Western District of North Carolina
Press releases recorded for this federal judicial district.
Former Bank Executive Admits to Embezzling More Than $200,000 and Pleads Guilty to ChargesRead the Press Release
CHARLOTTE, N.C. – A former Wholesale Banking Relationship Support Manager of a Charlotte area bank appeared in court today and admitted to stealing more than $216,889 from his employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Mark Isaac Coffino, 38, of Huntersville, N.C. pleaded guilty to one count of embezzlement by a bank employee before U.S. Magistrate Judge David C. Keesler.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina.
According to filed court documents and today’s court proceedings, from 2010 to 2016, Coffino was employed by a large international bank. Coffino used his position as a wholesale banking relationship support manager to create and issue approximately 20 cashier checks payable to his personal accounts. Coffino used the bank operating expenses ledger account numbers to conceal the origin of the funds. Court records indicate that Coffino lied to his direct reports to obtain approval of the cashier checks.
According to plea related documents, Coffino embezzled funds on twelve occasions between May 2015 and December 2016 in amounts ranging from $6,995 to $48,659.
Coffino was released on bond following his guilty plea. The charge carries a maximum prison term of 30 years and a $1,000,000 fine. As part of his plea agreement, has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was led by the FBI. Assistant United States Attorney Jenny Sugar, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Five Members of Fraudulent Debt Collection Company Are Sentenced to PrisonRead the Press Release
CHARLOTTE, N.C. – Five members of a fraudulent debt collection scheme, including the company’s owner and operator, were sentenced today by U.S. District Judge Robert J. Conrad, Jr., to sentences ranging from 42 to 18 months, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina joins U.S. Attorney Rose in making today’s announcement.
Cedrick Clark, 36, of Concord, N.C. was sentenced to 42 months; Michael Boughner, 49, of Charlotte, was sentenced to 41 months; Cynthia Martinez, 37, of Charlotte, was sentenced to 36 months; Felicia Shaw, 46, of Gastonia, was sentenced to 24 months; and Humberto Gonzalez, 31, of Charlotte, was sentenced to 18 months. In addition to the prison terms imposed, each defendant was ordered to serve three years of supervised release. A sixth co-defendant, Benjamin Murray, 28, of Charlotte, is currently awaiting sentencing.
According to information contained in filed court documents and today’s sentencing hearings, Clark was the sole owner, operator, and leader of the fraudulent debt collection company operating as Capital Solutions Agency, and/or Berkeley Hughes and Associates, and/or the Vortex Group, collectively “BHA.” Clarks’ five co-conspirators, Boughner, Martinez, Murray, Shaw and Gonzalez served as both collectors and team leaders or supervisors.
According to court records, from November 2011 through May 2015, BHA operated in Mecklenburg County and allegedly defrauded thousands of debtors throughout the United States of approximately $6 million. Using a number of interconnected fraudulent debt collection companies, the co-conspirators executed their scheme to defraud by coercing purported debtors to pay money, some of which was not even owed, by providing false information and using harassing and abusive tactics.
Court documents indicate that BHA’s collectors used prepared scripts that contained false and misleading information designed to scare targeted victims into paying monies, including threats to bring criminal charges if the purported debtor did not pay his/her debt by the end of the telephone call. According to court documents and today’s sentencing hearings, false statements made included telling purported debtors that the company’s systems were “integrated with the court system” and that criminal charges would be filed in specific county courts.
Court documents show that to evade detection, disguise the fraudulent nature of the scheme and to scare their victims into paying, the collectors changed the name or the nature of the business from which they were purportedly calling. In some instances, the collectors falsely represented that they were law firms, that they had attorneys on staff to consult, and/or that the collectors themselves were attorneys. In other instances, they falsely represented themselves to be members of law enforcement, and even played a police scanner in the background. In addition, filed court documents and statements made in court today indicate that BHA collectors often engaged in other scare tactics to fraudulently induce victims into paying the alleged debts, including harassing family members, including their children, and friends and calling places of employment purportedly regarding service of process.
In handing down today’s sentences, Judge Conrad characterized the defendants’ conduct as “reprehensible,” noting that they were “targeting desperate debtors” and using “brutal tactics involving threats of jail” and “bullying techniques.” Judge Conrad further noted the “predatory” nature of the conduct defendants engaged in and the “serious, heinous nature of the circumstances of the offense.”
Each of the six defendants previously pleaded guilty to one count of engaging in a fraudulent debt collection conspiracy to commit mail and wire fraud. Clark pleaded guilty to an additional count of money laundering. The five defendants sentenced today will be ordered to report to the Federal Bureau of Prisons upon designation of federal facilities. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Rose commended the FBI for leading the investigation.
Assistant United States Attorney Maria K. Vento, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Leaders and Associates of Fraudulent Debt Collection Company Are Facing Federal Charges for $3 Million Conspiracy Targeting Victims Throughout the United StatesRead the Press Release
CHARLOTTE, N.C. – A criminal bill of indictment was unsealed today in federal court charging five individuals for their involvement in a $3 million debt collection scheme operating in Mecklenburg County that targeted victims throughout the country, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. A criminal bill of information was also filed today charging a sixth defendant for her role in the conspiracy.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina joins U.S. Attorney Rose in making today’s announcement.
The indictment charges John Wayne Perry, Jr. 36; Rhonda Renee Scott, 52; Timothy Scott, Jr., 51; Paris Jontue Taylor, 37; and Rayshawn Lamont Tyler, 42, all of Charlotte, with mail and wire fraud conspiracy and wire fraud offenses. Perry, Taylor and Tyler are also each charged with one count of money laundering conspiracy. The indictment was returned by the federal grand jury on July 19, 2017, and was unsealed following today’s arrests of four named defendants. A warrant remains outstanding for Tyler’s arrest.
In a related case, Miranda Bailey, 29, of Charlotte, is charged separately with one count of wire fraud and mail fraud conspiracy. A signed plea agreement was also filed today and Bailey’s plea hearing has been set for Wednesday, July 26, 2017.
“The individuals charged today used intimidation, threats, and lies, including posing as lawyers and law enforcement, to scare victims into paying often non-existent debts. Their shake-down tactics included harassing the victims’ friends and families until they received payment,” said U.S. Attorney Rose. “Debt collections schemes are on the rise. We caution the public to be vigilant when receiving calls in which the caller uses threatening language similar to that alleged in the Bill of Indictment. Do not get ripped off. If contacted by a purported debt collector who threatens you with criminal charges, hang up the phone and notify law enforcement,” Rose added.
“It is difficult enough for many Americans to make ends meet and pay their bills on time. For criminals to prey on these hard working people is inexcusable. The FBI is working to uncover these fraudulent companies and hold those accountable for their predatory and criminal actions,” said Special Agent in Charge Strong.
According to allegations contained in the indictment, from at least January 2013 to November 2014, the co-conspirators operated a fraudulent debt collection company in Mecklenburg County, known at various points as RJ Financial Services and/or Nationwide Asset & Recovery (RJ Financial, collectively). RJ Financial allegedly defrauded thousands of debtors throughout the United States of approximately $3 million. Court documents allege that the co-conspirators targeted individuals and generally executed their scheme to defraud by coercing purported debtors to pay money, some of which was not even owed, by providing false and misleading information and using harassing and abusive tactics.
According to the indictment, Perry and Rayshawn Tyler were leaders of the conspiracy, and owners and operators of RJ Financial. Paris Taylor was also a leader of the conspiracy and used aliases “Brittany Martin” or “London Taylor” when speaking with purported debtors. Co-defendant Timothy Scott served as the scheme’s Operations Manager. He also used different “shake” names, such as “Dean McCoy” and “George Raffino.” Co-defendant Rhonda Scott served as a team leader or supervisor and collector, and generally used aliases or the “shake” names “Ada Brown” and “Katlin Pierce,” when talking to purported debtors. Co-conspirator Bailey served as a collector and team leader in the conspiracy, and used the “shake” name “Savannah Grant.”
According to the indictment, prior to joining RJ Financial, Timothy Scott was affiliated with another fraudulent debt collection company, known at various points as Capital Solutions Agency, and/or Berkley Hughes and Associates and/or The Vortex Group, collectively “BHA.” Seven co-conspirators associated with that scheme have been charged federally and are awaiting sentencing.
Timothy Scott helped the leader of the BHA scheme, Cedric Clark, learn the business. Timothy Scott also ran the operation of BHA. In that role at BHA, Timothy Scott assisted in hiring, provided scripts for use by collectors, monitored collectors’ calls, and closed the calls, including by pretending to be an attorney to induce victims to pay their purported debts. Also, prior to joining RJ Financials, Bailey and Rhonda Scott were collectors at BHA.
RJ Financial and BHA worked together and operated in much the same manner, the indictment alleges. For example, in addition to overlap in employees and scripts, RJ Financial and BHA purchased purported debt amounts together, splitting the lists and the costs. RJ Financial also paid Clark for skip-tracing services, to help locate biographical information about the purported debtors, including phone numbers, addresses, and social security numbers. The co-conspirators used this information coerce the debtors to pay their debts.
The indictment further alleges that when contacting purported debtors, RJ Financial collectors were instructed to follow scripts that included false and misleading information and various scare tactics to induce victims into paying moneys. For example, among the false and fraudulent representations in the script were that:
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The collector was calling “to investigate and possibly file 2 charges against you (the Debtor) in (Debtor’s local county court)” and that those charges included “Breach of contract or fraud” and “Malicious intent to defraud a financial institution.”
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“Federal law does require that I inform you that you do have the right to offer a counter offer; most defendants offer close to what they originally borrowed, plus the $300 civil penalty…assessed by the state….”
The indictment also alleges that in order to disguise the fraudulent nature of the business and scare purported debtors, the collectors:
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Frequently changed the name of the purported company they were working for when making calls so that victims would not be able to locate truthful information about the company.
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In some Instances the collectors falsely represented that they were law firms, that they had attorneys on staff to consult, and/or that the collectors themselves were attorneys.
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At times, they falsely represented to be members of law enforcement or that they were working with or affiliated with law enforcement, sometimes going as far as to play a police scanner in the background.
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They used aliases, commonly known as “shake” names, when making the calls and fraudulently identified themselves as “investigators” purportedly calling on behalf of a “client.”
The indictment alleges RJ Financial also often engaged in other scare tactics to fraudulently induce purported debtors, including:
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Harassing family members and friends to get the purported debtor to call them and pay them.
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Threatening that imminent civil and/or criminal charges would be filed if the debtor did not make arrangements to pay during the call.
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Threatening that the victims would be served with arrest warrants, subpoenas, restraining orders, and garnishment of wages, if they did not make arrangements to pay during the call.
Each of the five defendants is charged with one count of engaging in a fraudulent debt collection conspiracy to commit mail and wire fraud and one count of wire fraud, which each carry a maximum prison term of 20 years in prison and a $250,000 fine. The money laundering conspiracy charge carries a maximum prison term of 20 years and carries a fine of $500,000 or twice the amount of the criminally derived proceeds.
All charges contained in the charging documents are allegations. The defendants are presumed innocent until proven guilty beyond reasonable doubt in a court of law.
The Charlotte Division of the FBI is leading the investigation. Assistant United States Attorney Maria K. Vento, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
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Justice Department Files Sexual Harrassmnet Lawsuit Against Owner and Seller of North Carolina HomesRead the Press Release
CHARLOTTE, N.C. – The Justice Department today announced that it has filed a lawsuit against Robert N. Hatfield, who rents, sells, and finances homes in Wilkes County, North Carolina. The lawsuit alleges that Hatfield sexually harassed actual and prospective female residents and borrowers in violation of the Fair Housing Act and the Equal Credit Opportunity Act.
The complaint, filed in the U.S. District Court for the Western District of North Carolina, alleges that for over ten years Hatfield has committed egregious acts of sexual harassment against multiple women who have lived in or inquired about his homes. According to the complaint, Hatfield operates some of his homes as rental properties, which he manages, and offers and provides financing to purchasers of his other homes. The suit alleges that Hatfield’s conduct has included making unwelcome sexual comments and advances, engaging in unwanted sexual touching and groping, offering tangible housing benefits in exchange for sex acts, and taking or threatening to take adverse housing actions against women who object to his harassment.
“Sexual harassment in housing and lending is unacceptable, and indeed is illegal,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “Every woman has the right to feel safe in her home, and the Justice Department will continue to vigorously enforce the federal civil rights laws to hold accountable those who violate this basic right.”
“The victims in this case merely wanted to rent or buy a home, a place of sanctity and safety,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “Unfortunately, the process became sordid when Hatfield used the critical need for housing as leverage to make unwanted and aggressive sexual advances. This lawsuit should serve as fair warning that Mr. Hatfield’s actions were not only unlawful, but repugnant to the citizens of Western North Carolina - and this office will work vigorously to protect the women, families and other vulnerable individuals harmed by this type of conduct.”
The lawsuit seeks monetary damages to compensate victims, a civil penalty, and a court order barring further discrimination and requiring additional preventive measures. The complaint is an allegation of unlawful conduct. The allegations must be proven in federal court.
