of the conspiracy, LIU unlawfully provided the contractors with protected bid information submitted by competing firms that were actively seeking BPA awards. The contractors, in turn, used the stolen bid information to craft their own proposals and undercut the competitors’ pricing and other terms. After all the bids were submitted to CJTF-HOA and were pending LIU’s evaluation, LIU solicited his co-conspirators to assist him in paying down a debt he owed to a supplier on an unrelated and unauthorized “side deal” for two government vehicles. The scheme included LIU’s creation of a sham government contract for the vehicles worth $28,000, the awarding of the contract to the Ugandan contractor, and the diversion of the resulting government funds back to LIU through a complex series of pre-ordained international wires and withdrawals.
The government contractors with whom LIU conspired were based in Jacksonville, North Carolina, and Kampala, Uganda, respectively. Contractor Monroe Allen Stueber, Jr. pled guilty to one count of unlawfully obtaining procurement information on October 15, 2015 and was sentenced to 3 years of probation on February 23, 2016.
Investigation of this case was conducted by the Naval Criminal Investigative Service (NCIS) and Defense Criminal Investigative Service (DCIS), with the assistance of the Federal Bureau of Investigation. Assistant United States Attorney Adam F. Hulbig prosecuted the case for the government.
Wilson Man Sentenced for Drug Trafficking and Firearm OffensesRead the Press Release
RALEIGH – The United States Attorney’s Office announced that yesterday in federal court, Senior United States District Judge James C. Fox sentenced DENNIS TAYLOR, 55, of Wilson to 154 months imprisonment, followed by 5 years of supervised release.
TAYLOR was named in a two-count Indictment filed on May 7, 2015, charging him with Conspiracy to Distribute and Possess with the Intent to Distribute 28 grams or more of cocaine base (crack) and Using and Carrying a Firearm During and in Relation to a Drug-Trafficking Offense and aiding and abetting. On September 28, 2015, TAYLOR pled guilty to both Counts of the Indictment.
From September, 2013 to June, 2014, detectives with the Wilson County Sheriff’s Office Special Operations Division conducted an investigation involving the distribution of crack cocaine and firearms in the Rainwater and Artis Road area of Lucama. The investigation began as deputies had responded to this area of the county for numerous years for various complaints to include illegal street racing and drug activity. Throughout the course of the investigation, detectives seized a total of nearly 200 grams of crack cocaine and 12 firearms to include two .22 caliber rifles, two 7.62 SKS rifles, three .22 caliber pistols, a 9mm pistol, a .45 caliber pistol, a .17 caliber rifle, a 20 gauge shotgun, and a .380 pistol. A majority of the firearms that were seized throughout the investigation had been reported stolen. This case was part of Operation E.O.G. (Education Over Guns), an initiative conducted in June 2014.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, & Explosives and the Wilson County Sheriff’s Office with Detective Brandon Barbrey the lead investigator. Assistant United States Attorney Edward D. Gray prosecuted the case for the government.
Department of Justice Launched Inaugural National Reentry WeekRead the Press Release
RALEIGH – As part of the Obama Administration’s commitment to strengthening the criminal justice system, the Department of Justice designated the week of April 24-30, 2016, as National Reentry Week. Attorney General Loretta E. Lynch and U.S. Department of Housing and Urban Development Secretary Julián Castro traveled to Philadelphia yesterday, to hold events as part of National Reentry Week with public housing advocates, legal services providers and community leaders where they announced new efforts to improve outcomes for justice-involved individuals including youth.
The U.S. Attorney’s Office for the Eastern District of North Carolina (USAO-EDNC) will host a Reentry and Crime Prevention Conference on Thursday, April 28, 2016 at the North Carolina State Bureau of Investigation’s Auditorium located at 3320 Garner Road, Raleigh 27610. The press is invited to attend the conference beginning at 1:00 p.m. A variety of speakers will present at the conference representing USAO-EDNC’s partnerships with federal, state and local agencies on topics such as the judicial perspective on reentry and crime prevention; the reentry efforts at the Federal Bureau of Prisons in preparing individuals before they are released from federal incarceration; the state of North Carolina’s reentry efforts; and a panel discussion by members of the Capital Area Reentry Council.
“Too often, justice-involved individuals who have paid their debt to society confront daunting obstacles to good jobs, decent housing, adequate health care, quality education, and even the right to vote,” said Attorney General Lynch. “National Reentry Week highlights the many ways that the Department of Justice – and the entire Obama Administration – is working to tear down the barriers that stand between returning citizens and a meaningful second chance – leading to brighter futures, stronger communities, and a more just and equal nation for all.”
The Obama Administration has taken major steps to make our criminal justice system fairer, more efficient and more effective at reducing recidivism and helping formerly incarcerated individuals contribute to their communities. Removing barriers to successful reentry helps formerly incarcerated individuals compete for jobs, attain stable housing, and support their families. An important part of that commitment is preparing those who have paid their debt to society for substantive opportunities beyond the prison gates, and addressing collateral consequences to successful reentry that too many returning citizens encounter.
EDNC Acting United States Attorney John Stuart Bruce stated: “Our office is committed to helping formerly incarcerated citizens who are returning to their communities. Our goal is to help them become productive, law-abiding citizens and help break the cycle of recidivism.”
National Reentry Week events are being planned in all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands. U.S. Attorney’s Offices alone are hosting over 200 events and BOP facilities are holding over 370 events.
Credentialed members of the media are invited to attend. For additional information please e-mail Don Connelly at [email protected].
Manufacturer of Defective North Carolina Bridge Parts Sentenced to 35 Months in Federal PrisonRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court before United States District Judge Terrence W. Boyle, JOEL DE LA TORRE, 34, of Chicago, Illinois, was sentenced to serve 35 months in federal prison on charges of Making False Statements Concerning Highway Projects, and Aggravated Identity Theft. The defendant was also ordered to serve a 3 year term of supervised release and to make restitution.
In October of 2011 a federal highway contractor discovered a defect in a grouping of elastomeric bridge bearings that had been shipped for use on bridges in North Carolina. An elastomeric bridge bearing is a slab of rubber that is reinforced with multiple layers of steel and placed underneath bridges to absorb shock. The bearings were defective because the steel plates were exposed, subjecting them to the elements and creating the potential for deterioration. The North Carolina Department of Transportation began an investigation and found systematic problems with the bearings that had been shipped, and in some instances installed, on bridge projects throughout the state. In total, 1,270 of the shipped bearings were found to be nonconforming and defective. The bearings were shipped in connection with 25 different highway projects in North Carolina between May of 2009 and October of 2011. Upon further investigation, the Department of Transportation found that many of the bridge bearings had come from a company named Delgado Elastomeric Bearings Corporation located in the Chicago area.
The United States Department of Transportation conducted a criminal investigation into the creation and shipment of the defective bridge bearings. It was discovered that the North Carolina application to supply the bridge bearings to local contractors had been forged. The name of a teenager with no knowledge of how to manufacture bridge bearings was fraudulently used on the application. This teenager was also held out by Delgado Elastomeric Bearings Corporation as the vice president of the company, when in fact, the teenager had no idea of this title. This same name and title had also been used on all certificates sent to North Carolina highway contractors certifying the conformity of the bearings with applicable state and federal regulations.
Ultimately, the investigation revealed that the defendant, JOEL DE LA TORRE, had forged the name of the teenager on the documents described above. Inspection of the Chicago facility used to manufacture the bridge bearings revealed that the facility did not contain the required testing devices and machinery which would have revealed the defects in the bridge bearings.
