Western District of North Carolina
Press releases recorded for this federal judicial district.
Federal Court Grants Temporary Restraining Order Against Operators of “Get-Rich-Quick” SchemeRead the Press Release
CHARLOTTE, N.C. – U.S. District Court Judge Robert J. Conrad entered a Temporary Restraining Order (TRO) today against three Florida residents and three companies, to stop them from further operation of a predatory mass mailing scheme and from continuing to violate the criminal mail fraud statute.
According to the civil complaint filed on April 5, 2021, Keivy Chavez a/k/a Kamilo Correa, Jhon F. Palacio a/k/a Richard Diamond, Sr., and John Doe a/k/a Tom Jowarski, through several fictitious business entities including KC Promotions a/k/a Miracle Profits, TJ Ads and CS Enterprises, allegedly engaged in an ongoing chain letter mass mailing fraud scheme that has targeted thousands of victims across the United States, especially the elderly. The complaint also alleges that the defendants’ efforts have resulted in significant financial harm to their victims.
According to the complaint, the defendants allegedly made material misrepresentations and fraudulent statements through deceptive mass mailings in the form of chain letters and Internet advertisements, to induce victims to enroll in one or more of their fictitious “money-making” programs, including the “Cash and Gold Tycoon Program” and the “MAJOR BUX! HUGE BUZZ!! Money Making Program.” The complaint states that the defendants induced the victims by promising exponential profits in the form of cash, commission payments, gold coins and silver bars, among other things. The complaint also states that many victims relied on the defendants’ fraudulent misrepresentations and paid over $1,000 each to enroll in the fraudulent programs, only to receive nothing in return. According to the complaint, since February 2021, the defendants have sent thousands of unlawful mass mailings, and during the same time frame the United States Postal Inspection Service (USPIS) has collected over 30 mailings, including enrollment applications and payments, addressed to KC Promotions, from victims residing in 18 states, including in North Carolina.
According to the filed complaint, USPIS has issued a notice alerting the public about these types of fraudulent schemes, warning consumers they could be commiting a federal crime.
The TRO entered today by the U.S. District Court bars the defendants and their companies from continuing to engage in such predatory schemes to prevent further harm to potential victims.
In making today’s announcement, Acting U.S. Attorney Stetzer commended Postal Inspectors with USPIS for conducting this investigation.
The enforcement action is handled by Assistant U.S. Attorneys Katherine Armstrong and James B. Gatehouse, of the U.S. Attorney’s Office in Charlotte.
The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.
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In March 2019, the U.S. Attorney's Office announced the Elder Justice Initiative, which aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educate older adults on how to identify scams and avoid becoming victims of financial fraud; and promote greater coordination with law enforcement partners. For more information please visit: https://www.justice.gov/usao-wdnc/elder-justice-initiative
In addition to mass mail fraud schemes, other financial scams targeting seniors are:
- Lottery phone scams – in which the callers convince seniors that a large fee or taxes must be paid before they can receive lottery winnings.
- Grandparent scams – which convince seniors that their grandchildren are in trouble and need money to make rent, repair a car, or even money for bail.
- Romance scams – which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose.
- IRS imposter scams – which defraud victims by posing as IRS agents and claiming that victims owe back taxes.
- Sham business opportunities – which convince victims to invest in lucrative business opportunities or investments.
To avoid falling victim to a financial scam:
- Don’t share personal information with anyone you don’t know.
- Don’t pay a fee for a prize or lottery winning.
- Don’t click on pop-up ads or messages.
- Delete phishing emails and ignore harassing phone calls.
- Don’t send gift cards, checks, money orders, wire money, or give your bank account information to a stranger.
- Don’t fall for a high-pressure sales pitch or a lucrative business deal.
- If a scammer approaches you, take the time to talk to a friend or family member.
- Keep in mind that if you send money once, you’ll be a target for life.
- Remember, it’s not rude to say, “NO.”
- A good rule of thumb is, if it’s too good to be true, it’s likely a scam.
If you have been contacted by a scammer or believe you have fallen victim to a scam, please contact the Justice Department’s Elder Fraud Hotline at 1-833-Fraud-11 (1-833-372-8311). The National Elder Fraud hotline was created for the public to report fraud against individuals who are age 60 or older. The hotline is open seven days a week. For more information about the hotline, please visit https://stopelderfraud.ovc.ojp.gov/.
Charlotte Man Is Sentenced to 16 Years in Prison for the Armed Robbery of A Dollar General StoreRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Kenneth D. Bell ordered Ishmeel Qyshawn Chapman, 20, of Charlotte, to serve 16 years in prison and three years of supervised release, on charges stemming from the April 2020 armed robbery of a Dollar General store, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Johnny Jennings of the Charlotte-Mecklenburg Police Department (CMPD) join Acting U.S. Attorney Stetzer in making today’s announcement.
According to court documents and today’s sentencing hearing, on April 23, 2020, Chapman and another individual entered the Dollar General store located at 8825 WT Harris Boulevard in Charlotte. Upon entering, Chapman’s accomplice pointed a firearm at customers and a store employee, while Chapman grabbed a customer by the arms and forced him to the cash register counter. Court records show that the store employee complied with the robbers’ demands and opened the store’s first cash register, and Chapman’s accomplice began taking money out of it. While the employee was attempting to open the second cash register, Chapman struck the employee on the right side of her head, knocking her to the ground. Court records indicate that Chapman then took the firearm from his accomplice and pointed it at several customers, which included a one-year old child, and ordered the customers to hand over their purses and wallets.
According to court records, Chapman and his accomplice stole $510 from the cash register and fled the scene. As he was leaving the store, Chapman pointed a firearm at a customer and then struck the customer on the shoulder with the gun. CMPD officers alerted to the robbery located Chapman’s getaway vehicle and Chapman was arrested shortly thereafter. At the time of Chapman’s arrest, law enforcement also located the firearm used during the store robbery.
On December 1, 2020, Chapman pleaded guilty to robbery of a business affecting interstate commerce, or “Hobbs Act” robbery, and possession and brandishing a firearm during, in relation to, and in furtherance of a crime of violence.
Chapman is currently in federal custody in the Western District of North Carolina and will be transferred into the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked the FBI and CMPD for their investigation of this case.
The prosecution for the government was handled by Assistant U.S. Attorney Christopher Hess of the U.S. Attorney’s Office in Charlotte.
South Carolina Man Pleads Guilty in Scheme Involving Fraudulent Business Accounts That Defrauded Lowe's of More Than $450,000Read the Press Release
CHARLOTTE, N.C. – Bobby Cherry, 58, of Manning, South Carolina, appeared before U.S. Magistrate Judge David C. Keesler yesterday and pleaded guilty to wire fraud conspiracy, for his role in a scheme that defrauded Lowe’s of more than $450,000, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Stetzer is joined in making this announcement by Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte.
According to filed plea documents and today’s court hearing, from August 2019 to March 2020, Cherry and his two co-defendants, Russell Leroy Calvin and Michael Marcel Montgomery, along with other co-conspirators, defrauded Lowe’s through a scheme involving fraudulent business accounts. According to court records, Cherry and his co-defendants created fictional landscaping and home improvement companies to open fraudulent business accounts with Lowe’s, which they then used to make multiple purchases at stores in the Charlotte area and throughout North Carolina, South Carolina and Georgia. Court records show that, once the fraudulent business accounts were approved and funded, the codefendants used them to purchase expensive landscaping equipment, such as zero turn mowers and other items. In total, during the course of the scheme, the co-conspirators opened at least 25 such fraudulent business accounts which they used to obtain more than $450,000 in fraudulently purchased goods. The scheme involved local Lowe’s stores in Mecklenburg, Gaston, Union, Lincoln, Cleveland, and Iredell Counties.
Cherry pleaded guilty to wire fraud conspiracy which carries a maximum sentence of 20 years in prison and a $250,000 fine. Michael Marcel Montgomery pleaded guilty to the same charge on February 1, 2021. A sentencing date for Cherry and Montgomery has not been set. The charges against the third co-defendant, Russell Leroy Calvin, are still pending, and Calvin is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked ICE-HSI for their investigation of the case.
Assistant United States Attorney William Bozin, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
Career Coach Pleads Guilty to Stealing More Than $68,000 from Federally Funded Workforce Development ProgramRead the Press Release
CHARLOTTE, N.C. – Jessica Anne Miller, 38, of Hickory, N.C., pleaded guilty to federal charges today for stealing more than $68,000 from a federally funded workforce development program, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. U.S. Magistrate Judge David C. Keesler presided over the plea hearing.
Acting U.S. Attorney Stetzer is joined in making this announcement by Rafiq Ahmad, Special Agent-in-Charge, Atlanta Region, U.S. Department of Labor Office of Inspector General (DOL-OIG).
According to filed plea documents and today’s court hearing, from July 2016 to November 2019, Miller was employed as a career coach by an entity contracted by a nonprofit association of local governments to provide training to job seekers, using federal funds made available by the U.S. Department of Labor under the Workforce Innovation and Opportunity Act (WIOA). WOIA was signed into law in 2014, and it is designed to provide qualified individuals with access to training, education, and support services, and assistance with obtaining employment. As part of WOIA, qualified individuals can also be reimbursed for certain eligible expenditures such as mileage, costs and fees, and tools of the trade, among others.
According to court records, as career coach, Miller was responsible for providing career guidance, case management and follow up to participants in the youth program. As Miller admitted in court today, while serving as a career coach, she engaged in a scheme to divert more than $68,000 of government funds for her own benefit, by creating bogus documents, falsifying signatures, and making false and misleading statements to qualified individuals who were supposed to be the recipients of the WOIA funds.
According to court records, to perpetuate the scheme, in some instances Miller created fraudulent documents for mileage reimbursement on behalf of students enrolled in the program, and then cashed the checks and kept the proceeds for herself. When victims inquired about the status of their mileage reimbursement claims, Miller gave numerous bogus excuses, including that the program no longer had reimbursement funds available. In other instances, court records show that Miller created fraudulent documents that falsely indicated student-victims had received vaccines and were seeking reimbursements for the costs associated with those vaccines, when in truth and fact the student-victims had not received the vaccines, had no knowledge of the reimbursement forms submitted on their behalf, and did not receive the checks issued in their names. Instead, Miller kept the reimbursement checks, forging the signatures of the student-victims so that she could cash the checks and keep the proceeds for herself.
In other instances, Miller created fraudulent documents that falsely indicated that qualified individuals had made reimbursable purchases, such as tools of the trade, and were seeking reimbursement for those costs. Miller then submitted the fraudulent documents and cashed the reimbursement checks. Miller also created and submitted fraudulent documents, forging student-victims’ signatures, indicating that student-victims had successfully completed certain milestones that would have entitled them to gift cards. Instead of providing those gift cards to the student-victims, Miller kept them for herself.
As Miller admitted in court today, Miller also fraudulently opened bank accounts in the names of at least two student-victims and used those accounts to cash the fraudulent reimbursement checks. Additionally, Miller opened American Express accounts in the names of three student-victims, which she subsequently used to deposit some of the fraudulently obtained reimbursement checks. In total, Miller defrauded at least 40 individuals and diverted more than $68,000 in government funds for her own personal enrichment.
Miller pleaded guilty to wire fraud scheme, which carries a maximum prison term of 20 years and a $250,000 fine. Following today’s plea hearing, Miller was released on bond. A sentencing date for Miller has not been set.
In making today’s announcement, Acting U.S. Attorney Stetzer commended DOL-OIG for their investigation of the case and thanked the North Carolina State Bureau of Investigation and the Conover Police Department for their invaluable assistance.
Assistant United States Attorney Maria Vento, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
Court Enters $4.5 Million Judgment Against Owner of Defunct Urine Drug Testing Laboratory Resolving Allegations of Participation in Kickback SchemesRead the Press Release
CHARLOTTE, N.C. – Acting United States Attorney for the Western District of North Carolina William T. Stetzer announced today that the United States District Court for the Western District of North Carolina entered final judgment in the amount of $4.5 million against Douglas Smith, resolving the United States’ claims against Smith, one of the former owners of Physicians Choice Laboratory Services (PCLS), a now-defunct diagnostic testing laboratory formerly located in Charlotte, North Carolina and Rock Hill, South Carolina. Smith consented to entry of final judgment against him to resolve allegations that he violated the Anti-Kickback Statute (AKS), and, as a result, caused PCLS to submit millions of dollars in false claims for reimbursement to the Medicare program in violation of the federal False Claims Act (FCA).
In June of 2019 the United States filed its Complaint in Intervention asserting FCA claims against Smith, PCLS and other agents of the laboratory based on allegations that they participated in various schemes to offer or provide benefits to physicians in exchange for the referral of patient samples for drug testing. The United States contended that such conduct violated the AKS, which specifically forbids any person or entity from knowingly and willfully offering, paying, soliciting, or receiving remuneration to influence the referral of items or services reimbursable by a federal health care program, and, that as a result, it was entitled to recover damages under the FCA.
This settlement resolves the United States’ allegations that from September 2012 through July 2014, PCLS submitted false claims to the Medicare program as a result of Smith’s payment of kickbacks to the owner of a medical practice in Knoxville, Tennessee.
Last week, the U.S. Attorney’s Office for the Western District of North Carolina announced that another defendant, Philip McHugh, also a former owner of PCLS, had agreed to pay over $2 million to resolve claims asserted by the United States that he participated in schemes to illegally induce physicians to refer patients to PCLS for urine drug testing. In December of 2019, the U.S. Attorney’s Office announced that another defendant, Manoj Kumar, a former sales representative and manager of PCLS, had paid $649,407 to resolve similar claims.
The United States’ civil action was filed in the District of North Carolina following the filing of two whistleblower complaints under the qui tam provisions of the FCA, titled United States ex rel. Jenkins et al. v. Physician’s Choice Laboratory Services et al., originally filed in the Eastern District of Tennessee, and United States ex rel. Hartnett & Shoched v. Physicians Laboratory Services, LLC et al., originally filed in the Middle District of Florida, which were transferred to the Western District of North Carolina and consolidated under Civil Case No. 17-cv-37.
Resolution of this matter was the result of coordinated efforts and investigation by the U.S. Department of Health and Human Services Office of the Inspector General and U.S. Attorney’s Office. The claims resolved by entry of the judgment are allegations only and there has been no determination of liability.
Convicted Sex Offender in Gastonia, N.C. Is Sentenced to 12 Years for Possession of Child PornographyRead the Press Release
CHARLOTTE, N.C. – Acting U.S. Attorney William T. Stetzer announced that Joseph Soldano, 44, of Gastonia, N.C., was sentenced to 12 years in prison today for possession of child pornography. In addition to the prison term imposed, U.S. District Judge Frank D. Whitney ordered Soldano to serve a lifetime of supervised release, to register as a sex offender after he is released from prison, and to pay $22,000 in special assessment fees and $3,000 as restitution.
According to information contained in filed documents and statements made in court, in April 2019, law enforcement determined that an individual later identified as Soldano was using the Kik instant messaging application to communicate with another individual about the sexual abuse of minors, and to receive images containing visual depictions of minors engaging in sexually explicit conduct. Law enforcement visited Soldano’s residence and seized a cell phone. A forensic review of the seized device revealed that Soldano possessed multiple images and videos depicting the sexual abuse of children, including toddlers and infants. On August 18, 2020, Soldano pleaded guilty to possession of material containing child pornography that involved a prepubescent minor. At the time he committed the offense, Soldano was required to register as a sex offender based on his 2001 conviction of Second Degree Sexual Abuse involving an 8-year-old female victim in New York.