Individuals who believe they may have been victims of housing or lending discrimination by Robert Hatfield or who have information about this matter can contact the Justice Department by phone at 1-800-896-7743, mailbox number 3, or by e-mail at [email protected]. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Federal Jury Convicts TSA Officer of Drug Conspiracy ChargesRead the Press Release
CHARLOTTE, N.C. – On Friday, July 7, 2017, a federal jury handed down a guilty verdict against former TSA officer Jamie Blunder, 48, of Charlotte, convicting him of drug conspiracy and firearms offenses for his involvement in a drug trafficking network operating in Charlotte and Greensboro, N.C., announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina and Harold Scott, Jr., Special Agent in Charge, Office of Inspection - Washington Field Office of the Department of Homeland Security’s Transportation Security Administration (TSA) join U.S. Attorney Rose in making today’s announcement.
According to court documents, evidence presented at trial and witness testimony, beginning in at least December 2015, Blunder was the leader of a drug conspiracy network responsible for trafficking cocaine, crack cocaine and other controlled substances in Charlotte, Greensboro, and elsewhere. Trial evidence established that while Blunder did not utilize the Charlotte Douglas Airport to traffic narcotics, he did engage in drug dealing while dressed in his TSA uniform. In addition, court records indicate that Blunder relied on his TSA position to avoid law enforcement detection while travelling to, within, and back from the Jamestown, High Point, and Greensboro areas. Over the course of the investigation, law enforcement also seized at least two kilograms of cocaine, eight firearms, more than $130,000 in cash, drug paraphernalia and packaging material consistent with kilogram-quantity cocaine wrapping and packaging, as well as thousands of dollars in expensive watches and jewelry.
Blunder remains in federal custody. The drug trafficking conspiracy charge carries a maximum penalty of life in prison and a $10 million fine. The possession of a firearm in furtherance of a drug trafficking crime charge carries a maximum term of life in prison and a $250,000 fine. A sentencing date for the defendant has not been set.
Blunder’s co-codefendants, Dave Pate, Alafia Fowlkes, Samuel Little, Irvin Lampley, Aaron Dixon, Dennis Harrington, and Willie Nevius are also in federal custody on federal drug trafficking and are all pending sentencing.
U.S. Attorney Rose thanked the FBI for leading the investigation and TSA for their assistance with this case. Assistant U.S. Attorneys Dana Washington and Lambert Guinn of the U.S. Attorney’s Office in Charlotte are prosecuting the case.
Catawba Co. Man Sentenced to 20 Years in Prison on Child Pornography ChargesRead the Press Release
STATESVLLE, N.C. – Nathan Matthew Jennings-Townsend, 25, of Newton, N.C. was sentenced late yesterday by U.S. District Judge Richard L. Voorhees to 240 months in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Jennings-Townsend was also ordered to serve a lifetime of supervised release and to register as a sex offender.
Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation join U.S. Attorney Rose in making today’s announcement.
“Jennings-Townsend used his computer savviness in the worst possible way: to trade in child pornography and to exploit and victimize innocent children. Hiding behind the screen of a computer to violate children in no way shields an offender. This case demonstrates that law enforcement is very effective in identifying offenders and collecting evidence so that we may prosecute and imprison those engaged in such repugnant behavior” said U.S. Attorney Rose.
According to court documents and information introduced at the sentencing hearing, law enforcement became aware that an individual in the United States, later identified as Jennings-Townsend, was using a foreign based photo file sharing website to view child pornography and to solicit others to trade child pornography. In June 2014, law enforcement seized Jennings-Townsend electronic devices, including a computer and a cellphone. According to court records, forensic analyses of those devices revealed that Jennings-Townsend possessed images and videos of child pornography, some of which depicted prepubescent minors engaging in sadistic and masochistic or other violent conduct.
Jennings-Townsend pleaded guilty in January 2017 to one count of transportation of child pornography. Jennings-Townsend also has a previous statutory rape conviction in North Carolina. He is currently in 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.
U.S. Attorney Rose thanked HSI and SBI 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 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
Franklin, N.C. Man Sentenced to Five Years for Setting Forest FiresRead the Press Release
ASHEVILLE, N.C. – Keith Eugene Mann, 50, of Franklin, N.C. was sentenced today by U.S. District Judge Martin Reidinger to five years in prison for destroying real property of the United States by means of fire, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Mann was also ordered to serve three years under court supervision.
“Mann set forest fires which damaged natural resources and potentially put many lives at risk, because he ‘wanted to see something burn.’ Thanks to the swift and thorough investigative efforts of our law enforcement partners, Mann was quickly apprehended and he will be punished for his selfish and irresponsible actions,” said U.S. Attorney Rose.
According to today’s sentencing hearing and court documents filed in the case, on October 27, 2016, a wildfire was reported on U.S. Forest Service (USFS) Road 388, commonly referred to as Board Tree Road, which is in Macon Co., and within the Nantahala National Forest. Court documents indicate that the fire had been set intentionally. According to court documents, five other fires had been set in close proximity to the fire on Board Tree Road but appeared to have gone out on their own. Over the course of the investigation of these small fires, law enforcement located several wooden stem matches which helped to establish that the fires were intentionally set.
According to court documents, on November 22, 2016, a wildfire was reported at the end of U.S. Forest Service Road 763, commonly referred to as Jones Creek Road, by an individual who identified himself as “Keith Mann.” USFS firefighters responded to the fire and took immediate suppression action. The following day, on November 23, 2016, law enforcement returned to the fire site, where they observed a small cardboard box located at the origin of the fire, with numerous burned wooden stemmed matches next to the box. Following up on the Macon County 911 call, investigators spoke with Keith Mann who admitted to setting the fires both on Board Tree Road and on Jones Creek Road.
Mann pleaded guilty to the federal arson charge in March 2017. Mann 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 Rose thanked the U.S. Forest Service and the Macon County Sheriff’s Office for their investigation of this case.
Assistant United States Attorney Richard Edwards, of the U.S. Attorney’s Office in Asheville, prosecuted the case.
Federal Judge Sentences Guatemalan National to Two Years in Prison for Illegal Reentry After Deportation and Harboring Illegal AliensRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today Omar Abisai Ramirez-Ramos, 34, of Guatemala, to two years in prison and three years of supervised release on illegal reentry after deportation and harboring illegal aliens charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Ramirez-Ramos pleaded guilty to the offenses in December 2016.
U.S. Attorney Rose is joined by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Donald J. Hill of the Polk County Sheriff’s Office.
According to today’s sentencing hearing and court documents filed in the case, on October 9, 2016, a Polk County deputy conducted a traffic stop of the vehicle Ramirez-Ramos was driving. Over the course of the traffic stop, law enforcement determined that Ramirez-Ramos was an illegal alien who had been previously deported three times from the United States. Law enforcement also determined that eight passengers of the vehicle were also illegal aliens. Court records indicate that Ramirez-Ramos told law enforcement that he was being paid $1,000 to transport the eight individuals from Phoenix, Arizona to Charlotte, N.C., and that he did not know their countries of origin.
Ramirez-Ramos 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 defendant will also be subject to deportation proceedings upon the completion of his federal sentence.
In making today’s announcement, U.S. Attorney Rose thanked ICE-HSI and the Polk County Sheriff’s Office for their investigation of this case.
Assistant United States Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville, prosecuted the case.
Carolina Healthcare System Agreems to Pay $6.5 Million to Settle False Claims Act AllegationsRead the Press Release
CHARLOTTE, N.C. - U.S. Attorney Jill Westmoreland Rose announced today that the Charlotte-Mecklenburg Hospital Authority, dba Carolinas Healthcare System (CHS), has agreed pay the Government $6.5 million to resolve allegations that the company violated the False Claims Act, by “up-coding” claims for urine drug tests in order to receive higher payment than allowed for the tests.
U.S. Attorney Rose is joined in making today’s announcement by North Carolina Attorney General Josh Stein, and Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations - Atlanta Region.
“Medical service providers must respect public resources in government health care programs,” said U.S. Attorney Rose. “As more Americans struggle with healthcare costs, we must ensure that our programs are efficient and compliant. For those medical providers who seek to unlawfully and unfairly take advantage of government health care programs, this case resolution should serve as fair warning.”
“Healthcare providers must accurately represent the services they are providing,” said Attorney General Stein. “Up-coding is an unacceptable waste of taxpayer dollars, and my office will not allow it.”
“When health care companies try to boost their profits by billing federal health care programs for more expensive services than they actually provided, the Office of Inspector General will ensure they are held accountable for their deceptive schemes,” said Special Agent in Charge Jackson.
According to court documents, from 2011 to 2015, CHS conducted urine drug tests, categorized as “moderate complexity” tests by the Food and Drug Administration (FDA), but submitted claims that indicated the company had conducted “high complexity” tests. Claims submitted to federal health care programs include a code that identifies the services provided and that triggers a certain payment. The government alleged that CHS engaged in a practice referred to as “up-coding,” by submitting claims using code G0431, which should be used only for tests classified as “high complexity” by the FDA, instead of using code G0434, which is the code for moderately complexity tests, which triggers a payment of approximately $20.00. As a result of CHS’s up-coding practices, the government alleges that federal health care programs paid CHS, and certain facilities under contract with CHS, approximately $80 more per test for the claims submitted with the higher paying code.
The allegations arose from a lawsuit filed by a whistleblower, Mark McGuire (the Relator), a former laboratory director for CHS, under the qui tam provisions of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The act also allows the government to intervene and take over the action. The government conducted the investigation and intervened in this action to effectuate the settlement. Mr. McGuire will receive $1,365,000 from the settlement.
The settlement is the result of the coordinated effort between the United States Attorney’s Office for the Western District of North Carolina, the State of North Carolina’s Medicaid Investigations Division and the Department of Health and Human Services Office of the Inspector General.
This case is captioned United States ex rel. Mark McGuire v. The Charlotte-Mecklenburg Hospital Authority, et al., Case No. 3:15-cv-147. The claims resolved in this settlement are allegations only and there has been no determination of liability.
Federal Jury Convicts Bank RobberRead the Press Release
CHARLOTTE, N.C. – A federal jury in the Western District of North Carolina convicted Ronald McKnight, 44, of Charlotte, of two charges of bank robbery, following a two-day trial that ended today, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by 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.
Evidence presented at trial established that on January 5, 2015, McKnight entered a Fifth Third Bank branch located at 212 South Tryon Street in Charlotte, and presented a note to the teller that read, “Robbery. 100’s 50’s 20’s. No die packs.” The teller handed over $1,732 in U.S. currency from her drawer and McKnight left. Then, on January 9, 2015, McKnight entered a second bank, a Wells Fargo Bank branch located at 2910 South Boulevard, in Charlotte, and presented a note to the teller, using the same wording as in the previous robbery. The teller handed over $1,660 and McKnight left. McKnight was arrested later that same day.
McKnight has been in federal custody since January 2015. He will remain in custody until his sentencing date, which has not been set. McKnight faces a statutory maximum sentence of 20 years for each charge, and a fine of up to $250,000.
The FBI and CMPD led the investigation. Assistant U.S. Attorney Steven R. Kaufman is prosecuting the case.
North Carolina Man Sentenced to Life in Prison for Attempting to Commit an Act of Terrorism Transcending National BoundariesRead the Press Release
Justin Nojan Sullivan, 21, of Morganton, North Carolina, was sentenced today to life in prison for attempting to commit an act of terrorism transcending national boundaries, in support of the Islamic State of Iraq and al-Sham (ISIS). Sullivan pleaded guilty to the charge on Nov. 29, 2016.
Acting Assistant Attorney General for National Security Dana J. Boente, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina Division, made the announcement. U.S. District Judge Martin Reidinger presided over the sentencing.
“Sullivan is a convicted terrorist who plotted with now-deceased Syria-based terrorist Junaid Hussain to execute acts of mass violence in the United States in the name of ISIS,” said Acting Assistant Attorney General Boente. “Counterterrorism remains our highest priority and we will continue to identify and hold accountable those who seek to commit acts of terrorism within our borders. I want to thank the many agents, analysts and prosecutors who are responsible for this result.”
“Sullivan was actively planning the mass killing of innocent people with an attack designed to inflict maximum casualties and maximum pain in the name of ISIS, a sworn enemy of our nation. Sullivan’s allegiance to ISIS did not stop there. He also planned to film and send a video of his deadly attack to now-deceased Junaid Hussain, a prominent ISIS member based in Syria, and further expressed his wish to create a new branch of the so-called Islamic State in the United States. The life sentence imposed on Sullivan reflects the seriousness of his crimes, protects the public from the danger he poses, and serves as a deterrent to others who wish to harm civilians within our borders. Our fight against terrorism continues whether against those who commit crimes on behalf of ISIS or any other foreign terrorist organization,” said U.S. Attorney Rose.
“Identifying a terrorist before an attack happens is one of the most difficult tasks we face in the FBI. We compare it to finding a needle in a stack of needles. But that is exactly what we did to stop Justin Sullivan from carrying out his murderous plot in the name of ISIL. It took an incredible level of cooperation and collaboration between local, state and federal law enforcement agencies. Today’s life in prison sentence is the result of the hard work of the FBI’s Joint Terrorism Task Force working around the clock to protect this country from those who seek to do us harm,” said Special Agent in Charge Strong.