Although not presently incurred, costs associated with the replacement of the bearings are expected over time to exceed $5 million due to the difficulty in removing the bearings from beneath existing structures, engineering costs, and traffic control. Federal and state agencies have reported that there is no immediate threat to safety due to the faulty bearings, which will be monitored and replaced over time.
On March 2, 2016, the defendant’s brother, Santiago De La Torre, pleaded guilty in federal court to his role in the scheme, and to perjury. Santiago De La Torre’s sentencing is presently scheduled for the court’s June 20, 2016 term.
The investigation of this case was conducted by the United States Department of Transportation, Office of the Inspector General, with the assistance of the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore represented the United States.
Former Polk Correctional Officer Sentenced for CorruptionRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court, Chief United States District Judge James C. Dever III sentenced JASON DEAN, 30, of Henderson to 51 months imprisonment, followed by 3 years of supervised release.
DEAN was named in a four-count Indictment filed on August 19, 2015, and he pled guilty to Count 2 relating to his use of his position as a correctional officer at Polk Correctional Institution (Polk) to extort things of value.
In July 2014, the Federal Bureau of Investigation (FBI) in Raleigh initiated an investigation related to the smuggling of contraband into Polk in Butner, by correctional officers. DEAN used his position to obtain property and money from at least three inmates at Polk.
On February 9, 2015, DEAN seized a custom made gold grill (a gold plate shaped in the form of teeth designed to fit over an individual’s natural teeth) from an inmate as contraband. DEAN failed to turn the contraband over to his superiors or file the appropriate forms documenting the seizure. Instead, DEAN secreted the gold grill from the institution. On February 18, 2015, DEAN pawned the grill for $35.
Further investigation revealed that DEAN also provided several inmates with pieces of paper containing his name, address, and phone number in order to facilitate monetary wire transfers. Specifically, DEAN promised to supply the inmates with contraband cigarettes if the inmates wired him money through Western Union. One inmate wired DEAN $175 in February 2015; however, DEAN failed to provide the cigarettes as promised. In March 2015, DEAN resigned from his position at Polk.
Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorneys Dennis M. Duffy and Leslie K. Cooley prosecuted the case for the government.
Federal Judge Sends Raleigh Identity Thief Back to Prison for 84 MonthsRead the Press Release
Raleigh – The United States Attorney’s Office announced that today in federal court, Chief United States District Judge James C. Dever, III, sentenced MAMADOU JALLOW, 32, of Raleigh, to serve 60 months in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft and Conspiracy to Commit Access Device Fraud. The court also revoked JALLOW’s prior term of supervised release and sentenced him to an additional 24 months in prison to run consecutive. The total amount of prison time imposed on the charges and revocation of supervised release amounted to 84 months.
The indictment charged that JALLOW and others engaged in a scheme to acquire, among other things, large quantities of cigarettes in North Carolina and elsewhere using counterfeit gift cards. The gift cards utilized by JALLOW and others in the scheme were counterfeit because the data encoded in the magnetic strip of the cards had been altered to contain credit and debit card numbers that were not encoded upon them at the time they were manufactured. Conspirators acquired stolen credit and debit card data from sources on the internet. JALLOW and others received the stolen credit and debit card data in the form of internet email accounts to which they had access. Conspirators used the stolen credit and debit card data to fraudulently re-encode cards for later use to purchase cigarettes and other items.
The indictment further charged that after acquiring several counterfeit cards, JALLOW, and other conspirators used the cards, and caused the cards to be used, to purchase numerous cartons of cigarettes. The conspirators would generally travel from one store to another in a vehicle during a single trip to acquire a large volume of cigarettes. After acquiring the cigarettes, conspirators would transport them to other states to be resold at a profit.
The scheme was brought to an end in July and August of 2014 when JALLOW was caught attempting to make a purchase using the counterfeit cards. At the time the defendant committed the scheme, he was already serving a term of federal supervised release for a prior conviction for access device fraud in South Carolina.
Investigation of the case was conducted by the United States Secret Service. Assistant United States Attorney William M. Gilmore represented the United States.
Maryland Man Sentenced to 9 Years for Hobbs Act Robbery in Oxford, NCRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court, United States District Judge Terrence W. Boyle sentenced BERNARD SINGLETON, 67, of Clinton, Maryland to 108 months imprisonment, followed by 5 years of supervised release.
SINGLETON was named in an Indictment filed on August 19, 2015, charging him with Robbery of a Business Engaged in Interstate Commerce and Aiding and Abetting on January 18, 2015. On November 12, 2015, SINGLETON pled guilty to the charge.
On January 18, 2015, SINGLETON and an accomplice entered the ZMart convenience store in Oxford, North Carolina, and locked the door behind them. SINGLETON pointed a firearm at the clerk while the accomplice walked behind the counter and punched the victim in the face. SINGLETON approached the victim, who was on the ground, put the gun to the back of his head, and demanded money. The accomplice removed money from the cash register. SINGLETON forced the victim into the office and demanded money from the safe, which was on a 10-minute delay. While waiting for the safe to open, SINGLETON kept the gun pointed on the victim’s head. SINGLETON and the accomplice removed the money from the safe. They also stole the victim’s wallet, which contained United States currency along with his credit cards and driver’s license. SINGLETON and the accomplice stole $9,100 in United States currency, which included several old coins, and cartons of cigarettes.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Oxford Police Department, Creedmoor Police Department and the State Bureau of Investigation. Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Henderson Man Sentenced to 241 Months for String of Robberies in Granville CountyRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court, United States District Judge Terrence W. Boyle sentenced JOHNNIE ANTHONY MANSON, 24, of Henderson to 241 months imprisonment, followed by 5 years of supervised release.
MANSON was named in a Criminal Information filed on August 14, 2015, charging him with Armed Bank Robbery, Aiding and Abetting; two counts of Hobbs Act Robbery and Aiding and Abetting; and Discharging a Firearm in Furtherance of a Crime of Violence and Aiding and Abetting. On September 28, 2015, MANSON pled guilty to all four counts and he agreed to pay restitution of $1,715 to SunTrust Bank, $2,815.02 to Bowen’s Mini Mart, and $3,847 to Berea Mini Mart. Shaquan Manson was previously sentenced to 166 months imprisonment on November 17, 2014, for his involvement in the Bowens Mini Mart robbery and discharge of a firearm.
On March 20, 2013, JOHNNIE MANSON and another entered the SunTrust Bank located in Creedmoor, wearing masks and possessing a firearm. They left the bank with $1,715 in U.S. Currency.
On July 7, 2013, MANSON and his brother, Shaquan Manson, entered Bowen’s Mini Mart located in Oxford, North Carolina, wearing ski masks and possessing a handgun. The two left with $2,500 in U.S. currency. While leaving Bowen’s, a shot was fired back in to the store.
On August 2, 2013, JOHNNIE MANSON, and another, entered the Berea Mini Mart located in Oxford, North Carolina, wearing a mask and gloves. The two approached the cashier, pointed the firearm at the cashier, and demanded money. The cashier complied and provided them with $3,847 in U.S. currency.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Federal Bureau of Investigation, the Creedmoor Police Department, the State Bureau of Investigation, and the Granville County Sheriff’s Office. Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Arrest Made in Compromise of U.S. Army Computer ProgramRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that MITTESH DAS of Atlanta, Georgia, was indicted for intentionally causing damage to a U.S. Army computer program by transmitting malicious information, code, and command on a protected computer. DAS made his initial appearance in federal court today in the Northern District of Georgia.
The Grand Jury in the Eastern District of North Carolina indicted DAS on April 5, 2016.
The charges are punishable by up to 10 years imprisonment, a fine of up to $250,000, and a term of supervised release of up to 3 years.
The charges and allegations contained in the indictment are merely accusations. The defendant is considered innocent unless and until proven guilty in a court of law.