In making today’s announcement, Acting U.S. Attorney Stetzer commended the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) for their investigation of the case, and thanked the Gaston County Police Department for their invaluable assistance.
Assistant U.S. Attorneys Cortney Randall and Emily Wasserman, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Two Men Are Sentenced to Prison for Selling Stolen FirearmsRead the Press Release
CHARLOTTE, N.C. – Acting U.S. Attorney William T. Stetzer announced that Gevon Marquise King and Michael Dwane Williams were sentenced to prison late yesterday for selling stolen firearms and related firearm offenses. U.S. District Judge Kenneth D. Bell sentenced King, 35, of Hickory, N.C., to 144 months in prison followed by three years of supervised release, and ordered Williams, 22, also of Hickory, to serve 72 months in prison and two years under court supervision.
According to filed court documents and information presented at the sentencing hearings, from November 2019 to July 2020, King and Williams engaged in the unlawful sale of numerous firearms, some of which were stolen. Court records show that, over the course of the investigation, law enforcement determined that Williams was responsible for several vehicle break-ins in Burke County, from which firearms were stolen. King conspired with Williams to sell the stolen firearms, which included a short barrel rifle, a machine gun, a semi-automatic shotgun, several semi-automatic rifles, and several handguns.
In November 2020, both King and Williams pleaded guilty to dealing in firearms without a license. King also pleaded guilty to possession of a firearm by a felon, and Williams pleaded guilty to possession and sale of stolen firearm.
King is currently in federal custody. Williams has been released on bond and will be ordered to report to the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement Acting U.S. Attorney Stetzer commended the Bureau of Alcohol, Tobacco, Firearms and Explosives for their investigation of the case, and thanked the North Carolina State Bureau of Investigation, the Hickory Police Department, the Catawba County Sheriff’s Office, and the Burke County Sheriff’s Office for their invaluable assistance.
The prosecution was handled by Assistant United States Attorney Christopher Hess of the U.S. Attorney’s Office in Charlotte.
Owner of Defunct Urine Drug Testing Laboratory Agrees to Pay over $2 Million to Resolve Allegations of Participation in Kickback SchemesRead the Press Release
CHARLOTTE, N.C. – William T. Stetzer, Acting United States Attorney for the Western District of North Carolina announced today that the United States has settled claims asserted against Philip McHugh, one of the former owners of Physicians Choice Laboratory Services (PCLS), a now-defunct diagnostic testing laboratory formerly located in Charlotte and Rock Hill, South Carolina. McHugh has agreed to pay $2,021,795.57 to resolve the United States’ allegations that he violated the Anti-Kickback Statute (AKS), and, as a result, caused PCLS to submit millions of dollars in false claims for reimbursement to the Medicare program in violation of the federal False Claims Act (FCA).
In June of 2019, the United States filed its Complaint in Intervention asserting FCA claims against McHugh, PCLS and other agents of the laboratory based on allegations that they participated in various schemes to offer or provide benefits to physicians in exchange for the referral of patient samples for drug testing. The United States contended that such conduct violated the AKS, which specifically forbids any person or entity from knowingly and willfully offering, paying, soliciting, or receiving remuneration to influence the referral of items or services reimbursable by a federal health care program, and, that as a result, it was entitled to recover damages under the FCA.
“Strategic drug testing, when medically indicated and ordered without the taint of monetary gain, is an important tool that medical professionals can use to safeguard patients by confirming compliance with prescription medications and identifying signs of substance use disorders,” said Acting U.S. Attorney Stetzer. “Offering financial incentives to medical providers in exchange for performing these tests not only violates the law, it undercuts the significant efforts that the medical and law enforcement communities have made to combat the opioid crisis in America.”
“This laboratory used prohibited financial instruments and giveaways to physicians for patient referrals,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta (HHS-OIG). “Such quid pro quo arrangements are kickbacks that stifle competition and steer business to the company offering the inducements.”
This settlement resolves the United States’ allegations that during the time period beginning on June 20, 2013, and continuing through October 26, 2015, PCLS submitted false claims to the Medicare program as a result of McHugh’s participation in various kickback schemes, including (1) the provision of urine drug testing equipment, including desktop analyzers and associated supplies and services, to two physicians; (2) PCLS’ payment of volume-based commissions, and later a salary, to an individual in exchange for that individual’s exercise of influence over two physician practices; and (3) the provision of loans to two physicians – all with a purpose to induce the referral of quantitative urine drug tests to PCLS.
In December 2019, the U.S. Attorney’s Office for the Western District of North Carolina announced that another defendant, Manoj Kumar, a former sales representative and manager of PCLS, had paid $649,407 to resolve claims asserted by the United States that he participated in schemes to illegally induce physicians to refer patients to PCLS for medically unnecessary urine drug tests.
The United States’ civil action was filed in the District of North Carolina following the filing of two whistleblower complaints under the qui tam provisions of the FCA, titled United States ex rel. Jenkins et al. v. Physician’s Choice Laboratory Services et al., originally filed in the Eastern District of Tennessee, and United States ex rel. Hartnett & Shoched v. Physicians Laboratory Services, LLC et al., originally filed in the Middle District of Florida), which were transferred to the Western District of North Carolina and consolidated under Civil Case No. 17-cv-37.
This settlement was the result of coordinated efforts and investigation by the HHS-OIG and U.S. Attorney’s Office. The claims resolved in this settlement are allegations only and there has been no determination of liability.
Federal Judge Hands Down 30-Month Prison Sentence to Charlotte-Area Tax Return Preparer Convicted of Filing False Income Tax ReturnsRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced late yesterday former tax return preparer, Aminta Smith, 34, of Charlotte, to 30 months in prison, followed by one year of supervised release, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Smith to pay $171,017 as restitution. In May 2019, a federal jury convicted Smith of filing false tax returns for her clients and herself.
Brian G. Thomas, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), Charlotte Field Office, joins Acting U.S. Attorney Stetzer in making today’s announcement.
According to the sentencing hearing, court documents and evidence presented at trial, Smith owned and operated a Charlotte-based tax preparation business, Touch by Angels Tax Services, also known as Touch by Angels Accounting Services and Smith Tax & Insurance Group, LLC. According to court records, between 2011 to 2016, Smith prepared fraudulent income tax returns for clients that claimed false education credits, false W-2 wages, and false Schedule C businesses to inflate the refunds paid by the IRS. In addition to filing fraudulent income tax returns for her clients, Smith falsified her own income tax returns by underreporting the fees she earned in her tax preparation business for tax years 2011 to 2015, and in some years failing to disclose that she was in engaged in the operation of a tax preparation business. In total, Smith caused more than $1 million in tax loss to the IRS.
In May 2019, a federal jury convicted Smith of aiding and assisting in the filing of false tax returns and filing false tax returns for herself. Following the sentencing hearing, Smith was released on bond and will be ordered to report to the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement Acting U.S. Attorney Stetzer commended special agents of IRS-Criminal Investigation for their investigation of the case.
Assistant U.S. Attorney Caryn Finley of the U.S. Attorney’s Office in Charlotte prosecuted the case. Acting U.S. Attorney Stetzer also thanked the Department of Justice’s Tax Division for their invaluable assistance in this case.
Federal Indictment Charges Henderson County Man with Naturalization and Passport FraudRead the Press Release
CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte has returned a criminal indictment charging Herbert Leonel Diaz, 62, a former resident of Henderson County, N.C., with naturalization fraud and passport fraud, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Stetzer is joined in making today’s announcement by Thomas Giles, Field Office Director of the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations (ICE-ERO).
According to allegations contained in the federal indictment, from December 2003 to August 2006, while residing in Corona, Calif., Diaz committed sexual crimes against a child and was subsequently charged with multiple state offenses. In August 2006, the minor victim reported Diaz’s criminal conduct to law enforcement authorities. The following day, Diaz left California and moved to Henderson County, N.C.
The criminal indictment alleges that in November 2010, while residing in Henderson County, Diaz signed and submitted an application for naturalization to the U.S. Citizenship and Immigration Services (CIS). According to the indictment, Diaz lied on the application form he submitted by responding “No” to the question “Have you ever committed a crime or offense for which you were not arrested?” Diaz also signed the form, certifying that his answers were true and correct.
As alleged in the indictment, in March 2010, Diaz appeared in person at the CIS office in Charlotte for a naturalization interview. During the interview, Diaz swore under oath that his responses on the naturalization application were true and correct. At the conclusion of the interview, Diaz signed his naturalization application in the presence of an officer and swore under penalty of perjury that the contents of his application were true and correct. On March 30, 2011, Diaz appeared again in person at the CIS office in Charlotte and participated in a naturalization ceremony. Diaz was granted U.S. citizenship and received a Certificate of Naturalization.
According to the indictment, in May 2011, Diaz applied for a U.S. passport and submitted his Certificate of Naturalization as evidence of eligibility. The indictment alleges that Diaz also signed the passport application form, certifying that he did not knowingly and willfully make any false statements or included false documents in support of his application. Diaz was issued a U.S. passport in June 2011. In July 2012, law enforcement arrested Diaz on an outstanding warrant from the State of California related to his sexual crimes against the minor victim and he was extradited to California. In March 2014, Diaz pleaded guilty to five counts of lewd acts with a child and was sentenced to 35 years in prison.
Diaz will be scheduled to appear in federal court in Charlotte. The maximum prison sentence for naturalization fraud and passport fraud is 10 years and a $250,000 fine per charge.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today's announcement, Acting U.S. Attorney Stetzer thanked ICE-ERO for their investigation of the case.
Assistant U.S. Attorney Kenneth Smith, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Federal Jury Convicts Marion, N.C. Man of Child PornographyRead the Press Release
ASHEVILLE, N.C. – A federal jury in Asheville has convicted Jacob Daylen Ross, 46, of Marion, N.C. of child pornography charges, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. U.S. District Judge Martin Reidinger presided over the trial, which began on Thursday, March 4th, and ended on Monday, March 8, 2021.
Acting U.S. Attorney Stetzer is joined in making today’s announcement by Ronnie Martinez, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and Sheriff Ricky T. Buchanan of the McDowell County Sheriff’s Office.
According to filed court documents and evidence presented at trial, in June 2020, law enforcement became aware that Ross was involved in the online sexual exploitation of children overseas. Trial evidence established that Ross paid individuals abroad in exchange for live stream videos depicting children being sexually abused. Specifically, according to trial evidence, on multiple occasions Ross communicated via the WhatsApp messenger application with a woman residing in the Philippines and paid the woman to sexually abuse her young children while Ross watched a live stream video of the abuse. According to evidence presented at trial, law enforcement located on Ross’ seized cell phone 28 images of child pornography, which appeared to have been screenshotted during the course of a live stream video chat. A review of Ross’ Google accounts also revealed additional screenshotted images of the live sexual abuse of children.
The jury convicted Ross of five counts of production of child pornography and one count of possession of child pornography. Ross is currently in federal custody. A sentencing date has not been set.
The production of child pornography charge carries a mandatory minimum sentence of 15 years and a maximum sentence of 30 years in prison per count. The possession of child pornography charge carries a maximum sentence of 20 years in prison. Both charges carry a maximum fine of $250,000.
In making today’s announcement Acting U.S. Attorney Stetzer commended HSI and the McDowell County Sheriff’s Office for their investigation of this case and thanked the Wilkes County Sheriff’s Office for their invaluable assistance.
The U.S. Attorney’s Office in Asheville prosecuted the case. The prosecution team was led by Special Assistant United States Attorney (SAUSA) Alexis Solheim. Ms. Solheim is a state prosecutor with the office of the 43rd Prosecutorial District and has been assigned by District Attorney Ashley Welch to serve as a SAUSA with the U.S. Attorney’s Office in Asheville. Ms. Solheim is duly sworn in both state and federal courts. The SAUSA position is a reflection of the partnership between the office of the 43rd Prosecutorial District and the United States Attorney’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form.
Utah Resident Pleads Guilty to Federal Charges for $850,000 Mining Investment SchemeRead the Press Release
CHARLOTTE, N.C. – Acting U.S. Attorney William T. Stetzer announced today that a Utah man appeared in federal court and pleaded guilty to federal charges for orchestrating an investment scheme involving mining for precious metals. Andrew Malcolm Lovett, 59, a former resident of Cornelius, N.C., currently residing in Utah, pleaded guilty to securities fraud and transactional money laundering before U.S. Magistrate Judge David C. Keesler.
Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, join Acting U.S. Attorney Stetzer in making today’s announcement.
According to filed plea documents and today’s plea hearing, from 2014 to 2016, Lovett executed a financial fraud scheme involving investments in mining projects involving precious metals. During the course of the scheme, Lovett fraudulently obtained nearly $850,000 from more than 30 investors, by inducing victims to invest in Safari Minerals, Inc. (Safari) and other entities with which Lovett was affiliated. To induce victims to invest their money, Lovett falsely told them that their money would be used to grow Safari and to develop various purported mining projects.
According to court records, Lovett described Safari to his investors as “an emerging junior exploration and mining company” that focused on acquiring and developing properties in Nevada which “contains an abundance of … Gold, Silver, Platinum Group Metals and Rare Earth Elements….” Lovett also misled investors by touting his experience as a seasoned businessman with a wealth of experience in the mining industry. As Lovett admitted in court today, among other things, he lied to investors about the progress and viability of Safari and failed to disclose to investors his diversion of several hundred thousand dollars from Safari for his own personal use.
According to documents filed in court, rather than use the victims’ money to grow Safari’s business as promised, Lovett used a significant portion of the investments to pay for personal expenses like rent, entertainment and travel, and to make Ponzi-style payments to other victim investors.
Following his court appearance, Lovett was released on bond. The securities fraud charge carries a maximum penalty of 20 years in prison and a $1 million fine. The transactional money laundering charge carries a maximum prison term of 10 years and a $250,000 fine.
In making today’s announcement Acting U.S. Attorney Stetzer thanked IRS-CI, FBI, and the USPIS for its investigation of the case.
Assistant United States Attorneys Daniel Ryan and Caryn Finley, of the U.S. Attorney’s Office in Charlotte, are prosecuting the case.
Three Members of Extensive Mail Theft Ring Face Federal ChargesRead the Press Release
CHARLOTTE, N.C. – A criminal indictment was unsealed today in federal court following the arrest of two of the three defendants charged with mail theft, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Stetzer is joined in making today’s announcement by Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte.
Haleem Cornelius Gilliland, 23, of Charlotte, North Carolina, Shemar Isaiah Walker, 20, of, Atlanta, Georgia, and Daron Quashawn Wright, 20, of Shelby, North Carolina, are each charged with conspiracy to commit mail theft. Gilliland is also charged with wire fraud and aggravated identity theft. Law enforcement apprehended Gilliland and Walker on March 3, 2021. Wright has not been arrested yet.