Federal Terrorism Charges
According to information contained in court documents, starting no later than September 2014, Sullivan sought out and downloaded violent ISIS attacks on the Internet, such as beheadings, and collected them on his laptop computer. Court records indicate that Sullivan openly expressed support for ISIS in his home and destroyed religious items that belonged to his parents.
As Sullivan previously admitted in plea related documents filed with the court and at his plea hearing, beginning no later than June 7, 2015, Sullivan conspired with Junaid Hussain, an ISIS member responsible for online recruitment and providing directions and inspiration for terrorist plots in Western countries, to plan mass shooting attacks in North Carolina and Virginia. Sullivan discussed those plans on social media with an undercover FBI employee (UCE), who Sullivan attempted to recruit to join in such attacks.
Court documents indicate that Sullivan told the UCE via social media that it was better to remain in the U.S. to support ISIS than to travel. Sullivan suggested that the UCE obtain weapons and told the UCE that he was planning to buy a semi-automatic AR-15 rifle at an upcoming gun show in Hickory, North Carolina. On or about June 20, 2015, Sullivan attempted to purchase hollow point ammunition to be used with the weapon(s) he intended to purchase.
According to court records, Sullivan had researched on the Internet how to manufacture firearm silencers and asked the UCE to build functional silencers that they could use to carry out the planned attacks. Court records show that Sullivan told the UCE he planned to carry out his attack in the following few days at a concert, bar or club, where he believed as many as 1,000 people would be killed using the assault rifle and silencer.
Filed documents indicate that over the course of Sullivan’s communications with Junaid Hussain, Hussain had asked Sullivan to make a video of his planned terrorist attack, to which Sullivan had agreed.
On or about June 19, 2015, the silencer, which was built according to Sullivan’s instructions, was delivered to him at his home in North Carolina, where Sullivan’s mother opened the package. Sullivan took the silencer from his mother and hid it in a crawl space under his house. When Sullivan’s parents questioned him about the silencer, Sullivan, believing that his parents would interfere with his plans to carry out an attack, offered to compensate the UCE to kill them.
Sullivan previously admitted that he took substantial steps towards carrying out terrorist attacks in North Carolina and Virginia by: (1) recruiting the UCE; (2) obtaining a silencer from the UCE; (3) procuring the money that would have enabled him to purchase the AR-15; (4) trying to obtain a specific type of ammunition that he believed would be the most “deadly”; (5) identifying separate gun shows where he and the UCE could purchase AR-15s; and (6) obtained a coupon for the gun shows he planned for himself and the UCE to attend on June 20 or 21, 2015.
The Court’s Findings
The Court announced its reasons for accepting the agreed life sentence. The Court noted that Sullivan’s plan to murder innocent civilians at a social gathering was similar to the Orlando nightclub attack in 2016. According to the Court, Sullivan’s plan, however, was more sinister because he planned to use stealth – including a mask to hide his identity and a silencer to kill as many as possible, with the hope to escape and kill again. The Court found that Sullivan’s offense was cold and calculating.
In making today’s announcement, Acting Assistant Attorney General Boente and U.S. Attorney Rose praised the investigative efforts of the FBI, the Burke County Sheriff’s Office and the North Carolina State Bureau of Investigation. Acting Assistant Attorney General Boente and U.S. Attorney Rose also thanked the U.S. Postal Inspection Service’s Charlotte Division, the FBI’s Washington Field Office, the U.S. Attorney’s Office for the Eastern District of Virginia, the U.S. Customs and Border Protection in Charlotte, the North Carolina Highway Patrol and the Hickory Police Department for their assistance in this investigation.
The case is being prosecuted by Assistant U.S. Attorney Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory R. Gonzalez of the National Security Division’s Counterterrorism Section.
North Carolina Man Sentenced to Life in Prison for Attempting to Commit an Act of Terrorism Transcending National BoundariesRead the Press Release
ASHEVILLE, N.C. – Justin Nojan Sullivan, 21, of Morganton, North Carolina, was sentenced today to life in prison for attempting to commit an act of terrorism transcending national boundaries, in support of the Islamic State of Iraq and al-Sham (ISIS). Sullivan pleaded guilty to the charge on Nov. 29, 2016.
Acting Assistant Attorney General for National Security Dana J. Boente, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina Division, made the announcement. U.S. District Judge Martin Reidinger presided over the sentencing.
“Sullivan is a convicted terrorist who plotted with now-deceased Syria-based terrorist Junaid Hussain to execute acts of mass violence in the United States in the name of ISIS,” said Acting Assistant Attorney General Boente. “Counterterrorism remains our highest priority and we will continue to identify and hold accountable those who seek to commit acts of terrorism within our borders. I want to thank the many agents, analysts and prosecutors who are responsible for this result.”
“Sullivan was actively planning the mass killing of innocent people with an attack designed to inflict maximum casualties and maximum pain in the name of ISIS, a sworn enemy of our nation. Sullivan’s allegiance to ISIS did not stop there. He also planned to film and send a video of his deadly attack to now-deceased Junaid Hussain, a prominent ISIS member based in Syria, and further expressed his wish to create a new branch of the so-called Islamic State in the United States. The life sentence imposed on Sullivan reflects the seriousness of his crimes, protects the public from the danger he poses, and serves as a deterrent to others who wish to harm civilians within our borders. Our fight against terrorism continues whether against those who commit crimes on behalf of ISIS or any other foreign terrorist organization,” said U.S. Attorney Rose.
“Identifying a terrorist before an attack happens is one of the most difficult tasks we face in the FBI. We compare it to finding a needle in a stack of needles. But that is exactly what we did to stop Justin Sullivan from carrying out his murderous plot in the name of ISIL. It took an incredible level of cooperation and collaboration between local, state and federal law enforcement agencies. Today’s life in prison sentence is the result of the hard work of the FBI’s Joint Terrorism Task Force working around the clock to protect this country from those who seek to do us harm,” said Special Agent in Charge Strong.
Federal Terrorism Charges
According to information contained in court documents, starting no later than September 2014, Sullivan sought out and downloaded violent ISIS attacks on the Internet, such as beheadings, and collected them on his laptop computer. Court records indicate that Sullivan openly expressed support for ISIS in his home and destroyed religious items that belonged to his parents.
As Sullivan previously admitted in plea related documents filed with the court and at his plea hearing, beginning no later than June 7, 2015, Sullivan conspired with Junaid Hussain, an ISIS member responsible for online recruitment and providing directions and inspiration for terrorist plots in Western countries, to plan mass shooting attacks in North Carolina and Virginia. Sullivan discussed those plans on social media with an undercover FBI employee (UCE), who Sullivan attempted to recruit to join in such attacks.
Court documents indicate that Sullivan told the UCE via social media that it was better to remain in the U.S. to support ISIS than to travel. Sullivan suggested that the UCE obtain weapons and told the UCE that he was planning to buy a semi-automatic AR-15 rifle at an upcoming gun show in Hickory, North Carolina. On or about June 20, 2015, Sullivan attempted to purchase hollow point ammunition to be used with the weapon(s) he intended to purchase.
According to court records, Sullivan had researched on the Internet how to manufacture firearm silencers and asked the UCE to build functional silencers that they could use to carry out the planned attacks. Court records show that Sullivan told the UCE he planned to carry out his attack in the following few days at a concert, bar or club, where he believed as many as 1,000 people would be killed using the assault rifle and silencer.
Filed documents indicate that over the course of Sullivan’s communications with Junaid Hussain, Hussain had asked Sullivan to make a video of his planned terrorist attack, to which Sullivan had agreed.
On or about June 19, 2015, the silencer, which was built according to Sullivan’s instructions, was delivered to him at his home in North Carolina, where Sullivan’s mother opened the package. Sullivan took the silencer from his mother and hid it in a crawl space under his house. When Sullivan’s parents questioned him about the silencer, Sullivan, believing that his parents would interfere with his plans to carry out an attack, offered to compensate the UCE to kill them.
Sullivan previously admitted that he took substantial steps towards carrying out terrorist attacks in North Carolina and Virginia by: (1) recruiting the UCE; (2) obtaining a silencer from the UCE; (3) procuring the money that would have enabled him to purchase the AR-15; (4) trying to obtain a specific type of ammunition that he believed would be the most “deadly”; (5) identifying separate gun shows where he and the UCE could purchase AR-15s; and (6) obtained a coupon for the gun shows he planned for himself and the UCE to attend on June 20 or 21, 2015.
The Court’s Findings
The Court announced its reasons for accepting the agreed life sentence. The Court noted that Sullivan’s plan to murder innocent civilians at a social gathering was similar to the Orlando nightclub attack in 2016. According to the Court, Sullivan’s plan, however, was more sinister because he planned to use stealth – including a mask to hide his identity and a silencer to kill as many as possible, with the hope to escape and kill again. The Court found that Sullivan’s offense was cold and calculating.
In making today’s announcement, Acting Assistant Attorney General Boente and U.S. Attorney Rose praised the investigative efforts of the FBI, the Burke County Sheriff’s Office and the North Carolina State Bureau of Investigation. Acting Assistant Attorney General Boente and U.S. Attorney Rose also thanked the U.S. Postal Inspection Service’s Charlotte Division, the FBI’s Washington Field Office, the U.S. Attorney’s Office for the Eastern District of Virginia, the U.S. Customs and Border Protection in Charlotte, the North Carolina Highway Patrol and the Hickory Police Department for their assistance in this investigation.
The case is being prosecuted by Assistant U.S. Attorney Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory R. Gonzalez of the National Security Division’s Counterterrorism Section
Mexican National Sentenced to Prison for Fraudulent Identification Document ConspiracyRead the Press Release
CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Humberto Ginez-Edmundo, 26, of Mexico, to 34 months in prison and one year of supervised release on fraudulent identification document conspiracy and aggravated identity theft charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas.
According to filed court documents and today’s sentencing hearing, beginning in at least November 2015, Ginez-Edmundo produced and transfered fraudulent identification documents, including but not limited to, Social Security cards, state identification cards, driver’s licenses, and permanent residence cards. Ginez-Edmundo sold the falsified documents to other individuals, some of whom were undocumented aliens, knowing the documents would be used as proof of eligibility to remain in and work in the United States. Court records show that Ginez-Edmundo charged individuals between $130 to $600, depending on the type of fraudulent identification documents he provided.
Ginez-Edmundo 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 defendant will also be subject to deportation proceedings upon the completion of his federal sentence.
ICE-HSI led the investigation. Assistant United States Attorneys Kenneth Smith, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Federal Judge Convicts Two Former Swisher Hygine, Inc. Executives on Securities Fraud Charges Following Bench TrialRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. delivered guilty verdicts yesterday against two former executives of Swisher Hygiene, Inc. (Swisher), for their respective roles in a securities fraud conspiracy carried out at Swisher throughout fiscal year 2011, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Michael Kipp, 63, of Charlotte, and Joanne Viard, 38, of Indian Trail, were convicted of conspiring to commit securities fraud, making false and misleading statements to auditors, and falsifying the books and records of Swisher. Defendant Kipp was also convicted of wire fraud, securities fraud, and bank fraud.
Special Agent in Charge John A. Strong, of the FBI’s Charlotte Division joins U.S. Attorney Rose in making today’s announcement.
According to filed court documents, statements made in court, and evidence presented during the three-week bench trial:
Throughout fiscal year 2011, Kipp, who at the time was Swisher’s then chief financial officer, and Viard, a certified public accountant and Swisher’s then director of external reporting, and their conspirators, engaged in an accounting fraud scheme, to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, the investing public and others. In particular, the defendants manipulated Swisher’s books and records, so that Swisher would meet targeted goals despite actual earnings. When falling short of their target, the defendants utilized a number of ways to fraudulently inflate Swisher’s earnings.
The accounting fraud scheme began to unravel when Swisher’s then Controller pushed back on making a fraudulent entry during the year-end close. The Controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Defendant Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.” Later, Kipp fired the Controller for his persistent refusal to book the fraudulent entry. Swisher’s Audit Committee learned of the Controller’s allegations and promptly commissioned an independent internal investigation.
Approximately eleven months following the announcement of the federal investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year. The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time-period.
Previously, Swisher had entered into a Deferred Prosecution Agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty.
In October 2015, Swisher’s former senior-level accounting employee, John Pierrard, pleaded guilty to securities fraud conspiracy.
The conspiracy charge carries a maximum prison term of five years. The securities fraud and wire fraud charges each carry a maximum prison term of 20 years. The bank fraud charge carries a maximum prison term of 30 years. A sentencing date for the defendants has not been set.
The investigation as led by the FBI. U.S. Attorney Rose also thanked the U.S. Securities & Exchange Commission for their assistance in the case.
Assistant U.S. Attorneys Maria K. Vento and William Miller, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Charlotte Insurance & Financial Executive Sentenced to Prison for Filing False Tax Returns and Obstructing Grand Jury InvestigationRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Patrick Emanuel Sutherland, 48, of Charlotte, to 33 months in prison, followed by three years of supervised release, for filing false tax returns and obstructing a federal grand jury investigation, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Sutherland was also ordered to pay $597,122 as restitution to Internal Revenue Service.
U.S. Attorney Rose is joined in making today’s announcement by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations (IRS-CI).
