Western District of North Carolina
Press releases recorded for this federal judicial district.
Charlotte Business Owner Pleads Guilty to Transporting Stolen PropertyRead the Press Release
CHARLOTTE, N.C. – Edwin R. Barkley, 63, of Charlotte, appeared in federal court today and pleaded guilty to interstate transportation of stolen property, for operating a large-scale fraudulent scheme involving the purchase and sale of stolen goods and merchandise through his Charlotte-based storefront business, Tool King USA (Tool King).
Reginald A. DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department join the U.S. Attorney’s Office in making today’s announcement.
As Barkley admitted in court today, from at least September 2015 through October 2018, Barkley operated the Tool King as a “fence,” which is a business that buys stolen merchandise from multiple “boosters.” A booster is someone who steals goods and merchandise and sells them to a fence. Court records show that Barkley bought from multiple boosters large-ticket items such as power tools, vacuum cleaners, generators, and home electronic goods, at a fraction of their retail value. Barkley then sold the stolen merchandise on an e-commerce platform at or near ninety percent of their retail value, and used the profits to pay for his daily living expenses.
Barkley entered his guilty plea before U.S. Magistrate Judge David S. Cayer. The interstate transportation of stolen goods charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Barkley is currently released on bond. A sentencing date has not been set.
This case was the result of the investigative efforts of CMPD and the Secret Service. The CMPD and the Secret Service have established a fully integrated partnership to combat the most significant organized criminal groups operating in Charlotte. Through this partnership, this unit has successfully leveraged local and federal resources, personnel, expertise and authorities to identify and combat the criminals and criminal organizations that have the largest negative impact on the community.
Assistant U.S. Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.
New York Man Pleads Guilty to Securities Fraud for Defrauding Retired Victims of More Than $400,000Read the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Rudolph Carryl, 67, formerly of Oyster Bay, N.Y., appeared before U.S. Magistrate Judge David C. Keesler late Friday, March 15, 2019, and pleaded guilty to securities fraud, for defrauding retired victims of more than $400,000. Carryl was arrested on August 29, 2018, at a halfway house in Brooklyn, N.Y., where he was serving time for federal wire fraud charges related to a separate investment scheme.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Office joins U.S. Attorney Murray in making today’s announcement.
According to plea related documents and court proceedings, Carryl held himself out as an investment advisor to his victims and operated Carryl Capital Management (CCM), an investment management firm with offices in New York City. CCM maintained a website that purported the firm adhered to rigorous risk control measures, and was dedicated to achieving the investment goals for its clients.
In or about February 2015, Carryl induced a victim identified as “M.G.” to hand over money which he promised to invest in stocks. Over the course of two years, M.G., who was Carryl’s childhood friend and a retired nurse living in North Carolina, wired more than $75,000 to an account controlled by Carryl, based on Carryl’s misrepresentations that M.G.’s money would be used to purchase stocks on M.G.’s behalf. Similarly, in or about May 2015, Carryl solicited victims “W.B.,” a retired United States Air Force veteran, and his wife “A.B.,” both of North Carolina, to invest approximately $350,000 in a purported investment fund that was managed by Carryl. To induce the retired couple to part with their money, Carryl claimed that he was a successful investment adviser who managed investments for the country of Saudi Arabia and that he was friends with wealthy celebrities.
As Carryl admitted in court, rather than invest the victims’ funds as promised, Carryl used the money to pay for personal and other expenses, and to make substantial cash withdrawals.
Unbeknownst to his victims, Carryl had been convicted of federal wire fraud charges related to a separate investment scheme, and was sentenced in New York on or about August 9, 2017, to 12 months and one day in prison. After his sentencing but before he reported to the Federal Bureau of Prisons to begin serving his sentence, Carryl continued to be in contact with W.B., assuring W.B. that his investments were doing ok, all the while failing to disclose any information about his conviction or his impending report date to the Federal Bureau of Prisons.
The securities fraud charge carries a maximum prison term of 20 years and a $5 million fine. Carryl is currently detained. A sentencing date has not been set yet.
The FBI led the investigation. Assistant United States Attorney Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
In March 2019, U.S. Attorney Andrew Murray announced the Office’s 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: /usao-wdnc/elder-justice-initiative
Justice Department Announces Largest Ever Nationwide Elder Fraud SweepRead the Press Release
CHARLOTTE, N.C. – Attorney General William P. Barr and U.S. Attorney Andrew Murray today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep. The cases brought during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.
“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said. “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud. The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear. Today we are announcing the largest single law enforcement action against elder fraud in American history. This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep. I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible. Together, we are bringing justice and peace of mind to America’s seniors.”
The Department of Justice took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of millions more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars.
In the Western District of North Carolina, a federal criminal indictment was unsealed, charging Mark C. Ramsey, 49, of Asheville, N.C., with securities fraud, for allegedly defrauding dozens of victim investors, many of whom were at or near retirement age, of more than $1.4 million. As alleged in the indictment, Ramsey induced victims to part with their money by falsely assuring them his investments were “safe” and would yield “guaranteed” returns. Instead of investing the victims’ money as promised, the indictment alleges that Ramsey used it to make Ponzi-style payments to other investors, and to fund his personal lifestyle, including to take multiple trips to casinos in Las Vegas.
The charges against Ramsey are merely allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The Elder Justice Initiative
Today, the U.S. Attorney’s Office and the FBI announced the Western District’s 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 getting ripped off by scammers; and promote greater coordination with law enforcement partners.
“Scammers targeting seniors are a growing concern in North Carolina. Tech support scams, lottery and sweepstakes fraud, IRS impersonators, grandparent scams, and sham business opportunities are common examples of financial schemes that victimize older Americans, leaving them in financial peril. We have a responsibility to protect our vulnerable older population from financial fraud and from scammers looking to get a hold of their money,” said U.S. Attorney Murray. “That’s why we’ve partnered with the FBI to launch the Western District’s Elder Justice Initiative, to combat elder fraud and financial exploitation. Our goal is to increase federal criminal prosecutions and civil actions against wrong-doers and educate older adults on how to avoid becoming victims of scams. It’s time to take action and stop the fraud.”
“Years ago, our parents taught us not to talk to strangers. Their advice has proven to be timeless. Strangers are reaching out to us on social media, sending us emails, calling our homes and cell phones. If you fall for a scam, you can bet your life, they will call you again. They might have a different sales pitch or a different sob story, but they are the same crooks. They won’t stop until they get paid. Don’t be the person who pays them,” said FBI Special Agent in Charge John Strong. “Let’s put these predators out of business for good. Don’t fall for fraud.”
The U.S. Attorney’s Office and the FBI are also partnering with the AARP in North Carolina to conduct outreach and raise awareness through a series of seminars to educate seniors and prevent victimization.
The first seminar was held this morning in the format of a tele-town hall, during which more than one thousand seniors in North Carolina had an opportunity to participate in an interactive telephonic session and learn more about financial scams.
Some examples of financial fraud targeting seniors discussed during this morning’s seminar 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.
Below are some tips shared with participants during the seminar on how 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.
For more information about the Elder Justice Initiative, please visit: https://www.justice.gov/usao-wdnc/elder-justice-initiative.
To view our Public Service Announcement, please visit: https://youtu.be/qBGGAA7Mxbo
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
U.S. Attorney's Office & FBI to Announce Initiative Targeting Elder Financial FraudRead the Press Release
****** MEDIA ADVISORY *******
CHARLOTTE, NC. – March 3-9 is National Consumer Protection Week. The U.S. Attorney’s Office and the FBI will host a press conference on Thursday, March 7, 2019, to announce an initiative focusing on elder financial fraud. With financial scams targeting the elderly on the rise in North Carolina, federal prosecutors and law enforcement are increasing their efforts to combat financial schemes that victimize older Americans, by expanding their response to criminal and civil violations and raising public awareness.
WHO: Andrew Murray, United States Attorney
Western District of North Carolina
John Strong, Special Agent in Charge
Federal Bureau of Investigation
Lara Cole, Associate State Director, Charlotte Region
AARP – North Carolina
WHAT: Press Conference
WHEN: Thursday, March 7, 2019 at 11:15 A.M.
WHERE: U.S. Attorney’s Office
227 West Trade Street, Ste. 1650
Charlotte, NC 28202
OPEN PRESS - Camera preset: 11:00 a.m.
NOTE: Media may begin arriving at 10:30 am and be here no later than 11:10 a.m. Allow time for security check-in, x-ray of equipment, and set up. All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media must check in at the building’s security desk for an escort to the U.S. Attorney’s Office. Direct press inquiries to Lia Bantavani at [email protected] or 704-338-3140.
NOT FOR RELEASE OR PUBLICATION - FOR PLANNING PURPOSES ONLY
Federal Judge Sentences Former Berkeley County School District Chief Financial Officer to More Than Five Years for Embezzlement, Money Laundering, and Public CorruptionRead the Press Release
CHARLESTON, S.C. – Today, U.S. District Judge David C. Norton sentenced the former Chief Financial Officer (CFO) of the Berkeley County School District, Brantley Denmark Thomas, III, to 63 months in prison on charges of embezzlement, money laundering, and public corruption, announced the U.S. Attorney’s Office for the Western District of North Carolina. Judge Norton also ordered Thomas, 61, of Charleston, South Carolina, to serve three years under court supervision after he is released from prison, and to pay a total of $1,232,106.08 as restitution to Berkeley County School District (BCSD).
According to filed court documents and today’s sentencing hearing, from at least 2010 to December 2016, Thomas served as CFO of BCSD. As the School District’s CFO, Thomas was responsible for, among other things, reviewing invoices and authorizing payments to BCSD vendors. Court records show that, during the relevant time period, Thomas executed an embezzlement scheme by which he, among other things, intentionally overpaid certain BCSD vendors. When those vendors issued refund checks resulting from the overpayments, Thomas converted the checks issued to School District for his own use. Court records also show that, at times, Thomas deposited the refund checks directly into a personal bank account. At other times, Thomas converted the refund checks into cashier’s checks, which he then deposited into a personal bank account. Over the course of at least sixteen years, Thomas also used other methods to embezzle from BCSD, and stole at least $1.2 million of School District funds. Thomas used the stolen money on personal expenditures, including to pay for personal travel, jewelry and private club memberships.
According to court records and plea related documents, Thomas also admitted to taking at least $32,000 in bribes and kickbacks from an insurance broker in exchange for Thomas’ help in securing millions of dollars in BCSD’s insurance business.
In imposing the sentence, Judge Norton highlighted the serious nature of Thomas’ crimes, and noted its negative impact on the students of BCSD, the need to protect the public from Thomas, and the need to deter Thomas and others from committing such crimes in the future. Judge Norton also commented upon Thomas’ apparent “OPM Addiction,” – referencing Thomas’ repeated thefts of “Other people’s money.”
In January 2018, Thomas pleaded guilty to a total of twenty federal charges involving embezzlement, money laundering and public corruption. Thomas is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons, upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was conducted by the FBI and the South Carolina Law Enforcement Division. In making today’s announcement, the U.S. Attorney’s Office thanked the South Carolina Attorney General’s Office for its assistance.
The prosecution was handled by Assistant U.S. Attorney Daniel Ryan of the U.S. Attorney’s Office for the Western District of North Carolina in Charlotte upon recusal of the U.S. Attorney’s Office for the District of South Carolina.
Jamaican National Caught Smuggling Cocaine at Charlotte Airport Pleads Guilty to Drug Importation ChargesRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Christopher Anthony Samuels, 37, of Montego Bay, Jamaica, appeared in federal court and pleaded guilty to drug trafficking and importation related charges. U.S. Magistrate Judge David S. Cayer presided over today’s plea hearing.
According to filed court documents and the plea hearing, on November 6, 2018, Samuels flew into Charlotte-Douglas International Airport onboard a flight that originated in Montego Bay, Jamaica. Samuels was scheduled to connect in Charlotte, and fly the same day to New York City. Court records show that, upon entry into the United States, Samuels’ suitcase and backpack were inspected by U.S. Custom and Border Protection (CBP) officers on duty at Port of Entry in Charlotte. Samuels was sent to secondary inspection, during which time CBP officers X-rayed Samuels’ luggage. Upon further inspection, CBP officers, working jointly with Homeland Security Investigations (HSI), discovered two taped bags weighing approximately two (2) kilograms of cocaine, hidden within the suitcases’ bottom liners. As Samuels admitted today in court, he intended to deliver the cocaine to additional co-conspirators, located in New Jersey.
Samuels pleaded guilty to drug trafficking conspiracy, possession with intent to distribute cocaine, and unlawful importation of cocaine. Samuels is facing a mandatory minimum of five years in prison and a maximum of 40 years, a $5 million fine, and possible deportation. A sentencing date has not been set.
The case is the result of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Airport Drug Interdiction Initiative, that targets international drug smuggling and financial crimes, including money laundering, bulk cash smuggling, and unlicensed money transmitters/transporters that utilize air travel to further their criminal enterprise. Through this initiative, HSI incorporates the collaborative efforts of multiple law enforcement agencies, to include CBP, North Carolina Department of Public Safety’s Divisions of Alcohol Law Enforcement (ALE) and Department of Correction (DOC), and the Charlotte-Mecklenburg Police Department. In making today’s announcement U.S. Attorney Murray thanked these agencies for their joint investigation of this case.
Sanjeev Bhasker, Assistant U.S. Attorney for the Western District of North Carolina in Charlotte is in charge of the prosecution.
Project Safe Neighborhoods Initiative Leads to 10-Year Sentence for Man Convicted of Armed RobberyRead the Press Release
CHARLOTTE, N.C. – Octavius DeJuan Phillips, 30, of Gastonia, N.C., was sentenced to 121 months in prison and three years of supervised release on armed robbery 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 sentencing.
According to filed documents and statements made in court, on August 26, 2017, Phillips committed a robbery at the Family Dollar store located at 3400 Wilkinson Boulevard, in Charlotte. Court records show that Phillips entered the store at 9:54 a.m., armed with a silver handgun. Phillips approached the store clerk, pointed his firearm at the employee and demanded money from the register. The store clerk complied and Phillips fled the scene with the store’s money. He was apprehended the same day in Pineville, N.C. In October 2018, Phillips pleaded guilty to Hobbs Act robbery and brandishing a firearm during, in relation to, and in furtherance of a crime of violence. Court records show that Phillips has a previous felony drug conviction and multiple assault convictions.
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In a separate case, Quincy Lamonte Love, 27, Kannapolis, N.C., was sentenced to 60 months in prison, followed by three years of supervised release for possession of a firearm in furtherance of a drug trafficking offense. According to court records, on March 27, 2017, law enforcement found Love inside of a car with drugs and firearms. Following Love’s arrest, law enforcement seized a Glock, model 42, .380 caliber pistol and a Desert Eagle, .45 caliber pistol. Love has previous felony convictions and is prohibited from possessing firearms.
In making today’s announcement U.S. Attorney Murray commended the FBI and the Charlotte-Mecklenburg Police Department (CMPD) for investigating Phillips’ case, and thanked U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and CMPD for conducting the investigation into Love.
Assistant U.S. Attorney Erik Lindahl, of the U.S. Attorney’s office in Charlotte, prosecuted both cases.
These cases have been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.
Georgia Man Pleads Guilty to Conspiracy in Connection with A Bribery Scheme Involving Three Former Top Buncombe County OfficialsRead the Press Release
ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced that Joseph F. Wiseman, Jr., 58, of Roswell, Georgia, pleaded guilty to a conspiracy charge today, for his role in a bribery scheme involving three former top Buncombe County Officials.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Director Robert Schurmeier of the North Carolina State Bureau of Investigation (SBI); and Matthew D. Line, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), join U.S. Attorney Murray in making today’s announcement.
According to documents filed with the court, at various times from the mid-1980s through 2017, Wiseman was the agent and contractor on behalf of three businesses that collectively obtained more than $15 million in contracts with Buncombe County for consulting and engineering services. Court records show that from at least 2014 through June 30, 2018, Wiseman engaged in a bribery scheme involving three top Buncombe County Officials: former County Manager Wanda Skillington Greene; former Director of the Department of Planning and Development Jon Eugene Creighton; and former Director of the Department of Social Services, Assistant County Manager, and later Buncombe County Manager, Amanda Stone (collectively, “County Officials”).
According to court documents, the plea agreement, and statements made in court, Greene, Creighton, and Stone engaged in the bribery scheme with Wiseman and used their official positions to enrich and benefit themselves by soliciting and accepting gifts, payments, and other things of value from Wiseman, in exchange for awarding Wiseman and the companies he represented with lucrative county contracts and projects. Court records show that Wiseman understood and agreed that providing the trips, gifts, and other things of value to the three County Officials was a necessary condition for his companies to continue to obtain contracts with the County.
According to court records, prior to 2014, Greene, Creighton, and Stone went on trips that were connected in some way with legitimate county business, but during which Wiseman provided things of value such as meals, wine, tickets to sporting events, and other excursions. By 2014, the County Officials solicited and accepted valuable gifts from Wiseman that were entirely unrelated to any legitimate County business. For example, Wiseman paid for pleasure trips to various locations within the United States and abroad, including to Key West, Boston, Martha’s Vineyard, Napa Valley, San Diego, Vienna, Budapest, Cartagena, and Vancouver, among others. In addition to lodging and airfare, during those trips Wiseman also paid for sightseeing excursions, spa sessions, and gift shop purchases, such as cases of wine from the Napa Valley vineyards that the County Officials visited. To pay for the trips and other incidentals, Wiseman either provided the County Officials with his credit card number, or, as in Creighton’s case, the credit card itself.