According to allegations in the indictment, between November 2019 and February 2020, Gilliland, Walker, Wright and other co-conspirators stole and took letters, postal cards, packages, bags, and other mail (collectively, mail) from the mailboxes of at least nine apartment complexes in North and South Carolina. As alleged in the indictment, Gilliland and other co-conspirators used the stolen mail, including stolen driver’s licenses and stolen credit cards, to pay for car rentals, hotel rooms, and to pay for other personal expenditures.
Gilliland and Walker are currently in custody. The charge of conspiracy to commit mail theft carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. The aggravated identity theft charge carries a mandatory term of two years in prison, to be served consecutively to any other term of imprisonment imposed, and a $250,000 fine.
The charges contained in the indictment are allegations. The defendants are presumed innocent until and unless proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked the USPIS for their investigation which led to the charges.
Assistant U.S. Attorney Caryn Finley, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Bulk Cocaine Trafficker Is Sentenced to More Than 15 YearsRead the Press Release
CHARLOTTE, N.C. – Harold Broome Jr., 39, of Charlotte, was sentenced today to 181 months in prison and 10 years of supervised release for conspiracy to distribute and to possess with intent to distribute cocaine, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina.
Vincent C. Pallozzi, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD) join Acting U.S. Attorney Stetzer in making today’s announcement.
According to filed court documents and today’s sentencing hearing, in 2019, law enforcement learned that Broome was distributing large quantities of cocaine in the greater Charlotte area. In April 2019, law enforcement executed a search warrant at Broome’s residence, seizing more than five kilograms powder cocaine, over two pounds marijuana, digital scales, drug paraphernalia, and over $36,000 in cash. Court records show that Broome engaged in drug trafficking activities while on supervised release for a previous federal drug conviction. Broome was arrested on state drug charges and was subsequently released on bond. In December 2019, a federal indictment charged Broome with new drug offenses and an arrest warrant was issued.
In January 2020, law enforcement located and arrested Broome. At the time of his arrest, Broome was continuing to traffic narcotics and was found in possession of bulk cocaine, crack cocaine and marijuana. Subsequent to his arrest, Broome pleaded guilty to a federal superseding indictment, enlarging the scope of his drug trafficking conspiracy.
Broome is currently in custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked the ATF and CMPD for their investigation of this case.
Assistant U.S. Attorneys Sanjeev Bhasker and Dena King, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Armed Carjacker Is Sentenced to 12 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Jordan Allen Williams, 25, of Charlotte, was sentenced to 12 years in prison today on carjacking and firearms offenses, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn Jr. also ordered Williams to serve five years of supervised release upon completion of the prison term.
Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Charlotte, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD) join Acting U.S. Attorney Stetzer in making today’s announcement.
According to court documents and today’s sentencing hearing, on June 2, 2019, at approximately 2:45 p.m., Williams and a co-conspirator approached a male victim at the parking lot of the victim’s apartment complex in Charlotte. Williams pointed a firearm at the victim and ordered the victim to hand over his cell phone, wallet and car keys. The victim complied, and Williams ordered the victim to lay down on the sidewalk or Williams would shoot him. Williams and his co-conspirator fled the scene in the victim’s Jeep Grand Cherokee. CMPD officers located the vehicle shortly thereafter, and Williams and his co-conspirator were arrested after Williams crashed the stolen vehicle while attempting to evade the police.
In March 2020, Williams pleaded guilty to carjacking and brandishing a firearm during, in relation to, and in furtherance of a crime of violence. Court records show that, between 2014 and 2016, Williams was convicted of multiple counts of Breaking and Entering and other felony convictions in Mecklenburg County. During his incarceration for these crimes in 2017, Williams admitted to being a member of the United Blood Nation (UBN) or “Bloods” gang.
Williams is currently in custody and will be transferred to custody of the federal Bureau of Prisons upon designation of a federal facility.
The investigation was handled by ICE-HSI and CMPD. Assistant U.S. Attorney William Bozin of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Liberian National Is Arrested on Federal Charges in Connection with Online Romance Scam Targeting Elderly VictimsRead the Press Release
CHARLOTTE, N.C. – Michael Moore, 38, a Liberian national residing in Darby, Pennsylvania, has been arrested on federal charges for his involvement in an online romance scam that targeted older adults, announced William T. Stetzer, Acting U.S. Attorney for the Western District of North Carolina. The criminal indictment was unsealed following Moore’s initial appearance in federal court in the Eastern District of Pennsylvania.
Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and Barry Chastain, Port Director of the U.S. Customs and Border Protection (CBP) Area in Charlotte join Acting U.S. Attorney Stetzer in making today’s announcement.
According to allegations contained in the indictment, beginning in January 2016, Moore and others engaged in a fraudulent scheme to defraud unsuspecting victims, some of whom were elderly, by perpetrating an online romance scam. The indictment alleges that Moore and his co-conspirators generally targeted victims through Facebook and other social media platforms with false promises of a romantic relationship. Moore and others allegedly communicated with the victims via emails, text messages, and phone calls, and purported to be in a romantic relationship with the victims, when in reality no such relationship existed. The indictment alleges that Moore and his co-conspirators used a number of lies to steal the victims’ money, including that the money was needed to obtain travel documents or to release funds held by customs officials. In this manner, according to the indictment, Moore and his co-conspirators obtained over $1.5 million from at least 30 victims.
Moore is charged with two counts of making a false statement to an agency of the United States, which carries a maximum prison term of five years and a $250,000 fine. The indictment alleges that Moore lied to CBP officers and ICE-HSI agents when he was questioned at Charlotte Douglas International Airport about the source of the $75,000 in cash found in his possession, and later, Moore made false statements and representations on a federal form in an attempt to conceal that the money had come from a defrauded victim. Moore is also charged with wire fraud, which carries a maximum prison term of 20 years and a $250,000 fine.
The details contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, Acting U.S. Attorney Stetzer thanked CBP and HSI for handling the investigation that led to the federal charges.
Assistant U.S. Attorneys Sanjeev Bhasker and Maria Vento, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
In March 2019, the U.S. Attorney’s Office announced the Elder Justice Initiative, which aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educate older adults on how to identify scams and avoid becoming victims of financial fraud; and promote greater coordination with law enforcement partners. For more information please visit: https://www.justice.gov/usao-wdnc/elder-justice-initiativehttps://www.justice.gov/usao-wdnc/elder-justice-initiative
Some examples of financial scams targeting seniors are:
• Lottery phone scams – in which the callers convince seniors that a large fee or taxes must be paid before they can receive lottery winnings.
• Grandparent scams – which convince seniors that their grandchildren are in trouble and need money to make rent, repair a car, or even money for bail.
• Romance scams – which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose.
• IRS imposter scams – which defraud victims by posing as IRS agents and claiming that victims owe back taxes.
• Sham business opportunities – which convince victims to invest in lucrative business opportunities or investments.
To avoid falling victim to a financial scam:
• Don’t share personal information with anyone you don’t know.
• Don’t pay a fee for a prize or lottery winning.
• Don’t click on pop-up ads or messages.
• Delete phishing emails and ignore harassing phone calls.
• Don’t send gift cards, checks, money orders, wire money, or give your bank account information to a stranger.
• Don’t fall for a high-pressure sales pitch or a lucrative business deal.
• If a scammer approaches you, take the time to talk to a friend or family member.
• Keep in mind that if you send money once, you’ll be a target for life.
• Remember, it’s not rude to say, “NO.”
• A good rule of thumb is, if it’s too good to be true, it’s likely a scam.
If you have been contacted by a scammer or believe you have fallen victim to a scam, please contact the Justice Department’s Elder Fraud Hotline at 1-833-Fraud-11 (1-833-372-8311). The National Elder Fraud hotline was created for the public to report fraud against individuals who are age 60 or older. The hotline is open seven days a week. For more information about the hotline, please visit https://stopelderfraud.ovc.ojp.gov/.
William T. Stetzer to Serve as Acting United States Attorney for the Western District of North CarolinaRead the Press Release
CHARLOTTE, N.C. – William T. Stetzer has been named as the Acting United States Attorney for the Western District of North Carolina, following the departure of U.S. Attorney Andrew Murray on February 28, 2021.
Acting U.S. Attorney Stetzer is a career prosecutor who has dedicated his professional life to public service. Mr. Stetzer joined the U.S. Attorney’s Office in 2018 and has since served as the First Assistant United States Attorney for the Western District of North Carolina.
During his 20+ years of combined service as a state and federal prosecutor, Mr. Stetzer has handled numerous criminal cases and has extensive experience in felony jury trials, including capital and non-capital murder cases.
“It is a great honor to serve the people of the Western District and to work with an incredible group of dedicated public servants,” said Acting U.S. Attorney Stetzer. “The U.S. Attorney’s Office has a long legacy of fulfilling its mission to seek justice and to protect the rights and safety of the public, which I pledge to continue while serving in this new role.”
Since joining the U.S. Attorney’s Office as the Western District’s second-in-command, Mr. Stetzer has maintained an active caseload and has handled a variety of federal criminal prosecutions, including drug trafficking, violent crime, child exploitation, financial fraud, and public corruption cases. Notably, Mr. Stetzer served on the prosecution team in United States v. Lindberg et al., one of North Carolina’s most prominent bribery cases involving public officials.
Prior to joining the U.S. Attorney’s Office, Mr. Stetzer served as Supervisor of the Homicide Prosecution Team at the District Attorney’s (DA’s) Office for Mecklenburg County, which includes Charlotte. During his seven-year tenure as a Supervisor at the DA’s office, Mr. Stetzer’s unit achieved significant reductions in the homicide case backlog and in case disposition time, while increasing both the conviction rate of homicide defendants and the sentences they received.
From 2007 to 2010, Acting U.S. Attorney Stetzer also served as an Assistant District Attorney for the Gaston County DA’s Office. While there, Mr. Stetzer prosecuted serious violent felony cases including violent assaults, homicides, sexual assaults, and crimes against children.
In 2020, Mr. Stetzer received the Justice Department’s Assistant Attorney General’s Award for Exceptional Service. He has also been recognized for his lifelong contribution to the pursuit of justice by the FBI, the Crime Victim’s Coalition, and the Charlotte Mecklenburg Police Department Homicide Support Group.
Mr. Stetzer, who resides in Gaston County, received his undergraduate degree from the University of Central Florida in 1993. He graduated with honors from Washburn University School of Law in 1996.
Mr. Stetzer’s spouse, Kelly Stetzer, is a prosecutor assigned to the Violent Crimes Unit with the Mecklenburg County DA’s Office.
U.S. Attorney's Office Files Civil Complaint Seeking the Forfeiture of over $1 Million Seized from A Money Mule Bank Account Used to Defraud A Virgin Islands BusinessRead the Press Release
CHARLOTTE, N.C. – Andrew Murray, U.S. Attorney for the Western District of North Carolina, announced today the filing of a federal civil complaint seeking the forfeiture of $1,047,535 seized from a money mule bank account being used to defraud a Virgin Islands business via a business email compromise scheme.
Reginald DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Murray in making today’s announcement.
A business email compromise scheme, or BEC, is a sophisticated scam, often targeting businesses involved in wire transfer payments. The fraud is carried out by compromising and/or “spoofing” legitimate business email accounts through social engineering or computer intrusion techniques, to cause employees of the victim company (or other individuals involved in legitimate business transactions with the victim company) to transfer funds to accounts controlled by scammers. In addition to targeting businesses, BEC scams also often target individual victims, convincing victims to make wire transfers to bank accounts controlled by the scammers. Money mule accounts are bank accounts used by fraudsters as a pass-through means of moving fraudulently obtained funds.
According to allegations in the filed civil forfeiture complaint, in or about January 2021, the U.S. Secret Service (USSS) seized $1,047,535 held in a bank account on behalf of Boyang Group, Inc. (Boyang Group). As alleged in the complaint, at the urging of an acquaintance, an individual residing in Matthews, N.C., created Boyang Group in Florida, and opened a bank account in the company’s name. However, Boyang Group had no legitimate purpose and the Boyang Group’s bank account was operated solely as a pass-through money mule account to receive and distribute proceeds of the BEC scheme.
Specifically, as alleged in the complaint, between July and November 2020, one or more unidentified individuals (UI) perpetrated the BEC scheme against a private Virgin Islands business identified in the complaint as Victim Company. The Victim Company was in the process of purchasing real estate and was using a real estate agency to conduct the sale. The complaint alleges that UI perpetuated the BEC scheme by compromising the business email of an employee of the real estate agency. As alleged in the complaint, in November 2020, the UI used the real estate agency business email account to dupe an employee of the Victim Company, who had authority to conduct financial transactions on behalf of Victim Company, into wiring a payment of approximately $1,344,000 to the Boyang Group’s money mule bank account instead of the real estate agency’s so as to close a real estate sale.
As alleged in the complaint, following the fraudulent wire transfer into Boyang Group’s bank account, a UI initiated a $296,500 outgoing wire transfer from the Boyang Group’s money mule bank account to an unidentified bank account. Ultimately, the Victim Company uncovered the fraud and the theft was reported to law enforcement. Law enforcement traced the initial wire transaction from the Victim Company and proceeded to execute a warrant, seizing the fraudulently obtained funds from the Boyang Group’s money mule bank account. Law enforcement also identified the individual in Matthews who had opened the Boyang Group’s account.
“There has been a steady rise in business email compromise schemes in which online criminals recruit individuals to act as ‘money mules’ and transfer wired money stolen from victims back to the criminal perpetrators,” warned U.S. Attorney Murray. “I urge public, private and government entities and employees to stay vigilant and to protect themselves from BEC fraud, especially when conducting financial transactions at the direction of emails. And, I urge citizens to act responsibly and think twice before opening a bank account at the request of a person whom they don’t know and with no apparent legitimate purpose. Whether it’s an online romance, a business relationship, or a new work opportunity, remember: if it sounds too good to be true, it probably is.”
In December 2020, the U. Attorney’s Office joined the Justice Department in a landmark initiative aimed at global crackdown on money mule activity. As a result of the initiative, actions were taken to halt the conduct of approximately 2,300 money mules, spanning 92 federal districts. In addition, more than 35 individuals were criminally charged or arrested, including four individuals indicted in Western North Carolina for operating as money mules in two business email compromise schemes.
U.S Attorney Murray also commended the expeditious response of law enforcement stating that, “Law enforcement swiftly identified the money mule bank account and used civil forfeiture laws to secure a significant portion of the stolen funds. Identifying and seizing ill-gotten gains is a priority for my office, and civil asset forfeiture is an invaluable tool in our efforts to stop BEC fraud, particularly where perpetrators cannot easily be identified or apprehended.”
In making today’s announcement, U.S. Attorney Murray thanked the U.S. Secret Service for their investigation of the case.
Assistant United States Attorney Benjamin Bain-Creed of the United States Attorney’s Office in Charlotte is handling the proceedings.
Charlotte Man Is Sentenced to Nine Years in Prison on Drug Trafficking and Firearm ChargesRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Kenneth D. Bell sentenced Aleef Jamar Nicks, 39, of Charlotte, to 108 months in prison yesterday, on drug trafficking and firearm charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Judge Bell also ordered Nicks to serve three years under court supervision after completing his prison term.
Joining U.S. Attorney Murray in making today’s announcement is Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, and Sheriff Bill Beam of the Lincoln County Sheriff’s Office.