According to filed court documents, evidence presented at trial, and today’s sentencing hearing, from at least 2007 to 2015, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries. Between 2007 and 2010, Sutherland engaged in an elaborate scheme to conceal a substantial amount of income. According to evidence presented at trial, Sutherland filed false tax returns with the IRS which underreported business receipts and personal income of approximately $2 million in income received from an offshore bank account in Bermuda, as well as from domestic sources. Trial evidence established that despite receiving substantial income for the relevant time period, Sutherland reported a combined income of approximately $276,697, and paid less than $10,000 in total federal income taxes. During the same four-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, including paying over $80,000 in private school tuition and purchases of high end jewelry.
To conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister’s company. In reality, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda, which Sutherland controlled.
According to trial evidence, Sutherland worked with offshore insurance companies and some of his commissions were paid to an offshore intermediary. Sutherland used his Bermuda-based shell company, Steward Technology Services Limited (STS) to funnel personal and business funds to Sutherland’s bank accounts in the United States. On numerous occasions, Sutherland mischaracterized the wire transfers from STS’s bank account in Bermuda to Sutherland’s various domestic accounts as capital contributions and loans.
According to court records and evidence presented at trial, on several occasions between June 2012 and September 2012, Sutherland sought to obstruct a federal investigation by providing fraudulent documents, including records of sham loans and documents purportedly reflecting his lack of control over his foreign business bank account in Bermuda.
In announcing today’s sentence, Judge Cogburn stated that, “The defendant used his intelligence to the detriment of paying taxes due,” and emphasized the importance of deterrence in tax cases, noting that they are difficult to detect.
Sutherland will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
IRS-CI led the investigation. Assistant United States Attorneys Jenny G. Sugar and Daniel Ryan of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Union County Man Sentenced to Six Years on Child Pornography ChargesRead the Press Release
CHARLOTTE, N.C. – Sean C. Hammond, 29, of Monroe, N.C. was sentenced today by U.S. District Judge Max O. Cogburn, Jr. to 72 months in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Hammond was also ordered to serve a lifetime of supervised release and to register as a sex offender.
Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas joins U.S. Attorney Rose in making today’s announcement.
According to court documents and information introduced at the sentencing hearing, on March 27, 2015, law enforcement became aware that an individual, later identified as Hammond, was sharing child pornography on the Internet using a peer-to-peer network. During subsequent searches, law enforcement seized Hammond’s electronic devices, including a computer and a cellphone. Forensic analyses of those devices revealed that Hammond possessed more than 700 images and 67 videos of child pornography, some of which depicted prepubescent minors engaging in sexual conduct.
Hammond pleaded guilty in November 2016 to one count of receipt and one count of possession of child pornography. 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.
U.S. Attorney Rose thanked HSI for their investigation of this case. Assistant U.S. Attorney Kimlani Ford 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 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
Deputy Attorney General Recognizes Federal ProsecutorRead the Press Release
CHARLOTTE, N.C. – Steven R. Kaufman, Assistant United States Attorney (AUSA) of the U.S. Attorney’s Office in the District of North Carolina (WDNC), was one of 179 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 33rd Director’s Awards Ceremony today in Washington D.C.
The Western District of North Carolina was one of 35 districts represented at the ceremony, which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Deputy Attorney General Rosenstein told the awardees, “These 179 award recipients embody the best of the Department of Justice.… Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens — whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded. ”
AUSA Kaufman was recognized for his “Superior Performance as Criminal Assistant United States Attorney.” AUSA Kaufman is responsible for prosecuting some of the largest, most significant and most sophisticated Organized Crime Drug Enforcement Task Force (OCDETF) cases in the country. 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. During his tenure, AUSA Kaufman has demonstrated his ability to identify large-scale drug traffickers, locate their international sources of supply, and cripple those organizations by seizing their money and property and obtaining convictions against their members for both drug trafficking and money laundering.
Among his accomplishments, in 2015, AUSA Kaufman secured the extradition from Mexico, and subsequent guilty plea and sentence, of Consolidated Priority Organizational Target (CPOT) and black tar heroin kingpin Carlos Ramon “Cuate” Castro-Rocha. AUSA Kaufman also recently completed a seven-year prosecution of 67 members of a cross-country drug trafficking organization that utilized commercial aircraft and insiders with the Transportation Security Administration (TSA) to transport large amounts of narcotics and drug proceeds cross-country. AUSA Kaufman also disrupted a complex methamphetamine drug trafficking network operating throughout the Western District, by securing prison sentences for more than 165 traffickers thus far.
As WDNC’s environmental crimes coordinator, AUSA Kaufman has successfully prosecuted numerous cases involving federal violations of the Clean Water and the Clean Air Acts. AUSA Kaufman also took part in the landmark criminal prosecution of Duke Energy, for the company’s illegal discharge of coal ash. AUSA Kaufman and his multi-district team continue to work with the court-appointed monitor to ensure the company’s environmental compliance.
AUSA Kaufman received his Bachelor’s Degree in Psychology in 1990 from Tufts University, and his Juris Doctor in 1995 from Vanderbilt University School of Law. He is a Lieutenant Colonel in the United States Air Force, and performs his Reserve duty as the Staff Judge Advocate for the 94th Airlift Wing at Dobbins Air Reserve Base, Georgia. AUSA Kaufman is originally from Westchester County in New York.
“Steven Kaufman is a deserving recipient of this prestigious award, in recognition of his exemplary work and outstanding achievements as a criminal prosecutor. Mr. Kaufman is a talented Assistant United States Attorney and a committed public servant. He is dedicated to furthering the mission of the Department of Justice in enforcing the laws of our nation, protecting the rights of our citizens, and bringing justice to victims of crimes,” said Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Owner of Lake Norman Restaurant Pleads Guilty to Tax FraudRead the Press Release
CHARLOTTE, N.C. – Peter Gjuraj, 49, of Mooresville N.C., appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to one count of tax evasion, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI).
“Gjuraj reaped all the benefits of owning a profitable restaurant on the shores of Lake Norman, but did not want to pay taxes owed from operating his successful business. Instead, he used the extra income to fund homes, cars, and to travel. To those tax cheats who think they can get away without paying taxes owed, you will be investigated and you will be held accountable for your actions,” said U.S. Attorney Rose.
“Today’s plea of Peter Gjuraj’s is a reminder that any attempt to evade tax by hiding income and filing false returns is a theft from the American public. It is a felony offense that carries severe consequences,” said Special Agent in Charge Holloman. “The overarching principle of IRS’s enforcement strategy is simply this: We protect the integrity of the tax system by ensuring everyone pays the right amount of tax.”
According to filed documents and today’s court proceedings, from 2012 to the present, Gjuraj was a resident of Mooresville, N.C. and the owner and operator of Blue Parrot, a restaurant in Lake Norman, N.C. Gjuraj served as the bookkeeper for Blue Parrot, which obtained the majority of its income from the restaurant and from sale of gasoline to boaters.
According to filed documents and today’s court proceedings, for years 2012 through 2014, Blue Parrot earned additional gross receipts totaling approximately $2,793,873.00 that Gjuraj failed to report on his individual income tax returns filed with the IRS. As a result of the unreported gross receipts, Gjuraj had additional taxable income substantially in excess of that reported on his tax years 2012 through 2014. The additional federal tax due on this unreported income was a total of $319,974.92 based on additional tax due of $59,576.96, $96,866.96, and $163,531.00 for years 2012 through 2014, respectively.
According to filed documents and today’s court proceedings, as a result of the unreported gross receipts, Gjuraj fraudulently claimed various credits against taxes. For example, in 2012 and 2013, Gjuraj fraudulently claimed the Earned Income Tax Credit (EITC). During the relevant time period, Gjuarj structured cash withdrawals to avoid the filing of currency transaction reports. For example, between July 8, 2013 and September 27, 2013, Gjuraj made approximately fifteen cash withdrawals from a bank account of amounts between $9,000 and $9,900, totaling approximately $141,850.
According to filed documents and today’s plea hearing, Gjuraj’s expenditures for years 2012 through 2014 were far in excess of his reported income. Gjuraj used business funds to purchase, among other things: two houses for $375,000; cars worth approximately $80,000; and additional personal expenditures including travel and home improvements.
Court documents show that Gjuraj failed to file a timely tax return with the IRS for 2015, despite earning approximately $631,666 in income. As a result of his unreported gross receipts, Gjuraj has an additional tax due and owing of approximately $217,015.05 for tax year 2015.
Gjuraj was released on bond after his plea hearing. The tax evasion charge carries a maximum prison term of five years and a $250,000 fine. As part of his plea agreement, Gjuraj has agreed to pay restitution of $536,989.97 to the IRS. As sentencing date for the defendant has not been set.
The investigation was led by IRS-CI. Assistant U.S. Attorney Jenny G. Sugar, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
School Counselor Pleads Guilty to Health Care Fraud SchemeRead the Press Release
ASHEVILLE, N.C. – Joseph Frank Korzelius, owner of Western Carolina Counseling Services and a school counselor in the Polk County school system, admitted today to defrauding the North Carolina Medicaid Program of over $400,000, by submitting false and fraudulent reimbursement claims. Korzelius, 46, of Tryon, N.C., appeared before U.S. Magistrate Judge Dennis L. Howell and pleaded guilty to one count of health care fraud.
U.S. Attorney Rose is joined in making today’s announcement by North Carolina Attorney General Josh Stein.
“The defendant abused his position as an employee of the Polk County school system to access and misuse children’s identities to enrich himself, with funds stolen from a government-funded program. His actions are reprehensible and he will be punished for them,” said U.S. Attorney Rose.
“Using children’s personal information to defraud taxpayers is unconscionable,” said Attorney General Stein. "I will not tolerate Medicaid fraud, and my office will continue to work with the federal government to bring to justice anyone who is stealing from taxpayers.”
According to court documents and today’s plea hearing, from October 2013 to November 2016, Korzelius, a Licensed Professional Counselor and a Medicaid-approved provider of mental and behavioral health services, owned and operated Western Carolina Counseling Services in Tryon, NC. Korzelius was also employed as a school guidance counselor at Tryon Elementary School in Polk County. According to court records, Korzelius identified students and their siblings from his work at Tryon Elementary and used those potential beneficiaries’ information to access these individuals’ personal information. The defendant then used that information to create and submit billings for individual psychotherapy services when, in fact, no such services were provided.
Court documents show that Korzelius had minimal documentation to support his billings for services he fraudulently represented that he provided. Further, many recipients who Korzelius billed for indicated they never sought or received services from either Korzelius or Western Carolina Counseling Services. Filed court documents show that Korzelius controlled the bank accounts where the Medicaid approved reimbursements were deposited. During the course of his scheme, Korzelius submitted over $450,000 in false claims and received $436,229.08 in reimbursements for those fraudulent claims.
Korzelius was released on bond following his plea hearing. The health care fraud charge carries a maximum prison term of 10 years and a $250,000 fine. A sentencing date for the defendant has not been set.
The investigation was handled by the North Carolina Department of Justice, Medicaid Investigations Division (MID), and was prosecuted in the Western District of North Carolina through the MID’s participation in the Western District’s joint Health Care Task Force. The Task Force is a multi-agency team of federal and state investigators, working in conjunction with Civil and Criminal Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system and reducing the potential for health care fraud in the future. The Task Force builds upon existing partnerships between agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare fraud, please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or email [email protected]. To report Medicaid Fraud in North Carolina, please call the North Carolina Medicaid Investigations Division at 919-881-2320.
Fletcher, N.C. Attorney Indicted on Federal Charges for Bank Fraud and Making A False Statement to A BankRead the Press Release
CHARLOTTE, N.C. - A federal grand jury sitting in Asheville returned a criminal bill of indictment late yesterday against David R. Payne, 52, of Fletcher, N.C., charging him with multiple counts of bank fraud and making false statements to a bank, announced Jill Westmoreland Rose, U.S. Attorney forr the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Jay N. Lerner, Inspector General of the Federal Deposit Insurance Corporation, Office of the Inspector General (FDIC-OIG) join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the eight-count indictment, on multiple occasions throughout 2009, Payne executed a scheme to defraud three Western North Carolina financial institutions: Pisgah Community Bank (PCB), Mountain First Bank & Trust (MFBT), and Bank of Asheville (BOA), (collectively, “the Banks”). The indictment alleges that Payne defrauded the Banks for at least $1,607,000, by making false statements and material misrepresentations about his financial condition on a series of loan applications he submitted to the Banks. Payne applied for the fraudulent loans in his personal capacity and through other corporate entities he controlled, including Provision 08, LLC, and Shire Properties, LLC.
According to allegations in the indictment, in February 2007, Payne executed two promissory notes to NC Four C’s, LLC (NC4Cs), a North Carolina limited liability company, in exchange for NC4Cs’s disbursement of two loans totaling $800,000. In 2009, Payne ceased making payments to NC4Cs, when he allegedly began to have serious financial problems. The indictment further alleges that in December 2008, Payne, through Provision 08, LLC, entered into a transfer agreement with a victim identified in the indictment as “J.E.” Payne had previously acted as an attorney for J.E. and for J.E’s charitable and business enterprises. The indictment alleges that, according to the terms of the transfer agreement, Payne agreed to pay to J.E. and J.E.’s heirs $4.38 million in exchange for the transfer of four properties to Payne (collectively “the Properties). The indictment also alleges that J.E. never received a single payment from Payne or Provision 08, LLC.