"As charged, Mr. Das allegedly exploited his position as a cleared defense contractor to sabotage the U.S. Army Reserve's personnel system and disrupt pay to our nation's Soldiers," said Director Daniel Andrews of the Computer Crime Investigative Unit, U.S. Army Criminal Investigation Command. "Cybercrime and insider threats present significant challenges to national security and military operations, and we will continue to root out those responsible and help bring violators to justice."
The case is being investigated by U.S. Army CID. CID was assisted during the arrest by the Johns Creek, Georgia, Police Department. Assistant United States Attorney Jason Kellhofer is representing the government in this case.
Lumberton Man Sentenced to 140 Months for Firearms & Drug Trafficking OffensesRead the Press Release
GREENVILLE – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, Senior United States District Judge Malcolm J. Howard, sentenced BALAL THEO CHOUDHARY, a/k/a Paco Choudhary 28, of Lumberton, North Carolina, to 140 months imprisonment, followed by 5 years of supervised release.
On October 5, 2015, CHOUDHARY pled guilty to Possession of a Firearm by a Felon, Possession with Intent to Distribute a Quantity of Cocaine and a Quantity of Marijuana, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime.
According to the investigation, in December 2013, detectives with the Lumberton Police Department, Drug Enforcement Unit, initiated an investigation into the drug distribution activities of CHOUDHARY. Leading up to December 2013, the police department received a number of complaints
regarding CHOUDHARY’S possession of firearms and the distribution of drugs from his residence in Lumberton. Detectives conducted a controlled purchase of 0.1 gram of cocaine base from CHOUDHARY in December, 2013.
On December 13, 2013, detectives conducted a search of CHOUDHARY’S residence and found 3 handguns, approximately 62 grams of marijuana, cocaine, and cocaine base, U.S. currency, scales, and drug paraphernalia.
The criminal investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lumberton Police Department, and the Robeson County Sheriff’s Office. Assistant United States Attorney S. Katherine Burnette handled the prosecution on behalf of the Eastern District of North Carolina.
Weldon Man Sentenced for Selling Crack CocaineRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, United States District Judge Terrence W. Boyle, sentenced LUTHER ALLEN TERRY, 33, of Weldon, North Carolina, to 96 months in prison and 10 years of supervised released for distribution of crack cocaine. TERRY previously pled guilty to this charge on September 4, 2015.
On April 16 and 17, 2014, the Halifax County Sheriff’s Office used an informant to buy crack cocaine from TERRY twice near the Weldon High School in Weldon, N.C.
TERRY received an enhanced punishment as a career offender based on his two prior state convictions for selling cocaine.
The investigation of this case was conducted by the Halifax County Sheriff’s Office. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Raleigh Man Sentenced to 15 Years for Human TraffickingRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court, United States District Judge Terrence W. Boyle sentenced MAURICE MALIK SPENCER, 22, of Raleigh, North Carolina, to 180 months imprisonment, followed by 10 years of supervised release.
SPENCER was named in a six count Indictment filed on June 9, 2015. On December 9, 2015, SPENCER pled guilty to one count of Use of the Internet to Promote Prostitution and one count of Interstate Transportation for Prostitution (Mann Act).
The investigation revealed that SPENCER transported two female victims, one of whom was a 14-year-old female, from New York to North Carolina to engage in prostitution. Once in North Carolina, the defendant prostituted a third female victim as well. The defendant prostituted the two adult victims in September and November 2014; he also prostituted the 14-year-old victim in November 2014.
The defendant promoted his business by advertising the victims on internet websites and through social media websites such as Facebook. He also used websites such as Facebook to recruit his victims.
Throughout, the defendant used violence and threats of violence to control his victims and coerce them into continuing in prostitution. After his arrest, the defendant continued to threaten two victims.
Investigation of this case was conducted by the Federal Bureau of Investigation and the Greenville Police Department. Assistant United States Attorney Erin Blondel represented the government.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Four Indicted for Robbery and Firearm OffenseRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that a federal grand jury in Raleigh, North Carolina returned a three count indictment charging JAMES STEPHEN THORPE a/k/a J1, JOSHUA RAYSHAWN MELVIN a/k/a J.O., ERVIN MONTEZ ALSTON, JR. a/k/a Wes or Wesley, and JAHID PRESTON DIGGS with conspiring to commit interference with commerce by robbery; interference with commerce by robbery; and discharging a firearm during and in relation to a crime of violence and aiding and abetting.
The investigation revealed that on March 16, 2015, THORPE, MELVIN, ALSTON and DIGGS committed a home invasion and robbery of the victim and others in the victim’s residence. During the robbery, the victim was shot and others in the home were injured and threatened. All four defendants are in custody awaiting their next court appearance.
If convicted, the defendants face up to 20 years’ imprisonment on both robbery counts. They also face not less than 10 years’ imprisonment and up to life imprisonment for the firearms offense.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Bureau of Investigation’s Raleigh Durham Safe Streets Task Force, Durham County Sheriff’s Office, Durham Police Department, Morrisville Police Department, Orange County Sheriff’s Office, North Carolina State Highway Patrol, North Carolina Alcohol Law Enforcement, and the North Carolina Department of Probation and Parole.
2 More in Identity Theft and Cigarette Trafficking Ring Sentenced to Federal PrisonRead the Press Release
Raleigh – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday, Chief United States District James C. Dever, III, sentenced MAMADOU LAMARANA BAH, 25, of New York, to serve 72 months in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft and Conspiracy to Commit Access Device Fraud. The sentence follows a prior hearing on January 26, 2016 in which codefendant ALPHA OUMAR DIALLO, 24, of New York, was sentenced to 95 months in prison and 3 years of supervised release. BAH and DIALLO were also both ordered to make restitution to victims.
The indictment charged that DIALLO and BAH engaged in a scheme to acquire, among other things, large quantities of cigarettes in North Carolina and elsewhere using counterfeit gift cards. The gift cards utilized by DIALLO and BAH in the scheme were counterfeit because the data encoded in the magnetic strip of the cards had been altered to contain credit and debit card numbers that were not encoded upon them at the time they were manufactured. Conspirators acquired stolen credit and debit card data from sources on the internet. DIALLO and others received the stolen credit and debit card data in the form of internet email accounts to which they had access. Conspirators used the stolen credit and debit card data to fraudulently re-encode cards for later use to purchase cigarettes and other items.
The indictment further charged that after acquiring several counterfeit cards, DIALLO and BAH used the cards, and caused the cards to be used, to purchase numerous cartons of cigarettes. The conspirators would generally travel from one store to another in a vehicle during a single trip to acquire a large volume of cigarettes. After acquiring the cigarettes, conspirators would transport them to other states to be resold at a profit.
The scheme was brought to an end on January 31, 2014 when DIALLO AND BAH attempted to continue the fraud at a gas station Halifax County. The two were caught in possession of numerous counterfeit cards and other evidence of the crime.
Investigation of the case was conducted by the United States Secret Service, with the assistance of the Halifax County Sheriff’s Office, the Wake County Sherriff’s Office, and Raleigh Police Department. Assistant United States Attorney William M. Gilmore represented the United States.
Wilson Man Sentenced to 130 Months for Heroin Trafficking and Firearms ChargesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, United States District Judge Terrence W. Boyle, sentenced DUPREE TURNER, 29, of Wilson, North Carolina, to a total of 130 months in prison and 5 years of supervised released for three counts of distribution of heroin, one count of possession of firearm by a felon and brandishing a firearm during and in relation to a drug trafficking crime. TURNER previously pled guilty to these charges on November 5, 2015.