According to filed court documents and the sentencing hearing, on April 30, 2020, a deputy with the Lincoln County Sheriff’s Office conducted a traffic stop of the vehicle in which Nicks was a passenger. An individual later identified as Nicks’ girlfriend was the driver of the vehicle. Court documents show that, over the course of the traffic stop, Nicks removed from a backpack several ounces of cocaine which he gave to his girlfriend, who was pregnant at the time. Law enforcement later found the cocaine on the female passenger. Inside the backpack, law enforcement also found a loaded firearm and several thousand dollars. An analysis of Nicks’ two seized cell phones revealed that he engaged in extensive drug trafficking activities. Law enforcement also found on the cell phones photographs of narcotics, large stacks of cash, and firearms, including the pistol seized from Nicks’ backpack. On November 20, 2020, Nicks pleaded guilty to possession with intent to distribute cocaine and possession of a firearm by a felon. Nicks has three prior federal convictions for drug trafficking and firearms offenses.
Nicks is currently in federal custody. Upon designation of a federal facility, he will be transferred to the custody of the federal Bureau of Prisons.
In making today’s announcement, U.S. Attorney Murray thanked the DEA and the Lincoln County Sheriff’s Office for their investigation of this case.
Assistant U.S. Attorney Taylor G. Stout, of the U.S. Attorney’s Office in Charlotte, is prosecuted the case.
Georgia Man Is Sentenced to 6.5 Years for Defrauding the North and South Carolina Medicaid ProgramsRead the Press Release
CHARLOTTE, N.C. – Markuetric Stringfellow, 37, of Powder Springs, Georgia, was sentenced today to 78 months in prison and 3 years of supervised release for defrauding the North and South Carolina Medicaid programs, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina, and U.S. Attorney Peter M. McCoy, of the U.S. Attorney’s Office for the District of South Carolina. In addition to the prison term imposed, U.S. District Judge Kenneth D. Bell also ordered Stringfellow to pay $5,278,550 as restitution.
The North Carolina Scheme
According to filed court documents and today’s sentencing hearing, Stringfellow was a resident of Charlotte and Greensboro, North Carolina, and a partner in Everlasting Vitality, LLC (EV) and Do-It-4-The Hood Corporation (D4H). D4H operated after-school programs in Charlotte, Greensboro, Winston-Salem, and Rocky-Mount, North Carolina. Beginning in or about January 7, 2016, and continuing through November 12, 2018, Stringfellow and his co-conspirators executed a conspiracy to defraud the North Carolina Medicaid program by soliciting illegal kickbacks from various drug testing laboratories, in exchange for referrals of North Carolina Medicaid beneficiaries obtained through the after-school programs operated by EV and D4H.
According to court documents, Stringfellow and his co-conspirators paid individuals to recruit at-risk youths, in particular children who were Medicaid eligible, for EV’s or D4H’s after-school and youth mentoring programs. Once enrolled, children were required to submit urine specimens for drug testing. Stringfellow and his co-conspirators conspired with certain laboratories to perform the drug testing of the urine specimens submitted in the names of children enrolled at EV and D4H and received kickbacks after the laboratories were reimbursed by the North Carolina Medicaid.
In addition to the kickback scheme, Stringfellow and his conspirators devised a scheme to defraud North Carolina Medicaid by referring clients to laboratories which they knew would file fraudulent claims and receive reimbursement based on drug testing services that did not meet the drug testing policy requirements. For example, on some occasions, Stringfellow and his co-conspirators obtained personal identifying information (PII) of D4H clients, such as names, addresses, dates of birth, and Medicaid beneficiary numbers, which they provided to drug testing laboratories. In turn, the laboratories used D4H clients’ PII to submit drug testing claims to the North Carolina Medicaid that were fraudulent because, among other reasons, the drug tests were not medically necessary, or the urine specimens were not of the Medicaid beneficiaries under whose names they were submitted. Once North Carolina Medicaid paid the fraudulent claims submitted by the testing laboratories for these unauthorized and medically unnecessary drug tests, the labs then paid companies under the control of Stringfellow and others, at an agreed percentage of their Medicaid reimbursement.
The South Carolina Scheme
In addition to executing a fraudulent scheme in North Carolina, Stringfellow defrauded the South Carolina Medicaid program. According to court documents filed with the U.S. District Court in South Carolina, Stringfellow was a franchise owner of Wrights Care Services LLC (Wrights Care), a qualified provider of Medicaid rehabilitative behavioral health services in South Carolina. Wrights Care was located at 1320 Main Street, in Columbia, South Carolina, and maintained separate franchise locations throughout South Carolina, including in Spartanburg, Pickens, Cheraw, Society Hill, Bennettsville, Hartsville, and Conway. In April 2014, Wrights Care became a participating provider in the South Carolina Medicaid program, which allowed Wrights Care to submit claims for behavioral mentoring services reimbursable under Medicaid.
Starting in or around 2014, Stringfellow and his co-conspirators defrauded the South Carolina Medicaid program by filing fraudulent claims for services that were either not provided, partially provided, or did not qualify for reimbursement. According to court records, to support the fraudulent reimbursement claims filed with the South Carolina Medicaid, Stringfellow and his co-conspirators submitted falsified patient billing records and fake medical notes. Furthermore, court records show that after learning there was a Medicaid audit for Wrights Care, Stringfellow and his co-conspirators attempted to deceive South Carolina Medicaid auditors. In or about March 2015, Stringfellow met other associates of Wrights Care in Columbia for a “note party,” during which the co-conspirators created false and fraudulent billing records to substantiate previously-submitted fraudulent Medicaid claims, forged signatures, and falsified records subject to the audit, which they then submitted to South Carolina Medicaid auditors in response to the audit.
In July 2020, the criminal case pending against Stringfellow in South Carolina federal court was transferred to the U.S. District Court for the Western District of North Carolina for further proceedings. On August 21, 2020, Stringfellow pleaded guilty to conspiracy to commit Medicaid fraud in connection with both federal prosecutions.
Stringfellow will be ordered to report to the federal Bureau of Prisons to begin serving his sentence upon designation of federal facility.
In making today’s announcement U.S. Attorney Murray and U.S. Attorney McCoy commended the investigative work of the FBI field offices in Charlotte, Columbia and Atlanta, and the Medicaid Investigation Divisions in Raleigh, Columbia and Atlanta, and thanked the U.S. Attorney’s Office for the Northern District of Georgia for their assistance and coordination.
Assistant U.S. Attorneys Michael Savage with the U.S. Attorney’s Office in Charlotte and Brook Andrews with the U.S. Attorney’s Office in Columbia prosecuted the case.
Charlotte Man Who Produced Child Pornography Is Handed Down A 30+ Year SentenceRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Kenneth D. Bell sentenced Ted D. Melton, 46, of Charlotte, to 365 months in prison on child pornography charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Melton was also ordered to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison. Judge Bell also ordered Melton to have no contact with victims of child pornography.
U.S. Attorney Murray is joined in making today’s announcement by Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Sheriff Darren Campbell of the Iredell County Sheriff’s Office.
On October 21, 2020, Melton pleaded guilty to production of child pornography and possession with intent to view child pornography containing a minor who had not attained 12 years of age. According to filed documents and statements made in court, in February 2015, officers with the Internet Crimes Against Children (ICAC) task force determined that an individual later identified as Melton was using a peer-to-peer file sharing program to distribute child pornography. According to court records, in June 2015, law enforcement officers executed a search warrant at Melton’s residence, and seized his computers, a camera and a cell phone. Over the course of the investigation law enforcement determined that Melton had also sexually abused two minor females and had produced child pornography. A forensic analysis of Melton’s devices revealed that he possessed more than 18,000 images and 850 videos containing sexually explicit conduct involving children, including the child victims Melton had sexually assaulted.
Melton was arrested on state charges in 2015. He was transferred to federal custody in November 2019 upon his indictment on federal charges. He will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement U.S. Attorney Murray commended the FBI in Charlotte and the Iredell County Sheriff’s Office for their investigation of the case and thanked the Statesville Police Department for their invaluable assistance.
Assistant U.S. Attorney Alfredo De La Rosa, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children. By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
Former Cargill Employee Is Indicted for Extensive Bribery and Kickback SchemeRead the Press Release
CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte has indicted Michael A. Kennedy, 55, of Charlotte, on conspiracy and honest services wire fraud charges, for his role in an extensive bribery and kickback scheme that defrauded his employer, Cargill, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Tommy D. Coke, Inspector in Charge of the Atlanta Divsion of the U.S. Postal Inspection Service, which oversees Charlotte, join U.S. Attorney Murray in making today's announcement.
According to allegations in the indictment, Kennedy was a senior employee within Cargill’s division of strategic sourcing. Choung “Shawn” Nguyen was a procurement manager within the same division and reported to Kennedy. Brian Ewert was co-owner and primary sales representative of WDS, Inc., also known as Women’s Distribution Services, Inc. (WDS), a South Carolina-based company that provided non-raw materials and services to Cargill and its affiliates.
According to allegations in the indictment and information contained in filed court documents in related cases, from 2009 to 2016, Kennedy conspired with Ewert, Nguyen, and others to carry out a fraudulent bribery and kickback scheme. The indictment alleges that, during the course of the scheme, Ewert provided Kennedy and Nguyen and other Cargill employees with more than a $1 million in cash, gifts, and vacations, in exchange for them, among other things, putting the interests of WDS, and other companies Ewert controlled, ahead of Cargill’s, including by helping to conceal the fact that WDS was overcharging Cargill. For example, the indictment alleges that, as part of the conspiracy, Ewert provided Kennedy and his family with lavish trips that cost hundreds of thousands of dollars, including trips to the Caribbean on Ewert’s private jet and luxury yacht rentals to entertain Kennedy and his family. Ewert also paid for Kennedy and his family to go to Disney World and took them on ski trips. The indictment alleges that Kennedy and others concealed from Cargill the fact that they had received from Ewert the illicit bribes and kickbacks, in breach of their fiduciary duties to Cargill.
As alleged in the indictment, in early 2016, after others within Cargill began questioning the relationship between WDS and Cargill, Kennedy, Ewert, and others took numerous steps to conceal from Cargill significant overcharging of Cargill by WDS. Cargill eventually discovered the scheme and terminated its relationship with WDS and Ewert and fired Kennedy and Nguyen.
Kennedy had his initial appearance today before U.S. Magistrate Judge Gwynne E. Birzer in the U.S. District Court for the District of Kansas where Kennedy was arrested. The charges in the indictment each carry a maximum penalty of 20 years in prison and a $250,000 fine.
The charges in the indictment are allegations. The defendant is innocent unless and until proven guilty beyond reasonable doubt in a court of law.
In November 2019, Ewert, Nguyen and Jennifer Maier, the co-owner and Chief Executive Officer of WDS, were sentenced to 60, 41, and 24 months in prison, respectively, for defrauding Cargill.
The FBI and USPIS investigated the case. Assistant U.S. Attorneys Daniel Ryan and Graham Billings, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Honduran National Is Sentenced to 20 Years in Prison for KidnappingRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad Jr sentenced Luis Analberto Pineda-Anchecta, 38, a Honduran national, to 240 months in prison and five years of supervised release on kidnapping charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD), join U.S. Attorney Murray in making today’s announcement.
According to filed court documents, evidence presented at Pineda-Anchecta’s trial and today’s sentencing hearing, on or about May 15, 2019, CMPD officers arrested Pineda-Anchecta on several state charges, including Assault on a Female and Communicating Threats against his ex-girlfriend, identified in court documents as F.M. Two days following his arrest, Pineda-Anchecta was released from state custody on bond. As trial evidence established, in the evening of May 21, 2019, F.M. was approached by two masked men as she was walking to her vehicle parked at her apartment complex in Charlotte. The victim recognized one of the masked men as Pineda-Anchecta, who grabbed the victim by the arm, stuffed a cloth in her mouth, and wrapped a cord or rope around her head so the cloth would stay in place. Pineda-Anchecta and the other masked man forced F.M. against her will into the passenger seat of a vehicle, and Pineda-Anchecta told F.M. “I love you and I’m going to kill you.” According to trial evidence, the other masked individual did not accompany Pineda-Anchecta and F.M. in the vehicle.
Pineda-Anchecta then drove his vehicle on Lancaster Highway. Court records show that that while Pineda-Anchecta was driving, he maintained a tight grip on the plastic rope tied around the victim’s face. After traveling a short while on Lancaster Highway, Pineda-Anchecta parked his vehicle on the side of the road near a wooded area and turned off the vehicle’s engine. Pineda-Anchecta maintained his grip on the plastic rope around F.M.’s face and pulled the victim out of the car. He then dragged the victim to wooded area off of Lancaster Highway with which he was familiar, as the defendant had gone fishing there on previous occasions.
Following a struggle between Pineda-Anchecta and F.M., the victim was able to escape and run into the middle of the highway and was assisted by motorists who stopped to offer help. According to court records, the victim identified Pineda-Anchecta as the person who had assaulted her. Pineda-Anchecta left the scene on foot. After obtaining a search warrant, CMPD officers searched Pineda-Anchecta’s vehicle, from which they recovered a spool of plastic rope similar to the rope wrapped around the victim’s face during the course of the kidnapping. Law enforcement also located the victim’s phone in Pineda-Anchecta’s vehicle. On June 23, 2020, a federal jury convicted Pineda-Anchecta of kidnapping following a two-day trial.
In determining today’s sentence, Judge Conrad noted that this incident was “a series of violent acts between the defendant and victim that escalated over time and culminated into this offense.” Judge Conrad enhanced the sentence after noting that “this was not a mere kidnapping, but that the defendant intended to kill the victim.”
Pineda-Anchecta is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. The defendant will also be subject to deportation proceedings upon the completion of his federal sentence. Pineda-Anchecta was previously convicted of illegal reentry by a deported alien and was sentenced to seven months in prison.
In making today’s announcement U.S. Attorney Murray commended ICE’s Homeland Security Investigations and CMPD for their investigation of this case. He also thanked ICE’s Enforcement and Removal Operations for their assistance.
Assistant U.S. Attorneys Kenneth Smith and Regina Pack, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Office Manager Is Charged with Embezzling More Than $1 Million from His Former EmployerRead the Press Release
CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte returned a federal criminal indictment last week, charging Richard Allen Clark, 55, of Lenoir, North Carolina, with federal offenses arising from his embezzlement of more than $1 million from his former employer, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. The federal charges include mail fraud, money laundering and filing false tax returns. Clark had his initial appearance in court today before U.S. Magistrate Judge David C. Keesler.
Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), and Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, join U.S. Attorney Murray in making today’s announcement.
According to allegations in the criminal bill of indictment, beginning January 1, 2013 through May 31, 2019, Clark was employed as an office manager for two family owned businesses in Lenoir. As an office manager, Clark was responsible for, among other things, handling the companies’ bookkeeping and financial records, making payments to vendors and the IRS, and reconciling the companies’ bank accounts. As the indictment alleges, Clark used his position and his access to the companies’ financial records and bank accounts to embezzle more than $1 million from his employers.
According to allegations in the indictment, Clark embezzled money from his employers in a number of ways. In some instances, the indictment alleges, Clark created company checks payable to himself and falsified the entries in financial records. Clark also allegedly diverted to himself company payments to IRS that were supposed to cover payroll taxes. In addition, indictment also alleges that Clark stole money from a company bank account the owner had directed Clark to close. Instead of closing the account, Clark allegedly used it to steal from his employer, by instructing customers to make payments to that account and then diverting the funds for his personal use.