According to allegations in the indictment, upon acquiring the Properties from J.E., Payne began using the Properties to obtain bank loans from PCB, MFBT, and BOA, to benefit himself and his corporate entities. To secure the bank loans, Payne allegedly made numerous misrepresentations, false statements, and omissions, all with intent to defraud the Banks. For example, in December 2008, Payne used the acquisition of the Properties to secure a $735,000 bank loan from PCB. During the loan application process, Payne lied to a PCB loan officer who inquired about Payne’s acquisition of the Properties, telling the loan officer that J.E. had gifted Payne the Properties in recognition of previous services provided to J.E. The indictment also alleges that Payne failed to disclose to PCB his personal liabilities, including the $800,000 personal debt to NC4Cs.
The indictment goes on to allege that Payne continued to use the Properties as collateral in subsequent loan applications throughout 2009, and was able secure loans from two additional banks, MFBT and BOA, based on similar misrepresentations and omissions. In at least one of those instances, the indictment alleges that Payne’s own law firm served as the closing attorney for the loans, and that Payne was able to hide information from the bank regarding existing encumbrances on the property, which he used as collateral for the loan. As a result of Payne’s conduct, MFBT and BOA disbursed to Payne two loans in the amount of $250,000 and $522,000, respectively.
In making today’s announcement, U.S. Attorney Rose stated, “Payne allegedly went on a bank fraud spree, and, using his law license as a conduit to the fraud, he caused substantial financial harm to individuals and to financial institutions. I want to thank the FBI and the FDIC-OIG for leading this complex financial investigation that led to the federal charges,” said U.S. Attorney Rose.
Payne had his initial appearance today before U.S. Magistrate Judge Dennis Howell. The charges of bank fraud and making false statements on a loan and credit application each carry a maximum prison term of 30 years in prison and a $1,000,000 fine per count.
All the charges contained in the indictment are allegations. The defendant is innocent until proven guilty beyond reasonable doubt in a court of law.
The investigation was led by the FBI and FDIC-OIG. Assistant U.S. Attorneys Don Gast and Daniel Bradley of the U.S. Attorney’s Office in Asheville are in charge of the prosecution.
Federal Judge Sentences 16 Methamphetamine Traffickers to PrisonRead the Press Release
STATESVILLE, N.C. – A total of 16 defendants were handed prison terms ranging from 21 months to 18 years for trafficking methamphetamine, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Richard L. Voorhees presided over the court hearings, which began on Monday, June 5, 2017, and concluded today with the sentencing of the last defendant.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) in Atlanta and the Carolinas; Audria C. Bridges, Special Agent in Charge of the North Carolina State Bureau of Investigation’s Western District Office; and Colonel Glenn McNiell of the North Carolina State Highway Patrol; Chief Thurman Whisnant of the Hickory Police Department; Sheriff Coy Reid of the Catawba County Sheriff’s Office; Sheriff Chris Bowman of the Alexander County Sheriff’s Office; Chief Damon D. Williams of the Mooresville Police Department; and Sheriff Darren Campbell of the Iredell County Sheriff’s Office.
The 16 defendants sentenced in U.S. District Court in Statesville are:
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Jerry Wayne Grant, 45, of Mooresville, was sentenced to 216 months, followed by 5 years of supervised release. (5:16-cr-48)
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James Edward Russell, III, 38, of Hudson, was sentenced to 188 months, followed by 5 years of supervised release. (5:16-cr-13)
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Teddy Dwane McGee, 41, of Hickory, was sentenced to 120 months, followed by 5 years of supervised release. (5:16-cr-48)
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Larry Chad Roberts, 39, of Taylorsville, was sentenced to 120 months, followed by 5 years of supervised release. (5:16-cr-47)
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Richard Lee Knight, 41, of China Grove, was sentenced to 120 months, followed by 3 years of supervised release. (5:16-cr-42)
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Jason Mathew Beasley, 36, of North Wilkesboro, was sentenced to 120 months, followed by 5 years of supervised release. (5:16-cr-39)
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Davey Yang, 35, of Conover, was sentenced to 110 months, followed by 5 years of supervised release. (5:15-cr-73)
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Troy Lynn Bell, 48, of Taylorsville, was sentenced to 108 months, followed by 4 years of supervised release. (5:16-cr-66)
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Jamie Lee Grigg, 44, of Kings Mountain, was sentenced to 100 months, followed by 5 years of supervised release. (5:16-cr-46)
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Steven Matthew Donaldson, 25, of Charlotte, was sentenced to 96 months, followed by 4 years of supervised release. (5:16-cr-45)
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Josue Abraham Robles, 19, of Mexico, was sentenced to 86 months, followed by 5 years of supervised release. (5:16-cr-62)
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Jesus Cristino-Perales, 26, of Mexico, was sentenced to 78 months, followed by 5 years of supervised release. (5:15-cr-73)
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Norberto Macedo, Jr., 23, of Charlotte, was sentenced to 78 months, followed by 5 years of supervised release. (5:16-cr-55)
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Wendy Michelle Pennington, 39, of Hickory, was sentenced to 46 months, followed by 5 years of supervised release. (5:16-cr-48)
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Ritchie Allen Shook, 38, of Granite Falls, was sentenced to 37 months, followed by 5 years of supervised release. (5:16-cr-58)
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Shana Elyse Teague, 28, of Taylorsville, was sentenced to 21 months, followed by 1 year of supervised release. (5:16-cr-13)
According to court records, the defendants were involved in drug trafficking organizations that have trafficked methamphetamine worth millions of dollars. Over the course of the investigation, law enforcement seized more than 20 kilograms of crystal methamphetamine, $500,000 in U.S. currency and other assets, and dozens of firearms.
The defendants were charged as part of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF), which, since 2015, has resulted in the prosecution of more than 165 individuals.
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 Rose thanked all the law enforcement agencies for their investigative efforts. Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
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Federal Judge Sentences Asheville Area Cattle Farm and Its Owner for Discharging Cow Feces into French Broad River in Violation of the Clean Water ActRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today Crowell Farms, Inc. (Crowell Farms) located in Asheville, and its owner, Michael Alexander Crowell, 65, also of Asheville, on felony violations of the Clean Water Act, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
Michael Crowell was ordered to serve six months of house arrest during his three-year term of probation and to pay $10,000 in fines. Crowell Farms was ordered to pay an additional $40,000 in fines, offset by any fines paid to the State of North Carolina, and to serve a three-year term of probation during which it will have to abide by an environmental compliance program.
U.S. Attorney Rose is joined in making today’s announcement by Special Agent in Charge Andy Castro of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office; and John Keane, Acting Special Agent in Charge of the State Bureau of Investigations’ Diversion and Environmental Crimes Unit (SBI/ DECU).
According to court filings and today’s sentencing hearings, Crowell Farms is in the beef cattle farming business, maintaining more than 150 cows and managing more over 200 acres of agricultural fields. In the annual course of its operations, Crowell Farms disposes of thousands of pounds of solid and liquid animal waste, which are considered pollutants under the Clean Water Act. Court records show that Michael Crowell is the Operator Responsible-in-Charge (ORC) for the permitted waste disposal system at Crowell Farms. As the ORC, Michael Crowell is responsible for ensuring that animal waste is properly disposed into the farm’s waste management system, namely in solids waste lagoons.
According to court records, from in or about November 2015 through at least December 2015, Michael Crowell had installed bypasses at the farm’s waste lagoons, which were discharging liquid animal waste into a tributary of the French Broad River. Crowell Farms did not have a permit to discharge liquid waste to waters, and was permitted only to discharge the waste to an on-site land application system. Filed court documents indicate that Michael Crowell had installed the bypasses himself, because he had trouble managing Crowell Farms’ waste management system. Filed documents also show that Michael Crowell previously told inspectors he was aware that he had done “the wrong thing.” State inspectors further discovered that Crowell Farms did not own the proper land application equipment.
In November 2016, Michael Crowell and Crowell Farms pleaded guilty to one count of criminal violation of the Clean Water Act.
The Clean Water Act is a federal law enacted to prevent, reduce and eliminate pollution, and to restore and maintain the chemical, physical, and biological quality of the Nation’s waters for the protection and propagation of fish and aquatic life and wildlife, for recreational purposes, and for the use of such waters for public drinking water, agricultural, and industrial purposes. The French Broad River supplies drinking water to more than one million people and is frequently used for recreational water activities, such as swimming and kayaking. It is also protected because it supports secondary recreation, including fishing, fish consumption, and agriculture.
The investigation was led by the EPA’s Criminal Investigation Division and SBI’s DECU, with significant and substantial assistance from the North Carolina Department of Environmental Quality, Division of Water Resources – Asheville Regional Office. Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Charlotte Woman Pleads Guilty to Identity TheftRead the Press Release
CHARLOTTE, N.C. – Keniona Thomas, 24, of Charlotte, pleaded guilty to one count of identity theft for stealing the Personally Identifying Information (PII) of victims from the patient files of a Charlotte-area medical practice where she was employed, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
According to filed plea documents and today’s hearing, from in or about late 2014 through August 2016, Thomas provided the PII of more than 150 patients to her co-conspirator, Christopher Roach, who used the PII to make fraudulent purchases and to obtain fake driver’s licenses. According to court records, as an employee of the Charlotte medical practice, Thomas had access to patients’ PII, which included patient names, social security numbers, and dates of birth. Court records indicate that Roach paid Thomas ten dollars for each individual’s PII. As a result of the PII provided by Thomas, Roach and others obtained new credit card accounts and accessed existing accounts to defraud victims and banks of at least $97,000.
Thomas pleaded guilty to one count of identity theft before U.S. Magistrate Judge David C. Keesler. The maximum penalty for the charge is 15 years in prison and a $250,000 fine. A sentencing date for Thomas has not been set yet.
Christopher Roach was previously sentenced to 95 months in prison on conspiracy to commit bank fraud and aggravated identity theft charges.
In making today’s announcement, U.S. Attorney Rose thanked the U.S. Postal Inspection Service in Charlotte, the United States Secret Service’s Charlotte Field Office, and the Charlotte Mecklenburg Police Department, and noted that the case is the result of the Charlotte Financial Crimes Task Force (CFCTF). The task force was formed in early 2016 by the U.S. Postal Inspection Service and currently comprises over 25 local, state and federal law enforcement agencies located in the Western District of North Carolina. The goal of the taskforce is to focus on the identification and development of financial fraud investigations in the Charlotte area. Based on crime trends in the area, the task force began to focus its efforts on violent offenders with lengthy criminal histories who are committing fraud.
Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Armed Career Criminal Sentenced to 15 Years in Prison for Federal Firearms ViolationRead the Press Release
CHARLOTTE, N.C. – A South Carolina man was sentenced in federal court on Monday, May 22, 2017, for being a felon in possession of a firearm, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Marion Quinton Brewster, 38, of Columbia, S.C. was sentenced by U.S. District Judge Max O. Cogburn, Jr. to 180 months in prison, followed by five years of supervised release.
C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Rose in making today’s announcement.
According to the filed court documents and statements made in court, on May 19, 2016, CMPD officers responded to an armed robbery call at a self-service car wash located in Charlotte, N.C. When officers arrived, the victim reported that he had been robbed at gunpoint while washing his vehicle, by a man later identified as Brewster. Court records indicate that shortly thereafter, based on information provided by the victim, law enforcement located Brewster, who was riding as a passenger in a green Ford Expedition. CMPD officers conducted a traffic stop of the vehicle. According to court records, as they approached the vehicle, Brewster fled the scene on foot. A short foot chase ensued, during which law enforcement observed Brewster drop a handgun. Law enforcement apprehended Brewster and recovered the firearm, which was subsequently identified as a stolen Smith & Wesson .38 caliber handgun.
At the time of the offense, Brewster was a convicted felon and was prohibited from possessing a firearm. Brewster pleaded guilty to the firearm offense in January 2017. Court records indicate that Brewster had prior criminal convictions in South Carolina for offenses related to armed robbery and carjacking, and at sentencing he qualified as an armed career criminal.
Brewster 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 Rose thanked ATF and CMPD for leading the investigation.
Assistant United States Attorney Robert Gleason, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Drug Trafficker Sentenced to 24 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Lavon Williams, 38, of Jamaica, New York, to 292 months in prison on charges of conspiracy to distribute and to possess with intent to distribute marijuana and conspiracy to commit money laundering, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Williams was also ordered to serve eight years of supervised release after he is released from prison, and to pay a money judgment of $1.5 million for the value of the marijuana involved in the conspiracy.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Atlanta and the Carolinas, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).
According to filed documents and court proceedings, from October 2014 to February 2015, Williams transported more than 880 pounds of marijuana and drug proceeds from San Francisco to Charlotte via commercial aircrafts. Court records indicate that, over the course of the conspiracy, Williams flew at least 11 times, and carried approximately 40 pounds of marijuana each trip. Court records show that on February 4, 2015, Williams’ co-conspirator, Thajuan Brown, was arrested at Charlotte Douglas International Airport with 46 pounds of marijuana. Evidence recovered from that investigation linked Williams to the drug trafficking conspiracy. On February 10, 2015, law enforcement arrested Williams with $40,000 in drug proceeds at the San Francisco airport.