As a result of receiving the above-cited things of value, Greene and Creighton awarded on behalf of Buncombe County multiple contracts worth over $2 million to Wiseman’s company, Environmental Infrastructure Consulting, LLC (EIC). According to the filed factual basis statement to which Wiseman agreed during the entry of his guilty plea, Wiseman contends that the expenses he incurred by providing these trips, gifts, and other things of value to the County Officials came out of what otherwise would have been part of the his own profit, rather than from any type of “padding” or inflating of the contract amounts. However, Wiseman did agree that he provided the valuable gifts for the purpose of influencing Greene, Creighton, and Stone’s decision to award the contracts, and, in doing so, Wiseman conspired with the County Officials to deprive the Government and the citizens of Buncombe County of their right to the honest services of those employees.
Wiseman pleaded guilty to conspiracy to commit honest services fraud before U.S. Magistrate Judge Carleton Metcalf. The maximum penalty for the charge is five years in prison and a fine of $250,000. A sentencing date has not been set.
In making today’s announcement, U.S. Attorney Murray thanked the FBI, IRS-CI and the SBI for their investigation of this case, and noted that the investigation into allegations of criminal activities within the Buncombe County Government is ongoing.
Assistant United States Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville is prosecuting the case.
North Carolina Mechanic Sentenced to 36 Months for Embezzling Approximately $1.4 Million from his Employer and Filing a False Tax ReturnRead the Press Release
A North Carolina mechanic was sentenced to prison today for wire fraud and filing a false income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
Albert Strong, 59, a resident of Union, South Carolina, was sentenced to 36 months in prison by U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina. On April 12, 2018, Strong pleaded guilty to one count of wire fraud and one count of filing a false tax return for tax year 2013.
According to the documents filed with the court, Strong worked as a machinist/mechanic for a company at its Charlotte, North Carolina location. From 2008 to 2015, Strong embezzled funds from the company using a fraudulent purchasing and billing scheme. Strong created a purported parts vendor, and then caused the company to order fictitious parts from the vendor. As part of the scheme, Strong created false invoices and submitted them to the company for payment. In all, Strong embezzled approximately $1,488,000 from the victim company. Strong also failed to report the embezzled funds on his 2009 through 2015 tax returns, resulting in an approximate $450,000 tax loss.
In addition to the term of imprisonment imposed, Strong was order to serve two of supervised release and to pay restitution in the amount of $1,941,377.32.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS-Criminal Investigation, U.S. Postal Inspection Service, and U.S. Secret Service, who conducted the investigation, and Assistant U.S. Attorney Taylor Phillips and Trial Attorney Mara Strier of the Tax Division, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Mechanic Sentenced to 36 Months for Embezzling Approximately $1.4 Million from His Employer and Filing A False Tax ReturnRead the Press Release
CHARLOTTE, N.C. - A North Carolina mechanic was sentenced to prison today for wire fraud and filing a false income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
Albert Strong, 59, a resident of Union, South Carolina, was sentenced to 36 months in prison by U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina. On April 12, 2018, Strong pleaded guilty to one count of wire fraud and one count of filing a false tax return for tax year 2013.
According to the documents filed with the court, Strong worked as a machinist/mechanic for a company at its Charlotte, North Carolina location. From 2008 to 2015, Strong embezzled funds from the company using a fraudulent purchasing and billing scheme. Strong created a purported parts vendor, and then caused the company to order fictitious parts from the vendor. As part of the scheme, Strong created false invoices and submitted them to the company for payment. In all, Strong embezzled approximately $1,488,000 from the victim company. Strong also failed to report the embezzled funds on his 2009 through 2015 tax returns, resulting in an approximate $450,000 tax loss.
In addition to the term of imprisonment imposed, Strong was order to serve two of supervised release and to pay restitution in the amount of $1,941,377.32.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS-Criminal Investigation, U.S. Postal Inspection Service, and U.S. Secret Service, who conducted the investigation, and Assistant U.S. Attorney Taylor Phillips and Trial Attorney Mara Strier of the Tax Division, who prosecuted this case.
Georgia Man Sentenced to 10 Years for Trafficking Lethal Synthetic Opioid He Purchased on the Dark Web Using CryptocurrencyRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Marcus Lenard Armstrong, 35, of McDonough, Georgia, was sentenced to 120 months in prison and three years of supervised release on drug trafficking conspiracy charges, for buying the deadly synthetic opioid “U-47700” on the dark web using cryptocurrency.
“As Armstrong can attest, traffickers buying deadly drugs on the dark web in hopes of avoiding prosecution is a strategy fraught with peril,” said U.S. Attorney Murray. “The opioid abuse crisis is serious, and fighting an epidemic that is affecting communities across the Western District is a priority for my office. From the virtual street corner to the concrete one, those who pour lethal synthetic drugs into our neighborhoods will be investigated and prosecuted.”
Robert J. Murphy, the Special Agent in Charge of the Drug Enforcement Administration (DEA) Atlanta Field Division stated, “Whether you’re hiding behind the veil of the dark web or pushing drugs on a street corner or in a back alley, DEA, its law enforcement allies and the U.S. Attorney’s Office will relentlessly pursue you until you are brought to justice. With this case, the powerful and potentially deadly opioid “U47700” will no longer be distributed by this individual who is deserving of his lengthy sentence.”
“The Postal Service has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute illegal drugs or other harmful substances,” said David M. McGinnis, U.S. Postal Inspector in Charge of the Charlotte Division. “Postal Inspectors’ objectives are to rid the mail of illicit drug trafficking, preserve the integrity of the mail and, most importantly, provide a safe environment for postal employees and the American public. The sentencing handed down today should serve as a reminder to other perpetrators engaged in this type of criminal activity that we will continue to work closely with our law enforcement partners to ensure they are brought to justice.”
According to filed court documents, from November 2016 to January 2018, Armstrong engaged in a conspiracy to traffic a lethal synthetic opioid, known as “U-47700.” Court records show that in June 2017, Armstrong arranged for a package containing the deadly opioid to be mailed to a residential address in Charlotte. Over the course of the investigation, law enforcement determined that Armstrong was using cryptocurrency to purchase “U-47700” on multiple dark web markets that sell and purchase illegal drugs.
On June 30, 2017, law enforcement visited the residence the parcel was addressed to in Charlotte and spoke with an individual who admitted to accepting packages for a “family friend,” later identified as Armstrong. Law enforcement seized the package, and confirmed that it contained 1,003.38 grams of the U-47700 drug. Court records show that two more packages were scheduled for delivery to the same residential address. On the same day, Armstrong went to a local post office in Charlotte to inquire about the delivery of the package. A U.S. Postal Inspector on site approached Armstrong and asked the defendant for more information about the package. After Armstrong became suspicious, he assaulted the Postal Inspector and attempted to flee the scene. Armstrong was apprehended outside of the post office.
According to court records, following his arrest, Armstrong was placed on pretrial release with electronic monitoring. While on pretrial release, Armstrong cut the transmitter he was required to wear at all times and attempted to elude authorities. He was arrested by law enforcement and was placed in federal custody. In April 2018, Armstrong pleaded guilty to drug trafficking conspiracy.
According to the DEA, U-47700 is a novel synthetic opioid, and its abuse parallels that of heroin and morphine, prescription opioids, and other novel opioids. In November 2016, after receiving multiple reports of confirmed fatalities in multiple states, including in North Carolina, DEA responded to the imminent threat to public health and safety by placing U-47700 into Schedule I of the Controlled Substances Act. Emergency scheduling of dangerous drugs such as U-47700 on a temporary basis is one of the most significant tools utilized to address the problems associated with deadly new street drugs.
In making today’s announcement, U.S. Attorney Murray thanked the DEA, the U.S. Postal Inspection Service, and the Charlotte-Mecklenburg Police Department for their investigation of this case.
Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, was in charge of the prosecution.
Burke County Man Sentenced to 20 Years for Transporting Child PornographyRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today John Arthur Coburn, 72, of Morganton, N.C., to 20 years in prison on child pornography charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Coburn was also sentenced to a lifetime of supervised release and was ordered to register as a sex offender.
U.S. Attorney Murray is joined in making today’s announcement by John Eisert, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in the Carolinas.
According to filed documents and statements made in court, law enforcement were alerted to an individual, later identified as Coburn, using a peer-to-peer file sharing network to access child pornography on the internet. On November 2, 2017, law enforcement executed a search warrant at Coburn’s residence in Burke County and recovered, among other items, a laptop computer and a cellular phone. A forensic analysis of the Coburn’s cellular phone revealed that Coburn had used the device to produce lewd and lascivious child pornography images of a prepubescent minor female. In addition, law enforcement located child pornography on Coburn’s laptop, which he had downloaded using the peer-to-peer network. Coburn pleaded guilty in August 2018 to transportation of child pornography.
Coburn has been in federal custody since November 2017 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by ICE/HSI. The U.S. Attorney’s Office in Asheville 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.
Federal Judge Sentences Charlotte Man to Nine Years in Prison for Drug Trafficking and Money Laundering ConspiracyRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Shi Yun Zhou, 27, of Charlotte, to 108 months in prison and four years of supervised release on drug trafficking conspiracy and money laundering conspiracy charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
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 Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and court proceedings, beginning in 2015, law enforcement began to investigate a Drug Trafficking Organization (DTO) responsible for trafficking large quantities of marijuana and other narcotics between California and Charlotte. Court records show that from 2013 to 2018, Zhou was involved in the DTO, and engaged in extensive drug trafficking and money laundering activities. As Zhou previously admitted in court, during the relevant time period, Zhou trafficked more than 770 kilograms of marijuana and 500 grams of cocaine in and around Mecklenburg County, and used the drug proceeds to buy multiple residences and luxury vehicles. On April 3, 2018, law enforcement executed a search warrant at one of Zhou’s residences, and seized narcotics, three firearms and ammunition, a digital scale and other drug paraphernalia, and $215,106 in cash.
Zhou pleaded guilty in April 2018 to drug trafficking conspiracy, money laundering conspiracy, and possession with intent to distribute cocaine. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons to begin serving his sentence. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Murray thanked the DEA and IRS-CI for their investigation of this case.
Assistant U.S. Attorneys Sanjeev Bhasker and Ben Bain-Creed, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Federal Judge Sentences Minister to Five Years for Tax CrimesRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced a former Charlotte-area minister, William Todd Coontz, 51, of Fort Lauderdale, Florida, to 60 months in prison, for failure to pay taxes and aiding and assisting in the filing of false tax returns, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Judge Conrad also ordered Coontz to serve one year under court supervision after he is released from prison, and to pay $755,669 in restitution.
U.S. Attorney Murray is joined in making today’s announcement by Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI).
According to filed court documents and evidence presented at Coontz’s trial, from 2010 to 2014, Coontz was the minister of Rock Wealth International Ministries (Rockwealth Ministries), and the author of numerous books on faith and finances, such as “Please Don’t Repo My Car,” and “Breaking the Spirit of Debt.” Coontz also operated two for-profit companies, Legacy Media and Coontz Investments and Insurance.
Beginning in tax year 2000 and continuing through tax year 2014, Coontz filed delinquent U.S. Federal Income Tax Returns, Forms 1040, with the IRS and consistently failed to make timely payments on the taxes he owed, despite receiving multiple letters and late notices from the IRS. For example, for tax years 2011 through 2013, Coontz filed late tax returns and did not pay the total assessed taxes, resulting in total tax liabilities of more than $326,394 for those years.
According to today’s sentencing hearing and evidence presented at trial, Coontz also filed false federal income tax returns for tax years 2010 through 2013, which underreported his income. Specifically, Coontz engaged in a check cashing scheme, involving payments for travel reimbursements for speaking engagements and the sale of books and other products. For example, during 2010 through 2013, Coontz regularly traveled to speak at various ministries, for which he was paid speaking fees and was reimbursed for his travel expenses. Coontz hid income from the IRS by claiming the travel as a business expense while simultaneously receiving travel reimbursement that he kept as personal income. Also, in order to boost his income, Coontz told his travel assistant to bill the churches for the cost of a full fare first-class ticket, even though his actual expenses for those tickets was substantially less than the amount billed. Fraudulent travel invoices were created and submitted to the ministries that falsely purported that Coontz had actually paid the full fare ticket price. As a result, the travel reimbursement checks sent directly to Coontz were for amounts in excess of the actual travel expenses incurred by Rockwealth Ministry.
According to trial evidence and other court records, during 2010 through 2013, Coontz also directed that other checks, such as payments for speeches and for the purchase of books and other products, be made payable to “Todd Coontz” and sent to his personal address. In total, Coontz concealed and cashed at least 102 checks for travel reimbursements, speeches, and books and other products, totaling at least $252,037.99 for the relevant time period, causing his total income for the relevant tax years to be underreported on his federal income tax returns. During 2014, Coontz continued to conceal and cash checks received as payments, cashing at least 32 checks totaling $105,454.90 which were not reflected in his accounting records.
Coontz also underreported his income on his tax returns for tax years 2010 through 2013, by failing to include as income payments made by his corporations and ministry for his personal expenses, including payments for the benefit of his family members, and for meals and entertainment. Contrary to the advice of his Certified Public Accountant about comingling personal and business funds, Coontz spent substantial amounts of business funds to pay for personal expenditures, which were falsely classified as business expenses. These purported business expenses included payments totaling more than $227,700 for clothing purchases, and over $140,000 to pay for meals and entertainment expenses at various restaurants, including more than 400 distinct charges at movie theaters.
In addition, instead of holding assets in his own name, Coontz utilized residences and luxury vehicles titled in the names of companies he owned and controlled. For example, luxury vehicles purchased by Legacy Media, Coontz Investments and Insurance, and Rockwealth Ministries during 2011 through 2013 included three BMWs, two Ferraris, a Maserati, and a Land Rover, and a Regal 2500 boat, among others. Coontz treated payments for those items as business expenses, even though some of them were used by family members and there were no records kept about their supposed business use. Additionally, in 2012, Rockwealth Ministries purchased a $1.5 million condominium as a parsonage for Coontz.
In announcing Coontz’s sentence, Judge Conrad said that the defendant showed “incredible” and “long term disrespect for the law.” He also noted that the defendant was “relentless,” in the “ways in which Mr. Coontz tried to cheat.”
Coontz will be ordered to the report the federal Bureau of Prisons to begin serving his sentence, upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Murray thanked the IRS-CI for their investigation of the case.
Assistant U.S. Attorneys Jenny G. Sugar and Dallas Kaplan, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Buncombe County Man Sentenced to 28 Years for Producing Child PornographyRead the Press Release
CHARLOTTE, N.C. – On Thursday, January 24, 2019, U.S. District Judge Martin Reidinger sentenced Gabriel Allen Goss, 39, of Asheville, N.C., to 28 years in prison and a lifetime of supervised release for production of child pornography charges, announced U.S. Attorney Andrew Murray. Judge Reidinger also ordered Goss to register as a sex offender after he is released from prison.
John Eisert, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in the Carolinas and Sheriff Greg Christopher of the Haywood County Sheriff’s Office join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and today’s sentencing hearing, on March 18, 2017, Goss, then a resident of Haywood County, used a cellular phone to produce at least three child pornography videos of a prepubescent minor female. Court records show that on November 16, 2017, Goss engaged in a series of internet emails with another individual for the purpose of trading child pornography files. In one email to the other individual, Goss attached a video file of the child pornography Goss had produced depicting the minor victim.
Goss is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
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.
In making today’s announcement U.S. Attorney Murray thanked the ICE/HSI and the Haywood County Sheriff’s Office for their investigation of the case. The U.S. Attorney’s Office in Asheville handled the prosecution.
Armed Leader of Drug Conspiracy Is Sentenced to 27 YearsRead the Press Release
CHARLOTTE, N.C. – On Thursday, January 24, 2019, Dontarius Marquis Hall, 39, of Gaston County, N.C., was sentenced to 27 years in prison for drug trafficking conspiracy, distribution and possession with intent to distribute crack cocaine, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a felon, announced U.S. Attorney Andrew Murray. In addition to the prison term imposed, U.S. District Judge Robert J. Conrad, Jr. also ordered Hall to serve five years under court supervision.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Robert C. Helton of the Gastonia Police Department join U.S. Attorney Murray in making today’s announcement.
According to information contained in filed court documents and Hall’s sentencing hearing, Hall’s trial was scheduled to begin on June 4, 2018. The morning of the first day of trial Hall entered a plea of guilty, and admitted to being the leader, organizer and recruiter of a drug conspiracy that operated in an around Gaston County. Hall further admitted that between 2010 and 2015, the drug conspiracy trafficked eight to twenty-five kilograms of crack cocaine. According to court records, while executing a federal search warrant at Hall’s residence in December 2015, law enforcement recovered two firearms, drug trafficking paraphernalia, and $965 in cash. Due to his lengthy criminal history, which dates back to 1999 and includes several convictions for drug and firearm offenses, Hall was prohibited from possessing a firearm.
Hall is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.
This case stems from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. 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 thanked the FBI and the Gastonia Police Department for their investigation of the case.
Assistant U.S. Attorneys Steven R. Kaufman and Lambert Guinn of the U.S. Attorney’s Office in Charlotte handled the prosecution.
Three Convicted of Conspiring to Defraud the U.S. Small Business Administration Through Loan FraudRead the Press Release
CHARLOTTE, N.C. – Late yesterday, a Charlotte federal jury convicted Rafid Latif, 54, of Charlotte, N.C., Ejaz Shareef, 42, of Mt. Royal, New Jersey, and Imtiaz Shareef, 39, of Bossier City, Louisiana, of conspiracy to commit wire and bank fraud and conspiracy to commit money laundering through a fraudulent loan scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. A fourth co-defendant, Biren Sheth, 52, of West Caldwell, New Jersey, previously pleaded guilty on May 16, 2018, to conspiracy to commit wire and bank fraud, for his role in the scheme.