According to allegations in the indictment, Clark used the stolen funds to pay for his personal lifestyle, including to make payments for his home mortgage, to make auto loan payments for an F-150 truck and other vehicles, to install a home theater system, and to pay for travelling and shopping expenses, among other things.
During the relevant period, Clark allegedly failed to claim the additional income he stole on his IRS tax returns. The indictment alleges that in addition to his earned wages, Clark moved over $1 million from his employers into various personal bank accounts he controlled. However, Clark falsely declared only his legitimate W-2 income on his 2014 through 2018 U.S. Joint Income Tax Returns, resulting in approximately $195,000 in lost taxes to the United States.
Clark is charged with five counts of mail fraud affecting a financial institution, which carry a maximum prison term of 30 years in prison and a $ 1 million fine per count; five counts of making and subscribing a false return, which carry a maximum term of three years in prison and a $100,000 fine per count; and one count of money laundering, which carries a maximum penalty of 20 years in prison and a $500,000 fine.
The charges in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement U.S. Attorney Murray thanked IRS-CI, the USPIS, and the Caldwell County Sheriff’s office for their investigation which led to the charges.
Assistant U.S. Attorney Michael Savage of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Federal Indictment Charges Charlotte Man for Defrauding COVID-19 Government Benefits ProgramsRead the Press Release
CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte has indicted Rashawn Prioleau, 35, of Charlotte, on multiple financial institution fraud and aggravated identity theft charges, for stealing more than $60,000 from government-funded COVID-19 benefit programs, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, joins U.S. Attorney Murray in making today’s announcement.
According to allegations in the criminal bill of indictment, Prioleau engaged in a scheme to defraud the U.S. Department of Labor (DOL), the U.S. Small Business Administration (SBA) and other North and South Carolina state agencies by filing fraudulent claims for COVID-19 related unemployment insurance (UI) benefits using stolen information of identity theft victims. The indictment further alleges that Prioleau also fraudulently applied for two Economic Injury Disaster Loans (EIDL) based on false information.
As alleged in the indictment, from at least April 2020 to September 2020, Prioleau obtained the personal identifying information (PII) of at least seven identity theft victims, including names, Social Security Numbers, dates of birth, and addresses, and used it to file for fraudulent UI benefits in North and South Carolina. Prioleau allegedly directed the payments of the UI benefits be made to debit cards or bank accounts under his control. As alleged in the indictment, in July 2020, Prioleau also applied with the SBA for two EIDLs, using fraudulent business information. Over the course of the scheme, Prioleau allegedly obtained approximately $60,397 in government-funded COVID-19 benefits.
Prioleau is charged with nine counts of bank fraud, which carry a maximum prison term of 30 years and a $1,000,000 fine per count; two counts of making a false statement to the SBA, which carry a maximum term of 30 years in prison and a $1,000,000 fine per count; and two counts of aggravated identity theft, which carry a minimum prison term of two years per count, consecutive to any other prison term imposed, and a $250,000 fine. Prioleau had his initial court appearance today before U.S. Magistrate Judge David C. Keesler.
The charges in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement U.S. Attorney Murray thanked the U.S. Postal Inspection Service for their investigation which led to the charges.
Assistant U.S. Attorney Graham Billings, of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
The Coronavirus Aid, Relief and Economic Security (CARES) Act is a federal law enacted March 29, 2020, designed to provide emergency financial assistance, including expanded UI benefits, to millions of Americans suffering the economic effects of the COVID-19 pandemic. The Economic Injury Disaster Loan (EIDL) sponsored by the United States Small Business Administration (SBA) was expanded under the CARES Act, and it is designed to provide support for small businesses to remedy economic harm caused by the COVID-19 outbreak.
The Department of Justice and the U.S. Attorney’s Office for the Western District of North Carolina remain vigilant in detecting, investigating, and prosecuting wrongdoing related to the COVID-19 pandemic. If you think you are a victim of coronavirus fraud or have information pertaining to fraud involving COVID-19, contact the National Center for Disaster Fraud Hotline at 866-720-5721 or submit a complaint online using the NCDF Web Complaint Form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.
Drug Trafficker Is Sentenced to More Than Seven Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Frank D. Whitney sentenced Jose Flores Romero, 29, of Mexico, to 87 months in prison followed by three years of supervised release on drug trafficking charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
According to filed court documents and today’s sentencing hearing, on February 21, 2020, law enforcement in Kansas seized 25 kilograms of cocaine from two individuals operating as drug couriers, who were traveling from California to Charlotte. According to court records, the couriers informed law enforcement that they had made multiple drug deliveries from California to Charlotte. Over the course of the investigation, law enforcement identified Romero as one of the intended recipients of the seized cocaine in Charlotte, and determined that Romero was involved in numerous previous drug deliveries, including a drug delivery worth over $800,000. On July 23, 2020, Romero pleaded guilty to conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine, and attempt to possess with intent to distribute five kilograms or more of cocaine.
Romero is currently in federal custody. Upon designation of a federal facility he will be transferred to the custody of the federal Bureau of Prisons. The defendant will also be subject to deportation proceedings upon the completion of his federal sentence.
In making today’s announcement U.S. Attorney Murray thanked the U.S. Drug Enforcement Administration and the Kansas Highway Patrol for their investigation of this case. Assistant U.S. Attorney Taylor G. Stout, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Charlotte Woman Who Allegedly Exploited the Coronavirus Pandemic to Obtain A Fraudulent Loan Appears in Federal CourtRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced that Jasmine Johnnae Clifton, 24, of Charlotte, appeared in court today on federal charges, for fraudulently obtaining a COVID-19 loan for almost $150,000 from the U.S. Small Business Administration (SBA).
Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), and Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, join U.S. Attorney Murray in making today’s announcement.
On Wednesday, February 17, 2021, a federal grand jury sitting in Charlotte indicted Clifton on charges of wire fraud in relation to a disaster benefit, and fraud in connection with major disaster or emergency benefits. According to allegations in the criminal bill of indictment, Clifton engaged in a scheme to defraud the SBA by obtaining an Economic Injury Disaster Loan (EIDL) based on false information.
The CARES Act is a federal law enacted March 29, 2020, and it is designed to provide emergency financial assistance to millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act established several new temporary programs and provided for the expansion of others, including the EIDL program, which is an SBA program that provides low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters.
The indictment alleges that Clifton created Jazzy Jas LLC, an online retail clothing sales business, in April 2019. On July 24, 2020, Clifton submitted a fraudulent loan application to the SBA for Jazzy Jas, despite the fact the company had been dissolved by Clifton several months prior. As a result of the fraudulent application, which included false information about revenues and a fraudulent tax document, Clifton obtained $149,900 in disaster relief funds that were intended to be provided to an existing business harmed by the COVID-19 pandemic. On or about August 14, 2020, the EIDL funds were deposited directly into Clifton’s bank account. Clifton allegedly used the government funds to make purchases at numerous retail stores, including at Nordstrom, Ikea, Neiman Marcus, Rooms To Go, Louis Vuitton, Best Buy and other retail shopping outlets. Clifton also made purchases at multiple diamond stores.
Clifton was released on bond following today’s court appearance. The charge of wire fraud in relation to disaster benefit carries a maximum prison term of 30 years and a $1,000,000 fine. The maximum penalty for fraud in connection with major disaster or emergency benefits is 30 years in prison and a $250,000 fine.
The charges in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement U.S. Attorney Murray thanked IRS-CI and USPIS for their investigation which led to the charges.
Assistant U.S. Attorney William Bozin, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
The Department of Justice and the U.S. Attorney’s Office for the Western District of North Carolina remain vigilant in detecting, investigating, and prosecuting wrongdoing related to the COVID-19 pandemic. If you think you are a victim of coronavirus fraud or have information pertaining to fraud involving COVID-19, contact the National Center for Disaster Fraud Hotline at 866-720-5721 or submit a complaint online using the NCDF Web Complaint Form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.
Asheville Resident Is Sentenced to 7 Years for Distribution of Child PornographyRead the Press Release
ASHEVILLE, N.C. – On February 19, 2021, U.S. District Judge Max O. Cogburn Jr. sentenced Michael Lawrence Feith, 34, of Asheville, to 84 months in prison for distribution of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Feith was also ordered to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.
Chief David Zack of the Asheville Police Department joins U.S. Attorney Murray in making today’s announcement.
According to filed documents and statements made in court, on April 6, 2019, and May 13, 2019, law enforcement became aware that an individual, later identified as Feith, was using a peer-to-peer network to share with other users files containing images and videos depicting the sexual abuse of children. According to court records, on July 30, 2019, law enforcement executed a search warrant at Feith’s residence in Asheville. During the execution of the search warrant, law enforcement seized a custom built desktop computer. A forensic examination of the device revealed that it contained multiple images and videos depicting children being sexually abused. In total, law enforcement located 18 images and 150 videos of child pornography on Feith’s device. Court records also show that the peer-to-peer software was also located on the device. A forensic examination indicated that 128 different child pornography files had been shared 5,886 times with others via the peer-to-peer network.
On July 27, 2020, Feith pleaded guilty to distribution and attempted distribution of child pornography. He is currently in custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, U.S. Attorney Murray commended the APD for their investigation of the case and thanked the North Carolina State Bureau of Investigation and the Boone Police Department for their invaluable assistance. The U.S. Attorney’s Office in Asheville handled the prosecution.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children. By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Jackson County Man Is Sentenced to 18 Months for Embezzling Funds from Indian Tribal OrganizationRead the Press Release
ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Fredrick Thomas Gettins Strohm, 41, of Jackson County, was sentenced to 18 months in prison and three years of supervised release for embezzling more than $95,000 from an Indian tribal organization. U.S. District Judge Martin Reidinger presided over the hearing. In addition to the prison term imposed, Judge Reidinger also ordered Strohm to pay $199,077.06 to the Eastern Band of Cherokee Indians (EBCI) as restitution.
Chief Doug Pheasant of the Cherokee Indian Police Department joins U.S. Attorney Murray in making today’s announcement.
According to plea documents filed in the case and today’s sentencing hearing, Strohm was employed as an Office Manager at Cherokee Broadband Enterprises (CBE), an entity of the Eastern Band of Cherokee Indians. In that capacity, Strohm had access to CBE’s bank accounts and bank cards, which he was authorized to use to pay for business related expenses. Beginning in August 2014, and continuing through February of 2018, Strohm used his access to CBE’s bank accounts and bank cards to pay for personal expenses and to make large cash withdrawals. For example, Strohm unlawfully used CBE funds to pay for numerous personal purchases on Amazon, and to pay approximately $52,040.55 in personal credit card debt. During the relevant time period, Strohm also used CBE funds to make approximately $45,855.01 in PayPal payments, some covering personal purchases and some consisting of cash payments to himself. In total, during the relevant time period, Strohm embezzled approximately $199,077.06 of CBE funds.
Court records also show that, throughout the years in which he was engaged in the wrongdoing, Strohm attempted to conceal his embezzlement from the authorities within the Eastern Band of Cherokee Indians. To do so, Strohm altered bank statements for the CBE bank account he submitted to Tribal Finance, and further attempted to conceal evidence by deleting QuickBooks files from the CBE computer located in his office. According to court records, the authorities within the Eastern Band of Cherokee Indians were able to recover the deleted files and uncover Strohm’s theft.
In making today’s announcement, U.S. Attorney Murray commended the Cherokee Indian Police Department for their investigation of this case and thanked EBCI Attorney General Michael McConnell and his office for their invaluable assistance.
Assistant U.S. Attorney Daniel Bradley, of the U.S. Attorney’s Office in Asheville, prosecuted the case.
Gastonia Man Is Sentenced to 54 Months in Prison for Illegal Possession of A FirearmRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Samuel Lamont Harris Sr., 28, of Gastonia, North Carolina, was sentenced to 54 months in prison, followed by three years of supervised release for illegal possession of a firearm. U.S. District Judge Kenneth D. Bell presided over the hearing.
According to filed court documents and today’s sentencing hearing, on March 30, 2019, a state trooper with the North Carolina State Highway Patrol conducted a traffic stop of the vehicle Harris was driving in Lincoln County, North Carolina. During the traffic stop, law enforcement determined that Harris was driving with a suspended license and located a loaded firearm between the center console and the passenger side seat of the vehicle. Over the course of the investigation, law enforcement determined that the firearm was reported stolen on or about November 5, 2018, out of Caldwell County, North Carolina. Harris has a prior felony conviction and he is prohibited from possessing a firearm or ammunition.
On September 11, 2021, Harris pleaded guilty to possession of a firearm by a convicted felon. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, U.S. Attorney Murray commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the North Carolina Highway Patrol for their investigation of this case, and thanked District Attorney Mike Miller, of North Carolina’s 39th Prosecutorial District, for his office’s invaluable assistance and coordination.
Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Gastonia Man Is Indicted for Threatening the President of the United States and Related ChargesRead the Press Release
CHARLOTTE, N.C. – David Kyle Reeves, of, Gastonia, N.C., has been indicted by a federal grand jury in Charlotte for making threats against the President of the United States and related charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Reginald A. DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Murray for making today’s announcement.
Reeves was arrested on Friday, February 5, 2021, via a federal complaint. According allegations in the affidavit filed with the complaint and the indictment, between January 28 and February 1, 2021, Reeves contacted multiple times the White House switchboard via telephone and made threats against President Biden and others. Court documents allege that, a Secret Service agent contacted Reeves to discuss the threats. Reeves allegedly proceeded to call back the Secret Service agent multiple times throughout the day, and repeated the threats against the President, the Secret Service agent, and others. Court documents further allege that, on the same day, Reeves also contacted the U.S. Capitol Police switchboard and communicated similar threats.
The indictment charges Reeves with making a threat against the President of the United States, which carries a maximum penalty of five years in prison, and a $250,000 fine; two counts of interstate communications with intent to injure, which carry a maximum sentence of 5 years in prison and a $250,000 fine per count; and influencing a federal official by threat, which carries a maximum penalty of 10 years in prison and a $250,000 fine.
Reeves is currently in federal custody. Reeves’ court hearing on the new charges has not been scheduled yet. The charges against Reeves are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The Secret Service investigated the case. Assistant U.S. Attorney William Bozin, of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Convicted Sex Offender in Boone, N.C. Is Sentenced to 25 Years for Possession and Distribution of Child PornographyRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Kenneth D. Bell sentenced Joshua Wayne Clemons, 40, of Boone, North Carolina, to 25 years in prison on child pornography charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Clemons was also ordered to pay a $52,000 special assessment fee, to serve a lifetime of supervised release, and to register as a sex offender after he is released from prison.
According to information contained in filed documents and statements made in court, in October 2019, law enforcement determined that an individual later identified as Clemons was using a peer-2-peer network to download and transmit child pornography. In November 2019, law enforcement executed a search warrant at Clemons’ residence and seized numerous computer devices and a cell phone. A forensic review of the seized devices revealed that they contained more than 755 images depicting the sexual abuse of children. On August 11, 2020, Clemons pleaded guilty to possession and distribution and attempted distribution of child pornography. At today’s sentencing hearing, Judge Bell enhanced Clemons’ sentence, based on Clemons’ prior convictions of Indecent Liberties with a Child.