Between January 22, 2015, and April 16, 2016, the Greenville Regional Drug Task Force and Wilson Police Department used informants to buy a total of 800 bags of heroin from TURNER during five controlled purchases in Greenville and Wilson. During the controlled purchase on April 16, 2015, TURNER possessed and brandished a handgun. TURNER was arrested in Greenville following the last purchase. Agents located two additional handguns during a search of TURNER’S residence in Wilson. TURNER was prohibited from possessing firearms due to his 2007 convictions in New Jersey for robbery, conspiracy to commit robbery and possession of a sawed-off shotgun.
The investigation of this case was conducted by the Greenville Regional Drug Task Force, the Wilson Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Pitt County Behavioral Health Businessman Sentenced to 20 Years in Federal Prison for Medicaid FraudRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, TERRY LAMONT SPELLER, 38, of Winterville, North Carolina, was sentenced to 240 months in federal prison and 3 years of supervised release following his prior guilty plea to Health Care Fraud, and Engaging in Monetary Transactions in Criminally Derived Property. SPELLER was also ordered to make restitution of $5,962,189.77 to the victims of the offense, which included the North Carolina Medicaid program and a physician, whose name and identification number SPELLER used to commit the fraud.
Acting United States Attorney John Stuart Bruce stated, “Speller defrauded the taxpayer and attempted to intimidate a federal witness. The U.S. Attorney’s Office will vigorously prosecute those who steal from a program designed to help the less fortunate and those who try to subvert the justice system by threatening witnesses.”
“Speller thought his clever scheme, which included billing for services never rendered, identity theft and a sham nonprofit was undetectable. He was clearly outwitted by law enforcement,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “Today, Speller received a bill for hard prison time and millions of dollars payable to U.S. taxpayers.”
Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation said, “IRS, Criminal Investigation is committed to ‘following the money,’ in this case the taxpayer dollars purloined from the Medicaid system, and removing the financial incentive of crime.”
The Criminal Information to which SPELLER pleaded guilty provides that between 2010 and 2015, TERRY LAMONT SPELLER was an individual doing business through various Outpatient Behavioral Health and Outpatient Health Service providers in Pitt County and surrounding areas within the Eastern District of North Carolina. Through these providers, SPELLER recruited hundreds of Medicaid beneficiaries, mostly children, from various communities in Eastern North Carolina to receive alleged services compensable by Medicaid.
In 2010, North Carolina’s Division of Medical Assistance (DMA), which administers the Medicaid program in this state, began an investigation of one of SPELLER’s companies based upon allegations that the company was billing for services that were not actually rendered. DMA requested that SPELLER produce the underlying medical records to support the provider’s prior claims to Medicaid. SPELLER did not provide records to support the services that were billed. As such, the provider was suspended from further participation in Medicaid programs, and DMA would have rejected further attempts by SPELLER to become a provider.
Count One of the Criminal Information alleged that SPELLER affiliated himself with various other providers that he, and others working with him, used to bill the Medicaid program for millions of dollars in fraudulent claims. Count Two of the Criminal Information charged that SPELLER converted approximately $1 Million of the fraud proceeds into alleged loan payments to a third party. Despite investigation, however, no documentation was recovered to support the existence of the loans. The loan proceeds were then transferred back to SPELLER in cash.
Although SPELLER pleaded guilty, he contested numerous sentencing enhancements, resulting in a full day of testimony and argument before Senior United States District Judge James C. Fox. At sentencing, the Government’s evidence showed that SPELLER began fraudulently billing the Medicaid program in 2010 in connection with a Medicaid provider he operated, known as Carter Behavior Health Services. The evidence showed that stacks of fraudulent medical records were generated to bill the government for fictitious services. After learning of the fraud, North Carolina’s Division of Medical Assistance (DMA), suspended the defendant’s company as a Medicaid provider.
The evidence showed, however, that SPELLER continued to find ways to defraud the Medicaid program. Testimony at the sentencing hearing revealed that SPELLER used the names of other providers, some of which were operated through companies placed in the names of close family members, to continue to submit fraudulent claims.
Much of the testimony focused upon SPELLER’S involvement with a clinic known as the “Medical Office” which operated in Greenville, North Carolina. The evidence showed that SPELLER defrauded the Medicaid program by submitting an altered check to the program for the purposes of establishing a direct deposit into a bank account of an alleged nonprofit business operated by SPELLER, known as Distinct Advantage Behavior Health. After establishing this direct deposit, SPELLER and others fraudulently caused Medicaid to pay out some $4.9 million in funds.
Special Agents with North Carolina’s Medicaid Investigations Division, the United States Department of Health and Human Services Office of the Inspector General, and the Internal Revenue Service Criminal Investigation, executed search warrants at the Medical Office and Distinct Advantage Behavior Health in October of 2014. In a safe inside the defendant’s office, agents recovered the fraudulent check used by SPELLER to deceive the Medicaid program. Agents also found no medical records to support the $4.9 million paid into the defendant’s bank account.
SPELLER’s scheme was halted in May of 2015 when he threatened to kill a witness against him. Evidence at the sentencing hearing showed that when the witness indicated that they would testify against SPELLER, SPELLER drove the witness off of a roadway and displayed a firearm. SPELLER was arrested shortly thereafter on a federal warrant, and has been in custody since that time.
The investigation of this case was conducted by agents of the North Carolina State Bureau of Investigation assigned to the Medicaid Investigations Division of the North Carolina Attorney General’s Office; The Internal Revenue Service - Criminal Investigation; and the United States Department of Health and Human Services Office of the Inspector General. The investigation and prosecution of this matter is being handled in a partnership between the United States Attorney’s Office for the Eastern District of North Carolina and the Medicaid Investigations Division of the North Carolina Attorney General’s Office. Assistant United States Attorney William M. Gilmore of the Economic Crimes Division, and Special Assistant United States Attorney Daniel Spillman of the Medicaid Investigations Division of the North Carolina Attorney General’s Office, each represented the United States.
If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS- TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Ayden Man Sentenced to More Than 19 Years for Receipt of Child PornographyRead the Press Release
NEW BERN – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court, United States District Judge Louise W. Flanagan sentenced ANDREW DALE MOORE, 29, of Ayden, North Carolina, to 235 months imprisonment, followed by a lifetime of supervised release and a $5,000 fine.
MOORE was named in an eleven count Indictment filed on May 12, 2015. On July 15, 2015, MOORE pled guilty to one count of Receipt of Child Pornography.
The investigation revealed that on September 15, 2014, ANDREW DALE MOORE, a registered sex offender in Pitt County, North Carolina, contacted his sex offender counselor and acknowledged reoffending. Specifically, MOORE indicated that his criminal activities began between the ages of 14 and 16 and since that time, he has had sexual contact with at least 17 minor females between the ages of 2 to 14. Additionally, the defendant acknowledged reoffending since his release from custody on July 8, 2013, as well as possessing child pornography.
Based on the information, the Pitt County Sheriff’s Office
obtained a search warrant. On September 16, 2014, a search was completed at MOORE’s residence in Ayden, North Carolina. During the search, agents located and seized two computers, two cellular phones, multiple media storage devices, compact discs (CD’s) and digital video discs (DVDs). Forensic examination revealed child pornography (CP) on one of MOORE’s cellular phones. Agents determined that the defendant utilized the phone to access the internet and search for CP through peer-to-peer (P2P) file sharing programs.
The defendant provided an unprotected statement to agents in which he acknowledged receiving and collecting CP through the use of a P2P program. Additionally, the defendant obtained CP after he met individuals with similar interests on social networking sites. MOORE advised that he chatted with individuals who sent files containing CP to him through a Dropbox link. Agents were able to recover at least 150 still images and 50 videos containing CP from MOORE’s Dropbox account. Additionally, forensic examination uncovered at least 1,000 images and 100 videos stored on the defendant’s cellular phone. The defendant’s collection contained material that portrayed sadistic or masochistic conduct. Based on the investigation, MOORE is responsible for receiving and possessing at least 12,400 images of CP through the use of a computer or interactive computer service.