According to filed court documents and evidence presented at trial, from 2010 to 2018, Latif, Ejaz Shareef, and Imtiaz Shareef, conspired with each other and Sheth to defraud the U.S. Small Business Administration (SBA), various banks, and an insurance company through the operation and sale of two Charlotte-area hotels, the Days Inn located at 1408 West Sugar Creek Road, and the Arlington Suites located at 4416 South Tryon street.
Trial evidence established that the conspiracy involved three inter-related schemes: an insurance fraud scheme; a fraudulent loan-kickback scheme; and a short-sale scheme. According to court records, in 2010, Latif, Ejaz Shareef and Imtiaz Shareef were the operators of the Days Inn hotel. In that capacity, the three co-defendants engaged in a scheme to obtain fraudulent reimbursements from an insurance company for fictitious repairs and remodeling expenses at the Days Inn hotel. By submitting fake documents and bogus proofs of payment, the co-defendants obtained more than $825,000 from the insurance company, and then used a portion of the money to facilitate bank loan fraud schemes involving the two hotels.
According to trial evidence, in 2012, the defendants obtained an SBA loan from a bank in order to finance the purchase of the Days Inn hotel. The co-conspirators obtained the loan by making several false material representations including presenting the bank with fraudulent documents such as an inflated lease-purchase agreement; by misrepresenting the source of the down payment, which was the fraudulently-obtained insurance money; and by failing to disclose to the bank that the co-conspirators would receive nearly $700,000 as a kickback from the hotel’s inflated sale price.
In addition to the fraudulent scheme involving the Days Inn hotel, Sheth and Latif engaged in separate fraudulent loan scheme involving the Arlington Suites hotel. Trial evidence established that, as a favor for Sheth’s assistance in facilitating the purchase of the Days Inn hotel, Latif agreed to help Sheth with the fraudulent short sale of the Arlington Suites hotel. Sheth owned the Arlington Suites hotel, which was in part financed with an SBA loan. With Latif’s help, Sheth defrauded SBA by convincing SBA to agree to a short-sale when Sheth fell behind on his payments. According to trial evidence, Sheth arranged to “sell” the Arlington Suites hotel to a corporation in Latif’s name. This sham sale was in name only. According to trial evidence, Sheth convinced SBA to charge off nearly $1 million of the balance Sheth owed on the existing loan. Because Latif was only a straw purchaser and Sheth remained the true owner of the hotel, the $1 million represented an immediate increase in Sheth’s equity in the Arlington Suites hotel.
According to evidence presented at trial, Latif further defrauded SBA in connection with the Arlington Suites sale by obtaining another SBA loan to finance the purported purchase of the hotel. Latif secured the SBA loan by using false and fraudulent documentation and making material representations about the down-payment money, among other things.
In 2014, Sheth transferred to Latif $690,000 in kickback funds from the Days Inn sale, after Latif threatened to expose the Arlington Suites short-sale fraud.
At sentencing, Latif, Ejaz Shareef, and Imtiaz Shareef face a statutory maximum sentence of 30 years in prison and a $1,000,000 fine. A sentencing date for the defendants has not been set.
In making today’s announcement, U.S. Attorney Murray credited the Charlotte Division of the FBI for its investigation of this case and thanked the SBA for its invaluable assistance.
Assistant U.S. Attorneys Caryn Finley and William Miller, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Tennessee Man Is Sentenced to Prison for Unlawful Possession of Explosive Material at the Asheville Regional AirportRead the Press Release
ASHEVILLE, N.C. – Michael Christopher Estes, 47, formerly of Tazewell, Tennessee, was sentenced today by U.S. District Judge Max O. Cogburn, Jr. to 46 months in prison and two years of supervised release for unlawful possession of explosive material, in connection with the October 2017 incident at the Asheville Regional Airport, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Tammy Hooper of the Asheville Police Department join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and today’s sentencing hearing, shortly after 12:30 a.m. on October 6, 2017, Estes walked onto the grounds of the Asheville Regional Airport carrying a package containing an explosive device he had constructed. Estes placed the package outside the entrance of the airport’s baggage claim area. Estes constructed the device using material that is known to explode violently when coming in contact with a flame or other ignition source. The explosive device also contained nails and a shotgun cartridge. Nails, shrapnel, or ball bearings often are added to such devices to increase the devastation inflicted by the explosion. According to plea documents, the words “FOR GOD & COUNTRY” were written on the strike strip of a matchbox attached to the device. Another message, “FOR ALL THE V/N VETS OUT THERE!!!,” was written on the tape attaching a portion of a clock to the device. The alarm on the clock was positioned to go off at 6:00, but it was not actually set.
At approximately 6:30 a.m. on October 6, 2017, the Asheville Regional Airport Authority Department of Public Safety was alerted to the presence of a “suspicious bag” outside the terminal building. Law enforcement responded to the scene and evacuated the baggage claim area. According to court documents, bomb technicians rendered the device safe and it tested positive for explosive material. Estes was arrested the following day in an area not far from the airport.
Estes previously admitted in court that he purchased the material and constructed the explosive device he placed at the airport. Estes told law enforcement that we were getting ready to “fight a war on U.S. soil,” and that terrorists were coming to the United States. Estes told law enforcement that he believed that federal agencies were unprepared to fight the terrorists. Estes also told law enforcement that his intention was not to hurt the public but to devise a training scenario. He also said that he placed the device at the airport so it would be picked up by law enforcement, so that law enforcement would “now know how” to make a similar device. Estes also admitted to staging a backpack in the woods across from the airport. Law enforcement located the backpack, which contained some of the material Estes used to construct the device.
Estes is currently in federal custody. He will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was led by the FBI and the Asheville Police Department. In making today’s announcement U.S. Attorney Murray thanked the North Carolina State Bureau of Investigation and the Asheville Regional Airport Authority Department of Public Safety for their invaluable assistance and coordination in this case.
Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville prosecuted the case.
Swain Co. Man Charged with Murder in Indian CountryRead the Press Release
ASHEVILLE, N.C. – United States Attorney Andrew Murray announced today that a federal grand jury sitting in Asheville has charged Shane McKinley Swimmer, 18, of Cherokee, N.C., with first degree murder in Indian Country.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Doug Pheasant of the Cherokee Indian Police Department join U.S. Attorney Murray in making today’s announcement.
The charging document alleges that on November 10, 2018, in Indian Country, Swimmer, who is an Indian, did unlawfully kill another human being, identified in the criminal indictment as “C.W.” The indictment further alleges that Swimmer killed C.W. willfully, deliberately, maliciously and with premeditation.
Swimmer is currently in federal custody. If convicted of first degree murder, Swimmer faces mandatory life in prison.
An indictment is merely an allegation and 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 FBI and the Cherokee Indian Police Department for their investigation of the case.
Assistant U.S. Attorney John Pritchard and Special Assistant U.S. Attorney Justin Eason of the U.S. Attorney’s Office in Asheville are in charge of the prosecution.
Superseding Indictment Charges Asheville Man with First Degree Murder and Aggravated Sexual Abuse Resulting in DeathRead the Press Release
ASHEVILLE, N.C. – A superseding criminal bill of indictment was returned on December 4, 2018, by a federal grand jury, charging Derek Shawn Pendergraft, 21, of Asheville, N.C., with one count of first degree murder and two counts of aggravated sexual abuse resulting in the death of his Pisgah Inn co-worker, Sara Ellis, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Pendergraft was previously charged with second degree murder.
U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Neal D. Labrie, Chief Ranger of the Blue Ridge Parkway; and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (SBI).
According to allegations contained in the superseding indictment and other court documents, on the evening of July 24, 2018, Pendergraft, who worked at the Pisgah Inn on the Blue Ridge Parkway, reported that his co-worker, Sara Ellis, was missing. Court documents allege that when initially interviewed by investigators, Pendergraft stated that he and Sara Ellis got off work shortly after 4:00 p.m., and decided to go for a hike on an unnamed trail near the employee housing area of the Pisgah Inn. Pendergraft stated that shortly after starting their hike it began to rain, and the victim decided to return to the housing area while Pendergraft continued to hike. Court documents allege that Pendergraft stated that on his way back, upon reaching the point where he last saw the victim, Pendergraft saw the victim’s umbrella and hat lying on the ground. Pendergraft informed the management staff at the Pisgah Inn that the victim was missing. Rangers and first responders searched the area and located the victim’s body lying off an embankment, near a trail, within the boundary of the Blue Ridge Parkway, in Transylvania County, in the Western District of North Carolina.
According to allegations contained in court documents, on the evening of July 25, 2018, the manager of the Pisgah Inn contacted law enforcement and advised that Pendergraft was in her office and had made statements regarding the death of Sara Ellis. Law enforcement arrived at the Pisgah Inn, interviewed Pendergraft, and arrested him shortly thereafter in connection with the victim’s murder.
Pendergraft is currently in federal custody. His court hearing on the new charges is set for Friday, December 7, 2018, at 10:00 a.m., at the federal courthouse in Asheville. The penalty for first degree murder is life in prison or death. The aggravated sexual abuse resulting in death charge carries a maximum penalty of life in prison or death.
The indictment includes a Notice of Special Sentencing Factors which could permit the United States to seek the death penalty. The Department of Justice has not yet announced whether it will seek the death penalty.
An indictment is merely an allegation and 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 National Park Service, the FBI, the SBI, the Transylvania County Sheriff's Office, the Haywood County Sheriff’s Office, and the Cruso Fire Department for their respective work and assistance in this case.
Assistant U.S. Attorneys Don Gast and John Pritchard, of the U.S. Attorney’s Office in Asheville are in charge of the prosecution.
Armed Cocaine Dealer Is Sentenced to More Than 10 Years on Drug and Gun ChargesRead the Press Release
STATESVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Ashonta Eswaien Hammond, 41, of Hickory, N.C., was sentenced to 120 months in prison on drug and gun charges. U.S. District Judge Richard L. Voorhees also ordered Hammond to serve four years under court supervision, upon completion of his prison term. Hammond previously pleaded guilty to conspiracy to distribute and to possess with intent to distribute cocaine; possession with intent to distribute cocaine; possession of a firearm in furtherance of a drug trafficking crime; and possession of a firearm by a felon.
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 Chief Thurman Whisnant of the Hickory Police Department join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and today’s plea hearing, from December 2016 to May 2018, while investigating a drug conspiracy operating in and around Hickory, N.C., law enforcement identified Hammond as a cocaine and crack cocaine dealer in the area. Court records show that over the course of the investigation, Hammond engaged in multiple drug sales, while knowingly and unlawfully possessing a firearm. Hammond’s criminal history dates back more than two decades, and includes a federal drug conspiracy conviction, for which he was sentenced to 72 months in prison, and state convictions for larceny, assault on a female, domestic violence, and multiple traffic violations, among others.
Hammond is currently in federal custody. He will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Murray thanked the DEA and the Hickory Police Department for their investigation of the case.
This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.
Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Matthews, N.C. Man Pleads Guilty to Attempted Possession of Radioactive Material in Murder-For-Hire PlotRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Bryant Riyanto Budi, 27, of Matthews, N.C. appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to attempted possession of radioactive material with intent to cause death or serious bodily injury to another person.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and John Eisert, Acting Special Agent in Chargeof U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in the Carolinas, join U.S. Attorney Murray in making today’s announcement.
According to information contained in filed court documents and today’s plea hearing, from April 22, 2018 to June 1, 2018, Budi attempted to possess radioactive material, and did so with the intent to cause death or serious bodily injury to another person. Court documents show that Budi contacted an FBI covert employee via the internet to purchase a lethal dose of a radioactive substance. In his communications with the covert employee, Budi expressed his intent to use the radioactive substance to kill an unnamed individual. On May 31, 2018, a package containing an inert substitute for the radioactive material ordered by Budi was delivered to an address in Charlotte as instructed by Budi. Law enforcement arrested Budi on June 1, 2018.
The charge of attempted possession of radioactive material with intent to cause death carries a maximum term of life in prison. A sentencing date for Budi, who remains in federal custody, has not been set.
In making today’s announcement U.S. Attorney Murray thanked HSI in Buffalo, New York and Charlotte; the FBI in Charlotte and supporting FBI field offices; the FBI’s Weapons of Mass Destruction Directorate in Washington, D.C.; the U.S. Attorney’s Office for the Western District of New York, and the Department of Justice’s National Security Division.
Assistant U.S. Attorney Casey Arrowood of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution, assisted by Trial Attorney Bridget Behling, of the National Security Division.
Bulk Trafficker of Heroin and Crystal Methamphetamine Pleads Guilty to Drug Conspiracy and Money Laundering ChargesRead the Press Release
CHARLOTTE, N.C. – Otequise Lenard Miller, 33, of Concord, N.C. appeared before U.S. Magistrate Judge David S. Cayer today, and pleaded guilty to drug trafficking conspiracy resulting in an overdose death and money laundering charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Christopher H. Healy, Acting Deputy Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) Charlotte; Chief Gary J. Gacek of the Concord Police Department; and Chief J.W. Chavis of the Kannapolis Police Department join U.S. Attorney Murray in making today’s announcement.
According to filed court documents and today’s plea hearing, from 2015 until his arrest on August 22, 2018, Miller was part of a drug conspiracy that trafficked bulk crystal methamphetamine and heroin in Mecklenburg County and elsewhere. During the relevant time period, Miller trafficked approximately 7-9 kilograms of heroin, and 14-18 kilograms of actual crystal methamphetamine. In addition to drug trafficking, Miller concealed and laundered the drug proceeds. As Miller admitted in court today, in December 2017, he sold heroin to a victim identified in court documents as “W.M.,” which resulted in the victim’s overdose death. Court documents show that Miller is a repeat offender, and was previously convicted of drug trafficking charges.
Miller is currently in federal custody. The drug trafficking conspiracy charge resulting in death carries a mandatory sentence of 20 years, up to a maximum of life in prison. The money laundering charge carries a maximum penalty of 20 years in prison. A sentencing date has not been set.
This case is part of the U.S. Attorney’s Office initiative to combat the opioid abuse epidemic in the Western District of North Carolina through prosecution, enforcement and prevention.
This prosecution is also part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), targeting the importation of narcotics from Mexico into Western North Carolina.
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.
DEA, HSI, the Concord Police Department, and the Kannapolis Police Department investigated the case.
Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
Armed Bank Robber Is Sentenced to More Than 23 YearsRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced that Anthony Lamont Caldwell, 49, of Charlotte, was sentenced yesterday afternoon to 284 months in prison on armed bank robbery and firearms charges.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department, join U.S. Attorney Murray in making today’s announcement.
On May 30 2018, a federal jury convicted Caldwell of bank robbery conspiracy, bank robbery, possession of a firearm in furtherance of a crime of violence, and possession of a firearm by a convicted felon. Under federal sentencing law, Caldwell was subject to an enhanced sentence as an Armed Career Criminal, based on prior convictions. Caldwell’s criminal history includes two previous federal convictions for bank robbery in 1997 and attempted bank robbery in 2004. Caldwell was also convicted in Union County of Assault with a Deadly Weapon Inflicting Serious Injury with Intent to Kill in 1991.
According to filed court documents, trial evidence and the sentencing hearing, Caldwell planned the bank robbery, recruited two teenagers to rob the bank, and served as the getaway driver. Trial evidence established that on December 9, 2016, Caldwell’s co-conspirators entered a Wells Fargo Bank branch located at 10210 Couloak Drive in Charlotte, armed with two firearms supplied by Caldwell. As they approached the teller area, the bank robbers pointed the firearms at the tellers behind the counter and demanded money. The tellers complied, and the bank robbers fled in a car driven by Caldwell with $5,791.60 in cash. Shortly after the robbery, law enforcement located Caldwell hiding in a wooded area near a bag which contained $5,614 and a GPS tracker from the bank. They also located in close proximity the vehicle Caldwell was driving.
According to evidence presented at trial, Caldwell told law enforcement that he had been carjacked while picking up a pizza, and claimed that he had been forced at gunpoint by two males out of his vehicle and into the back seat of the car. Witness testimony and trial evidence established that, contrary to his claims, Caldwell had not been carjacked. Also, over the course of the investigation, law enforcement located in Caldwell’s vehicle the two revolvers used to perpetrate the robbery.
Caldwell will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The FBI and CMPD investigated the case. Assistant U.S. Attorneys William Bozin and William Stetzer handled the prosecution.
Convicted Sex Offender Found Guilty on Drug Conspiracy and Related ChargesRead the Press Release
CHARLOTTE, N.C. B Late yesterday, a Charlotte federal jury convicted Keith Antonio Barnett, 46, of Gastonia, N.C., of drug conspiracy and related drug charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Nick S. Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas; Chief Robert C. Helton of the Gastonia Police Department; and Chief Joseph D. Ramey of the Gaston County Police Department.
According to filed court documents and evidence presented at trial, beginning from at least 2016, Barnett was part of a drug conspiracy operating in Gaston County. Trial evidence established that, during the relevant time period, Barnett was responsible for trafficking more than 280 grams of crack cocaine. The evidence at trial also established that, in October 2017, while executing a search warrant at a Gaston County residence that was being used as a drug house, law enforcement arrested Barnett, and recovered more than 120 grams of crack cocaine, over 40 grams of cocaine, more than six grams of heroin, and approximately $3,000 in cash.