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In a separate case, Frank Darrell Cromwell, 24, of Boone, N.C., has pleaded guilty to production of child pornography. According to plea documents and today’s plea hearing, between December 2018 and February 2019, Cromwell used Snapchat to convince a minor victim that Cromwell was a female, and to communicate with the minor. During the relevant time period, Cromwell admitted to inducing the minor victim to engage in sexually explicit conduct and to send explicit images and videos to Cromwell. The defendant entered his guilty plea before U.S. Magistrate Judge David C. Keesler. At sentencing, Cromwell faces a minimum penalty of 15 years and a maximum of 30 years in prison. A sentencing date has not been set.
In making today’s announcement, U.S. Attorney Murray commended the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Boone Police Department for their investigation of both cases, and thanked the North Carolina State Bureau of investigation for their invaluable assistance with Cromwell’s investigation.
Assistant U.S. Attorneys Emily Wasserman and Mark Odulio prosecuted Clemons’ case. Assistant U.S. Attorneys Cortney Randall and Emily Wasserman, and Special Assistant U.S. Attorney Stephanie Spaugh are in charge of Cromwell’s prosecution.
Both cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Convicted Felon on Supervised Release Is Sentenced to 9 1/2 for Armed RobberyRead the Press Release
CHARLOTTE, N.C. – Yakotus Odum, 31, of Gastonia, North Carolina, was sentenced late yesterday to 114 months in prison and five years of supervised release in connection with the 2018 armed robbery of a convenience store, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn Jr. presided over the hearing.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Travis Brittain of the Gastonia Police Department are joining U.S. Attorney Murray in making today’s announcement.
On September 25, 2020, a federal jury convicted Odum of Hobbs Act robbery, possession of a firearm in furtherance of a crime of violence, and possession of a firearm by a convicted felon. According to court documents, evidence presented at Odum’s trial, and court hearings, on March 31, 2018, Odum robbed a Circle K convenience store located at 516 Cox Road in Gastonia. Trial evidence established that Odum stole approximately $100 from the cash register at gunpoint. On April 14, 2018, in a second incident, Odum illegally possessed a stolen firearm. Odum was on supervised release for a previous federal felony conviction for illegal firearm possession when he committed the armed robbery.
Odum is currently in federal custody and upon designation of a federal facility he will be transferred into custody of the Federal Bureau of Prisons.
The investigation was handled by the FBI and the Gastonia Police Department. The prosecution for the government was handled by Assistant U.S. Attorney David Kelly and Special Assistant U.S. Attorney (SAUSA) Stephanie Spaugh. Ms. Spaugh is a state prosecutor with the office of the 26th Prosecutorial District and was assigned by District Attorney Spencer Merriweather to serve as a SAUSA with the U.S. Attorney’s Office in Charlotte. Ms. Spaugh is duly sworn in both state and federal courts. The SAUSA position is a reflection of the partnership between the office of the 26th Prosecutorial District and the United States Attorney’s Office.
U.S. Attorney Andrew Murray Announces DepartureRead the Press Release
CHARLOTTE, N.C. – Andrew Murray, United States Attorney for the Western District of North Carolina (WDNC), announced today that he will be stepping down as U.S. Attorney, effective midnight on Sunday, February 28, 2021. Upon Mr. Murray’s departure, First Assistant United States Attorney William (Bill) Stetzer will serve as Acting U.S. Attorney.
“It has been a privilege to serve the people of the Western District and I am grateful for the opportunity to have worked with such an extraordinary group of consummate, dedicated and experienced public servants. I am proud of our accomplishments and our collective hard work to protect communities across the district and to seek justice.”
U.S. Attorney Murray was appointed by President Trump and confirmed by the U.S. Senate in November 2017. Under U.S. Attorney Murray’s leadership, the Office has prosecuted cases involving gangs, violent crime, firearms, domestic and international drug trafficking, immigration, human trafficking, child exploitation, investment fraud, elder fraud, COVID-19 fraud, securities and banking fraud, tax fraud, healthcare fraud and cybercrime. The office has also successfully litigated numerous affirmative civil enforcement actions and has reached significant civil settlements involving False Claims Act and antitrust violations. The office’s civil litigation practice has also seen notable successes in civil forfeiture and the defense of federal employees and agencies sued in federal court. During his time as U.S. Attorney, Mr. Murray has supervised complex litigations and has overseen high profile cases, including the $3 billion settlement with Wells Fargo over unscrupulous sales practices; the antitrust settlement with Atrium, the largest hospital system in North Carolina; and the criminal prosecution of United States v. Lindberg et al., one of North Carolina’s most prominent bribery cases involving public officials.
During his tenure, U.S. Attorney Murray has focused on establishing strategies to reduce violent crime by implementing the Justice Department’s reinvigorated Project Safe Neighborhoods (PSN) initiative. PSN is a collaborative effort by federal, state and local law enforcement, prosecutors and communities to prevent and deter gang and gun violence. In addition to criminal prosecutions, under U.S. Attorney Murray’s direction, the office has worked closely with local and state law enforcement agencies and non-government organizations to ensure they receive federal PSN grants, to assist in their work to reduce violent crime in their communities.
U.S. Attorney Murray has also focused on combating the heroin and opioid epidemic and its devastating effects on communities. During U.S. Attorney Murray’s tenure, the office concentrated on investigating and prosecuting high-level Drug Trafficking Organizations (DTOs) and drug traffickers operating on the Dark Web. The district also formed the Heroin Education Action Team (HEAT), to heighten awareness and educate the public about the increased danger of heroin and opioid addiction.
In March 2019, U.S. Attorney Murray also announced the district’s Elder Justice Initiative (EJI), to combat the neglect, abuse, and financial exploitation of seniors. Since the inception of EJI, the office has actively engaged in efforts to investigate and prosecute financial scams impacting seniors, hold training seminars for older adults and caretakers on how to identify and respond to elderly exploitation and financial schemes, and promote greater coordination with federal state and local law enforcement partners to combat elder financial exploitation and abuse.
While serving as U.S. Attorney, Mr. Murray has successfully led the Office through significant challenges, including the longest-ever government shutdown and the devastating coronavirus pandemic. Since the onset of the pandemic, U.S. Attorney Murray has balanced the need for employee safety while effectively protecting and keeping the citizens of the Western District protected and safe without a reduction in productivity. Throughout the pandemic, U.S. Attorney Murray also has directed the office’s criminal and civil prosecutors to remain vigilant in detecting, investigating, and prosecuting wrongdoing related to the crisis and to concentrate on stopping bad actors from exploiting important government-funded COVID relief programs.
U.S. Attorney Murray said, “Despite considerable difficulties, we have increased the Office’s workforce with additional prosecutors and support staff, and we have steadfastly continued to handle high-volume cases and fulfill our mission. Our accomplishments are a testament to the hard work of the men and women in this Office. It has been a privilege to have served with such dedicated colleagues and I have the utmost respect for their commitment to the pursuit of justice.”
U.S. Attorney Murray has also worked closely with federal, state, and local law enforcement counterparts to improve the intake process of cases for federal criminal prosecution. Under U.S. Attorney Murray’s direction, the office created a collaborative program wherein Assistant U.S. Attorneys are assigned to specific District Attorney’s (DA’s) Offices in WDNC and are paired with state prosecutors from that DA’s office. This symbiotic relationship serves to maximize information sharing and expedite the triage of joint jurisdiction cases to ensure that the most appropriate prosecution path is pursued to protect the public and obtain justice.
“The collective goal of all law enforcement officers and prosecutors is to protect law-abiding citizens and hold law-breakers accountable for their actions. I have spent over 30 years as a public servant, both in the civilian and military sectors, and I can say with certainty that the talented men and women of the U.S. Attorney’s Office who have chosen a career in public service have a deep commitment to the people they serve and to our country. It has been a privilege and an honor to have served with each and every one of them. I could not have been more blessed than to have led such a selfless team that strives every day to simply do what is right and just.”
Man Sentenced for Operating Multi-Million Dollar International Money Laundering SchemeRead the Press Release
A Ukrainian man was sentenced today to 87 months in prison and ordered to pay $98,751.64 in restitution after pleading guilty to committing wire fraud, stemming from his participation in a scheme to launder funds for Eastern European cybercriminals who hacked into and stole funds from online bank accounts of U.S. businesses.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina and Special Agent in Charge Robert R. Wells of the FBI’s Charlotte Division made the announcement.
According the plea agreement and other court documents, from 2009 to 2012, Aleksandr Musienko, 38, of Odessa, Ukraine, partnered with Eastern European computer hackers to obtain over $3 million from U.S. victims’ bank accounts and launder the stolen funds from U.S. bank accounts overseas. Musienko’s partners in the scheme hacked and stole information from victims in the United States and used that information to impersonate the victims. By deceiving the victims’ banks into believing that withdrawals from the victims’ accounts were requested by the victims, Musienko and others were able to steal large amounts of money from the victims’ accounts.
Musienko was involved in recruiting, supervising, and directing a network of “money mules,” or individuals who transmitted funds, with American corporate and individual bank accounts that could receive the stolen funds and transmit it overseas. Musienko, using an alias, recruited American “mules” by advertising on employment websites that he was hiring a financial assistant. Musienko instructed the mules, who believed they were working for a legitimate business, that they were to assist clients transfer funds overseas. In September 2011, Musienko’s partners in the scheme hacked into the online accounts of a North Carolina-based company and transferred a total of $296,278 to two bank accounts controlled by Musienko’s mules. Musienko instructed the mules to wire the funds to several European bank accounts, although the company’s bank detected the fraud and deducted $197,526.36 in stolen funds from one of the mules before it was wired overseas.
Sealed charges were filed against Musienko in 2016 in the Western District of North Carolina. Musienko was arrested in South Korea in 2018 and extradited to the United States in 2019. In or about April 2019, the FBI searched Musienko’s laptop and identified files containing approximately 120,000 payment card numbers and associated identifying information for persons other than Musienko.
This case was investigated by the FBI. The Justice Department’s Office of International Affairs provided significant support with the defendant’s extradition and with obtaining evidence from South Korea. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Graham Billings of the Western District of North Carolina, and Assistant U.S. Attorney Taylor Phillips, now with the Middle District of Tennessee.
Man Sentenced for Operating Multi-Million Dollar International Money Laundering SchemeRead the Press Release
CHARLOTTE, N.C. – A Ukrainian man was sentenced today to 87 months in prison and ordered to pay $98,751.64 in restitution after pleading guilty to committing wire fraud, stemming from his participation in a scheme to launder funds for Eastern European cybercriminals who hacked into and stole funds from online bank accounts of U.S. businesses.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina and Special Agent in Charge Robert R. Wells of the FBI’s Charlotte Division made the announcement.
According the plea agreement and other court documents, from 2009 to 2012, Aleksandr Musienko, 38, of Odessa, Ukraine, partnered with Eastern European computer hackers to obtain over $3 million from U.S. victims’ bank accounts and launder the stolen funds from U.S. bank accounts overseas. Musienko’s partners in the scheme hacked and stole information from victims in the United States and used that information to impersonate the victims. By deceiving the victims’ banks into believing that withdrawals from the victims’ accounts were requested by the victims, Musienko and others were able to steal large amounts of money from the victims’ accounts.
Musienko was involved in recruiting, supervising, and directing a network of “money mules,” or individuals who transmitted funds, with American corporate and individual bank accounts that could receive the stolen funds and transmit it overseas. Musienko, using an alias, recruited American “mules” by advertising on employment websites that he was hiring a financial assistant. Musienko instructed the mules, who believed they were working for a legitimate business, that they were to assist clients transfer funds overseas. In September 2011, Musienko’s partners in the scheme hacked into the online accounts of a North Carolina-based company and transferred a total of $296,278 to two bank accounts controlled by Musienko’s mules. Musienko instructed the mules to wire the funds to several European bank accounts, although the company’s bank detected the fraud and deducted $197,526.36 in stolen funds from one of the mules before it was wired overseas.
Sealed charges were filed against Musienko in 2016 in the Western District of North Carolina. Musienko was arrested in South Korea in 2018 and extradited to the United States in 2019. In or about April 2019, the FBI searched Musienko’s laptop and identified files containing approximately 120,000 payment card numbers and associated identifying information for persons other than Musienko.
This case was investigated by the FBI. The Justice Department’s Office of International Affairs provided significant support with the defendant’s extradition and with obtaining evidence from South Korea. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Graham Billings of the Western District of North Carolina, and Assistant U.S. Attorney Taylor Phillips, now with the Middle District of Tennessee.
Individual Charged with Threatening the President of the United States Appears in Federal CourtRead the Press Release
CHARLOTTE, N.C. – A federal criminal complaint was unsealed in federal court today, charging David Kyle Reeves, 27, of, Gastonia, N.C., with threatening the President of the United States, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Reeves was arrested on Friday, February 5, 2021, and had a court hearing this morning before U.S. Magistrate Judge David C. Keesler.
Reginald A. DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Murray for making today’s announcement.
According allegations in the affidavit filed in support of the criminal complaint, between January 28 and February 1, 2021, Reeves contacted multiple times the White House switchboard via telephone and made threats against President Biden and others. The criminal complaint alleges that, on February 1, 2021, a Secret Service agent contacted Reeves to discuss the threats. Reeves allegedly called back the Secret Service agent multiple times throughout the day, and repeated the threats against the President, the Secret Service agent, and others. According to filed court documents, on the same day, Reeves also contacted the U.S. Capitol Police switchboard and communicated similar threats.
Following today’s hearing, Judge Keesler ordered Reeves to remain in custody.
The charge of making a threat against the President of the United States carries a maximum penalty of five years in prison, and a $250,000 fine.
All charges in the complaint are allegations. The defendant is presumed innocent until proven guilty beyond reasonable doubt in a court of law.
The Secret Service is investigating the case. Assistant U.S. Attorney William Bozin, of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Federal Jury Convicts Drug TraffickerRead the Press Release
CHARLOTTE, N.C. – A Charlotte federal jury has convicted Cristian Cabrera-Rivas, 39, of Charlotte, N.C, of conspiracy to distribute and possess with intent to distribute methamphetamine and aiding and abetting possession with intent to distribute methamphetamine, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad Jr. presided over the two-day trial, which ended yesterday.
According to filed court documents and evidence presented at trial, Cabrera-Rivas and two other individuals, Marco Ramos-Garcia and Silvia Hernandez-Iturralde, were involved in a conspiracy to traffic methamphetamine in and around Gaston County. Trial evidence established that in early January 2019, Cabrera-Rivas arranged to sell two kilograms of methamphetamine for $24,000. According to trial evidence, Cabrera-Rivas directed Ramos-Garcia to transport the methamphetamine from Texas to Gastonia, N.C., for the sale. On January 7, 2019, Cabrera-Rivas and Ramos-Garcia met at a restaurant in Gastonia and then drove separately to the sale location. At that location, law enforcement found Ramos-Garcia and Hernandez-Iturralde in a van, along with two kilograms of methamphetamine, a firearm, and cocaine. Law enforcement arrested Cabrera-Rivas on scene following a brief foot chase.