Two remaining defendants are fugitives wanted by law enforcement. They are: Pierre Buissereth, 35, of New York. and Toccara Quantavia King, 35, of Virginia. Anyone with information about Buissereth or King are asked to contact the Homeland Security Investigations office at 704-679-6140.
This prosecution is part of an 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 drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
The investigation was led by HSI and CMPD. Assistant U.S. Attorney Steven R. Kaufman coordinated the investigation and prosecution of this OCDETF operation.
83 “Bloods” Gang Members Indicted on Federal ChargesRead the Press Release
CHARLOTTE, N.C. – Eighty-three alleged leaders and members of the “United Blood Nation” (UBN or Bloods) have been indicted on federal racketeering conspiracy charges and charges related to murder, attempted murder, violent assault, narcotics distribution, firearms possession and Hobbs Act robbery. A number of defendants are also charged with bank fraud, wire fraud and aggravated identity theft related to financial crimes. A federal grand jury returned the sealed indictment on May 16, 2017, which was unsealed today following this morning’s arrests.
In a coordinated operation, more than 600 federal, state and local law enforcement officers executed the arrest warrants this morning in Charlotte, Cleveland County, and eastern North Carolina. Arrests were also made in Florida, South Carolina, New York, and Virginia. Of the 83 defendants charged, ten are not in custody.
“This morning’s arrests are the result of a joint law enforcement investigation targeting alleged leaders and members of the Nine Trey Gangsters faction of the UBN. These defendants participated in a racketeering conspiracy, committing multiple violent crimes, including at least six murders and five attempted murders in North Carolina. Today’s law enforcement action delivered a serious blow to the leadership structure throughout the ranks of this criminal organization. And this is only the beginning. The investigation and prosecution of violent gangs is a priority for this office. Our goal is to curb the influence of violent street gangs, to protect the people of this district from gangsters’ criminal activity and to restore our neighborhoods as places where all citizens can live and prosper,” said Jill Westmoreland Rose, United States Attorney for the Western District of North Carolina.
"The murders, the assaults, the robberies, the drug deals, each and every crime committed by these ruthless gang members was a blow to the safety of our communities. Innocent families should not suffer because of the violent actions of others. Anyone who tries to fill the criminal void left by today’s arrests should know, the FBI and our law enforcement partners will come after you next,” said John Strong, the Special Agent in Charge of the FBI in North Carolina.
“These arrests and collaborative efforts are important in helping to curb the criminal influence and gang activities not only in our communities, but also behind prison walls,” said Secretary Erik A. Hooks of the North Carolina Department of Public Safety. “Gang activity drives a great deal of criminal enterprise, and it takes a cooperative law enforcement effort and a sharing of intelligence across agencies to fight it.”
“The Charlotte-Mecklenburg Police Department will continue to work tirelessly to protect our community. These arrests send a clear message to violent offenders that our neighborhoods will not be a safe haven for their illegal activities,” said Chief Kerr Putney of the Charlotte Mecklenburg Police Department.
“This investigation is a great example of collaboration between agencies to fight the type of crime that is causing the senseless killing of our young people and destroying families in our communities. The statement made today is simple - violent crime and gang activity will not be tolerated in our communities. We will work with our law enforcement partners to ensure that our citizens are able to live, work and play in the safest environment possible,” said Chief Jeff Ledford of the Shelby Police Department.
“Today’s arrests will have a significant impact in Shelby and Cleveland County. The Cleveland County Sheriff’s Office will continue to work hand-in-hand with our law enforcement partners to tackle violent gang activity. But, we all have to do more to prevent young men and women from joining street gangs. Gangs are not just a law enforcement problem, they are a community problem. And prevention is key. We need our faith, civic, and community leaders to join forces with us and help law enforcement combat the gang problem that plagues our communities,” said Sheriff Alan Norman with the Cleveland County Sheriff’s Office.
"We value the partnerships with all of our local, state, and federal partners. The success of this investigation is a result of sharing resources and working together,” said Chief Robert Helton of the Gastonia Police Department.
As alleged in the indictment, the Bloods were formed in the 1970s in Los Angeles, California, when a group of seven individual street gangs united to form a larger unit. The gang quickly spread to surrounding areas, eventually expanding its influence across the United States. In 1993, a single Bloods entity, the UBN, was created on the east side of Rikers Island Prison. Membership of the UBN is estimated to be between 7,000-15,000 members along the east coast, with ultimate authority for gang decisions still maintained in New York and members currently incarcerated in the New York prison system. The various Bloods’ gangs or “Hoods,” which unified under the UBN, kept their original names. The “Nine Trey Gangsters” is one of the original factions of the UBN, with a large gang presence in North Carolina.
The indictment alleges that the gang is governed by 31 rules known as “The 31.” These rules were written by UBN’s founders and are strictly enforced. In addition, the gang maintains a strict hierarchy or chain of command, with each gang member assigned to a specific rank with specific duties and responsibilities. A typical structure for the Nine Trey Gangsters includes the leader of the hood, referred to as the “Godfather,” followed by ranked “Generals,” down through unranked members called “Soldiers” or “Scraps.” Additionally, within the UBN, some females hold unique positions of authority, including that of a “First Lady,” who is often responsible for record keeping, covert communications, and distribution of gang records.
The indictment alleges that UBN members represent their gang affiliation with common tattoos, graffiti markings, language, and communication codes, and are identified by wearing the color red. Gang members are also expected to pay gang dues, which are used to support the enterprise, to finance the gang’s criminal activity, and as gifts of respect to incarcerated high-ranking members.
According to allegations contained in the indictment, beginning by at least 2009 to present, the defendants were leaders and members of the UBN’s Nine Trey Gangsters. As alleged members of the criminal organization, they engaged in a pattern of racketeering activity, including, but not limited to, murder, attempted murder, assault with a deadly weapon, robbery, narcotics distribution and firearms possession. Additionally, the indictment alleges that certain defendants engaged in the racketeering acts of bank fraud and wire fraud. As alleged in the indictment, the defendants committed these crimes to generate proceeds to pay gang dues, to maintain membership with the gang, to discipline other gang members, and to be promoted within the leadership structure of the gang.
According to allegations contained in the 69-count indictment, the defendants communicated regularly with each other and other UBN members to discuss gang business, including the enforcement of gang rules; disciplinary action of UBN members; the identities and punishment of individuals cooperating with law enforcement; the collection of gang dues; and to plan future crimes. The indictment further alleges that the defendants maintained and circulated a collection of firearms, including assault rifles, for the use in criminal activity by gang members.
Over the course of the investigation, agents and officers seized, among other evidence: 36 firearms and ammunition, cocaine, crack cocaine, heroin, marijuana, MDMA, prescription pills and other narcotics and drug paraphernalia, counterfeit checks, credit cards and gift cards, and credit card making devices.
The 83 defendants charged with one count of Racketeering Influenced Corrupt Organization (RICO) conspiracy are:
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Sherman Devante Addison, a/k/a “Ace,” 22, of Shelby.
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Aaron Demitri Alexander, a/k/a “A Dawg,” 24, of Charlotte.
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Montraya Antwain Atkinson, a/k/a “Hardbody,” 30, of Raleigh, N.C.
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Freddrec Deandre Banks, a/k/a “Drec/Banga,” 21, of Shelby.
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James Baxton, a/k/a “Frank White,” 43, incarcerated in New York.
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Bradley Beauchamp, 29, of Fort Lauderdale, Florida.
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Destinee Danyell Blakeney, a/k/a “Lady Rude,” 22, of Morven, N.C.
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Antonio Dontre Brooks, a/k/a “Montana,” 24, of Shelby.
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Antarious Qaushard Byers, a/k/a “Bang,” 23, of Shelby.
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Renaldo Rodregus Camp, a/k/a “Rodeo/Drop,” 39, of Shelby.
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Shakira Monique Campbell, a/k/a “Lady Rage,” 23, of Charlotte.
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Adrian Nayron Coker, a/k/a “Gotti,” 27, of Gastonia, N.C.
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Brandon Khalil Covington, a/k/a “Blokka,” 24, of Charlotte.
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Alex Levi Cox, a/k/a “Quick,” 26, of Myrtle Beach, S.C.
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Marquel Michael Cunningham, 20, incarcerated in North Carolina.
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Richard Diaz, a/k/a “Damu,” 32, of Charlotte.
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James Walter Dowdle, a/k/a “Staxx,” 24, incarcerated in North Carolina.
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John Paul Durant, a/k/a “JP/Glock/Gudda,” 28, of Shelby.
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Cynthia Gilmore, a/k/a “Cynthia Young/Lady Bynt,” 41, of Raleigh.
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Shamon Movair Goins, a/k/a “Rugie,” 26, incarcerated in North Carolina.
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Pedro Gutierrez, a/k/a “Magoo/Light/Inferno,” 44, incarcerated in New York.
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Jalen Raekwon Hackney, a/k/a “Menace,” 19, incarcerated in North Carolina.
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Christopher Dentre Hamrick, a/k/a “Red Dot,” 27, incarcerated in North Carolina.
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Lavaughn Antonio Hanton, a/k/a “Killem/Billy-D,” 33, incarcerated in North Carolina.
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Anthony Oneil Harrison, a/k/a “Ant,” 20, of Charlotte.
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Bianca Kiashie Harrison, a/k/a “Lady Gunz,” 27, of Raleigh.
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Quincy Delone Haynes, a/k/a “Black Montana,” 38, Shelby.
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Delonte Maurice Hicks, a/k/a “BBB Shooter/Black,” 28, of Morven.
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Jasmin Reikeem Hicks, a/k/a “Rude,” 26, of Morven.
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Bobby Earl Hines, a/k/a “Swahili,” 34, incarcerated in North Carolina.
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Raheam Shumar Hopper, a/k/a “Bone,” 23, of Shelby.
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Wesley Javon Howze, a/k/a “Drama,” 21, incarcerated in North Carolina.
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Donl Lequintin Hunsucker, a/k/a “Remy,” 31, of Charlotte.
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Dricko Dashon Huskey, a/k/a “Drizzy,” 25, incarcerated in North Carolina.
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Muhammad John Jackson, a/k/a “Picasso,” 32, of Charlotte.
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Terrence Thomas Johnsom, a/k/a “Sypher,” 40, of Shelby.
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Joe Tarpeh Johnson, a/k/a “JR/Big Pusha/Kutthroat,” 26, of Charlotte.
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Latif Nakia Antoine Johnson, a/k/a “Billy Solo,” 23, of Charlotte, N.C.
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Tonney Horatio Kerbay, a/k/a “Rich Tonney,” 29, of Charlotte.
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Rashad Monte King, a/k/a “Billy Kilo Montana,” 25, of Charlotte.
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Barrington Audley Lattibeaudiere, a/k/a “Bandana/Bobby Seale,” 30, of North Lauderdale, Florida.
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Juan Cruz Leon, a/k/a “Jefe,” 21, of Charlotte.
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Renaire Roshique Lewis, Jr., a/k/a “Banz/Esco,” 22, incarcerated in North Carolina.
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Lamonte Kentrell Lloyd, a/k/a “Murda Mo/Moo,” 23, incarcerated in North Carolina.
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David Matthew Lowe, a/k/a “Gucci,” 26, of Shelby.
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Charles Kenyon Lytle, a/k/a “Kam,” 39, of Charlotte.
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Terry Lavon Maddox, a/k/a “Turbo,” 26, of Shelby.
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Bradon Theodore Manning, a/k/a “Billy B,” 28, of Columbia, S.C.
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Travis Cordell McClain, a/k/a “Fridaay Daa Thuurteenth,” 25, of Charlotte.
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Robert Allen McClinton, a/k/a “Trigga,” 27, incarcerated in North Carolina.
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Isaac Nabah MckIntosh, a/k/a “Mac,” 26, of Charlotte.
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D’Angelo De’Mara McNeil, a/k/a “Dutch,” 26, of Charlotte.
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Christopher Lashon Miller, a/k/a “Dro,” 23, incarcerated in North Carolina.
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Johnny Thomas Mitchell, a/k/a “Joker,” 37, of Shelby.
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Christopher O’Brien Moore, a/k/a “Ratchet,” 22, incarcerated in North Carolina.
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Myquan Lamar Nelson, a/k/a “Dripz,” 26, of Charlotte.
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Thomas Oliver, a/k/a “T.O., Recon,” 31, incarcerated in North Carolina.
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Kolawole Olalekan Omotosho, a/k/a “Rugged Red,” 19, of Jacksonville, N.C.
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James Bradin Pegues, 30, of Charlotte.
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Deshawn Deonta Peterkin, a/k/a “Proo,” 28, of Morven.
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Laquida Shuntae Poston, a/k/a “Lady Recon,” 25, incarcerated in North Carolina.
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Austin Demontry Potts, a/k/a “Big Tek, B-Tek,” 23, of Charlotte.
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Tyquan Ramont Powell, a/k/a “Savage,” 22, incarcerated in North Carolina.
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Omar Lionel Reed, a/k/a “Omega,” 38, incarcerated in New Mexico.