The jury convicted Barnett of conspiracy to distribute and to possess with intent to distribute crack cocaine; distribution and possession with intent to distribute crack cocaine; and possession with intent to distribute cocaine, crack cocaine, and heroin.
Barnett has a prior criminal history that includes two convictions for Possession of Crack Cocaine in 1991; Indecent Liberties with a Child in 1997; Criminal Domestic Violence of a High and Aggravated Nature in 2006; Failure to Register as a Sex Offender in 2010; and Failure to Register as a Sex Offender in 2013.
Barnett is currently in federal custody. At sentencing, Barnett faces a statutory mandatory minimum sentence of life in prison and a fine of up to $20 million. A sentencing date has not been set.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), which 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 credited the FBI and HSI in Charlotte for their investigation of this case, and thanked the Gastonia Police Department and Gaston County Police Department for their invaluable assistance.
Assistant U.S. Attorneys Steven R. Kaufman and Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Buffalo Man, Convicted by Federal Jury, Sentenced on Gun and Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Larry Willis, 33, of Buffalo, NY, who was convicted following a jury trial of possessing crack cocaine with intent to distribute, maintaining a drug involved premises, possessing firearms in furtherance of drug trafficking activities, and being a felon-in-possession of firearms and explosives, was sentenced to serve 210 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorneys Laura A. Higgins and Paul E. Bonanno, who handled the trial of the case, stated that between November 2016 and December 1, 2016, Willis and co-defendant Isiah Pierce utilized two apartments inside 70 Henrietta Avenue, Buffalo, New York, to manufacture, package, and store quantities of crack cocaine, heroin, cocaine, fentanyl, and butyryl fentanyl, along with the proceeds from the sale of such substances. To protect their product and their proceeds, the defendants maintained multiple firearms and ammunition within each of the apartments.
During the execution of a search warrant in the lower apartment at 70 Henrietta Avenue, officers recovered crack cocaine, three firearms and ammunition, a digital scale with drug residue, packaging material, whisks, spoons, and cutting agents. A subsequent search of the upper apartment uncovered additional amounts of crack cocaine, a mixture of heroin and butyryl fentanyl, three handguns, and numerous rounds of ammunition.
The sentencing is the result of an investigation by the Erie County Sheriff’s Office, under the direction of Sheriff Timothy Howard and the Federal Bureau of Investigation, Safe Streets Task Force, under the direction of Special Agent-in-Charge Gary Loeffert.
Isiah Pierce is awaiting sentencing.
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Online Distributor of Child Pornography Is Sentenced to 16.5 YearsRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Jose Antonio Hendricks, 60, of Charlotte, to 198 months in prison on child pornography charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Judge Conrad ordered Hendricks to serve 20 years under court supervision, and to register as sex offender upon his release from custody. A federal jury convicted Hendricks on February 21, 2018, of possession, receipt and transportation of child pornography. He has been in custody since February 2018.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Murray in making today’s announcement.
According filed court documents, trial evidence and witness testimony, on October 14, 2014, law enforcement determined that Hendricks was using a peer-to-peer network to distribute and to view child pornography online. Trial evidence established that between October 2014 and February 2015, law enforcement connected to Hendricks’ IP address approximately 70 times. During a vast majority of these sessions, law enforcement were able to confirm that Hendricks was sharing either child pornography or child erotica. According to evidence presented at trial, on March 12, 2015, a search of Hendricks’ home resulted in the seizure of a tablet and the tablet’s SD card. A forensic examination of the items revealed that they contained numerous images of child pornography. There was also evidence that Hendricks was accessing numerous child pornography websites that include sadistic or masochistic images of children being sexually abused.
In making today’s announcement, U.S. Attorney Murray commended the work of the FBI’s Crimes Against Children Squad, which investigated the case. Assistant U.S. Attorneys Cortney Randall and William Stetzer, 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.
Four Mexican Nationals with Prior Deportations Are Sentenced for Illegal ReentryRead the Press Release
CHARLOTTE, N.C. – Four Mexican nationals were sentenced today in federal court in Charlotte for illegally reentering the United States after being deported, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. presided over the sentencings. The four defendants will also be subject to deportation proceedings upon completion of their sentences.
Eli Vega Delao, 39, a Mexican national formerly residing in Charlotte, was sentenced to 30 months in prison and two years of supervised release. On March 27, 2018, Delao pleaded guilty to unlawful reentry after a felony conviction. According to court records, Delano has prior state convictions, including a drug-related conviction in Milwaukee, Wisconsin, and a 2015 federal illegal reentry conviction in Greensboro, N.C. Immigration judges have ordered Delao’s removal from the United States on at least nine occasions. Judge Conrad gave Delao a sentence at the high end of the applicable Sentencing Guidelines range, and stated that the defendant, “had not shown respect for immigration rules and the laws of the United States and needed adequate deterrence to avoid his illegal returning to this country.”
Carlos Arturo Aguilar Galeno, 43, of Mexico, was sentenced to 12 months in prison and one year of supervised release. Galeno was arrested in Gaston County in May 2018, for Methamphetamine Trafficking and related charges. Court records show that law enforcement determined that Galeno was in the country illegally. Galeno has prior state and federal convictions, including a federal drug trafficking conspiracy conviction in Tucson, Arizona. According to court records, Galeno had been previously removed from the United States to Mexico eight times, and at the time of his recent arrest an order for Galeno’s deportation or removal was outstanding. Galeno pleaded guilty to illegal reentry of a deported alien on August 2, 2018.
Hardoldo Garcia Racancoj, 44, of Mexico and residing in Charlotte, was sentenced to eight months in prison. Racancoj pleaded guilty on April 20, 2018, to unlawful reentry by a deported alien. At the time of his arrest, an order for Racancoj’s deportation or removal was outstanding.
Judge Conrad also sentenced Jose Jesus Ramirez Orduna, 40, of Mexico, to 10 months in prison and one year of supervised release. Orduna was arrested in Union County on April 18, 2018. Prior to that, Orduna had been arrested and removed from the United States on at least two occasions. Orduna pleaded guilty to one count of reentry of a deported alien on August 3, 2018.
In making todays’ announcement, U.S. Attorney Murray thanked the U.S. immigration and Customs Enforcement’s Enforcement and Removal Operations in Charlotte for their assistance.
Assistant U.S. Attorney Kenneth Smith, of the U.S. Attorney’s Office in Charlotte, prosecuted the cases.
Atrium Health Agrees to Settle Antitrust Lawsuit and Eliminate Anticompetitive Steering RestrictionsRead the Press Release
The Department of Justice announced today that it has reached a settlement with Atrium Health, formerly known as Carolinas HealthCare System (“Atrium”). The settlement prohibits Atrium from using anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina metropolitan area. If approved by the Court, today’s settlement resolves over two years of civil antitrust litigation challenging Atrium’s use of steering restrictions that prevent health insurers from promoting innovative health benefit plans and more cost-effective healthcare services to consumers.
“With healthcare costs rising, vigilant antitrust enforcement is an essential tool for protecting consumers,” said Assistant Attorney General Makan Delrahim. “By eliminating restrictions that curb comparison shopping and interfere with competition among healthcare providers, today’s resolution of our antitrust action allows consumers in the Charlotte area to benefit from competition when making critically important healthcare choices.”
In June 2016, the Department filed a civil antitrust lawsuit against Atrium challenging provisions that prohibit steering in the hospital system’s contracts with major health insurers. Steering is a method used by insurers to offer consumers options to reduce some of their healthcare expenses. As alleged in the complaint, insurers are increasingly designing health benefit plans that give patients financial incentives to choose more cost-effective hospitals and physicians. Increased consumer access to these health benefit plans invigorates competition between providers to offer lower premiums and better overall healthcare services.
The Department alleged that Atrium, the dominant hospital system in the Charlotte area, used its market power to restrict health insurers from encouraging consumers to choose healthcare providers that offer better overall value. The restrictions also constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans.
“Competition encourages healthcare providers to reduce costs, lower prices, and increase quality,” said Assistant Attorney General Makan Delrahim. “Atrium’s steering restrictions interfered with the competitive process, resulting in fewer choices and higher costs for consumers.”
“The resolution of this antitrust enforcement action gives Charlotte-area consumers what they did not have before: the ability to receive the appropriate, high-quality treatment they need, from a healthcare provider they choose, at a fair price,” said U.S. Attorney for the Western District of North Carolina, R. Andrew Murray. “Today’s enforcement action will restore competition in the Charlotte area, resulting in lower healthcare costs and increased healthcare access for consumers and their families.”
The proposed settlement, in which the U.S. Department of Justice was joined by the North Carolina Attorney General’s Office, was filed today in the U.S. District Court for the Western District of North Carolina. The proposed settlement prevents Atrium from enforcing steering restrictions in its contracts with health insurers. It also bars Atrium from seeking contract terms or taking actions that would prohibit, prevent, or penalize steering by insurers in the future.
Atrium is North Carolina’s largest healthcare system and one of the largest not-for-profit healthcare systems in the United States. Atrium’s flagship facility is Carolinas Medical Center, the largest hospital in North Carolina. Atrium also operates eight other general acute-care hospitals in the Charlotte area and owns, manages, or has strategic affiliations with more than 40 hospitals in the Carolinas. Atrium provides healthcare services throughout the Carolinas, including in freestanding emergency departments, urgent care centers, physician practices, outpatient surgery centers, imaging centers, nursing homes, and laboratories. In 2017, Atrium’s owned, managed, and affiliated hospitals and other healthcare providers earned net operating revenue of close to $10 billion.
As required by the Tunney Act, the proposed settlement and the Department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter J. Mucchetti, Chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the Western District of North Carolina may enter the proposed consent decree upon finding that it serves the public interest.
Atrium Health Agrees to Settle Antitrust Lawsuit and Eliminate Anticompetitive Steering RestrictionsRead the Press Release
CHARLOTTE, N.C. – The Department of Justice announced today that it has reached a settlement with Atrium Health, formerly known as Carolinas HealthCare System (“Atrium”). The settlement prohibits Atrium from using anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina metropolitan area. If approved by the Court, today’s settlement resolves over two years of civil antitrust litigation challenging Atrium’s use of steering restrictions that prevent health insurers from promoting innovative health benefit plans and more cost-effective healthcare services to consumers.
“With healthcare costs rising, vigilant antitrust enforcement is an essential tool for protecting consumers,” said Assistant Attorney General Makan Delrahim. “By eliminating restrictions that curb comparison shopping and interfere with competition among healthcare providers, today’s resolution of our antitrust action allows consumers in the Charlotte area to benefit from competition when making critically important healthcare choices.”
In June 2016, the Department filed a civil antitrust lawsuit against Atrium challenging provisions that prohibit steering in the hospital system’s contracts with major health insurers. Steering is a method used by insurers to offer consumers options to reduce some of their healthcare expenses. As alleged in the complaint, insurers are increasingly designing health benefit plans that give patients financial incentives to choose more cost-effective hospitals and physicians. Increased consumer access to these health benefit plans invigorates competition between providers to offer lower premiums and better overall healthcare services.
The Department alleged that Atrium, the dominant hospital system in the Charlotte area, used its market power to restrict health insurers from encouraging consumers to choose healthcare providers that offer better overall value. The restrictions also constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans.
“Competition encourages healthcare providers to reduce costs, lower prices, and increase quality,” said Assistant Attorney General Makan Delrahim. “Atrium’s steering restrictions interfered with the competitive process, resulting in fewer choices and higher costs for consumers.”
“The resolution of this antitrust enforcement action gives Charlotte-area consumers what they did not have before: the ability to receive the appropriate, high-quality treatment they need, from a healthcare provider they choose, at a fair price,” said U.S. Attorney for the Western District of North Carolina, Andrew Murray. “Today’s enforcement action will restore competition in the Charlotte area, resulting in lower healthcare costs and increased healthcare access for consumers and their families.”
The proposed settlement, in which the U.S. Department of Justice was joined by the North Carolina Attorney General’s Office, was filed today in the U.S. District Court for the Western District of North Carolina. The proposed settlement prevents Atrium from enforcing steering restrictions in its contracts with health insurers. It also bars Atrium from seeking contract terms or taking actions that would prohibit, prevent, or penalize steering by insurers in the future.
Atrium is North Carolina’s largest healthcare system and one of the largest not-for-profit healthcare systems in the United States. Atrium’s flagship facility is Carolinas Medical Center, the largest hospital in North Carolina. Atrium also operates eight other general acute-care hospitals in the Charlotte area and owns, manages, or has strategic affiliations with more than 40 hospitals in the Carolinas. Atrium provides healthcare services throughout the Carolinas, including in freestanding emergency departments, urgent care centers, physician practices, outpatient surgery centers, imaging centers, nursing homes, and laboratories. In 2017, Atrium’s owned, managed, and affiliated hospitals and other healthcare providers earned net operating revenue of close to $10 billion.
As required by the Tunney Act, the proposed settlement and the Department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter J. Mucchetti, Chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the Western District of North Carolina may enter the proposed consent decree upon finding that it serves the public interest.
Three Felons with Guns Are Sentenced to PrisonRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Murray announced today that three felons convicted of illegally possessing firearms have been sentenced to prison, as part of the Western District’s Project Safe Neighborhoods (PSN) strategy to remove guns from the hands of prohibited persons and reduce gun-related violence.
U.S. District Judge Max O. Cogburn, Jr. sentenced Louie Raymond Forney, 27, of Charlotte, to 40 months in prison, for possessing a firearm after being convicted of a felony. According to court records, on or about December 22, 2015, Charlotte-Mecklenburg Police Department (CMPD) officers attempted to conduct a traffic stop of the vehicle Forney was driving. Forney did not stop the vehicle and instead sped away. After crashing the vehicle, Forney jumped out of the car window, dropped a Smith and Wesson, Shield .40 caliber semiautomatic pistol on the ground, and fled on foot. At the time of the incident, Forney had prior felony convictions and was prohibited from possessing a firearm. In addition to the prison term imposed, Judge Cogburn also ordered Forney to serve two years under court supervision after he is released from prison.
Judge Cogburn also sentenced Damarius Derron Massey, 38, of Charlotte, to 33 months in prison and two years of supervised release for being a felon in possession of a firearm. Court records show that on June 16, 2017, over the course of a traffic stop, CMPD officers found Massey to be in possession of a stolen and loaded Taurus PT AFS .40 caliber pistol. Massey was previously convicted of Conspiracy to Commit Armed Robbery and Attempted Trafficking in Cocaine and is prohibited from possessing a firearm or ammunition.
On Monday, Judge Cogburn ordered Joseph Gerell Banks, 27, of Charlotte, to serve 46 months in prison and two years of supervised release for illegally possessing a firearm. According to court records, on April 8, 2017, Banks possessed a Glock, model 36, .45 caliber pistol and a .45 shell casing. Banks was previously convicted of a crime punishable by more than one year in prison and is prohibited from possessing a firearm.
“With each gun prosecution, an illegal firearm has been taken off our streets and, in all likelihood, multiple gun-related crimes have been prevented,” said U.S. Attorney Murray. “My priority as U.S. Attorney is to reduce gun violence across the Western District, and to hold accountable those who carry guns illegally and violate federal gun laws. Guns do not belong in the hands of felons,” Murray added.
In making today’s announcement, U.S. Attorney Murray thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and the Charlotte Mecklenburg Police Department for their investigation of each case, and commended Assistant U.S. Attorneys Sanjeev Bhasker for handling the prosecution of Louie Forney; William T. Bozin for handling the prosecution of Damarius Massey; and Erik Lindahl for handling the prosecution of Joseph Banks.
These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Record Breaking 29,992 Pounds of Prescription Drugs Collected in North Carolina During 16th National Take-Back DayRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that 29,992 pounds of unwanted, unused or expired medications were collected across North Carolina during the 16th National Prescription Drug Take-Back Day, which was held on Saturday, October 27, 2018. This is the highest total collected in North Carolina since the Drug Enforcement Administration (DEA) began the take-back initiative in 2010.
“The record number of prescription medications collected in North Carolina underscores the importance of the take-back campaign, as an opportunity to safely get rid of dangerous prescription drugs, and to raise awareness about their link to drug addiction and overdose deaths. We all need to do our part to stem the tide of prescription drug abuse in our communities, and clearing our homes of leftover prescription medicines for safe disposal is an important first step,” said U.S. Attorney Murray.
During the semiannual collection event, the DEA and state, local and tribal law enforcement partners collected nearly 11 million pounds of unused pills nationwide. This brings the total amount of prescription drugs collected by DEA since the fall of 2010 to 10,878,950 pounds, or 5439.5 tons.
Robert J. Murphy, Special Agent in Charge of the DEA’s Atlanta Field Division, which oversees the Carolinas, said, “DEA’s 16th National Prescription Drug Take-Back Day was a success locally and nationally. I would like to thank the multitude of partners, both law enforcement and non-law enforcement, who worked tirelessly to make this event another great success.”
Since the DEA launched the biannual take-back events, permanent prescription drug collection boxes have been installed by law enforcement agencies, pharmacies, and others throughout North Carolina, for convenient and safe drug disposal. The DEA’s next official Prescription Drug Take-Back Day is April 27, 2019. For the complete results of this year’s fall collection event please visit: https://takebackday.dea.gov/#initiative-results.
The U.S. Attorney’s Office and the DEA encourage parents, along with their children, to educate themselves about the dangers of legal and illegal drugs by visiting the DEA’s interactive websites at https://www.justthinktwice.gov, https://www.getsmartaboutdrugs.gov and http://www.dea.org.