Investigation of this case was conducted by the Pitt County Sheriff’s Office. Assistant United States Attorney Ethan Ontjes represented the government.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Rocky Mount Man Receives over 10 Years for Drug and Gun PossessionRead the Press Release
GREENVILLE – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, Senior United States District Judge Malcolm J. Howard sentenced DETRAY MAURICE WILLIAMS, 37, of Rocky Mount, North Carolina, to 144 months imprisonment, followed by 5 years of supervised release.
DETRAY MAURICE WILLIAMS was named in an eight count Indictment returned on May 19, 2015. On October 5, 2015, WILLIAMS pled guilty to possession with intent to distribute cocaine base, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon.
According to the investigation, on January 22, 2014, officers attempted to stop WILLIAMS and he fled from officers on foot. During their pursuit, officers observed WILLIAMS remove a handgun from his jacket pocket and throw it to the ground. Officers retrieved the pistol and also located a bag containing crack cocaine on the ground in the area where WILLIAMS was ultimately arrested. On October 9, 2014, WILLIAMS, a convicted felon, was again stopped by law enforcement who located a rifle in the backseat of his vehicle.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Rocky Mount Police Department and Nash County Sheriff’s Office. Assistant United States Attorney Carrie Randa represented the government.
Smithfield Man Sentenced to 235 Months for Distribution of Child PornographyRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, Senior United States District Judge James C. Fox sentenced james owen hagins, 44, of Smithfield, North Carolina, to 235 months imprisonment, followed by a lifetime of supervised release.
HAGINS was named in a three count Indictment filed on September 9, 2015, charging him with one count of Distribution of Child Pornography and two counts of Receipt And Possession Of Child Pornography. On November 30, 2015, HAGINS pled guilty to the Distribution of Child Pornography.
The investigation revealed that on July 2, 2015, agents with the U.S. Marshal’s Service questioned HAGINS in regard to his relationship with an individual under investigation in Tennessee for the kidnapping and sexual abuse of a minor female. HAGINS is a registered sex offender who had been convicted previously of Indecent Liberties with a Child and Third Degree Sexual Exploitation of a Minor in Johnston County in 1995 and 2004, respectively. HAGINS admitted that he had been in contact with the suspect in Tennessee and met him in a chat room. The suspect has since been arrested and the minor child safely located and returned to her family.
On July 5, 2015, HAGINS admitted that he had exchanged images of child pornography for several months. He also admitted to exchanging images of child pornography with several other individuals he met in a chat room.
On July 10, 2015, agents with the Federal Bureau of Invetigation (FBI) executed a search warrant on HAGINS home in Smithfield and seized a computer, multiple cell phones, and multiple media storage devices. Forensic examination of these devices uncovered more than 2,000 images and 487 videos of child pornography.
Investigation of this case was conducted by the United States Marshal’s Service, the Federal Bureau of Investigation, and the Johnston County Sheriff’s Office. Assistant United States Attorney Ethan Ontjes represented the government.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Jacksonville Man Sentenced to 151 Months for Receipt of Child PornographyRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, Senior United States District Judge James C. Fox sentenced RONALD LESLIE PIERCE, Jr., 53, of Jacksonville, North Carolina, to 151 months imprisonment, followed by 10 years of supervised release.
RONALD LESLIE PIERCE, JR. was named in an eleven count Indictment filed on March 3, 2015, charging him with receipt and possession of child pornography. On November 2, 2015, PIERCE pled guilty to possession of child pornography and on November 9, 2015, PIERCE pled guilty to receipt of child pornography.
On November 6, 2013, Detectives with the Cabarrus County Sheriff’s Office identified a suspect computer sharing child pornography via an internet peer to peer file sharing network. Detectives were able to identify the IP address from the suspect computer to PIERCE and were able download images of child pornography from PIERCE. Agents with the SBI subsequently searched the computers and other devices from the defendant’s Jacksonville, North Carolina home, revealing that PIERCE had downloaded thousands of images and videos of child pornography.
Investigation of this case was conducted by the State Bureau of Investigation and the Cabarrus County Sheriff’s Office. Assistant United States Attorney Carrie Randa represented the government.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
First of Three Co-Defendants Sentenced in Gun Trafficking CaseRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, Senior United States District Judge James C. Fox sentenced AHKEEM DONTE PRATT, 24, to 188 months imprisonment, followed by 3 years of supervised release.
AHKEEM DONTE PRATT and two co-defendants were named in a seventeen count Indictment filed on March 24, 2015, charging him with conspiracy, theft of firearms from Federal Firearms Licensees, possession of stolen firearms, possession of a firearm by a convicted felon, interstate transportation of stolen firearms, and dealing in firearms without a license. On November 30, 2015, PRATT pled guilty to conspiracy, theft of firearms from a Federal Firearms Licensee, possession of a firearm by a convicted felon, and interstate transportation of stolen firearms.
According to the investigation, beginning in August, 2014, and continuing until December 5, 2014, PRATT and two co-defendants broke into numerous Federal Firearm Licensees around Eastern and Central North Carolina, stealing almost 200 firearms. PRATT and his co-defendants used various tools, including bolt cutters and hammers, to gain entry into such businesses to steal the firearms. Most of these incidents were captured on store surveillance video. Agents were able to obtain DNA from one of the tools left behind at the scene of a robbery and it matched a co-defendant. On two occasions PRATT and others drove to New Jersey and sold the stolen firearms to a third party. The stolen firearms were ultimately recovered from crime scenes in North Carolina, Pennsylvania, Maryland, and New Jersey, among other places. The crimes to which the recovered firearms were linked included various violent crimes, including rape, a robbery, and a murder.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Carrie Randa represented the government. The two remaining co-defendants will be sentenced at later dates.
Mount Olive Man Sentenced to 35 Years for Methamphetamine Manufacturing and DistributionRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, Senior United States District Judge James C. Fox, sentenced RANDALL STEWART HILL, 39, of Mount Olive, North Carolina, to 420 months’ imprisonment followed by a lifetime of supervised release.
On November 13, 2015, HILL was found guilty in a jury trial of Conspiracy to Manufacture, Distribute, Dispense, and Possess with the Intent to Distribute a Mixture and Substance Containing 500 Grams or more of Methamphetamine from January 2010 to April 8, 2015.
The investigation revealed that HILL was involved in manufacturing and distributing methamphetamine (meth) in Duplin
County, North Carolina, from at least January 2010 to April 8, 2015. Manufacturing meth requires many ingredients found in over-the-counter cold medicine, as well as other commonly found ingredients. Multiple cooperating witnesses explained how HILL arranged for numerous individuals, commonly referred to as “smurfs,” to obtain the pseudoephedrine (pseudo) through purchase at various stores. HILL then used the pseudo to cook meth and compensated the “smurfs” by providing them with meth.
On April 21, 2010, a deputy with the Duplin County Sheriff’s Office attempted to conduct a traffic stop of a vehicle driven by HILL for a traffic infraction. HILL stopped his vehicle at a residence frequented by meth users and sellers. HILL was observed moving around inside the vehicle and looked as though he was reaching beneath the seat. HILL refused the deputy’s orders to exit the vehicle. As a second deputy attempted to gain entrance to the passenger side of the vehicle, HILL rapidly accelerated and drove away. Deputies pursued HILL as he drove down a dirt path and entered a field. HILL’S vehicle began to slow down and the officer attempted to block HILL’S driver’s side door to prevent HILL from jumping from the vehicle, but HILL accelerated and struck the deputy’s vehicle with his own vehicle in the right front quarter panel. A short time later, HILL was taken into custody by other responding units.