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Omari Rosero, a/k/a “Uno B,” 40, incarcerated in New York.
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Porsha Talina Rosero, a/k/a “Porsha Talina Gowdy/Lady Uno B,” 34, of Syracuse, New York.
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Kenneth Marquise Ruff, a/k/a “Red Hot,” 26, of Shelby.
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Rashad Sattar, 20, of Fort Lauderdale.
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Alandus Montrell Smith, a/k/a “Kadafia,” 27, incarcerated in North Carolina.
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Anthony Bernard Smith, a/k/a “Redd Lion,” 24, incarcerated in North Carolina.
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Denzel Lamont Spikes, a/k/a “Dinki/Dino,” 24, incarcerated in North Carolina.
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Isaiah Devon Stallworth, a/k/a “Zay/Juice,” 25, of Charlotte.
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Cedric Lexander Surratt, a/k/a “Hollywood/5-Star,” 29, of Charlotte.
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Peatrez Lamar Teaste, a/k/a “P-Wheezy,” 24, of Myrtle Beach.
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Jhad Elijah Thorbourne, a/k/a “Flight,” 23, of Charlotte.
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Lavon Christopher Turner, a/k/a “Hungry,” 27, Charlotte.
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Jesse James Watkins, a/k/a “Showtime,” 33, of Charlotte.
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Quintez Lamar Watkins, a/k/a “Bandana,” 27, incarcerated in North Carolina.
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David Earl Watson, a/k/a “Gunz,” 31, of Jacksonville.
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Twylain Stanley Wilson, a/k/a “5 Alive,” 24, incarcerated in North Carolina.
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Ronald Anthony Wofford, 27, of Charlotte.
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Jonathan Wray, a/k/a “Jon Jon/Yungin,” 26, incarcerated in North Carolina.
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Patrick Devon Wray, a/k/a “Ike, Murda,” 28, of Shelby.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until they are proven guilty beyond a reasonable doubt in a court of law.
The indictment is the result of a joint investigative effort by the Federal Bureau of Investigation (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 United States Federal Probation; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Internal Revenue Service; the United States Postal Inspection Service; the United States Army Criminal Investigation Command; and the New York Department of Corrections and Community Supervision, Office of Special Investigations.
U.S. Attorney Rose thanked each of the above law enforcement agencies that took part in the arrests today, along with FBI Albany; FBI Atlanta; FBI Columbia; FBI Knoxville; FBI Miami; FBI Norfolk; FBI Richmond; FBI Washington Field Office; the United States Marshals Service; the North Carolina State Bureau of Investigation; and the Anson County Sheriff’s Office. They also acknowledged the United States Attorney’s Offices in the Eastern District of North Carolina, the United States Attorney’s Office in the Southern District of Florida, and the Broward County Sheriff’s Office in Florida for their invaluable assistance in this case.
Assistant U.S. Attorneys Elizabeth Greene and Matthew Warren of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.
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.
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Hazardous Waste Company , Owner, and Employees Indicted for Illegally Abandoning Hazardous Waste in TrailersRead the Press Release
CHARLOTTE, N.C. – A hazardous waste company, its owner, and two employees were indicted today for illegally abandoning more than 10,000 gallons of liquid hazardous waste and more than five tons of solid hazardous waste in trailers on the company’s property in Charlotte, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Special Agent in Charge Andy Castro, of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office; Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (NC SBI).
The criminal bill of indictment was returned by a the grand jury on May 17, 2017, charging Parts Cleaning Technology of North Carolina (“PCT”), its owner, David Russ Crandell, of 36, of Novi, Michigan, and two employees, Timothy Michael Connelly, 54, of Concord, N.C. and Vincent Edward Peters, Sr., 51, of York, S.C., with one count of conspiracy to illegally store hazardous waste, one count of illegal storage of hazardous waste without a permit, and one count of illegal storage of hazardous waste in violation of a permit. Connelly and Peters are also each charged with making false official statements to regulators.
According to allegations contained in the indictment, PCT, was a business engaged in the collection and transportation of hazardous waste in Charlotte, N.C. From at least as early as in or about 2011, the defendants allegedly stored hazardous waste on unpermitted trailers on PCT’s property at 3114 and 3124 Cullman Avenue, in Charlotte. The indictment alleges that the defendants had ongoing difficulty paying the disposal companies, which were refusing to accept hazardous waste from PCT. As alleged in the indictment, on July 7, 2014, PCT was evicted from the Cullman Avenue facilities, the defendants did not remove the hazardous waste and did not notify anyone that the waste had to be removed.
The indictment also alleges that on August 19, 2015, North Carolina State regulators executed a search warrant and located hazardous waste for which 43 customers had paid PCT for disposal. The indictment further alleges that regulators also located hazardous waste in the building located at 3124 Cullman Avenue, which was not permitted to store any hazardous waste. It is also alleged that over the course of the criminal conduct, defendants Connelly and Peters made false official statements to regulators about the contents of the trailers.
In 1976, in response to a growing number of hazardous waste sites resulting from unregulated waste disposal activities, Congress enacted the Resource Conservation and Recovery Act (RCRA). RCRA established a strictly-regulated “cradle-to-grave” regulatory program, which governs and tracks hazardous waste from the point of generation until its final disposition.
The object of RCRA includes, among other things, protection of human health and the environment through stringent regulation of the generation, transportation, storage, treatment and disposal of hazardous waste.
The conspiracy charge carries a maximum sentence of five years of imprisonment and a fine of $250,000. The RCRA violations carry a maximum sentence of five years of imprisonment and a fine of $50,000 per day of violation. The false official statements charges carry a maximum sentence of five years of imprisonment and a fine of $250,000.
The details contained in this 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 Rose thanked the EPA-CID and NC SBI for leading the investigation. Assistant U.S. Attorney Steven R. Kaufman, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
Charlotte Man Sentenced to More Than 7.5 Years in Connection with Bank Fraud and Identity Theft SchemeRead the Press Release
CHARLOTTE, N.C. –Christopher Bryan Roach, 34, of Charlotte, was sentenced today to 95 months in prison for his involvement in a bank fraud and identity theft scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Robert J. Conrad, Jr. also sentenced Roach to two years of supervised release.
According to today’s sentencing hearing and documents filed in the case, from December 2010 to January 2017, Roach and others used the stolen social security numbers and dates of birth of identity theft victims to take over the victims’ already existing credit card accounts and to open new accounts at stores such as Best Buy and Sam’s Club. Roach and others then used the accounts to purchase items, which resulted in losses in excess of $263,000. According to the indictment, Roach obtained some of the identity theft victims’ information by buying that information from an employee of a medical practice.
Roach pleaded guilty in January 2017 to one count of aggravated identity theft and one count of conspiracy to commit bank fraud. According to statements made at today’s hearing, Roach continued to engage in fraudulent activity, including identity theft, after he entered his guilty plea by providing a co-conspirator with the stolen personal information of an identity theft victim in order to buy iPhones.
Roach will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In a related case, co-defendant Kendell Bowden pleaded guilty on March 28, 2017, to one count of conspiracy to commit bank fraud and two counts of aggravated identity theft and is awaiting sentencing.
In making today’s announcement, U.S. Attorney Rose thanked the U.S. Postal Inspection Service in Charlotte, the United States Secret Service’s Charlotte Field Office, and the Charlotte Mecklenburg Police Department, and noted that the case is the result of the Charlotte Financial Crimes Task Force (CFCTF). The task force was formed in early 2016 by the U.S. Postal Inspection Service and currently comprises over 25 local, state and federal law enforcement agencies located in the Western District of North Carolina. The goal of the taskforce is to focus on the identification and development of financial fraud investigations in the Charlotte area. Based on crime trends in the area, the task force began to focus its efforts on violent offenders with lengthy criminal histories who are committing fraud.
Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
South Carolina Man Arrested on Federal Charges for "Synthetic Identity" Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – A South Carolina man was arrested today on bank, wire, and mail fraud charges in connection with a “synthetic identity” fraud scheme that defrauded financial institutions of more than $340,000, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The criminal bill of indictment against Charles Whitlock, Jr., 50, of Rock Hill, S.C. was returned by a federal grand jury on April 20, 2017, and was unsealed today following the defendant’s court appearance.
David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the indictment, from least in or about December 2013, through in or about April 2017, Whitlock engaged in mail fraud, wire fraud and bank fraud by executing a synthetic identity fraud scheme, through which he fraudulently obtained more than $340,000 from one or more financial institutions. According to the indictment, a synthetic identity is a fictitious identity created with a combination of real and fabricated information about people, or sometimes entirely fictitious information about people, including names, social security numbers (SSN), dates of birth (DOB), addresses and telephone and cell phone numbers. As alleged in the indictment, Whitlock submitted more than 750 new credit card applications to financial institutions via the Internet and by telephone, using synthetic identity information. The credit cards issued by financial institutions in connection to Whitlock’s synthetic identity fraud scheme had credit limits ranging from $100 to more than $500.The indictment alleges that in some instances, Whitlock used “pollinated synthetic identities” when he submitted new credit card applications containing synthetic identity information to financial institutions. Pollinated synthetic identity means a synthetic identity is added as an authorized user of an existing credit card account. This enables fraudsters to inherit the credit history of the existing credit card account holder, and makes it easier to get multiple new credit card accounts and higher credit limits. As alleged in the indictment, Whitlock was able to obtain multiple new credit cards in the names of synthetic identities, and to obtain higher credit limits for new credit cards issued under the names, SSNs and DOBs of synthetic identities.
The indictment further alleges that, in order to evade the financial institutions’ new credit card fraud detection systems, Whitlock filled out the false and fraudulent applications using hundreds of addresses, including addresses of residences located within the Western District of North Carolina. The indictment alleges that Whitlock also used the online U.S. mail forwarding services of the United States Postal Service to divert fraudulently-obtained credit cards mailed by financial institutions to mailing addresses controlled or accessible to Whitlock.
The indictment alleges that Whitlock used the fraudulently-obtained credit cards to obtain money, goods and services through electronic payments at point-of-sale (POS) terminals; money from automated teller machines (ATMs); and to obtain money through one or more online merchants controlled by or accessible by the defendant.
Whitlock had his initial appearance today before U.S. Magistrate Judge David Keesler and is currently detained pending his detention hearing scheduled for Thursday, May 11, at 2:00 p.m.
- penalty for the bank fraud charges carries a maximum penalty of 30 years in prison and a maximum $1 million fine. wire fraud and mail fraud charges each carry a maximum penalty of 20 years in prison and a maximum $250,000 fine.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation was led by USPIS and the FBI. Assistant U.S. Attorney Thomas O’Malley, of the U.S. Attorney’s office in Charlotte, is prosecuting the case.
Florida Man Sentenced to 16 Years on Production of Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – Yesterday, U.S. District Court Judge Max O. Cogburn, Jr. sentenced a Tampa, Florida man to 192 months in prison on production of child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Richard Spencer Flynn, 41, to serve a lifetime of supervised release and to register as a sex offender after he is released from prison. Flynn pleaded guilty in December 2016 to one count of production of child pornography.
John A. Strong, Special Agent in Charge of the FBI in North Carolina, and Sheriff Van Duncan of the Buncombe County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.
“Flynn was a predator lurking on the Internet who targeted a child for his deviant sexual purposes. His conduct was reprehensible and for that, he will deservedly serve time in federal prison,” said U.S. Attorney Rose.
According to filed court documents and yesterday’s sentencing hearing, beginning in or about March 2015 and continuing through March 2016, Flynn traveled to North Carolina to meet with a 15-year-old female he met via the Internet and other electronic means to engage in illicit sexual conduct. Court documents also show that Flynn produced numerous images of child pornography of his victim.
In announcing today’s sentence Judge Cogburn said, “This is a serious crime with a serious punishment.”
Flynn has been in custody since September 29, 2016. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentencings are served without the possibility of parole.
The FBI and the Buncombe County Sheriff’s Office led the investigation. The U.S. Attorney’s Office in Asheville prosecuted the case.
Federal Indictment Charges Founders of Defunct Hickory E-Waste Company with Defrauding Victims of at Least $25 MillionRead the Press Release
CHARLOTTE, N.C. – Today, a criminal indictment was unsealed in federal court, charging Robert M. Boston, 53, and Robert S. LaBarge, 50, both of Hickory, N.C., with conspiracy relating to a fraud totaling at least $25 million, to include wire fraud, securities fraud, bank fraud, and money laundering, announced Jill Westmoreland Rose, 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, joins U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the indictment, Boston and LaBarge defrauded franchisees, investors, and lenders of their company, Zloop. The indictment alleges that, 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.
The indictment alleges that Boston and LaBarge founded Zloop, an electronic waste recycling firm, in 2012 and began marketing Zloop franchises in or about July 2012. Federal law requires potential franchisors, like Zloop, to disclose certain litigation and bankruptcy matters in a franchise disclosure document. As alleged in the indictment, Zloop franchise disclosure documents omitted required information, including that Boston’s former company had filed bankruptcy, that Boston had filed personal bankruptcy, and that Boston had been held liable in an action alleging that he had knowingly submitted false financial documentation to obtain a $2.9 million line of credit.