High-Ranking North Carolina Bloods Gang Leader Sentenced to 19 Years for Racketeering ConspiracyRead the Press Release
CHARLOTTE, N.C. – A high-ranking North Carolina leader of the Nine Trey Gangsters set of the United Blood Nation (UBN or Bloods) street gang, was sentenced today to 19 years in prison for racketeering conspiracy. Also sentenced today were two other members of the Bloods gang. Sixty-seven defendants have now either pleaded guilty or have been convicted at trial.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, and Special Agent in Charge John A. Strong of the FBI Charlotte, North Carolina Field Division, made the announcement.
Cynthia Gilmore, aka Cynthia Young and Lady Bynt, 43, of Raleigh, North Carolina, was sentenced by Chief Judge Frank D. Whitney to serve 228 months in prison. Gilmore had been convicted, together with UBN Godfathers Pedro Gutierrez and James Baxton, by a federal jury sitting in Charlotte on May 17, following a two-week trial. In addition, two other Bloods members were also sentenced today. Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, was sentenced by Judge Whitney to serve 43 months in prison. Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, was sentenced by Judge Whitney to serve 70 months in prison.
“As a trusted leader of the Nine Trey Gangsters, Cynthia Gilmore played an integral role in the gang’s violent mission by trafficking narcotics, robbing other drug dealers, and acting as a communications conduit for Pedro Gutierrez, the gang’s incarcerated leader who had previously ordered a gang war,” said Assistant Attorney General Benczkowski. “Now totaling 67 defendants adjudicated guilty, the Department of Justice’s prosecution of the Nine Trey Gangsters continues to disrupt and weaken this violent prison and street gang, and serves as a testament to what cooperation between federal, state, and local law enforcement can accomplish.”
“Cynthia Gilmore was a gang member who had risen to the leadership ranks within the Nine Trey Gangsters, a powerful set of the Bloods in North Carolina, said U.S. Attorney Murray. “As a gang member, Gilmore engaged in racketeering criminal acts, including robbery and drug trafficking, to support the gang and pay her dues. As a trusted gang leader, Gilmore had direct access to the gang’s highest leadership, including to the Bloods’ Godfather, Pedro Gutierrez, with whom she had face-to-face meetings while he was incarcerated in New York. As the Godfather’s messenger, Gilmore assisted Gutierrez in maintaining control over the gang, and made certain that other gang members knew, understood, and executed Gutierrez’s orders. With another Bloods leader and two more gang members put behind bars, my office continues our work to dismantle criminal enterprises and to protect the people of the Western District from violent street gangs.”
In February 2017, President Donald Trump directed the Department of Justice “to reduce crime in America,” and Attorney General Jeff Sessions has made violent crime reduction and eliminating gangs a priority during his tenure. In June 2018, the Attorney General announced the largest increase in Assistant U.S. Attorneys—311 new prosecutors, including eight in North Carolina—to combat violent crime and carry out other Department priorities.
Additionally, Attorney General Sessions last year announced a reinvigorated Project Safe Neighborhoods program aimed at reducing the rising tide of violent crime in America. The U.S. Attorney’s Office for the Western District of North Carolina is an active participant in PSN.
Deputy Attorney General Rod Rosenstein mentioned many of these announcements and more when he delivered remarks in August to the 17th Annual Gangs Across the Carolinas Conference, a conference which Attorney General Sessions delivered remarks to in August 2017.
According to court documents and evidence presented at trial, the UBN is a violent criminal street gang operating throughout the east coast of the United States since it was founded as a prison gang in 1993. UBN members are often identified by their use of the color red, and can also often be identified by common tattoos or burn marks. Examples include: a three-circle pattern, usually burned onto the upper arm, known as a “dog paw”; the acronym “M.O.B.,” which stands for “Member of Bloods”; the words “damu,” or “eastside”; the number five; the five-pointed star; and the five-pointed crown. UBN members have distinct hand signs and written codes, which are used to identify other members and rival gang members. The Nine Trey Gangster set of the UBN refer to themselves as “Billies.”
According to court documents and evidence presented at trial, the UBN is governed by a common set of 31 rules, known as “The 31,” which were originally written by the founders of the UBN. Members of the UBN are expected to conduct themselves and their illegal activity according to rules and regulations set by their leaders. Prominent among these is a requirement to pay monthly dues to the organization, often in the amounts of $31 or $93. A percentage of these funds are transferred to incarcerated UBN leadership in New York; these funds also are used locally to conduct gang business. UBN gang dues are derived from illegal activity performed by subordinate UBN members including narcotics trafficking, robberies, wire fraud, and bank fraud, among other forms of illegal racketeering activities.
According to court documents and evidence presented at trial, the Nine Trey Gangsters’ leadership proceeds in rank, from lowest to highest, from “Scrap,” “1-Star General” through “5-Star General,” “Low,” “High,” and “Godfather.”
Evidence at trial established that Gilmore was a high-ranking leader of the Nine Trey Gangsters in North Carolina with the rank of “Low,” and that she was involved in drug trafficking and the robbery of other drug dealers. Evidence also established that Gilmore traveled regularly between North Carolina and New York State, where she met with Pedro Gutierrez, the highest ranking leader of the United Blood Nation, who was incarcerated at the time. Evidence further established that Gilmore assisted Gutierrez’s control of the Bloods organization in North Carolina by sending him dues and by passing along communications from Gutierrez to other gang leaders and members.
In all, 67 defendants have been adjudicated guilty in this case, including the three defendants who were found guilty at trial; 64 defendants have pleaded guilty in this investigation. Twelve defendants in high-ranking leadership positions have been convicted:
- Montraya Antwain Atkinson, aka Hardbody, 31, of Raleigh, North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of his plea agreement, Atkinson admitted to holding the leadership rank of “High,” and admitted to possessing marijuana and cocaine with intent to distribute, and to purchasing and selling powder cocaine. Atkinson was sentenced on Aug. 21 to a term of 208 months in prison;
- James Baxton, aka Frank White and Grown, 44, of New York City, New York, was convicted at trial on May 17. Trial evidence established that Baxton was a “Worldwide High” of the Nine Trey Gangsters and that, while incarcerated in the New York State Department of Corrections, Baxton trafficked heroin within the prison system and engaged in wire fraud by threatening the relatives of other incarcerated inmates. Baxton was sentenced on Sept. 4 to a term of 240 months in prison, to be served federally after completing a term in New York State prison;
- Adrian Nayron Coker, aka Gotti, 28, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy and three counts of possession with intent to distribute narcotics. According to the factual basis of his plea agreement, Coker admitted to holding the leadership rank of “Low,” and to possessing a stolen firearm and ammunition, despite having previously been convicted of a felony. Coker was also recorded discussing a potential murder of a rival gang member. Coker was sentenced on June 18, to a term of 140 months in prison;
- Pedro Gutierrez, aka Magoo, Light, and Inferno, of New York City, New York, was convicted at trial on May 17. Based on evidence introduced during the trial, Gutierrez was a “Godfather” of the Nine Trey Gangsters and had served since 2003 as the “Chairman” of the council that governs the UBN. As the Godfather of the set, Gutierrez, along with Baxton, conducted gang business and participated in the distribution of gang dues while incarcerated in the New York State Department of Corrections. Trial evidence also established that Gutierrez ordered a gang war in North Carolina in 2011, directing that members of the Bloods gang attack and kill members of a renegade gang called Pretty Tony. The war resulted in numerous injuries among inmates and the lockdown of five North Carolina prisons for six months. Gutierrez was sentenced on Sept. 4 to a term of 240 months in prison, to be served consecutively to the remainder of a New York State sentence for murder;
- Bianca Kiashie Harrison, aka Lady Gunz, 28, of Midway Park, North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of her plea agreement, Harrison admitted to holding the leadership rank of “High,” and to participating, at facilities within the New York Department of Corrections, in gang leadership meetings with alleged UBN Godfathers Gutierrez and Baxton. Harrison was sentenced on June 18, to a term of 32 months in prison;
- Quincy Delone Haynes, aka Black Montana, 39, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy and three counts of trafficking cocaine. According to the factual basis of this plea agreement, Haynes admitted to holding the leadership rank of “Low.” Haynes was sentenced on Aug. 15, to a term of 64 months in prison;
- Bobby Earl Hines, aka Swahili Red, 35, of North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of his plea agreement, Hines admitted to holding the leadership rank of “High;”
- Barrington Audley Lattibeaudiere, aka Bandana and Bobby Seale, 31, of Fort Lauderdale, Florida, pleaded guilty to racketeering conspiracy and conspiracy to commit wire fraud. According to the factual basis of his plea agreement, Lattibeaudiere admitted to holding the leadership rank of “High,” and coordinating the transmission of hundreds of dollars of UBN gang dues to Gutierrez and Baxton. Lattibeaudiere further admitted to participating in a scheme to make and attempt to make over $64,000 in purchases using fraudulent credit and gift cards. Lattibeaudiere was sentenced on June 19, to serve 56 months in prison;
- MyQuan Lamar Nelson, aka Dripz, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and conspiracy to possess with intent to distribute heroin, and according to the factual basis of his plea agreement admitted to holding the leadership rank of “Low;”
- Omari Rosero, aka Uno B, 41, of Elmira, New York, pleaded guilty to racketeering conspiracy. During his plea, Omari Rosero admitted to holding the leadership rank of “High,” and to serving as an acting “Godfather” of the entire UBN. Rosero was sentenced on July 31, to 87 months in prison, to be served federally after completing a sentence in New York State;
- Porsha Talina Rosero, aka Lady Uno B, 35, of Syracuse, New York, pleaded guilty to racketeering conspiracy. Rosero admitted to participating in the distribution of gang dues, and to participating in a phone call during which Omari Rosero stated that a suspected cooperator would be “faded straight up.” Porsha Rosero was sentenced on July 31, to serve 21 months in prison; and
- Tywlain Wilson, aka 5 Alive, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy, possession with intent to distribute marijuana, and firearm possession in furtherance of a drug trafficking crime. According to the factual basis of his plea agreement, Wilson admitted to holding the leadership rank of “Low.” Wilson was sentenced on July 30, to serve 82 months in prison.
The following 34 defendants have also pleaded guilty and have been sentenced in this investigation:
- Sherman Devante Addison, aka Ace, 24, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy. Addison was sentenced on Aug. 15, to serve 33 months in prison;
- Freddrec Deandre Banks, aka Drec and Banga, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Banks was sentenced on Aug. 14, to serve 33 months in prison;
- Destinee Danyell Blakeney, aka Lady Rude, 23, of Morven, North Carolina, pleaded guilty to racketeering conspiracy. Blakeney was sentenced on July 31, to serve 18 months in prison;
- Shakira Monique Campbell, aka Lady Rage, 24, of Charlotte, North Carolina, pleaded guilty to possession of cocaine. Campbell was sentenced to serve eight months in prison;
- Brandon Khalil Covington, aka Blokka, 25, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm in furtherance of drug trafficking. Covington was sentenced to serve 87 months in prison;
- Alex Levi Cox, aka Quick, 28, of Loris, South Carolina, pleaded guilty to racketeering conspiracy. Cox was sentenced on Aug. 21, to serve 17 months in prison;
- Richard Diaz, aka Damu, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Diaz was sentenced on Aug. 15, to serve 33 months in prison;
- Christopher Dentre Hamrick, aka Red Dot, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon. Hamrick was sentenced on May 30, to serve 64 months in prison;
- Lavaughn Antonio Hanton, aka Killem and Billy-D, 35, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Hanton was sentenced on Aug. 21, to 216 months in prison;
- Anthony ONeil Harrison, aka Ant, 20, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Harrison was sentenced on June 25, to serve 27 months in prison;
- Delonte Maurice Hicks, aka BBB Shooter and Black, 29, of Bennettsville, South Carolina, pleaded guilty to racketeering conspiracy. Hicks was sentenced on May 31, to serve 24 months in prison;
- Raheam Shumar Hopper, aka Bone, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Hopper was sentenced on June 20, to serve 27 months in prison;
- Donl Lequintin Hunsucker, aka Remy, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Hunsucker was sentenced on Aug. 15, to serve 52 months in prison;
- Muhammad John Jackson, aka Picasso, 33, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Jackson was sentenced on Aug. 21, to serve 27 months in prison;
- Terrence Thomas Johnsom, aka Sypher, 41, of Durham, North Carolina, pleaded guilty to racketeering conspiracy. Johnsom was sentenced on May 30, to serve 57 months in prison;
- Joe Tarpeh Johnson, aka JR, Big Pusha and Kutthroat, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Johnson was sentenced on April 28, to serve 31 months in prison;
- Latif Nakia Antoine Johnson, aka Billy Solo, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Johnson was sentenced on July 9, to serve 18 months in prison;
- Rashad Monte King, aka Billy Kilo Montana, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. King was sentenced on July 30, to serve 25 months in prison;
- David Matthew Lowe, aka Gucci, 26, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Lowe was sentenced on May 29, to serve 24 months in prison;
- Charles Kenyon Lytle, aka Kam, 40, of Concord, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon. Lytle was sentenced on Aug. 22, to serve 46 months in prison;
- Brandon Theodore Manning, aka Billy B, 29, of Columbia, South Carolina, pleaded guilty to racketeering conspiracy. Manning was sentenced on July 31, to serve 21 months in prison;
- Travis McClain, aka Fridaay Daa Thuurteenth, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McClain was sentenced on Aug. 14, to serve 27 months in prison;
- Isaac Nabah McIntosh, aka Mac, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McIntosh was sentenced on July 30, to serve 18 months in prison;
- D’Angelo De’Mara McNeil, aka Dutch, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McNeil was sentenced on June 20, to serve 33 months in prison;
- Kolawole Olalekan Omotosho, aka Rugged Red, 19, of Jacksonville, North Carolina, pleaded guilty to racketeering conspiracy. Omotosho was sentenced on May 29, to serve 33 months in prison;
- James Brandin Pegues, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Pegues was sentenced on May 29, to serve 33 months in prison;
- Deshawn Deonta Peterkin, aka Proo, 29, of Wallace, South Carolina, pleaded guilty to racketeering conspiracy. Peterkin was sentenced on June 25, to serve 21 months in prison;
- Austin Demontry Potts, aka Big Tek and B-Tek, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Potts was sentenced on May 29, to serve 30 months in prison;
- Rashad Sattar, 20, of Lauderdale Lakes, Florida, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Sattar was sentenced on Aug. 22, to serve 33 months in prison;
- Anthony Bernard Smith, aka Redd Lion, 25, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy. Smith was sentenced on April 23, to serve 44 months in prison;
- Cedric Surratt, aka Hollywood, 5-Star and Lingo, 30, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Surratt was sentenced on June 20, to serve 28 months in prison;
- Peatrez Lamar Teaste, aka P-Wheezy, 25, of Loris, South Carolina, pleaded guilty to racketeering conspiracy. Teaste was sentenced on Aug. 21, to serve 109 months in prison;
- Lavon Christopher Turner, aka Hungry, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Turner was sentenced on April 23, to serve 35 months in prison; and
- Jesse James Watkins, aka Showtime, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Watkins was sentenced on July 30, to serve 27 months in prison.
The following 19 defendants have also pleaded guilty and are awaiting sentencing in this case:
- Aaron Demitri Alexander, aka A Dawg, 25, of Charlotte, North Carolina, pleaded guilty on July 9, to racketeering conspiracy;
- Antarious Quashard Byers, aka Bang, 25, of Shelby, North Carolina, pleaded guilty on Aug. 28, to racketeering conspiracy;
- Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession with intent to distribute cocaine;
- Marquel Michael Cunningham, aka Omega, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- James Walter Dowdle, aka Staxx, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and use of a firearm in furtherance of a crime of violence;
- John Paul Durant, aka JP, Glock and Gudda, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Shamon Movair Goins, aka Rugie, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
- Jasmin Reikeem Hicks, aka Rude, 28, of Morven, North Carolina, pleaded guilty to racketeering conspiracy;
- Wesley Javon Howze, aka Drama, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Juan Cruz Leon, aka Jefe, 22, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
- Terry Lavon Maddox, aka Turbo, 27, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and possession with intent to distribute cocaine base;
- Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and two counts of possession with intent to distribute cocaine base;
- Christopher Lashon Miller, aka Dro, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Johnny Thomas Mitchell, aka Joker, 38, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Christopher O’Brien Moore, aka Ratchet, 23, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Kenneth Marquise Ruff, aka Red Hot, 28, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Isaiah Devon Stallworth, aka Zay and Juice, 25, of Charlotte, North Carolina, pleaded guilty on Jan. 5, to racketeering conspiracy and to use of a firearm in furtherance of a crime of violence;
- Jhad Elijah Thorbourne, aka Flight, 24, of Charlotte, North Carolina, pleaded guilty on July 19, to racketeering conspiracy; and
- Patrick Wray, aka Ike and Murda, 30, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.
The investigation was conducted by the FBI; the Charlotte Mecklenburg Police Department; the Shelby Police Department; the Cleveland County Sheriff’s Office; the Gastonia Police Department; the North Carolina State Highway Patrol; the Mecklenburg County Sheriff’s Office; the North Carolina Division of Adult Correction and Juvenile Justice; the North Carolina Department of Motor Vehicles; the U.S. Federal Probation; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the IRS Criminal Investigation; the U.S. Postal Inspection Service; the U.S. Army Criminal Investigation Command; and the New York Department of Corrections and Community Supervision, Office of Special Investigations. Trial Attorneys Andrew L. Creighton and Beth Lipman of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Matt Warren and Christopher Hess for the Western District of North Carolina are prosecuting the case.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. 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 level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Mount Holly Woman Convicted of Bank Fraud Conspiracy and Other Charges for $1 Million Fake Car Loan SchemeRead the Press Release
CHARLOTTE, N.C. – A federal jury in Charlotte returned a guilty verdict late yesterday against Kimberlie L. Flemings, 49, of Mt. Holly, N.C. for her role in a $1 million fake car loan scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. The jury found Flemings guilty of conspiracy to commit wire and bank fraud; wire fraud affecting financial institutions; and multiple counts of financial institution fraud. U.S. District Judge Robert J. Conrad presided over the trial.