Investigators located two plastic bags with electrical tape wrapped around them along the path they had been driving in pursuit of HILL. About five feet from the bags, deputies recovered .1 gram of meth. A search of HILL’S pants pockets and wallet revealed a sum of $1,806 in United States currency, which converts to 18.6 grams of meth. A HILL is responsible for an estimated amount of 729.57 grams of meth from at least January 2010 to April 8, 2015. HILL possessed at least one firearm and maintained a premise for manufacturing meth. HILL manufactured meth and created a substantial risk of harm to the life of a minor and involved an individual who was less than 18 years of age in the offense. HILL paid at least five individuals with meth to purchase pseudo. As such, HILL acted as a manager of a criminal activity involving five or more participants. Finally, HILL recklessly created a substantial risk of death or serious bodily injury to another person in the course of fleeing from a law enforcement officer.
The criminal investigation of this case was conducted by the North Carolina State Bureau of Investigation and the Duplin County Sheriff’s Office and the Drug Enforcement Administration. Assistant United States Attorney Jennifer Wells handled the prosecution on behalf of the Eastern District of North Carolina.
Harnett County Man Sentenced to 9 Years for Unlawful Possession of FirearmRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today Chief United States District Judge James C. Dever, III, sentenced SHANE JAMES SHIRLEY, 32, of Erwin, North Carolina, to 108 months’ imprisonment followed by 3 years’ supervised release.
On September 23, 2015, a Federal Grand Jury returned a Criminal Indictment charging SHIRLEY with unlawful possession of a firearm and ammunition while subject to a domestic violence protection order. On October 29, 2015, SHIRLEY pled guilty to the charge.
According to the investigation, on June 2, 2015, a domestic violence protection order was filed against SHIRLEY which prohibited him from possessing firearms and from having any contact with his wife. On June 21, 2015, the Harnett County Sheriff’s Office responded to a home invasion at a residence in Lillington. SHIRLEY, pointed an AR-15 style rifle through the window of a residence, and then kicked in the front door. SHIRLEY threatened and terrorized the victims inside the residence with the firearm. SHIRLEY fled the residence on foot and was later captured near the residence. Officers found a loaded 30-round magazine in the driveway and a bulletproof vest. SHIRLEY’S jacket, a loaded Smith and Wesson M&P 15 semi-automatic 5.56 caliber AR-15 style rifle with scope and magazine were located in the woods near the residence. SHIRLEY was located approximately 100 yards from the residence and was taken into custody.
The criminal investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Harnett County Sheriff’s Office, and the North Carolina State Highway Patrol. Assistant United States Attorney Jane J. Jackson handled the prosecution on behalf of the Eastern District of North Carolina.
Fayetteville Man Sentenced to 8 Years for Unlawful Possession of FirearmRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today Chief United States District Judge James C. Dever, III, sentenced TIRREIL MARIO MAYNOR, 33, of Fayetteville, North Carolina, to 96 months’ imprisonment followed by 3 years’ supervised release.
On July 21, 2015, a Federal Grand Jury returned a Criminal Indictment charging MAYNOR with unlawful possession of a firearm by a convicted felon. On October 29, 2015, MAYNOR pled guilty to the charge.
According to the investigation, on September 26, 2014, the Cumberland County Sheriff’s Office was dispatched to a residence on Ireland Drive regarding the discharge of a firearm and a robbery. The investigation revealed that MAYNOR, a convicted felon, discharged a firearm inside the residence and stole a television from the residence. Earlier in the evening, MAYNOR fired a gun at another location and threatened to kill several individuals. MAYNOR fled the Ireland Drive residence and proceeded to drive down Ireland Drive and shot the back window out of the vehicle in front of him. On September 29, 2014, MAYNOR was arrested and found in possession of a loaded .25 caliber semi-automatic pistol. Ballistics linked the firearm to the various shootings that took place on September 26, 2014.
The criminal investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Cumberland County Sheriff’s Office, and the Fayetteville Police Department. Assistant United States Attorney Jane J. Jackson handled the prosecution on behalf of the Eastern District of North Carolina.
Two Middlesex Men Plead Guilty to Drug ConspiracyRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, THURMAN STANCIL, 69, and HAROLD DEVON SCARBORO, 25, both of Middlesex, pleaded guilty to conspiracy to distribute cocaine, cocaine base (crack), and marijuana. As part of his plea, STANCIL agreed to forfeit real property located at 357 Barns Lake Road, Middlesex, NC. Both men face a maximum of twenty years imprisonment.
Investigation of this case was conducted by the Johnston County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Lawrence Cameron represented the government.
Manufacturer of Defective North Carolina Bridge Parts Pleads Guilty to Conspiracy and PerjuryRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that SANTIAGO DE LA TORRE, 45, of Joliet, Illinois, pleaded guilty today to Counts One and Seventeen of the indictment, which charge him with Conspiracy to Make False Statements Concerning Highway Projects, and Perjury.
The indictment alleged that SANTIAGO DE LA TORRE and his brother, Joel De La Torre, residents of Illinois, opened a business called Delgado Elastomeric Bearings Corporation (DEBC). Through DEBC, the defendant and his brother manufactured and sold elastomeric bridge bearings, which are effectively shock absorbers for bridges. The defendant and his brother sold the bearings for use by multiple North Carolina highway contractors on numerous bridges in the state.
Joel De La Torre previously pled guilty on April 16, 2015 to one count of Making False Statements Concerning Highway Projects and Aggravated Identity Theft; aiding and abetting.
The indictment alleges that between 2009 and October of 2011, SANTIAGO DE LA TORRE and Joel De La Torre carried out a scheme to manufacture and sell bridge bearings on federal and state highway contracts in North Carolina as though an individual, identified as “A.D.,” was a vice president of DEBC with knowledge of the company’s operations. In fact, A.D. was a minor who was paid a wage by SANTIAGO DE LA TORRE and Joel De La Torre. A.D. had no knowledge or training in how to manufacture Bridge Bearings. A.D. was not, to his knowledge, a vice president of DEBC. The indictment further alleged that the defendant and his brother forged an application with the State of North Carolina to be able to supply bridge bearings on highway projects within the state.
The indictment further alleged that with each shipment of bridge bearings, SANTIAGO DE LA TORRE and his brother falsified various documents concerning the quality and testing of the bridge bearings. The indictment alleged that the certifications were false and fraudulent for various reasons, including the fact that SANTIAGO DE LA TORRE and Joel De La Torre fabricated the test results listed in the certifications.
The indictment further alleges that federal and state construction contractors received and relied upon the false and fraudulent certifications.
With respect to the count of perjury, the indictment alleges that SANTIAGO DE LA TORRE lied to the federal grand jury sitting in this District. At that time, the grand jury was engaged in an investigation concerning who created the false certifications.
The maximum punishment for the count of Conspiracy to Make False Statements Concerning Highway Projects, and the count of Perjury, is up to five years in prison for each count, a $250,000.00 fine for each count, and 3 years of supervised release.
The investigation of this case was conducted by the Federal Bureau of Investigation and the United States Department of Transportation, Office of the Inspector General. Assistant United States Attorney William M. Gilmore represents the United States.
Greenville Tax Preparer Sentenced to 90 Months in Prison for Tax Fraud Conspiracy and Aggravated Identity TheftRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday, February 25, 2016, Senior United States District James C. Fox entered judgment against TONYA MARIE BATTLE, 37, of Greenville, North Carolina, sentencing her to serve a total of 90 months in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft and Conspiracy to Defraud the United States on Claims. BATTLE was also ordered to make restitution of $1,635,515 to the Internal Revenue Service.