Cabrera-Rivas is currently in federal custody. At sentencing, he faces 10 years to life in prison for each offense. A sentencing date for Cabrera-Rivas has not been set. Ramos-Garcia and Hernandez-Iturralde have been already sentenced, after pleading guilty to federal drug offenses. Ramos-Garcia was sentenced to 132 months in prison and five years of supervised release. Hernandez-Iturralde was sentenced to 37 months in prison and two years of supervised release.
In making today’s announcement, U.S. Attorney Murray thanked ICE’s Homeland Security Investigations (HSI) in North Carolina, the Gaston County Police Department, the City of Gastonia Police Department, the Mt. Holly Police Department, and the Waxhaw Police Department for the investigation and coordination in this case.
Assistant U.S. Attorney Erik Lindahl, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Southeastern Physical Therapy and Owner to Pay $152,000 to Settle False Claims Allegations for Submitting Claims for Medically Unnecessary Durable Medical Equipment to Veterans AdministrationRead the Press Release
ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Asheville-based Southeastern Physical Therapy (SEPT) and owner Darren Cady have agreed to resolve allegations that Cady received illegal kickbacks and violated the False Claims Act by submitting claims for reimbursement for certain durable medical equipment to the Veterans Affairs (VA) while participating in the VA “Choice Provider” program.
The Veterans Access, Choice, and Accountability Act of 2014 provided veterans with expanded access to third-party providers outside the VA system. In 2018, the program was replaced by the VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018 (“Mission Act”). The Mission Act provided for the same access to third-party providers. Under the 2014 Act and the Mission Act, veterans could use third-party providers like SEPT for certain services. Provider participation in the program was memorialized in contracts with third-party administrators. The contracts required providers to comply with applicable local, State, and federal laws, rules, regulations and institutional and professional standards of care.
The United States alleges that, among other things, SEPT and Cady made materially false, fictitious, and fraudulent statements and representations, or material omissions, regarding the medical necessity of a medical device and received illegal kickbacks from the device manufacturer for prescribing the devices to VA patients. The United States alleges that Cady entered into a contract with the device manufacturer, which paid Cady for prescribing the devices. The United States also alleges that Cady gave a copy of his signature to a medical device salesperson, who used Cady’s signature to complete at least some medical necessity forms for VA patients, which forms accompanied invoices to the United States for payment for the devices. The United States alleges that Cady did not examine or personally treat the VA patients for whom he prescribed the devices, and further alleges that the patients were not instructed on how to safely or effectively use the product.
“Prescribing devices to VA patients that are not medically necessary is dangerous and wastes important resources intended to help our nation’s veterans,” said U.S. Attorney Murray. “My office will vigorously pursue providers and other actors that seek to take advantage of VA benefits through the submission of false claims that promote fraud and abuse in these critical government programs.”
This settlement resolves allegations investigated by the government under the False Claims Act. The settlement is a result of the coordinated effort between the VA Office of Inspector General and the U.S. Attorney’s Office for the Western District of North Carolina.
The claims resolved in this settlement are allegations only and there has been no determination of liability against SEPT, Cady, or any other entity.
Indian Trail Man Pleads Guilty to Wire Fraud for Scheme to Defraud COVID-19 Unemployment Insurance Benefit ProgramRead the Press Release
CHARLOTTE, N.C. – Joseph Ransome, 51, of Indian Trail, N.C., pleaded guilty to wire fraud today, for defrauding the COVID-19 Unemployment Insurance (UI) benefit program, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, join U.S. Attorney Murray in making today’s announcement.
The Coronavirus Aid, Relief and Economic Security (CARES) Act is a federal law enacted March 29, 2020, designed to provide emergency financial assistance, including expanded UI benefits, to millions of Americans suffering the economic effects of the COVID-19 pandemic.
According to plea documents and statements made in court, from March 2020 through July 2020, Ransome received UI benefits to which he was not entitled. Court documents show that Ransome applied for fraudulent UI benefits in multiple states, including in North Carolina, New Jersey, New York, and elsewhere. Ransome filed for the UI benefits based on fraudulent claims, including non-existent employment and false reason for termination. For example, Ransome falsely claimed to have been laid off from Walmart in North Carolina due to COVID, when in fact Ransome had been laid off due to misconduct. Ransome also falsely claimed prior employment at Target, BestBuy, Lowe’s, and Hobby Lobby, and falsely claimed that he had been laid off from some of these companies because he had been diagnosed with COVID or due to lack of work because of the coronavirus, when he had never in fact been employed by those companies. As a result of the fraudulent scheme, during the relevant time period, Ransome applied for more than $150,000 in fraudulent UI benefits provided under the expanded CARES Act.
Ransome appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to wire fraud in relation to a disaster benefit. The charge carries a maximum term of 30 years in prison and a $1,000,000 fine. A sentencing date for Ransome has not been set.
In making today’s announcement, U.S. Attorney Murray commended the U.S. Postal Inspection Service and the FBI for their investigative efforts, and thanked the Atlanta Regional Office of the U.S. Department of Labor, Office of the Inspector General, for their invaluable assistance.
The prosecution for the government is handled by Assistant U.S. Attorney Caryn Finley of the U.S. Attorney’s Office in Charlotte.
The Department of Justice and the U.S. Attorney’s Office for the Western District of North Carolina remain vigilant in detecting, investigating, and prosecuting wrongdoing related to the COVID-19 pandemic. If you think you are a victim of coronavirus fraud or have information pertaining to fraud involving COVID-19, contact the National Center for Disaster Fraud Hotline at 866-720-5721or submit a complaint online using the NCDF Web Complaint Form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.
Federal Judge Sentences Three Methamphetamine TraffickersRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Kenneth D. Bell handed down sentences ranging from 120 to 144 months in prison, to three individuals for their involvement in a methamphetamine trafficking ring, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Judge Bell sentenced the defendants as follows:
- Christy Lee Latham, 43, of West Jefferson, N.C. was sentenced to 144 months in prison, followed by five years of supervised release. Latham pleaded guilty to methamphetamine trafficking conspiracy and distribute and possession with intent to distribute methamphetamine. Latham’s sentence was enhanced due to her violation of her conditions of supervised release for a prior federal methamphetamine trafficking conviction.
- Joshua Dean Lipford, 33, of Trade, Tennessee, was sentenced to 138 months in prison and five years of supervised release. Lipford pleaded guilty to methamphetamine trafficking conspiracy.
- Chasty Elaine Hinson Stallings, 40, of Morganton, N.C., was sentenced to 120 months in prison and five years of supervised release. Stallings pleaded guilty to two counts of possession with intent to distribute methamphetamine and one count of possession of firearm by felon.
A fourth defendant, Heather Renee Arnold pleaded guilty on December 23, 2020, to possession with intent to distribute methamphetamine and is awaiting sentencing.
According to court documents and today’s sentencing hearing, in September 2019, Stallings was a part of a methamphetamine trafficking ring operating in Caldwell County and elsewhere. Over the course of the investigation Stallings was found in possession of 730 grams of 97.9% pure methamphetamine and a firearm. According to court records, between February and March 2020, in Ashe and Watauga Counties, and elsewhere, law enforcement seized more than 750 grams of methamphetamine with purity greater than 94% from Arnold, Latham, and Lipford.
This case is the result of the Organized Crime Drug Enforcement Task Force (OCDETF) Operation “Dixie Crystal.” According to court documents, since 2015, more than 220 individuals have been prosecuted as a result of the Dixie Crystal investigation. Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars. Over the course of the investigation, law enforcement seized far in excess of 100 kilograms of crystal methamphetamine, $1,000,000 in U.S. currency and other assets, and dozens of firearms. OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
In making today’s announcement, U.S. Attorney Murray recognized the following federal, state and local agencies which partnered in Operation Dixie Crystal, and thanked them for their continued cooperation and support: the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); North Carolina State Bureau of Investigation (NC SBI); Alexander County Sheriff’s Office; Ashe County Sheriff’s Office; Boone Police Department; Caldwell County Sheriff’s Office; Hickory Police Department; Jefferson Police Department; North Wilkesboro Police Department; Watauga County Sheriff’s Office; Wilkesboro Police Department; and Johnson County Sheriff’s Office, Tennessee.
The prosecutions are being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Is Sentenced to 17 ½ Years for Child PornographyRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad Jr. sentenced today George Malcolm Hargrove, 30, of Charlotte, to 17 ½ years in prison on child pornography charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Judge Conrad also ordered Hargrove to serve 30 years supervised release and to register as a sex offender after he is released from prison.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins U.S. Attorney Murray in making today’s announcement.
According to court documents and today’s sentencing hearing, on or about June 11-12, 2018, the FBI determined that an individual, later identified as Hargrove, was using an online file sharing network to exchange child pornography with another user. Court records show that, in October 2018, the FBI executed a search warrant at Hargrove’s residence and seized Hargrove’s laptop and other devices. A forensic examination of the seized items revealed that Hargrove possessed hundreds of images and videos depicting the sexual abuse of minors, including prepubescent children. Hargrove was arrested on state offenses. In April 2019, Hargrove was indicted on federal child pornography charges and was released on pretrial probation.
On July 19, 2019, the U.S. Probation Office conducted an inspection of Hargrove’s residence. U.S. probation officers discovered that Hargrove was using the internet to contact a 14-year-old girl. According to court records, Hargrove, who knew the age of the minor, began communicating with her online prior to his arrest, and continued his communication with her while on pretrial release.
On October 7, 2019, Hargrove pleaded guilty to possession, distribution and attempted receipt of child pornography. He is in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, U.S. Attorney Murray commended the FBI for their investigation of the case and thanked the U.S. Probation Office for their invaluable assistance.
Assistant United States Attorneys Emily Wasserman and Cortney Randall, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Waxhaw, N.C. Man Is Sentenced to 30 Years for Producing Child PornographyRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Kenneth D. Bell sentenced today Derek Robert Seely, 32, of Waxhaw, N.C. to 30 years in prison for production of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Judge Bell also ordered Seely to serve a lifetime of supervised release and to register as a sex offender.
Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Charlotte, and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (NC SBI) join U.S. Attorney Murray in making today’s announcement.
According to court documents and information introduced at the sentencing hearing, in September 2018, law enforcement became aware that an individual later identified as Seely was sharing child pornography online. Court records show that, in February 2019, law enforcement executed a search warrant at Seely’s residence and determined that Seely actively traded child pornography online. Law enforcement also recovered multiple electronic devices, including three external hard drives. A forensic examination of the seized items revealed that Seely possessed approximately 500 videos and 240 images depicting the sexual abuse of children. Court documents also show that Seely also produced child pornography, which he distributed to others.
On August 31, 2020, Seely pleaded guilty to production of child pornography. He is in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement U.S. Attorney Murray thanked HSI and SBI for their investigation of the case. Assistant United States Attorney Alfredo De La Rosa, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Convicted Felon on Trial for Drug and Gun Charges Is Found GuiltyRead the Press Release
CHARLOTTE, N.C. – A Charlotte federal jury has convicted Marcus Isaiah Curry, 37, of Gastonia, N.C., on drug trafficking and firearms charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn Jr. presided over the two-day trial, which ended late yesterday.
Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Travis Brittain of the City of Gastonia Police Department (GPD) join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and evidence presented at trial, law enforcement determined that Curry engaged in drug trafficking in and around Gastonia, North Carolina. On March 5, 2020, FBI agents and GPD officers executed a search warrant at Curry’s residence, and seized crack cocaine, powder cocaine, various chemicals and other supplies used for cooking powder cocaine into crack cocaine, and $1,801 in drug proceeds. Law enforcement also recovered from the residence two firearms and ammunition, including an assault pistol loaded with an extended high-capacity magazine, a .45 caliber handgun capable of firing shotgun shells, and a 100-round capacity ammunition drum loaded with 76 rounds. Curry has multiple prior felony convictions and he is prohibited from possessing firearms or ammunition. According to witness testimony, in addition to engaging in drug trafficking activities, law enforcement determined that Curry was planning to intimidate a witness.
The jury convicted Curry of four counts of distribution of crack cocaine, possession with intent to distribute cocaine and crack cocaine, possession of firearms in furtherance of drug trafficking, and possession of firearms by a convicted felon. Curry is in federal custody and faces a sentence of 10 years to life in prison. A sentencing date has not been set.
In making today’s announcement, U.S. Attorney Murray thanked the FBI and GPD for their investigative work on this case.
Assistant U.S. Attorney Steven R. Kaufman, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Charlotte Man Is Sentenced to 10 Years in Prison on Drug and Gun ChargesRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Kenneth D. Bell sentenced Nathaniel Jerome Steele, 45, of Charlotte, to 10 years in federal prison today, on drug trafficking and gun charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Steele was also ordered to serve six years under court supervision after he is released from prison.
Vincent C. Pallozzi, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD), join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and today’s sentencing hearing, in June 2019, law enforcement became aware that Steele was selling narcotics out of his residence in Charlotte. On June 14, 2019, law enforcement executed a search warrant at Steele’s residence, where they recovered fentanyl, cocaine, crack cocaine, and methamphetamine. Law enforcement also seized a firearm and a loaded high-capacity magazine. Steele has a prior federal firearm conviction and he is prohibited from possessing firearms or ammunition.
On October 14, 2020, Steele pleaded guilty to possession with intent to distribute fentanyl, possession with intent to distribute cocaine, possession with intent to distribute crack cocaine, possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of drug trafficking. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
U.S. Attorney Murray thanks the ATF and CMPD for handling this investigation. Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Bristol, Virginia Man Sentenced for Illegal Possession of Machinegun, SilencerRead the Press Release
AGBINGDON, Va.- Michael Houser, a Bristol, Virginia man who was convicted of federal gun offenses occurring in both the Western District of Virginia and Western District of North Carolina, was sentenced yesterday in U.S. District Court in Abingdon to 30 months in prison, Acting United States Attorney Daniel P. Bubar of the Western District of Virginia, United States Attorney Andrew R. Murray of the Western District of North Carolina, and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Washington Field Division made the announcement today.
Houser, 48, pleaded guilty in October 2020 to two counts of an indictment filed in the Western District of Virginia charging him with possession of an unregistered machinegun and possession of an unregistered silencer. In addition, Houser pleaded guilty to a one-count Information filed in the Western District of North Carolina charging him with illegal possession of firearms by a previously convicted felon. Today’s sentencing covers the charges filed in both districts.
According to court documents, on December 4, 2019, Houser was arrested at his home in Bristol, Virginia on state charges. Following his arrest, Houser called a friend and asked him to retrieve certain firearms and ammunition from Houser’s home. At Houser’s request, the friend retrieved several firearms, a silencer, and ammunition.
During an investigation, ATF agents examined a receiver from one of the firearms and determined that it met the definition of a machinegun. Houser had not registered either the machinegun or the silencer, as required by federal statute.
On or about January 23, 2020, Houser was convicted of two felonies in Washington County, Virginia. After his July 2020 federal indictment relating to the machinegun and silencer, law enforcement located Houser in Avery County, North Carolina. At the time of his arrest, Houser was found to be in possession of three firearms and ammunition, after having been convicted of the two prior felonies.
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Avery County, North Carolina Sheriff’s Office. Assistant United States Attorney Whit D. Pierce, of the Western District of Virginia, and David Thorneloe, of the Western District of North Carolina, are prosecuting the case for the United States.