Two of Flemings’ co-conspirators, Stanley Reginald Barron, 38 of Cornelius, N.C. and Brian Lyles, 46, formerly of Jersey City, New Jersey, previously pleaded guilty to conspiracy to commit wire and bank fraud. Lyles also pleaded guilty to bank fraud. They are currently awaiting sentencings.
According to evidence presented at trial, witness testimony and filed court documents, from at least 2012 to 2015, Flemings, Barron, Lyles and others submitted dozens of fraudulent automobile and personal loan applications in their names, and the names of at least 30 other individuals they had recruited to participate in the scheme, to at least 19 banks and credit unions. As a result of the fraudulent applications, the co-conspirators obtained more than $1 million in fraudulent loan proceeds. To facilitate the fraud, the co-conspirators created fake automobile dealerships that purported to be the sellers of vehicles purchased with the fraudulent loans. The co-conspirators also set up bank accounts, websites, and addresses associated with these fake automobile dealerships, and created fictitious purchase orders which were submitted to the financial institutions as part of the loan application.
Flemings, Barron and Lyles deposited the fraudulently-obtained checks from the financial institutions into accounts Barron controlled. After keeping a portion of the fraudulent loan proceeds, Barron distributed the rest to Flemings, Lyles, and others. According to court records, the majority of the loans defaulted, causing losses to the impacted financial institutions. To cover up the fraud, Barron and others made false statements to the defrauded banks and credit unions that attempted to collect on the debts, including that borrowers had been the victims of identity theft and that they had not authorized the loans.
Flemings is currently released on bond. Each of the charges the defendant was convicted of carries a maximum sentence of 30 years in prison and a $1,000,000 fine. A sentencing date has not been set.
In making today’s announcement U.S. Attorney Murray thanked the Postal Inspection Service (USPIS) and the Office of Inspector General of the Federal Housing Finance Agency for their investigation of the case, and recognized the North Carolina Division of Motor Vehicles for their assistance.
Assistant U.S. Attorneys Daniel Ryan and Taylor J. Philips of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.
U.S. Army Reservist, Who Exploited Opioid Addictions of Young Women, Convicted of Sex Trafficking and Related OffensesRead the Press Release
CHARLOTTE, N.C. – Xaver M. Boston, 29, of Charlotte, North Carolina, was convicted yesterday by a federal jury of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise. The verdict was announced by Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney Andrew Murray of the Western District of North Carolina, and Special Agent in Charge John Strong of the FBI Charlotte, North Carolina, Field Division. U.S. District Judge Robert J. Conrad, Jr. presided over the trial.
Evidence presented during the three day trial, including the testimony of three of the four victims identified in the indictment by their initials, revealed that Boston, who served in the U.S. Army as a reserve military policeman, operated an extensive sex trafficking enterprise in the Charlotte area between 2012 and September 2017, except for a brief period when he was deployed overseas. Boston recruited the victims—young women and one teenager who were all struggling with drug addictions—by promising to provide them with a place to live and drugs to feed their addictions. He also falsely promised them a house, car, and other material possessions. Boston then advertised them on Backpage.com for prostitution and collected the proceeds for his own profit.
After recruiting the victims, Boston controlled their supply of highly addictive drugs such as heroin and hydrocodone pills. Without the drugs, the victims would experience excruciating physical and mental pain and withdrawal symptoms. In order to coerce the victims to prostitute, Boston withheld their drugs until after they completed commercial sex acts, and he withheld it as punishment if they failed to turn over all of the prostitution proceeds or otherwise violated his rules.
Evidence presented at trial also showed that Boston used violence to control and coerce the victims on occasion. For example, he choked one victim on multiple occasions, and he punched and slapped others as well. Boston also used a pistol to strike one victim in the face, breaking her nose.
“The defendant in this case preyed upon young vulnerable women, exploiting their drug addictions and forcing them to engage in prostitution for his own profit,” said Acting Assistant Attorney General Gore. “The Civil Rights Division will continue its vigorous efforts to work with our federal and state partners to hold human traffickers accountable and vindicate the rights of victims.”
“Boston is a predator who ran a criminal enterprise that violated the most basic standards of human decency,” said U.S. Attorney Murray. “The defendant preyed on and abused vulnerable young women with the intention of exploiting them for his financial gain, and used violence and drugs to exert his control. My office will continue to prosecute sex traffickers and work with our law enforcement partners to identify those who engage in this illegal, dehumanizing business.”
“Xaver Boston promised his victims a better life, instead he robbed them of their civil rights and freedom to make a profit, now he will pay the price. The FBI devotes a significant amount of resources to help sex trafficking victims recover from the trauma they suffer at the hands of ruthless people like Boston,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
After deliberating for seven hours, the jury found the defendant guilty of seven out of nine counts contained in the indictment. Boston is currently in federal custody. Each sex trafficking charge carries a minimum sentence of 15 years in prison and a maximum sentence of life, mandatory restitution and a $250,000 fine. A sentencing date has not been set.
The case was investigated by the FBI Charlotte, North Carolina, Field Division with assistance from the Charlotte-Mecklenburg Police Department. The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
U.S. Attorney Murray Announces Progress in Making Our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
CHARLOTTE, N.C. - One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Sessions has made the centerpiece of the Department’s violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Throughout the past year, we have partnered with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”
“In this district, local, state, federal and tribal law enforcement have a long history of working together to protect our communities and reduce violent crime by identifying serial violent offenders, focusing on crime hot spots, and dismantling criminal enterprises,” said U.S. Attorney Murray. “In addition to enforcement actions, as part of our strategy under the revitalized PSN program, we have expanded our existing partnerships and created new ones with important community stakeholders on our prevention, education and outreach efforts. Using the additional resources we have received from the Justice Department, will further our mission to increase safety and reduce violent crime in neighborhoods across Western North Carolina,” said U.S. Attorney Murray.
Enforcement Actions
Over the past year, the U.S. Attorney’s Office has worked with federal, state, local, and tribal law enforcement to identify and prosecute the most violent individuals who use firearms to commit violent crimes:
- On September 25, 2018, three Gaston County drug traffickers were sentenced to prison terms ranging from nine to 17.5 years. The three men were responsible for trafficking multiple kilograms of crack cocaine. Over the course of the investigation, law enforcement seized illegally possessed firearms, including one AK-47 assault rifle, one shotgun, four handguns, and ammunition.
- On September 10, 2018, Johnny Obrian Leach, 31, of Gastonia, N.C. was sentenced to 180 months for possession of a firearm by a convicted felon. Due to his prior offenses, that included Assault with Deadly Weapon Inflicting Serious Injury, Robbery with Dangerous Weapon, and First Degree Kidnapping, Leach received an enhanced sentence as an Armed Career Criminal.
- On September 4, 2018, two high-ranking leaders of the Nine Trey Gangsters set of the Bloods street gang, including the “Godfather” of the set, who also served as “Chairman” of the UBN, and a second leader who held the rank of “Worldwide High” were each sentenced to 20 years in prison for racketeering conspiracy.
- On August 23, 2018, 11 individuals were arrested on drug and gun charges as part of a PSN initiative in Mecklenburg County.
- On February 13, 2018, 44 individuals were arrested on federal and state drug and gun charges. Over the course of the investigation, law enforcement recovered more than 27 firearms and illegal substances, including heroin, cocaine, crack cocaine, methamphetamine, marijuana, and MDMA (ecstasy) pills.
Community Partnerships
In addition to our law enforcement efforts to identify and prosecute violent offenders, as part of the U.S. Attorney’s Office’s PSN strategy, we have partnered with area schools and community-based organizations on initiatives focusing on prevention and education.
In August 2018, we partnered with the Asheville Police Department and the Buncombe County Sheriff’s Office to conduct the Law Enforcement Guiding Adolescent Lives (L.E.G.A.L.) training program in Asheville. Volunteer officers and deputies, and 18 young men selected from the Asheville-based youth development program My Daddy Taught Me That, participated in this youth-oriented community outreach initiative, designed to foster positive interactions between young people and members of the law enforcement community.
In partnership with Charlotte-Mecklenburg County Schools, Buncombe County Schools and Asheville City Schools, we continue to co-sponsor the Do the Write Thing writing challenge, which gives middle school students an opportunity to examine the impact of violence on their lives, by communicating what they have seen to be the causes of youth violence. By encouraging students to make personal commitments to do something about the problem, the program ultimately seeks to empower them to reduce violence in their homes, schools and neighborhoods.
The U.S. Attorney’s Office is partnering with school districts to organize the Violence Prevention Youth Summits. These summits are designed to encourage middle school and high school students to discuss the culture and climate within their schools, to develop conflict resolution skills, to discuss strategies for dealing with social pressures, and to brainstorm on solutions for creating a positive and inclusive school environment for students. In addition to the summits, the Stand Up, Speak Out campaign, which the U.S. Attorney’s Office co-sponsors, encourages students to take the anti-bullying pledge and to make a positive change within their schools.
The U.S. Attorney’s Office is also working with faith-based organizations in the Asheville area to develop strategies for improving community relations and, specifically, relationships between law enforcement and minority groups.
Improvements to Community Safety
- The FBI’s official crime data for 2017 reflects that, after two consecutive, historic increases in violent crime, in the first year of the Trump
Administration the nationwide violent crime rate began to decline. The nationwide violent crime rate decreased by approximately one percent in 2017, while the nationwide homicide rate decreased by nearly one and a half percent.
- The preliminary information we have for 2018 gives us reason for optimism that our efforts are continuing to pay off. Public data from 60 major cities show that violent crime was down by nearly five percent in those cities in the first six months of 2018 compared to the same period a year ago.
- In Charlotte, homicides are down 37% compared to the same time last year, and violent crimes involving firearms are down 7%.
In support of the Department’s PSN programs throughout the country, the Attorney General also announced almost $28 million in grant funding to combat violent crime through PSN and another $3 million for training and technical assistance to develop and implement violent crime reduction strategies and enhance services and resources for victims of violent crime. Since the announcement of the reinvigoration of the PSN program in October 2017, the Justice Department has also increased the number of federal prosecutors focused on violent crime. North Carolina has received nearly $1 million in PSN grants, $311,781 of which will be allocated to the Western District. The U.S. Attorney’s Office was also allocated two Assistant U.S. Attorneys to focus on violent crime prosecutions.
These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. Learn more about Project Safe Neighborhoods.
U.S. Attorney Announces Almost $2.5 Million in Federal Grants Awarded in the Western District to Combat Opioid CrisisRead the Press Release
CHARLOTTE, N.C. – During National Substance Abuse Prevention Month, the Department of Justice announced it is awarding almost $320 million to combat the opioid crisis in America. The unprecedented funding will directly help those most impacted by the deadliest drug crisis in American history, including crime victims, children, families, and first responders. U.S. Attorney Andrew Murray announced today that nearly $2.5 million will be awarded to five grantees in the Western District of North Carolina.
“President Trump has made ending the opioid crisis a priority for this administration, and under his leadership, the Department of Justice has taken historic action,” said Attorney General Jeff Sessions. “Today we are announcing our next steps: investing $320 million into all three parts of the President’s comprehensive plan to end the epidemic: prevention, treatment, and enforcement. We are attacking this crisis from every angle—and we will not let up until we bring it to an end.”
“The solution to the opioid crisis is not going to be quick or easy. To reverse this deadly trend, we have to implement a holistic, sustained and concerted effort, focusing on law enforcement action, treatment accessibility and community education and outreach. The grants announced today will provide much-needed funding to communities located in the Western District, including Indian Country, that are dealing with the opioid epidemic. The grants will be used to pay for technical assistance needs, to support drug courts, to enhance treatment efforts, and to provide assistance to youth impacted by the opioid crisis,” said U.S. Attorney Murray.
The approximately $320 million awarded by the Department’s Office of Justice Programs (OJP) will be distributed in order to maximize effectiveness over the country. A breakdown of all the grant funding can be found here.
In the Western District of North Carolina, the Eastern Band of Cherokee Indians will receive 713,035 to fund the planning and implementation of programs aimed at reducing opioid abuse, increasing accessibility to treatment, and to pay for staffing and treatment resources.
The Jackson County Sheriff’s Office will receive $256,795 in federal funding under BJA’s Justice and Mental Health Collaboration Program (JMHCP), to address the treatment needs of people using opioids.
Gaston County will receive $708,279 under OJP’s Office for Victims of Crime’s (OVC) program, to help children and youth impacted by the opioid crisis.
Burke County has been awarded $500,000 and Buncombe County has been granted $249,644 to support drug court programs in each county. Buncombe County has also been awarded $299,644 to enhance existing veterans’ treatment courts.
In 2017, more than 72,000 Americans lost their lives to drug overdoses, an increase from the 64,000 overdose deaths in 2016, according to the Centers for Disease Control and Prevention. The majority of these deaths can be attributed to opioids, including illicit fentanyl and its analogues. October marks two important anti-drug events: Red Ribbon Week and National Prescription Drug Takeback Day. Red Ribbon Week takes place every year between October 23-31 and encourages students, parents, schools, and communities to promote drug-free lifestyles. The Drug Enforcement Administration’s (DEA) National Prescription Drug Take Back Day on October 27 aims to provide an opportunity for Americans to prevent overdose deaths and drug addictions before they start. DOJ expanded on DEA's Drug Takeback Days and collected more than 2.7 million pounds of expired or unused prescription drugs since April 2017.
The Attorney General been resolute in the fight against the drug crisis in America. The Department assigned more than 300 federal prosecutors to U.S. Attorneys’ offices and hired more than 400 DEA task force officers, announced the formation of Operation Synthetic Opioid Surge, a new program to reduce the supply of deadly synthetic opioids in high impact areas, and created a new data analytics program called the Opioid Fraud and Abuse Detection Unit to assist 12 prosecutors sent to drug “hot spot districts.” In addition, the Department charged more than 3,000 defendants with trafficking in heroin, fentanyl, or prescription drugs in FY 2017, announced the first-ever indictments of Chinese nationals for fentanyl trafficking, and scheduled variants of fentanyl to prevent illicit drug labs from circumventing the law. In addition, DOJ executed the largest ever health care fraud enforcement action charging more than 600 defendants and DOJ also proposed rules consistent with President Trump's "Safe Prescribing Plan," requiring a reduction of ten percent in 2019 in manufacturing quotas. The Department dismantled AlphaBay, the largest criminal marketplace on the Internet and has already generated prosecutions in the fight against online drug trafficking through the Joint Criminal Opioid Darknet Enforcement Team (J-CODE).
OJP provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at: www.ojp.gov.
Seven Charged in Telemarketing Sweepstakes Scheme that Victimized People in the United States, Including the ElderlyRead the Press Release
Seven U.S. citizens were charged in an indictment unsealed today for their roles in a Costa Rica-based telemarketing scheme that allegedly defrauded victims in the United States, including the elderly, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney R. Andrew Murray of the Western District of North Carolina announced.
Roger Roger, 34, previously of Hialeah, Florida and currently residing in Costa Rica; Paul Andy Stiep, 26, of Miami, Florida; Manuel Mauro Chavez, 27, also of Miami; David Michael Nigh, 49, previously of Oklahoma and currently residing in Costa Rica; Mark Raymond Oman, 33, of Long Beach, Washington; Cole Anthony Parks, 33, of Pompano Beach, Florida; and Nicholas Richer, 24, of Nashua, New Hampshire, were charged in a 20-count indictment filed in the Western District of North Carolina with one count of conspiracy to commit wire and mail fraud, nine counts of wire fraud, one count of conspiracy to commit money laundering and nine counts of international money laundering.
“According to the allegations in the indictment unsealed today, Roger Roger and his codefendants ran a telemarketing call center in Costa Rica that duped victims—including senior citizens—into sending money to claim bogus ‘sweepstakes prizes,” said Assistant Attorney General Benczkowski. “This indictment further demonstrates that the investigation and prosecution of individuals who victimize seniors and other vulnerable populations are among the highest priorities for the Criminal Division and our law enforcement partners.”
“Scamming elderly people out of their life’s savings is deplorable,” said U.S. Attorney Murray. “Most older Americans live on a fixed income, so when scammers come along and steal these elderly victims’ limited financial resources, our mission is to find the perpetrators and bring them to justice.”
The indictment alleges that the defendants worked for a telemarketing sweepstakes call center located in Costa Rica, which was supervised by Roger. Telemarketers in the call center, including Roger, Parks, Nigh and other co-conspirators, allegedly called intended victims in the United States – including elderly persons – convincing them that they had won a substantial sweepstakes prize, but, to claim the prize, they needed to send funds, such as insurance or customs fees or taxes. If a victim sent money, telemarketers called back seeking more money, telling the victims that there was a clerical error, or the prize had increased due to the disqualification of the grand prize winner, requiring payment of additional insurance, fees, taxes and customs duties, the indictment alleges. Victims sent the funds either directly to Costa Rica, where they were retrieved by co-conspirators, including Oman and Parks, or, for victims reluctant to send money to Costa Rica, to co-conspirators in the United States, including Stiep, Chavez and Richer, who, for a portion of the victim proceeds, retrieved the funds and forwarded them to Costa Rica. The promised sweepstakes prize did not exist, and the defendants and their co-conspirators kept the victims’ money to fund the call center operations and for their personal benefit, the indictment alleges.