The investigation showed that BATTLE, with the assistance of others, devised a scheme to file fraudulent personal income tax returns with the IRS. BATTLE and those working at her direction, recruited individuals to participate in the scheme and offered those individuals significant refunds through the use of their name and identifying information.
In January, 2011, BATTLE opened TBS Tax Service in Greenville, North Carolina, and filed returns using an Electronic Filing Identification Number (EFIN). BATTLE also established a business account with Drake Software and purchased their products to electronically prepare and e-file income tax forms. BATTLE also established an account with EPS Financial Services to print refund checks in her office.
BATTLE used the personal information of TBS Tax Service’s clients to create and e-file false Form 1040s. Once the returns were accepted and funded by the IRS, BATTLE printed refund checks in her office. BATTLE then contacted clients and informed them their checks were available. BATTLE had several office assistants, one of whom was a “strongman”, who escorted clients to a nearby check cashing service in Greenville. BATTLE instructed office assistants to take a portion of most checks as additional fees and return the cash to BATTLE. Some clients had refund checks of as much as $6,000, of which BATTLE would collect the majority.
To carry out the scheme, BATTLE created and used at least 14 fictitious companies. BATTLE applied for Employer Identification Numbers (EINs) through the IRS website for each company, and then provided false names, addresses, and employees for each business. BATTLE then created fictitious Form 1099s for the TBS Tax Service clients using the IRS website to make it appear as though the TBS Tax Service clients had income from the fake companies.
To carry out the scheme BATTLE also utilized a list of dependents, consisting of the names and social security numbers of various children. BATTLE added various dependents’ names to TBX Tax Service client Form 1040s to maximize profits under the scheme.
The investigation established that between January, 2011, and April, 2012, BATTLE filed, or caused to be electronically filed, 366 fraudulent returns with the IRS, which resulted in a loss of $1,635,515 to the government.
On July 13, 2015, BATTLE pleaded guilty to Counts One and 35 of the Indictment, which charged her, respectively, with Conspiracy to Defraud the United States on Claims, in violation of Title 18, United States Code, Section 286; and Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A.
Investigation of BATTLE’s case was conducted by the Internal Revenue Service Criminal Investigation. Assistant United States Attorney William M. Gilmore represented the United States.
Former Bank Employees Sentenced for Making False EntriesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced today in federal court, Chief United States District Judge James C. Dever, III, sentenced APRIL LYNN LOCKLEAR, 36, of Rowland, North Carolina, to 24 months’ imprisonment, followed by 3 years of supervised release. LOCKLEAR was also ordered to pay $500,000 in restitution, jointly and severally, with CHONA KAY OXENDINE, 32, of Shannon, North Carolina. OXENDINE was sentenced to 30 months’ imprisonment, followed by 3 years of supervised release.
On March 24, 2015, LOCKLEAR and OXENDINE were indicted by a federal grand jury on 16 counts related to crimes committed while they were employed by the Lumbee Guaranty Bank headquartered in Pembroke, North Carolina. As a result of a robbery of the branch in Red Springs, North Carolina, on April 9, 2010, an internal audit was conducted and revealed that $500,000 was missing, in addition to the money stolen during the bank robbery.
On November 23, 2015, LOCKLEAR and OXENDINE pled guilty to conspiring to make false entries in bank records.
The investigation of this case was conducted by the Federal Bureau of Investigations. Assistant United States Attorney Felice McConnell Corpening represented the government.
John Michael Wade Pleads Guilty to Conspiracy to Defraud A Cary, NC CompanyRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court, JOHN MICHAEL WADE, 63, pled guilty to Conspiracy to commit wire fraud. As part of his plea, WADE agreed to pay $219,304 in restitution. He faces a maximum of five years imprisonment.
The Criminal Information WADE pled guilty to charged that he and a co-conspirator contracted with a company in China to supply tools to their company headquartered in Cary, NC. WADE, his coconspirator, and the Chinese company reached an agreement to inflate the invoices to WADE’S company. After WADE’S company paid the inflated invoices to the Chinese company, the Chinese company paid the inflated amounts to WADE’S coconspirator, who in turn split the proceeds with WADE. Wade incorporated a business to receive his share of the proceeds.
The criminal investigation of this case was conducted by Internal Revenue Service Criminal Investigation. Assistant United States Attorney David Bragdon handling the case on behalf of the government.
Scotland Neck Man Sentenced for Selling HeroinRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, Chief United States District Judge James C. Dever, III, sentenced GERALD WHITAKER, 41, of Scotland Neck, North Carolina, to 120 months in prison and 3 years of supervised released for distribution of heroin. WHITAKER previously pled guilty to these charges on November 23, 2015.
Between June 21, 2013, and July 22, 2013, the Halifax County Sheriff’s Office and the North Carolina Alcohol Law Enforcement used an informant to buy 182 doses of heroin from WHITAKER on four occasions in Scotland Neck, N.C.
WHITAKER received an enhanced punishment as a career offender based on his four prior state convictions for selling cocaine.
The investigation of this case was conducted by the Halifax County Sheriff’s Office and the North Carolina Alcohol Law Enforcement. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
North Carolina Grocery Store Owner Sentenced to Prison for ConspiracyRead the Press Release
WASHINGTON – A Wendell, North Carolina man was sentenced to 20 months in prison today following his plea of guilty to commit theft of government funds, Acting Assistant Attorney General Caroline D. Ciraolo of the Department of the Justice’s Tax Division and Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina announced.
According to court documents, Jose Alfonso Rodriguez Collado, 54, operated two grocery stores in Middlesex and Siler City, North Carolina. In 2012, co-conspirators brought Rodriguez fraudulently obtained U.S. Treasury checks, which Rodriguez cashed without receiving identification for the individuals listed on the checks, or any other source of authority for the co-conspirators to cash the checks. Rodriguez initially was not a licensed check casher, but one co-conspirator gave him $50,000 to qualify for a check-cashing license. In exchange for cashing the fraudulently obtained U.S. Treasury checks, Rodriguez was paid a fee for cashing the checks in excess of that allowed for under North Carolina law. In addition, Rodriguez cashed checks in excess of $10,000 and failed to file Currency Transaction Reports as required by law. The conspiracy caused a loss to the government of $2,502,348.
In addition to the prison term, U.S. District Court Judge Louise W. Flanagan of the Eastern District of North Carolina ordered Rodriguez to serve three years of supervised release following his prison term, and pay restitution to the IRS in the amount of $2,502,348.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Bruce commended special agents of Internal Revenue Service Criminal Investigation who investigated the case and Trial Attorneys Lauren Castaldi and Nathan Brooks of the Tax Division, who prosecuted the case.
More information about the Tax Division and its enforcement efforts can be found on the division’s website.
Former Software Company Employee Sentenced to 30 Months in Prison for Sending Damaging Computer Code to Company ServersRead the Press Release
A Union, New Jersey, man was sentenced today to 30 months in prison following his guilty plea to one count of causing the transmission of computer code and, as a result, damaging computers and causing at least $5,000 in losses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina and Special Agent in Charge John A. Strong of the FBI in North Carolina.
Nikhil Nilesh Shah, 33, was sentenced by U.S. District Judge Louise W. Flanagan of the Eastern District of North Carolina, who also ordered Shah to pay $324,462 in restitution.
According to the plea agreement, from 2007 to 2012, Shah was an information technology manager at Smart Online Inc., a company located in Durham, North Carolina, that developed platforms for the creation of mobile applications. Shah admitted that in March 2012, he left Smart Online to work for another technology company, and on June 28, 2012, he sent malicious computer code to Smart Online’s computer servers in Durham and Raleigh, North Carolina, deleting much of Smart Online’s intellectual property.