North Carolina Nail Salon Owner Convicted of Forced LaborRead the Press Release
The Justice Department announced today that after a five-day trial, a federal jury in Charlotte, North Carolina, found Thuy Tien Luong, 37, of Charlotte, North Carolina, guilty of forced labor after finding that Luong compelled the labor of one of her nail technicians at a nail salon she owned and operated in Davidson, North Carolina.
“More than 150 years after the United States ratified the Thirteenth Amendment to the Constitution and abolished slavery and involuntary servitude, human trafficking remains a problem in our cities, our towns, and our communities,” said Assistant Attorney General for the Civil Rights Division Eric Dreiband. “Like slave masters of old, human traffickers are adept at targeting the most vulnerable members of our society and using coercive and violent tactics to intimidate and compel their services. We must and will confront and defeat this vile conduct, like this defendant’s, and the Department of Justice will continue its vigorous and systematic efforts to hold human traffickers accountable, bring justice to their victims, and prevent them from harming others.”
“Through the infliction of mental and physical abuse, Luong despicably preyed upon the victim’s hardships and personal vulnerabilities for her own selfish financial gains,” said U.S. Attorney R. Andrew Murray for the Western District of North Carolina. “Forced labor schemes are an assault on human dignity and have no place in modern society. My office remains committed to combating all forms of human trafficking and prosecuting perpetrators to the fullest extent of the law.”
“Traffickers treat human beings as commodities, and this case is no exception. They use force, fraud or coercion to prey on people’s vulnerabilities,” said U.S. Department of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Charlotte Special Agent in Charge Ronnie Martinez. “HSI special agents will continue to focus their efforts on eradicating this heinous crime; no one should be subject to human trafficking.”
Evidence presented at trial established that Luong compelled the victim’s labor from October 2016 to June 2018 through a variety of coercive means. Luong physically assaulted the victim on several occasions, including pulling her hair out, stabbing her with nail salon tools, and pouring acetone on her head. Luong also threatened to ruin the victim’s reputation with her family by threatening to tell them information about the victim which would negatively impact the victim’s relationship with her family. Luong falsely claimed that the victim owed her a debt of $180,000, and falsely alleged that the victim’s poor work performance caused Luong to lose this amount of money. Luong even executed a debt contract with the victim in the amount of $180,000, and threatened to send the victim to jail if she did not repay all of it. In reality, the victim was a good employee. Luong often treated the victim in a humiliating and demeaning fashion, all while having her work 10 hours a day for 6 to 7 days a week. The totality of Luong’s coercive scheme caused the victim to fear Luong and forced her to continue working for Luong until a particularly violent assault led to the victim reporting Luong to the Davidson Police Department and to Luong’s subsequent arrest in June 2018.
A sentencing date has not been scheduled at this time, but it will occur before District Court Judge Kenneth D. Bell. The defendant faces a maximum sentence of 20 years imprisonment and must pay mandatory restitution to the victim as well.
The case is being investigated by HSI with assistance from the Davidson Police Department and Charlotte-Mecklenburg Police Department. It is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Maryam Zhuravitsky of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Davidson Nail Salon Owner Convicted of Forced LaborRead the Press Release
CHARLOTTE, N.C. – The Justice Department and the U.S. Attorney’s Office announced today that after a five-day trial, a federal jury in Charlotte found Thuy Tien Luong, 37, of Charlotte, guilty of forced labor after finding that Luong compelled the labor of one of her nail technicians at a nail salon she owned and operated in Davidson, North Carolina.
“More than 150 years after the United States ratified the Thirteenth Amendment to the Constitution and abolished slavery and involuntary servitude, human trafficking remains a problem in our cities, our towns, and our communities,” said Assistant Attorney General for the Civil Rights Division Eric Dreiband. “Like slave masters of old, human traffickers are adept at targeting the most vulnerable members of our society and using coercive and violent tactics to intimidate and compel their services. We must and will confront and defeat this vile conduct, like this defendant’s, and the Department of Justice will continue its vigorous and systematic efforts to hold human traffickers accountable, bring justice to their victims, and prevent them from harming others.”
“Through the infliction of mental and physical abuse, Luong despicably preyed upon the victim’s hardships and personal vulnerabilities for her own selfish financial gains,” said U.S. Attorney Andrew Murray. “Forced labor schemes are an assault on human dignity and have no place in modern society. My office remains committed to combatting all forms of human trafficking and prosecuting perpetrators to the fullest extent of the law.”
“Traffickers treat human beings as commodities, and this case is no exception. They use force, fraud or coercion to prey on people’s vulnerabilities,” said Homeland Security Investigations (HSI) Charlotte Special Agent in Charge Ronnie Martinez. “HSI special agents will continue to focus their efforts on eradicating this heinous crime; no one should be subject to human trafficking.”
“Davidson police officers and investigators took immediate action when this horrific crime was reported by the brave victim,” said Chief Penny L. Dunn of the Davidson Police Department. “We are extremely grateful for the quick response of Special Agents of Homeland Security and for the pursuit of justice for victims by the U.S. Attorney’s Office. The case is an example of how domestic trafficking can and does happen anywhere in our nation.”
Evidence presented at trial established that Luong compelled the victim’s labor from October 2016 to June 2018 through a variety of coercive means. Luong physically assaulted the victim on several occasions, including pulling her hair out, stabbing her with nail salon tools, and pouring acetone on her head. Luong also threatened to ruin the victim’s reputation with her family by threatening to tell them information about the victim which would negatively impact the victim’s relationship with her family. Luong falsely claimed that the victim owed her a debt of $180,000, and falsely alleged that the victim’s poor work performance caused Luong to lose this amount of money. Luong even executed a debt contract with the victim in the amount of $180,000, and threatened to send the victim to jail if she did not repay all of it. In reality, the victim was a good employee. Luong often treated the victim in a humiliating and demeaning fashion, all while having her work 10 hours a day for 6 to 7 days a week. The totality of Luong’s coercive scheme caused the victim to fear Luong and forced her to continue working for Luong until a particularly violent assault led to the victim reporting Luong to the Davidson Police Department and to Luong’s subsequent arrest in June 2018.
Following entry of the guilty verdict, Luong was remanded into federal custody. A sentencing date has not been scheduled at this time, but it will occur before District Court Judge Kenneth D. Bell. The defendant faces a maximum sentence of 20 years in prison and must pay mandatory restitution to the victim.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations with the invaluable assistance of the Davidson Police Department and the Charlotte-Mecklenburg Police Department. Assistant United States Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Maryam Zhuravitsky of the Civil Rights Division’s Human Trafficking Prosecution Unit are prosecuting the case.
January is National Slavery and Human Trafficking Prevention Month
In recognition of National Slavery and Human Trafficking Prevention Month, U.S. Attorney Murray highlights the continued efforts of the U.S. Attorney’s Office to combat human trafficking, raise awareness, and prosecute perpetrators.
In addition to Luong’s conviction of forced labor charges, in 2020, the U.S. Attorney’s Office’s anti-trafficking efforts resulted in significant prosecutions.
- In October, a federal grand jury indicted Dajuan Akeem Blair, 25, of Cornelius, N.C, on two counts of sex trafficking of two minors and child pornography charges.
- Simone Cherelle McIllwain, 29, of Matthews, N.C. was also indicted in October with sex trafficking of on a minor. McIllwain allegedly trafficked the minor while on federal supervised release for another federal sex trafficking conviction in Florida.
- On October 22, 2020, Xavier Boston, 31, of Charlotte, was sentenced to 40 years in federal prison. Boston was convicted by a jury of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise.
- In August 2020, Timothy Johnson, 25, of Charlotte, pleaded guilty to conspiracy to commit human trafficking.
The charges against McIllwain and Blair are pending. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. A sentencing date for Johnson has not been set yet.
“Human trafficking is one of the most abhorrent crimes that can be inflicted upon another human being. Whether forced into unpaid labor or coerced into commercial sex acts, trafficking victims are reduced to commodities, their worth determined by how much a trafficker profits from them. In most cases, victims also endure great physical violence and mental abuse in the hands of the perpetrators,” said U.S. Attorney Murray. “Since launching our initiative to combat human trafficking, the U.S. Attorney’s Office has shed a light on this blight to modern society. We remain committed to educating the public and we will continue to work closely with our law enforcement partners to investigate and prosecute traffickers who exploit their victims for personal gain. While we have had many notable successes, our efforts to eradicate human trafficking in the Western District continue.”
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If you believe you are a victim or may have information about a potential trafficking situation, call the National Human Trafficking Resource Center (NHTRC) at 1-888-373-7888. NHTRC is a national, toll-free hotline, with specialists available to answer calls from anywhere in the country, 24 hours a day, seven days a week, related to potential trafficking victims, suspicious behaviors, and/or locations where trafficking is suspected to occur. You can also submit a tip to the NHTRC online.
You can also contact ICE-Homeland Security Investigations at 1-866-DHS-2-ICE (1-866-347-2423) or the Charlotte Office of the FBI at 704-672-6100.
Justice Department Files Statement of Interest Urging Transparency in the Compensation of Asbestos ClaimsRead the Press Release
CHARLOTTE, N.C. – The Department of Justice today filed a Statement of Interest in In re Bestwall LLC in the United States Bankruptcy Court for the Western District of North Carolina. In this bankruptcy case, the debtor Bestwall LLC seeks to establish a trust to resolve its asbestos liabilities pursuant to 11 U.S.C. § 524(g), a provision in the Bankruptcy Code that provides the framework for responding to the unique issues associated with asbestos liability.
As part of the bankruptcy, the court will evaluate the submitted asbestos claims and estimate the amount of the debtor’s asbestos liabilities. In order to ensure the accuracy of the estimation, the debtor has asked the court to require asbestos claimants to fill out a questionnaire providing basic information about their claims and to authorize discovery from other asbestos trusts to which claimants have submitted claims. The department’s Statement of Interest supports these proposed procedures on the ground that they will further transparency in the evaluation of the submitted asbestos claims and ensure the reliability of the estimation of the debtor’s asbestos liabilities.
“In recent years, numerous courts and commentators have recognized that many asbestos claims are based on inaccurate or even fraudulent information,” said United States Attorney R. Andrew Murray for the Western District of North Carolina. “That lack of transparency in the compensation of asbestos claims has been a significant problem,”
“It has become increasingly common for claimants’ counsel to seek duplicative recoveries from multiple sources by misrepresenting the asbestos products to which claimants were exposed,” said Deputy Assistant Attorney General Douglas Smith. “Such duplicative claiming depletes resources that would otherwise be available to compensate deserving claimants filing claims in the future. Today’s Statement of Interest is one of many actions the department has taken over the last several years to encourage greater transparency in asbestos bankruptcy proceedings and prevent fraud.”
Congress enacted 11 U.S.C. § 524(g) to create a comprehensive mechanism for addressing injuries caused by asbestos. Under section 524(g), asbestos-related claims may be channeled to a special trust created under the bankruptcy plan of reorganization, which then assumes responsibility for both the defense and payment of those claims. The trusts are managed by trustees, who often must secure support for major decisions from a “trust advisory committee,” whose members are often the same attorneys who represented asbestos claimants during the bankruptcy. Since 1994, more than 60 such trusts have been established by chapter 11 debtors with asbestos-related liabilities.
According to the Government Accountability Office, asbestos bankruptcy trusts paid $17.5 billion from 1988 through 2011, and more recent studies estimate higher amounts.
Both courts and commentators have expressed growing concerns that claims submitted in these bankruptcies may be fraudulent. In 2014, the same bankruptcy court in which the United States today filed its Statement of Interest found a substantial pattern of misrepresentation in another case, In re Garlock Sealing Technologies LLC, 504 B.R. 71 (Bankr. W.D.N.C. 2014). The court found that, in a sample of asbestos claims submitted before the bankruptcy, in each and every case key evidence about asbestos exposure had been misrepresented or withheld. In several instances, plaintiffs made claims against defendants to whose products they had previously represented they had never been exposed. Similarly, several studies have demonstrated problems with claims submitted to asbestos trusts. One study found that, in the study period, people without malignant asbestos injury accounted for 86 percent of all claims made to the trusts and 37 percent of all trust payments. Another found that many of the claim forms submitted by the same claimants and law firms to different trusts contradicted each other. The secrecy with which asbestos claims are processed by asbestos trusts has facilitated the payment of claims that do not deserve compensation and has made it difficult to detect when plaintiffs are seeking a recovery based on inaccurate or fraudulent representations. Recognizing this problem, 16 states have already passed legislation requiring disclosure of basic information regarding other sources of asbestos compensation as well as the asbestos products to which claimants were exposed.
The United States’ Statement of Interest argues that there should be transparency in the estimation of asbestos claims in bankruptcy proceedings in order to prevent fraud and abuse. As the statement explains, courts presiding over asbestos bankruptcy cases increasingly are putting in place procedures requiring claimants to provide basic information documenting their allegations regarding product identification (and other elements of their claims) as well as any prior claims they have filed in the courts or with other asbestos trusts. Courts increasingly recognize that such transparency is critical to the fair and efficient resolution of asbestos claims.
Today’s filing is part of broader efforts by the department to look for opportunities to increase the transparency of asbestos bankruptcy proceedings and asbestos trusts in order to protect the interests of legitimate claimants and the United States. This includes objecting to bankruptcy plans that lack critical provisions to ensure transparency and accountability and to prevent fraudulent claims and mismanagement of asbestos trust funds, including provisions: that require compliance with the Medicare Secondary Payer Statute that notify claimants of their potential obligation to reimburse Medicare; that prevent excessive administrative costs and attorney contingency fees; that avoid conflicts of interest among members of the trust advisory committee; and that prevent payments to those who cannot demonstrate exposure to the defendants’ products or who have made inconsistent claims in other asbestos proceedings.
This matter is being handled by the Justice Department’s Civil Division with assistance from the U.S. Trustee Program and the U.S. Attorney’s Office for the Western District of North Carolina.
Matthews, N.C. Man Is Sentenced to More Than 15 Years in Prison for Child PornographyRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad Jr. sentenced today Brian Parks Moore, 51, of Matthews, N.C. to 188 months in prison for transportation of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Judge Conrad also ordered Moore to serve 30 years of supervised release and to register as a sex offender.
According to court documents and information introduced at the sentencing hearing, Moore was indicted in November 2018 on child pornography charges. According to court records, Moore told law enforcement that he had initially accessed child pornography for the purpose of incriminating another individual, but subsequently began viewing the child pornography himself. In total, Moore possessed approximately 1,769 images and videos depicting the sexual abuse of children. On December 27, 2018, Moore was released on bond following his arraignment hearing. As a condition of his pretrial release, the Court ordered Moore only to use electronic devices approved by the U.S. Probation Office.
According to court records, on March 13, 2019, a U.S. probation officer conducted an unannounced visit at Moore’s residence, during which the officer located an unauthorized tablet computer in Moore’s bedroom. A review of the web history of the tablet showed that Moore’s search history was consistent with attempting to access child pornography and child erotica while on pretrial supervision. As a result, Moore’s bond was revoked and Moore was taken into custody. On May 24, 2019, Moore pleaded guilty to transportation of child pornography.
In making today’s announcement U.S. Attorney Murray commended the U.S. Probation Office, Homeland Security Investigations, and the FBI for their investigative efforts.
Assistant United States Attorney Alfredo De La Rosa, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.