The named defendants and their co-conspirators allegedly used a variety of techniques to conceal their identities and perpetrate the fraud, including use of “phone names” (i.e., aliases) when communicating with victims and Voice over Internet Protocol (VoIP) technology to make it appear that they were calling from Washington, D.C. or other places in the United States. They also allegedly often misrepresented that they were government agents or representatives, including from the IRS, Treasury Department or Federal Trade Commission.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service, IRS Criminal Investigation and the FBI, with assistance from the Federal Trade Commission, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Interpol, the Department of State's Diplomatic Security Service and the Department of Justice’s international partners in Costa Rica. The case is being prosecuted by Trial Attorneys William Bowne and Jennifer Farer of the Criminal Division’s Fraud Section. The U.S. Attorney’s Office for the Western District of North Carolina provided substantial assistance with this matter.
Department of Justice Announces More Than $70 Million to Support School Safety and $64 Million to Improve State Criminal Records SystemsRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Andrew Murray joined the Department of Justice today in announcing more than $70 million in grant funding to bolster school security, educate and train students and faculty, and support law enforcement officers and first responders who arrive on the scene of a school violence incident, including $373,971 for the City of Waxhaw, N.C., and $13,892 for Yancey County in the Western District of North Carolina.
These grants are in addition to the funding to the National Association of School Resource Officers (NASRO), announced by Attorney General Sessions last week, to expand and update their curriculum to better support training programs. These combined grants will better protect students, teachers, faculty, and first responders across the United States. Additionally, the Department is awarding more than $64 million to state agencies to improve the completeness, quality, and accessibility of the nation’s criminal record systems, which will help law enforcement and increase the effectiveness of background checks.
“President Trump and his administration will ensure the safety of every American school,” Attorney General Jeff Sessions said. “Earlier this year he signed into law the STOP School Violence Act, which provides grant funding to develop anonymous school threat reporting systems, to implement school building security measures, and to train students, school personnel, and law enforcement on how to prevent school violence. Today I am announcing $70 million in these grants to hundreds of cities and states across America. These grants will go a long way toward giving young people and their families both safety and peace of mind.”
“The safety of our students, faculty and staff in our District’s school systems is paramount. Nothing is more important to parents than knowing their children can learn in a safe environment, away from danger and out of harm’s way. The federal grants awarded to the City of Waxhaw and to Yancey County will help further school safety and enhance each school district’s existing violence prevention program,” said U.S. Attorney Murray.
The Office of Justice Program’s (OJP) Bureau of Justice Assistance (BJA) and the Office of Community Oriented Policing Services (COPS Office) together are making more than 220 awards to jurisdictions across the country to help make schools more secure. The awards, granted through three funding streams, will provide new technology for reporting systems and other threat deterrent measures and create school safety training and education programs for school administrators, staff, students, and first responders. This includes the support for existing crisis intervention teams and the creation of new ones.
- The COPS Office School Violence Prevention Program (SVPP) will provide nearly $25 million to 91 jurisdictions for school safety measures including coordination with law enforcement, training for law enforcement to prevent student violence against others and self, target hardening measures, and technology for expedited notification of law enforcement during an emergency.
- BJA’s STOP School Violence Threat Assessment and Technology Reporting Program will provide 68 awards valued at more than $19 million. This funding supports training to create and operate threat assessment and crisis intervention teams and to develop technology for local or regional anonymous reporting systems. This technology may be in the form of a mobile phone application, hotline, or website.
- The STOP School Violence Prevention and Mental Health Training Program, also managed by BJA, will provide training and education on preventing violence and effectively responding to related mental health crises. This program will fund 85 awards at nearly $28 million.
The grants are authorized by the STOP School Violence Act, which are intended to improve school security by helping students and teachers reduce exposure to risks, prevent acts of violence, and quickly recognize and respond to violent attacks.
The Department also announced that it has awarded more than $64 million to state agencies to improve the completeness, quality, and accessibility of the nation’s criminal record systems. These grants are administered by the Bureau of Justice Statistics, part of OJP. Approximately $43 million in funding will be administered through the National Criminal History Improvement Program (NCHIP), and nearly $21 million will be awarded under the National Instant Criminal Background Check System (NICS) Act Record Improvement Program. These grant programs help states automate and upgrade records accessed by the firearms background check system. This year, at the direction of the Attorney General, the Department prioritized funding for projects that improve accessibility of criminal history records, domestic violence convictions, and information on persons who are prohibited from possessing firearms for mental-health related reasons.
The Department is also investing over $1 million in research to better understand the factors behind mass shooting incidents. The grant awards, made by the Department’s National Institute of Justice (NIJ), part of OJP, support scientific investigations that will examine factors that contribute to mass violence, identify any patterns in mass shootings, analyze psychological and social life histories of mass shooters and community-level predictors of mass violence, and will examine firearm purchasing patterns of known mass shooters in order to create a risk prediction tool.
For addition information on today’s grant announcements, visit www.bja.gov or www.cops.usdoj.gov.
NOTE: The breakdown of the STOP School Violence Grants can be found here: STOP School Violence Threat Assessment and Technology Reporting Program, STOP School Violence Prevention and Mental Health Training Program, and COPS Office School Violence Prevention Program
Founder and CEO of Charlotte Area Start-Up Company Sentenced to 10 Years for Defrauding Victims of More Than $25 MillionRead the Press Release
CHARLOTTE, N.C. – Andrew Murray, U.S. Attorney for the Western District of North Carolina announced that U.S. District Judge Robert J. Conrad, Jr. sentenced Robert M. Boston, 54, of Hickory, N.C., to 120 months in prison and 2 years of supervised release for his role in defrauding victims of more than $25 million. A federal jury convicted Boston on all counts of conspiracy, wire fraud, securities fraud and money laundering following a five-day trial in December 2017. Judge Conrad also sentenced Boston’s co-defendant, Robert S. LaBarge, to 2 years in prison and 2 years of supervised release. Judge Conrad further ordered that Boston is liable for more than $27,366,733.59 million in restitution to victims, and ordered him to forfeit his interest in several properties.
John A. Strong, 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 filed court documents and evidence presented at trial, Boston and LaBarge defrauded franchisees, investors, and lenders of their start-up company, Zloop. Through their fraud, the defendants obtained millions of dollars, much of which was spent on expensive personal real estate, a private plane, and the racing career of Boston’s son. Evidence at trial indicated that Boston caused Zloop to spend more money on his son’s racing career than the entire operational revenue of the company before it went bankrupt. According to evidence presented at trial, while inquiring about the potential purchase of a private island, Boston wrote, “My son is a NASCAR driver. I spend 5 Million a year so he can play race car driver.”
According to previously filed court documents, trial evidence and witness testimony, Boston and LaBarge founded Zloop, an electronic waste recycling firm, in 2012 and began marketing Zloop franchises the same year. Court records show that Boston concealed crucial information from franchisees, including that Boston’s former company had filed bankruptcy, that Boston had filed personal bankruptcy, that Boston had a judgment against him for fraud, and that Boston had been held liable in an action alleging that he had knowingly submitted false financial documentation to a bank to obtain a $2.9 million line of credit. When Boston was warned that, according to the company’s attorney, concealing this information from the franchisees of Zloop would be fraud, he wrote, “it is my decision how I want to move forward.”
Beginning on or about December 2012, Boston and LaBarge caused Zloop to raise money through the sale of equity. To sell equity in the company, Boston and LaBarge caused a misleading private placement memo (“PPM”) to be sent to investors who invested millions in Zloop. Evidence at trial demonstrated that the PPM contained material half-truths and omissions, including the omission of the litigation and bankruptcy history of Boston, that Zloop was planning to use the investors’ money to pay off a $4 million debt that it owed to a prior lender, and that Boston and LaBarge had already caused Zloop to spend more than $1.5 million on their personal real estate. Evidence at trial also indicated that the books and records of Zloop had been falsified to conceal the personal real estate expenses.
Evidence at trial also demonstrated that Boston promised investors that their money would be held until the offering closed, but he instead spent their money on the same day that much of it came in. When Zloop investors sought the return of their money in or about the middle of 2013, Zloop sought a loan from an individual identified as Victim 1. To do so, Boston repeatedly falsified emails to make the company look more attractive to Victim 1.
According to trial evidence, Boston induced Victim 1 to secure a $14 million line of credit from a bank. After Boston and LaBarge caused Zloop to draw approximately $3.5 million from that line of credit, they spent hundreds of thousands of dollars on, among other things, a private plane, a new Corvette, and a new Grand Cherokee. Zloop subsequently drew an additional $1.3 million from the credit card line, of which more than $500,000 was spent on racing-related expenditures and approximately $79,808 on a suite at a professional football stadium.
LaBarge pleaded guilty to conspiracy to commit wire fraud on November 2, 2017.
During the sentencings, Judge Conrad commented that Boston engaged in a “pattern and practice of deception over a long period of time involving a variety of financial instruments to take other peoples’ money and to use it for himself,” and that he was “motivated by greed and to promote a lavish lifestyle on the backs of others, all of whom deserved honest representations.” Boston’s “substantial” sentence, according to the Court, was necessary to deter others who may be tempted by greed. Judge Conrad also noted that although LaBarge “raised concerns” about Boston’s conduct, he squelched them, and said that LaBarge’s actions constituted a “velleity:” a desire not amounting to action.
The FBI led the investigation. Assistant U.S. Attorneys Taylor J. Phillips and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Federal Opioid Reduction Task Force Initiative Leads to 76 Arrests in North Carolina Indian CountryRead the Press Release
ASHEVILLE, N.C. – A major law enforcement operation targeting drug trafficking in and around Indian Country in North Carolina has resulted in the arrest of more than 75 individuals on federal, state and tribal charges, announced Secretary of Interior Ryan Zinke and Andrew Murray, U.S. Attorney for the Western District of North Carolina.
The undercover operation, led by the Department of Interior’s (DOI) Opioid Reduction Task Force, in coordination with the Drug Enforcement Administration (DEA), the Cherokee Indian Police Department and multiple federal, state, and local law enforcement agencies, began in March 2018, and aimed at disrupting and dismantling drug distribution networks operating in and around the Qualla Boundary.
In addition to the 76 arrests announced today in connection with DOI’s Opioid Reduction Task Force operation, a concurrent two-year investigation spearheaded by the Bureau of Indian Affairs’ Division of Drug Enforcement and the DEA led to the previous arrest of 56 additional individuals responsible for trafficking opiates and methamphetamine in Indian Country, bringing the total number of those arrested to 132.
To date, the joint investigations have yielded a seizure of more than 3.8 pounds of heroin and Fentanyl; more than 18 pounds of methamphetamine; over 270 Fentanyl and Oxycodone tablets; and more than 100 kilograms of marijuana, with a combined street value of over $1.82 million. Over the course of the investigation, law enforcement also seized five illegally possessed firearms.
“First and foremost, Bravo Zulu to the dozens of law enforcement professionals who are on the front lines and putting their own lives at risk to take these deadly drugs off the streets. President Trump and I could not be prouder of their work,” said Secretary Zinke. “It’s heartbreaking to see the scale of the problem, and rather than further stigmatizing victims, we are cracking down on the dealers who are selling out our children, selling out our communities, and selling out our nation. The Trump Administration is serious about ending the opioid crisis and that means both treatment of those suffering as well as eradicating the drugs from our communities. This week’s law enforcement action gets us closer to that goal.”
“The Eastern Band of Cherokee Indians is a community that has been hard hit by the opioid epidemic. Drug distribution, drug-fueled crimes, and drug abuse pose a grave threat to the safety, stability, cultural preservation, and well-being of the tribal community,” said U.S. Attorney Murray. “The Justice Department and my office are committed to working with our law enforcement partners to stem the flow of drugs onto the Qualla Boundary, and to reduce the opioid abuse epidemic that has devastated Indian Country.”
“Dangerous and deadly drugs, both licit and illicit, see no boundaries,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “If the drugs are destined for the inner city, rural suburbia or Indian Country, regardless, the outcome is the same: they destroy dreams, communities, families and lives. The Eastern Band of Cherokee Indians community, and adjoining areas elsewhere, have felt the sting of drug abuse and addiction. DEA, its law enforcement partners and the U.S. Attorney’s Office are committed to making our communities safer by removing those who push these deadly substances. This investigation was a huge success because of the spirited efforts between DEA, its federal, state, local and tribal law enforcement partners and the subsequent prosecution by the U.S. Attorney’s Office and state and tribal prosecutors.”
“I am extremely grateful to the Secretary of the Interior, the BIA and the multiple state and local agencies who helped make this operation a success. The arrest of these drug dealers is a critical step towards ensuring that the Eastern Band of Cherokee Indians is able to provide the healthy environment our people deserve.” Principal Chief Richard Sneed.
Twelve individuals face federal drug offenses. They are:
- Dontavius Juan Cox, 26, of Sylva, N.C.
- Derek Wilson Driver, 26, of Cherokee, N.C.
- David Charles Fisher, 56, of Bryson City, N.C.
- Timothy Mark Grady, 43, Bryson City, N.C.
- Kandace Rhean Griffin, 29, of Cherokee, N.C.
- Kenneth Dean Griffin, 51, Cherokee, N.C.
- Kevin Dewayne Huskey, 47, of Bryson City, N.C.
- Saryna Michelle Miller, 22, of Bryson City, N.C.
- Jeremy Dwayne Morton, 21, of Bryson City, N.C.
- Javier Fernando Perez, 27, of Norcross, Georgia.
- David William Smith, 30, of Sylva, N.C.
- Dee Anna Wike, 45, of Cherokee, N.C.
Those arrested will have their initial hearings in federal court on Friday. Federal arrests warrants have been issued for Cox and Perez. Other offenses fall under tribal, state and local jurisdictions.
The charges contained in the indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Murray thanked the Bureau of Indian Affairs; the DEA; the Cherokee Indian Police Department; the Swain County Sheriff’s Office; the Jackson County Sheriff’s Office; the McDowell County Sheriff’s Office; the Henderson County Sheriff’s Office; the Rutherford County Sheriff’s Office; the Buncombe County Sheriff’s Office; the Asheville Police Department; the North Carolina State Bureau of Investigation; the North Carolina State Highway Patrol; and the U.S. Marshals Service for their coordinated efforts throughout this investigation.
Assistant U.S. Attorney John Pritchard and Special Assistant U.S. Attorney Alexis Solheim, of the U.S. Attorney’s Office in Asheville, are in charge of the federal prosecutions.
Last year, Attorney General Jeff Sessions announced a series of new actions by the Justice Department to support law enforcement and maintain public safety in Indian Country. Among the actions announced was the deployment of the expanded Tribal Access Program for National Crime Information (TAP), which is designed to provide the Eastern Band of Cherokee Indians and other federally-recognized tribes with access to national crime information databases for criminal and civil purposes. TAP allows tribes to more effectively serve and protect their nations’ citizens by ensuring the exchange of critical data across the Criminal Justice Information Services (CJIS) systems and other national crime information systems.
The Office of Tribal Justice also created the Indian Country Federal Law Enforcement Coordination Group, an unprecedented partnership that brings together sworn federal agents and key stakeholders from 12 federal law enforcement components with responsibilities in Indian Country, with the goal of increasing collaboration and coordination among law enforcement and enhancing the response to violent crime in Indian Country.
“As a member of the Native American Issues Subcommittee of the Attorney General’s Advisory Council, addressing substance abuse and violent crime in Indian Country is a priority,” said U.S. Attorney Murray. “My office is committed to supporting our tribal law enforcement partners and tribal leadership to identify and dismantle drug networks operating in and around Indian Country, and to provide greater access to technology, information, and funding, as we work jointly to increase public safety within the tribal community,” said U.S. Attorney Murray.
Two Charlotte Area Hospitals Among $260 Million Global Settlement Between Hospital Chain and the United StatesRead the Press Release
CHARLOTTE, N.C. – The Department of Justice announced today that Health Management Associates, LLC (HMA), formerly a major U.S. hospital chain headquartered in Naples, Florida, will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States. This global settlement also resolves False Claims Act allegations against two Charlotte-area hospitals, Lake Norman Regional Medical Center and Davis Regional Medical Center.
“Today’s settlement demonstrates the government’s commitment to hold companies accountable for the abuse of government healthcare programs,” said Andrew Murray, United States Attorney for the Western District of North Carolina. “My office will continue to steadfastly use the False Claims Act to safeguard the integrity of our healthcare system and protect taxpayer dollars from healthcare providers that engage in this type of fraudulent activity.”
The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees. Lake Norman Regional Medical Center and Davis Regional Medical Center, are two HMA hospitals in which the alleged fraudulent scheme was carried out.
Today’s settlement resolves multiple allegations against HMA for both criminal and civil liability. As part of today’s settlement, HMA agreed to pay $62.5 million to resolve HMA’s liability for submitting false claims between 2008 and 2012 as part of a corporate-wide scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65. The government alleged that the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting.
HMA agreed to pay $61,839,718 to the United States and $706,084 to participating States. HMA also agreed to pay $12 million to resolve allegations that from September of 2009 through December of 2011, certain HMA hospitals submitted claims to Medicare and Medicaid seeking reimbursement for falsely inflated emergency department facility charges. HMA agreed to pay $11,028,000 to the United States and $972,000 to participating States to settle HMA’s inflated billing practices.