The FBI’s Raleigh Office investigated the case. Senior Trial Attorney Richard D. Green of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina prosecuted the case.
Former Software Company Employee Sentenced to 30 Months in Prison for Sending Damaging Computer Code to Company ServersRead the Press Release
WASHINGTON – A Union, New Jersey, man was sentenced today to 30 months in prison for one count of causing the transmission of computer code and, as a result, damaging computers and causing at least $5,000 in losses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina and Special Agent in Charge John A. Strong of the FBI in North Carolina.
Nikhil Nilesh Shah, 33, was sentenced by U.S. District Judge Louise W. Flanagan of the Eastern District of North Carolina, who also ordered Shah to pay $324,462 in restitution.
According to the plea agreement, from 2007 to 2012, Shah was an information technology manager at Smart Online Inc., a company located in Durham, North Carolina, that developed platforms for the creation of mobile applications. Shah admitted that in March 2012, he left Smart Online to work for another technology company, and on June 28, 2012, he sent malicious computer code to Smart Online’s computer servers in Durham and Raleigh, North Carolina, deleting much of Smart Online’s intellectual property.
The FBI’s Raleigh Office investigated the case. Senior Trial Attorney Richard D. Green of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina are prosecting the case.
North Carolina Man Pleads Guilty in U.S. Treasury Check SchemeRead the Press Release
WASHINGTON – A Smithfield, North Carolina man pleaded guilty today to one count of a dual object conspiracy to defraud the United States and commit theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina.
According to court documents, Oscar Barahona Fiallos, 52, owned and operated a tax preparation business in Smithfield. In 2011 and 2012, Fiallos cashed large numbers of U.S. Treasury checks issued as a result of fraudulent tax returns filed with the Internal Revenue Service (IRS) in the names of third parties. The checks were provided to Fiallos by co-conspirators and Fiallos never met the third-party payees, who purportedly lived in New York, New Jersey and North Carolina. Fiallos deposited the checks into his bank account and then provided co-conspirators with cash equal to the value of the check, less a check cashing fee. After a bank account was closed, Fiallos obtained a check cashing license so that he could continue cashing checks for his co-conspirators. He also prepared Individual Taxpayer Identification Number applications and false tax returns for third parties he did not meet and who did not sign the documents.
Fiallos faces a statutory maximum sentence of five years in prison. In his plea agreement, he has agreed to pay restitution to the United States in the amount of $2,802,496. The sentencing hearing is set for June.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Bruce commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Lauren M. Castaldi and Nathan P. Brooks of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Man Pleads Guilty in Tax Refund Fraud SchemeRead the Press Release
WASHINGTON – A Raleigh, North Carolina, man pleaded guilty today to one count of conspiracy to commit theft of public money and one count of theft of public money, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina announced.
According to court documents, in 2011 and 2012 Wilfredo Acosta Hidalgo, 47, conspired with check cashers to cash U.S. Treasury refund checks issued as a result of fraudulently-filed income tax returns. Hidalgo provided the check cashers with U.S. Treasury checks issued to third-parties in whose name the fraudulent returns were filed. The check cashers deposited the U.S. Treasury checks into their business bank accounts and provided Hidalgo with cash equal to the value of the U.S. Treasury checks, less a check-cashing fee. The third-party payees were not present when the Treasury checks were cashed.
Hidalgo faces a statutory maximum sentence of five years in prison for the conspiracy charge and 10 years in prison for the charge of theft of public funds. In his plea agreement, he has agreed to pay restitution to the United States in the amount of $4,280,871. Hidalgo’s sentencing has not been scheduled.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Bruce commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Lauren Castaldi and Nathan Brooks of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Husband & Wife Indicted for Conspiracy to Commit Mail Fraud by Filing Fraudulent Alien Income Tax ReturnsRead the Press Release
GREENVILLE – The United States Attorney’s Office for the Eastern District of North Carolina announced that a federal grand jury in Greenville returned an Indictment charging, PERFECTO RUANO, 56, and WALDA LUNA, 45, both of Wallace, North Carolina, of conspiracy to commit mail fraud by filing fraudulent income tax returns with the United States Department of Treasury. LUNA was also charged with three counts of filing false personal income tax returns, two counts of mail fraud and two counts of aggravated identity theft. According to the Indictment, LUNA falsely claimed two individuals as her dependents and failed to report all of her business income.
Thomas J. Holloman, IRS Special Agent in Charge of the Charlotte field office, said "tax refund fraud is a serious crime, and while the conduct detailed in the Indictment is an allegation, it outlines a complex, criminal scheme to defraud the Internal Revenue Service and the hard working American taxpayers.
“Tax fraud is an outrage to hard-working Americans everywhere who fulfill their obligation to society by paying their fair share,” said Special Agent in Charge of Homeland Security Investigations Atlanta Field Office Nick S. Annan. “Criminals who attempt to cheat the system and steal from law-abiding citizens will continue to be a major priority for HSI.”
According to the criminal complaint filed on January 5, 2016, RUANO and LUNA used post office boxes and physical addresses controlled by them to obtain more than one million dollars in fraudulent refunds from the Internal Revenue Service (IRS) through a program designed for individuals earning income in the United States, who are not eligible to obtain social security numbers but can obtain an Individual Tax Identification Number (ITIN). An ITIN can be obtained from the IRS by presenting original or certified copies of foreign identification documents to include passports, birth certificates and school records. The ITIN applicant must also establish a tax purpose, which is usually satisfied by filing an income tax return reflecting income earned in the United States by that individual. Dependents claimed on those returns, which are not eligible for a SSN, may also obtain an ITIN.
LUNA, who owned and operated a retail store in Wallace, had been licensed by the North Carolina Commission of Banks to cash checks. According the the criminal complaint, between January 2009 and May 2012, 2,760 U.S. Treasury refund checks with a total face value of $12,104,825.90 were deposited into a bank account controlled by the defendants. During this same time frame, LUNA withdrew $11,888,300 in cash by writing checks to cash.
On or about May 2014, the couple was stopped by the Arkansas State Police as they were driving west on Interstate 40. The police found $1,789.520 in cash in the vehicle. Most of the cash had been wrapped into nine large bundles and hidden in two safes and a cardboard box. The following day, the Duplin County Sheriff’s Office observed, in the couple’s Wallace residence, three empty cardboard boxes partially wrapped in packing tape consistent in shape and size to the bundles of currency seized from the vehicle in Arkansas. The Duplin County deputies also seized documents from their residence consistent with use for tax preparation services, foreign identification documents issued by the Republic of Honduras and Guatemala to individuals other than RUANO and LUNA, and over 300 ITIN letters issued by the IRS to individuals other than RUANO and LUNA. A laptop computer was seized from LUNA’S retail store, which contained tax files for fraudulent ITIN returns filed with the IRS. Refund checks were issued for 75 of these fraudulent ITIN returns and were deposited into the couple’s bank account.
The maximum penalty the couple can receive for the conspiracy charge is 20 years’ imprisonment. LUNA faces additional penalties for the other charges, including two mandatory minimum sentences of two years for each of the aggravated identity theft charges. The Indictment also seeks forfeiture of the monies seized in Arkansas, several tracts of land owned by the defendants in Duplin County and a money judgment of at least $2,944,799. United States Magistrate Judge Robert Jones previously ordered the couple detained pending trial.
The Internal Revenue Service – Criminal Investigations has led the investigation of this case with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Postal Inspection Service, and the Duplin County Sheriff’s Office.