This settlement resolves certain claims brought by Doctors Thomas L. Mason, Steven G. Folstad and their company Mid-Atlantic Emergency Medical Associates (MEMA), in a qui tam complaint filed on September 23, 2010 in the Western District of North Carolina. MEMA, Mason and Folstad’s company, provided contracted emergency department physician service to HMA at Lake Norman Regional Medical Center and Davis Regional Medical Center. Mason and Folstad alleged that because they resisted HMA’s efforts to enact this scheme, HMA fired MEMA and awarded the contract for emergency department services to EmCare, Inc. (EmCare), a large national emergency department services company. Mason and Folstad also named EmCare as a defendant in their complaint. The settlement amount of $62.5 million and $12 million resolves allegations of fraud included in doctors Mason and Folstad’s complaint. EmCare previously settled its civil liability with the government in December 2017 for $29.6 million. More information on EmCare’s settlement can be found here.
Mason and Folstad filed their complaint under the qui tam provisions of the False Claims Act, which allows private citizens with knowledge of potential fraud to file a complaint on behalf of the United States. These whistleblowers, known as relators under the statute, often bring corporate wrongdoing to the attention of the United States.
“The efforts of relators like Doctors Mason and Folstad are essential to protecting the integrity of our Medicare and Medicaid systems,” said U.S. Attorney Murray. “We thank them for bringing these allegations to the United States.”
Under the False Claims Act, the United States investigates relators’ allegations, often with assistance from relators and their counsel, to determine if it will intervene in the case.
“Relators’ counsel has provided invaluable assistance to the United States during this long investigation,” said Murray. “Such assistance greatly enhances government resources allowing us to more effectively fight fraud on government programs.”
Three Armed Drug Traffickers Are Sentenced to Lengthy Prison TermsRead the Press Release
CHARLOTTE, N.C. – Three Gaston County drug trafficker were sentenced in federal court yesterday to prison terms ranging from nine to 17.5 years, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Quinton Lavar Brown, 34, of Gastonia, was sentenced to 210 months in prison and five years of supervised release; Antwan Lamar Floyd, 35, of Gastonia, was sentenced to 144 months in prison and five years of supervised release; and Maurice Terrell Robinson, 29, of Dallas, N.C. was sentenced to 110 months in prison, followed by 6 years of supervised release. Chief U.S. District Judge Frank D. Whitney presided over the sentencing hearings.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Robert C. Helton of the Gastonia Police Department join U.S. Attorney Murray in making today’s announcement.
According to court documents and information presented at the sentencing hearings, the three men were responsible for trafficking multiple kilograms of crack cocaine in and around Gaston County. Court records show that, over the course of the investigation, law enforcement recovered from the defendants’ stash houses and residences more than $24,931 in cash, 74 grams of cocaine, 1.5 kilograms of marijuana, a money counter and four sets of digital scales. In addition, law enforcement seized illegally possessed firearms, including one AK-47 assault rifle, one shotgun, four handguns, and ammunition.
Brown, who engaged in drug trafficking while on supervised release for a previous federal drug and racketeering conspiracy conviction, pleaded guilty on May 2, 2018, to conspiracy to distribute and to possess with intent to distribute crack cocaine. Floyd pleaded guilty to conspiracy to distribute and to possess with intent to distribute crack cocaine on April 11, 2018. Robinson, who was also on supervised release in connection with a previous federal drug, racketeering conspiracy and Hobbs Act Robbery conviction, pleaded guilty to possession with intent to distribute crack cocaine on December 19, 2017.
All three defendants are currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
These convictions stem from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. 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.
These cases are also part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN.
In making today’s announcement U.S. Attorney Murray thanked the Federal Bureau of Investigation, Charlotte Division, and the Gastonia Police Department for their investigation of the case.
Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte was in charge of the prosecution.
Charlotte Man Convicted of Conspiracy to Defraud the GovernmentRead the Press Release
A federal jury in Charlotte, North Carolina convicted a Charlotte man today of conspiracy to defraud the government, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
According to court documents and evidence presented at trial, between October 2007 and May 2016, Arthur Joseph Gerard III assisted clients in hiding income and assets from the Internal Revenue Service (IRS) using straw companies and bank accounts opened in the names of those companies. In particular, Gerard conspired with his client, Reuben DeHaan, to hide from the IRS over $2.7 million in gross receipts earned by DeHaan through his holistic medicine business. Gerard recruited his friend, Richard H. Campbell Jr., into the scheme to serve as a nominee on DeHaan’s bank accounts. Gerard also assisted DeHaan in the filing of false documents with the IRS to obstruct the IRS’ collection efforts. Gerard charged DeHaan a fee of between $1,000 and $2,500 for each straw company he created. In total, Gerard’s conduct caused a tax loss of approximately $560,000.
Gerard faces a statutory maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties. DeHaan and Campbell each previously pleaded guilty and have been sentenced.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney William Miller and Trial Attorney Mara Strier of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Charlotte Man Convicted of Conspiracy to Defraud the GovernmentRead the Press Release
CHARLOTTE, N.C. - A federal jury in Charlotte, North Carolina convicted a Charlotte man today of conspiracy to defraud the government, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
According to court documents and evidence presented at trial, between October 2007 and May 2016, Arthur Joseph Gerard III assisted clients in hiding income and assets from the Internal Revenue Service (IRS) using straw companies and bank accounts opened in the names of those companies. In particular, Gerard conspired with his client, Reuben DeHaan, to hide from the IRS over $2.7 million in gross receipts earned by DeHaan through his holistic medicine business. Gerard recruited his friend, Richard H. Campbell Jr., into the scheme to serve as a nominee on DeHaan’s bank accounts. Gerard also assisted DeHaan in the filing of false documents with the IRS to obstruct the IRS’ collection efforts. Gerard charged DeHaan a fee of between $1,000 and $2,500 for each straw company he created. In total, Gerard’s conduct caused a tax loss of approximately $560,000.
Gerard faces a statutory maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties. DeHaan and Campbell each previously pleaded guilty and have been sentenced.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney William Miller and Trial Attorney Mara Strier of the Tax Division, who prosecuted the case.
Sixteen Indicted in Methamphetamine, Cocaine and Marijuana ConspiracyRead the Press Release
CHARLOTTE, N.C. – United States Attorney Andrew Murray announced today that 16 individuals are facing federal drug conspiracy charges for their involvement in a drug distribution ring. A federal criminal indictment was filed on August 23, 2018, and was unsealed today in federal court.
“The 16 individuals charged in the criminal indictment are alleged to have been part of a drug ring that distributed methamphetamine, cocaine and marijuana in Western North Carolina,” said U.S. Attorney Murray. “Working with our law enforcement partners, we will continue to investigate drug traffickers and dismantle drug networks that feed the deadly cycle of drug abuse, and jeopardize the safety and stability of our communities.”
Robert J. Murphy, Special Agent in Charge of the DEA Atlanta Field Division said, “All participating agencies played a crucial role in the eradication of this poly-drug distribution network. Their methamphetamine, cocaine and marijuana trafficking activities posed a threat to the quality of life in Western North Carolina. The dismantling of this organization makes the affected areas a safer place today. DEA thanks its federal, state and local law enforcement counterparts and the U.S. Attorney’s Office who had a direct impact in making this investigation a success.”
“ATF is proud to have been a part of a collaborative effort with our federal, state and local law enforcement partners. Today’s federal charges will dissolve this drug network, which will have a positive impact on the level of gun violence, violent crime and drug activity in the area,” said Wayne Dixie, Special Agent in Charge of ATF’s Charlotte Field Division.
According to allegations contained in the criminal indictment, from 2014 until August 2018, the defendants operated as a drug conspiracy responsible for trafficking methamphetamine, cocaine and marijuana in Western North Carolina, centered in and around Catawba County. The conspiracy extended well beyond North Carolina to Georgia, Texas, California, Illinois, Mexico and elsewhere, and involved the trafficking of multi-kilogram quantities of narcotics. The 16 defendants named in the indictment are all charged with conspiracy to distribute and to possess with intent to distribute methamphetamine, cocaine, and marijuana. Some of the defendants face additional offenses related to drug trafficking. Those named in the indictment are:
- Juan E. Villarreal, 28, of Hickory, N.C.
- Jesus Bedolla, 25, of Sweetwater, Tennessee
- Tommy Warren Boyett, 33, of New London, N.C.
- Joey Antoine Carroll, 32, of Lincolnton, N.C.
- Ricardo Cervantes-Sanchez, 39, of Hickory, N.C.
- Ivan Garcia-Arcos, 34, of Newton, N.C.
- Clayton Ismael Rivera-Trejo, 22, of Hickory, N.C.
- David Charles McIntosh, 37, of Conover, N.C.
- Manuel Bernarno Martinez, Jr., 33, of Alamo, Texas
- Ricky Joe Moses, 39, of Conover, N.C.
- Cindy Santillan, 25, of Taylorsville, N.C.
- Daniel Santillan, 36, of Hickory, N.C.
- Martin Vidal Santillan, 53, of Hickory, N.C.
- Rogelio Vidal Santillan, 51, of Hickory, N.C.
- Juan Manuel Villagomez, 29, of Hickory, N.C.
- Raymundo Villarreal, 21, of Newton, N.C.
McIntosh, Carroll, Juan Villarreal and Raymundo Villarreal are also charged with separate counts of distribution and possession with intent to distribute methamphetamine. Juan Villarreal and Raymundo Villlarreal face additional charges of attempt to possess with intent to distribute marijuana.
Each defendant in the indictment is facing a mandatory minimum sentence of 10 years in prison and a maximum of up to life in prison and a monetary fine of up to $10 million.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Murray commended the work of the Drug Enforcement Administration with the assistance of the Federal Bureau of Investigation; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Secret Service; the United States Probation Office; the North Carolina State Bureau of Investigation; the Catawba County Sheriff’s Office; the Alexander County Sheriff’s Office; the Hickory Police Department; the Newton Police Department; the Lincolnton Police Department; the Maiden Police Department; and the Cornelius Police Department. U.S. Attorney Murray also thanked the DEA’s offices in McAllen, Texas; Louisville, Kentucky; Indianapolis, Indiana; and Knoxville Tennessee, and the 9th Judicial Drug Task Force in Tennessee for their assistance in this case.
Assistant U.S. Attorney William Bozin of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). 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 level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Justice Department Files Statement of Interest in New Asbestos Trust ProposalRead the Press Release
The Department of Justice today filed a Statement of Interest in In re Kaiser Gypsum Co. in the United States Bankruptcy Court for the Western District of North Carolina. In the case, Kaiser Gypsum Company and Hanson Permanente Cement Inc. propose the establishment of a new asbestos trust under 11 U.S.C. § 524(g), a section of the Bankruptcy Code that provides the framework for responding to the unique issues associated with asbestos liability.
“In recent years, alarming evidence has emerged of fraud and mismanagement inside asbestos trusts,” said Principal Deputy Associate Attorney General Jesse Panuccio. “Asbestos victims should feel certain that they will receive compensation when they are promised it, but fraudulent claims and mismanagement call that promise into question. In addition, the United States and all who depend on Medicare are harmed when Medicare is not reimbursed for treatment costs that have been paid by trust funds. With today’s Statement of Interest, the Department sends a clear message that we will not tolerate fraudulent conduct that cheats asbestos victims and the United States. This is just one action the Department will take to increase the transparency and accountability of asbestos trusts, and we are grateful for the many partners we have in that mission, including the many state attorneys general who have brought attention to this issue. We encourage anyone with information about fraud or mismanagement of asbestos trusts to report it to the Department of Justice.”
Congress enacted 11 U.S.C. § 524(g) to create a comprehensive mechanism for addressing injuries caused by asbestos. Under section 524(g) plans, 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” (TAC), 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.
In recent years, both courts and researchers have expressed growing concern that the trusts, enabled by a lack of oversight or accountability, may be paying fraudulent claims and mismanaging funds. In 2014, the same bankruptcy court in which the United States today filed its statement of interest found a substantial pattern of fraud 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 15 civil asbestos cases, in each and every case key evidence about asbestos exposure had been improperly misrepresented or withheld. In three instances, plaintiffs made claims against defendants to whose products they had previously represented they had never been exposed. Similarly, several studies have demonstrated problems caused by the lack of oversight. 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 many trust claims are submitted, allowed, and paid has made it nearly impossible to detect when plaintiffs are seeking a recovery based on misrepresentations.
The United States’ Statement of Interest argues that the plans currently on file in this case do not have sufficient safeguards in place to prevent fraud and abuse. The Statement also indicates that the United States will object to any plan that lacks critical provisions to ensure transparency and accountability and to prevent fraudulent claims and mismanagement of the 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 TAC; and that prevent payments to those who cannot demonstrate exposure to the defendants’ products or who have made inconsistent claims in other asbestos proceedings. The United States is filing this Statement of Interest now to allow the parties sufficient time to address the concerns it raises.
Finally, in addition to filing the Statement of Interest, the Department also responded today to letters from 19 state attorneys general regarding concerns over asbestos trusts.
The Department will continue to look for opportunities to increase the transparency of asbestos trusts and protect the interests of legitimate claimants and the United States. The Department will also investigate conduct related to asbestos trusts that is illegal under federal law. If anyone has information on asbestos trust fraud or mismanagement, the Department welcomes the reporting of that information so that it may pursue all appropriate means under federal law to ensure that asbestos trusts operate lawfully and responsibly.
This matter has been handled by the 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.
Armed Career Criminal Sentenced to 15 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced that, late yesterday, Johnny Obrian Leach, 31, of Gastonia, N.C. was sentenced to 180 months in prison and three years of supervised release for possession of a firearm by a convicted felon. U.S. District Judge Robert J. Conrad, Jr. presided over the sentencing.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Robert C. Helton of the Gastonia Police Department join U.S. Attorney Murray in making today’s announcement.
According to court documents and today’s sentencing hearing, on November 7, 2017, Leach possessed a loaded .22 caliber Walther pistol. Leach’s prior convictions, which include Assault with Deadly Weapon Inflicting Serious Injury on April 24, 2004; two counts of Robbery with Dangerous Weapon and two counts of First Degree Kidnapping on October 20, 2005; and two counts of Robbery with Dangerous Weapon on October 26, 2005, prohibit Leach from possessing firearms. At today’s sentencing hearing Leach received an enhanced sentence as an “Armed Career Criminal.”
Leach pleaded guilty to possession of a firearm by a convicted felon in February 2018. He is currently in federal custody and will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
In making today’s announcement U.S. Attorney Murray thanked the FBI and the Gastonia Police Department for their investigation of the case.
Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Repeat Offender Sentenced to 27 Years for Producing Child PornographyRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced a repeat offender to 27 years in prison for production of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Estefano Gerardo Lopez, 26, of Charlotte, was also ordered to spend the rest of his life under court supervision and to register as a sex offender after he is released from prison.
According to court documents and information introduced at the sentencing hearing, Lopez pleaded guilty in April 2015 in Cumberland County Superior Court to soliciting a minor by computer. According to court records, Lopez met a 12-year-old victim online and traveled to Fayetteville, N.C. to meet the minor, where he was arrested by law enforcement. Lopez was sentenced to probation. A condition of Lopez’s probationary sentence involved warrantless searches.
On August 6, 2015, Lopez’s probation officer, accompanied by officers with the Charlotte-Mecklenburg Police Department, conducted a warrantless search at Lopez’s residence. Court records show that law enforcement located on Lopez’s cell phone images of child pornography, which were hidden in a password-protected phone application. Law enforcement recovered additional child pornography on Lopez’s computer, including videos of Lopez sexually abusing a young child. According to court records, in addition to the child pornography, law enforcement also located numerous chats that Lopez had engaged in using the phone application “KIK messenger.” In these chats, Lopez identified himself as a teenage boy, and chatted with others who identified themselves as 12 or 13 years old. Over the course of the chats, the defendant solicited pornography images of the minor victims, and sent them pornographic pictures of a minor, which Lopez pretended was him.
Lopez pleaded guilty to production of child pornography in February 2018. 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. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Murray thanked the Charlotte-Mecklenburg Police Department for their investigation of this case.
Assistant U.S. Attorney 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 t4he 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.
Former Elementary School Music Teacher Is Sentenced to More Than 10 Years for Child PornographyRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced a former elementary school music teacher to 121 months in prison for possession and transportation of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Judge Conrad ordered Benjamin McMiller, 33, of Charlotte, to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.
Chief Kerr Putney of the Charlotte-Mecklenburg Police Department joins U.S. Attorney Murray in making today’s announcement.
Filed court documents show that on September 20, 2016, McMiller streamed child pornography to another person using Omegle.com (Omegle), a free website where users can video or text chat. According to court records, the child pornography McMiller streamed via Omegle depicted a minor female engaging in sexually explicit conduct with an adult male. Law enforcement identified McMiller’s IP address as the one used to access the website. On November 8, 2016, law enforcement conducted a search of McMiller’s residence and recovered multiple electronic devices, including McMiller’s computer, a USB drive, and an external hard drive, which the defendant initially denied possessing. A forensic examination of McMiller’s devices revealed that the defendant possessed 88 images and 54 videos of child pornography, some of which depicted prepubescent children being sexually abused.
McMiller pleaded guilty to possession and transpiration of child pornography in February 2018. 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. All federal sentences are served without the possibility of parole.
The Charlotte-Mecklenburg Police Department investigated the case. Assistant U.S. Attorney Cortney Randall, of the U.S. Attorney’s Office in Charlotte, was in charge of the prosecution.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat t4he 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.