The indictment further alleges that, beginning in or about December 2012, Boston and LaBarge caused Zloop to raise money through the sale of equity. To sell equity in the company, the indictment alleges that Boston and LaBarge caused a misleading private placement memo (“PPM”) to be sent to investors who ultimately invested approximately $2.5 million in Zloop. According to the indictment, the PPM contained material half-truths and omissions, including the omission of the litigation and bankruptcy history of Boston, and the fact that Boston and LaBarge had already caused Zloop to spend more than $1.5 million on their personal real estate.
When Zloop investors sought the return of their money in or about the middle of 2013, the indictment alleges that Zloop sought to repay them with a loan from an individual identified as Victim 1. In doing so, Boston allegedly induced Victim 1 to provide a $3 million loan by offering to file a lien on Zloop’s equipment for Victim 1’s benefit. Instead, after Victim 1 provided the loan used to repay Zloop’s other investors, LaBarge allegedly sent a fraudulent financing statement that purportedly was filed with the North Carolina Secretary of State.
The indictment also alleges that, after receiving the fraudulent UCC financing statement, Victim 1 agreed to secure a multi-million line of credit from Patriot Bank, a federally insured financial institution. After Boston and LaBarge caused Zloop to draw approximately $3.5 million from the Patriot Bank line of credit, the indictment alleges that they promptly spent hundreds of thousands of dollars on, among other things, a private plane, a new Corvette, and a new Grand Cherokee. After Zloop subsequently drew an additional $1.3 million from the credit card line, the indictment alleges that more than $500,000 was spent on racing-related expenditures and approximately $79,808 on a suite at a professional football stadium.
The indictment charges Boston and LaBarge each with one count of conspiracy to commit wire and bank fraud; one count of wire fraud; one count of securities fraud; one count of bank fraud; and one count of money-laundering conspiracy. LaBarge is also charged with false writing in connection with an FBI investigation.
The defendants appeared today in the United States District Court in Charlotte. The conspiracy charge and bank fraud charge each carry a maximum prison term of 30 years. The wire fraud charge and the securities fraud charge each carry a maximum prison term of 20 years. The maximum penalty for the money-laundering conspiracy charge is 10 years in prison, and the maximum prison term for false writing is five years in years in prison.
All the charges contained in the indictment are allegations. The defendants are presumed innocent until proven guilty beyond reasonable doubt in a court of law.
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.
Hickory Pathology Lab Agrees to Pay the United States $601,000 to Settle False Claims Act AllegationRead the Press Release
CHARLOTTE, N.C. - U.S. Attorney Jill Westmoreland Rose announced today that Piedmont Pathology in Hickory, N.C., has agreed to pay the United States $601,000 to settle allegations that it violated the False Claims Act by submitting false claims to Medicare and Medicaid for medically unnecessary procedures.
U.S. Attorney Rose is joined in making today’s announcement by Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General for the region including North Carolina.
“Government healthcare programs serve a vital role in providing necessary services to the citizens of our district,” said U.S. Attorney Rose. “This office is dedicated to ensuring that money is spent wisely on medically necessary services that benefit healthcare consumers as opposed to profiting the bottom line of healthcare providers.”
“Patients should be able to trust that their health care providers only provide medically necessary services,” said Special Agent in Charge Jackson. “Working in close coordination with the U.S. Attorney’s Office, we will continue to pursue health care companies that threaten the integrity of federal health care programs.”
The allegations arose from a lawsuit filed by a whistleblower, Dr. Kim Geisinger (the Relator), under the qui tam provisions of the False Claims Act. Relator Dr. Geisinger is a pathologist who formerly worked for Piedmont Pathology. Under the False Claims Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The case is investigated by the United States, which can choose to take over the case or allow the Relator to pursue the case. Relator Dr. Geisinger will receive approximately $120,200 from the recovery announced today.
According to court documents, pathology practices apply stains to specimens to allow pathologists to identify abnormalities in the tissue. These stains include a routine hemotoxylin and eosin (H&E) stain and other special stains for various purposes. Among other things, the complaint alleges that a pathologist should review the specimen with the routine H&E stain before any special stain is used on the specimen. Special stains are billed separately to government healthcare programs. The government considers the use of special stains before the analysis of the routine H&E stained specimen to be medically unnecessary. In November 2016, the United States intervened in the case, pursuing claims that Piedmont Pathology lacked medical necessity for the special stains conducted on certain gastric biopsies before a pathologist reviewed the routine H&E stained specimen.
In making today’s announcement U.S. Attorney Rose thanked HHS-OIG for their coordination with the U.S. Attorney’s Office in investigating this case. The settlement was negotiated by Assistant U.S. Attorney Jonathan Ferry, of the U.S. Attorney’s Office in Charlotte.
The case is captioned United States of America ex rel. Geisinger v. Piedmont Pathology Associates, Inc. and Piedmont Pathology, Professional Corporation, Case No. 5:14-CV-121. The claims settled by the lawsuit are allegations only and there has been no determination of liability.
Court Orders Forfeiture of Henderson County ResidenceRead the Press Release
ASHEVILLE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that the federal court in the Western District of North Carolina has ordered the final forfeiture of a Henderson County residence used in the illegal distribution of oxycodone and other narcotics. The forfeiture of the residence to the United States is the result of the collaborative efforts of the Henderson County Sherriff’s Office, the United States Drug Enforcement Administration (DEA) and the U.S. Attorney’s Office.
The case against the residence arose out of a civil complaint for forfeiture filed by the United States in February 2015 (Docket No. 1:15-cv-23). The United States’ forfeiture lawsuit was brought pursuant to 21 U.S.C. § 881, which, under certain circumstances, allows for forfeiture of property which is proceeds of or used to commit or facilitate the commission of felony drug offenses. In its civil complaint, the United States alleged that the property located at 318 Jody Street, in East Flat Rock, N.C. (“the Jody Street Property”), facilitated and was proceeds of narcotics offenses by Harvey Franklin Hunt, Vivian Hunt, and Dorothy Hunt.
The civil complaint detailed narcotics offenses dating back to 2012. Specifically, the civil complaint alleged illegal sales of oxycodone from the property, and also the recovery of large amounts of cash, digital scales, marijuana, alprazolam, and methamphetamine from the residence. Finally, the civil complaint alleged multiple state controlled substances convictions against Harvey Hunt, Vivian Hunt, and Dorothy Hunt.
Ultimately, the civil forfeiture case was stayed pending the resolution of state criminal charges against the Hunts based on the continuing drug activity. In 2016, after the successful resolution of the state cases and the conviction of the Hunts, the federal court lifted the stay. The United States ultimately obtained agreement from Harvey and Vivian Hunt, the owners of the Jody Street Property, to their eviction from and final forfeiture of the property. The default judgment and final order entered this month by the federal court enables the United States to evict the Hunts and sell the property.
In making today’s announcement, the U.S. Attorney’s Office commended the coordination and collaborative work of the DEA, the Henderson County Sherriff’s Office, and the Henderson County Drug Task Force.
Assistant United States Attorney Benjamin Bain-Creed, of the U. S. Attorney’s Office in Charlotte, handled the civil proceedings.
Two Charlotte Bloods Gang Members Sentenced to Life in Prison for the Double-murder of Lake Wylie CoupleRead the Press Release
CHARLOTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that Jamell Lamon Cureton, 24, and Malcolm Jarrel Hartley, 23, were both sentenced to life in prison without parole in connection to the 2014 double-murder of Douglas and Deborah London in Lake Wylie, S.C., and related charges. Cureton was also sentenced to life in prison for the 2013 murder of Kwamne Donqurius Clyburn in Charlotte. U.S. District Judge Max O. Cogburn, Jr. presided over today’s sentencing hearings.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Chief Kerr Putney of the Charlotte-Mecklenburg Police Department; and Sheriff Kevin R. Tolson of the York County Sheriff’s Office in South Carolina join U.S. Attorney Rose in making today’s announcement.
“Today, the Court handed down life sentences to Cureton and Hartley for the murders of three innocent people whose families are still dealing with the loss of their loved ones. May these sentences bring some sense of peace for those grieving families,” said U.S. Attorney Rose. “Our message to these violent gangs: We are resolute, we are prepared and we will ensure you are punished mightily for gang violence and community intimidation.”
According to previous court filings, admissions contained in filed plea documents and today’s sentencing hearings:
Beginning at least in or about 2012, Cureton, Hartley and their co-defendants were members of the United Blood Nation gang (UBN or Bloods) in Charlotte. As UBN members, the defendants carried out violent acts for the purpose of protecting and furthering the gang’s power. Court documents show that the defendants operated according to a common set of Bloods’ rules and participated regularly in gang meetings to discuss, among other things, the commission of crimes, including robbery and murder.
Cureton, a.k.a. “Assassin” and “Murda Mel,” is a member of the Charlotte-area UBN and holds the rank of 5-Star General. As early as 2007, Cureton reported his affiliation with the UBN as a Valentine Blood. Law enforcement seized Cureton’s UBN “Book of Knowledge,” wherein he was identified as a 3-Star General and has since been promoted to a 5-Star General. As a 5-Star General, Cureton commanded the gang’s activities in the area. Hartley, a.k.a. “Silent” and “Bloody Silent,” is also a member of the Charlotte-area Valentine Blood set of the UBN. Hartley was “ranked up,” or “promoted,” to a 2-Star General, following the murders of Douglas and Deborah London.
On or about May 25, 2014, Cureton, Nana Yaw Adoma and David Lee Fudge robbed “The Mattress Warehouse” store, owned by the victims, Douglas and Deborah London, in Pineville, N.C. Federal charges were subsequently filed against Cureton, Adoma and Fudge in connection with the robbery. In the months that followed, Cureton communicated with Hartley and other UBN gang members and associates, including co-defendants Daquan Lamar Everrett, Randall Avery Hankins, II, Nehemijel Maurice Houston, Briana Shakeyah Johnson, Ibn Rashaan Kornegay, Centrilla Shardon Leach, and Rahkeem Lee McDonald to plan the murders of Douglas and Deborah London. In a letter Cureton sent from prison, Cureton explained that he ordered the murder of Douglas London because the victim was going to testify against him in court, and described Deborah London as “collateral damage.” The gang’s leadership authorized Hartley to proceed with the murder, and on or about October 23, 2014, Johnson drove Hartley to South Carolina, where Hartley shot and killed Douglas and Deborah London at their home.
Following the Londons’ murders, UBN leadership directed the gang members to “lay low” and to avoid contact with law enforcement. Cureton also told Hartley that from that point forward the topic of the victims’ murders was forbidden to be discussed and authorized action against any person who talked about it.
In addition, on August 22, 2013, Cureton, Adoma and Akheem McDonald murdered Kwamne Donqurius Clyburn, after luring him to Pressley Road Neighborhood Park, in Charlotte. Cureton admitted in court papers that the three gang members murdered Clyburn because they suspected that Clyburn was “false claiming” (falsely claiming to be a Bloods member), and because Clyburn failed a “DNA check,” meaning that they could not verify Clyburn’s claim to be a Blood.
In September 2016, Cureton pleaded guilty to a total of 10 criminal counts: two counts of murder in aid of racketeering for the deaths of Douglas and Deborah London; two counts of use and carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the deaths of Douglas and Deborah London; one count of racketeering conspiracy; one count of Hobbs Act robbery; one count of assault with a dangerous weapon in aid of racketeering activity; one count of use or carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence; one count of murder in aid of racketeering for the death of Kwamne Donqurius Clyburn; and one count of use and carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Kwamne Donqurius Clyburn.
Hartley pleaded guilty to a total of five counts: two counts of murder in aid of racketeering for the deaths of Douglas and Deborah London; two counts of use and carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the deaths of Douglas and Deborah London; and one count racketeering conspiracy.
Cureton and Hartley’s co-defendants, Fudge, Everett, Kornegay, Leach, Johnson, Houston and Rahkeem Lee McDonald previously pleaded guilty to federal charges in connection with this prosecution. Sentencing dates for those defendants have not been set.
Three additional defendants, Adoma, Hankins and Ahkeem McDonald currently each face racketeering conspiracy charges. Ahkeem McDonald and Adoma are also charged with murder in aid of racketeering and use and carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Kwamne Donqurius Clyburn. Adoma is also charged with Hobbs Act Robbery, assault with a dangerous weapon in aid of racketeering activity and use or carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence for his role in the mattress store robbery. Randall Hankins is also charged with two counts of murder in aid of racketeering and two counts of use and carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the deaths of Douglas and Deborah London.
The investigation was led by the FBI with the invaluable assistance of CMPD and the York County Sheriff’s Office. In making today’s announcement U.S. Attorney Rose also thanked York County Solicitor Kevin Brackett for his support and assistance throughout the investigation and prosecution of this case.
Assistant U.S. Attorneys Elizabeth Greene and Don Gast are prosecuting the case.
Michigan Man Sentenced to More Than Two Years in Prison for Operating Multi-million Dollar Internet Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – Troy Barnes, 53, of Riverview, Michigan, was sentenced today to 33 months in prison for operating a multi-million dollar Internet Ponzi scheme that defrauded more than 10,000 investor victims worldwide, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Barnes was also ordered to spend three years under court supervision after he is released from prison. Furthermore, Barnes was ordered to forfeit $4.7 million and to pay $302,297 in restitution to victims.
Barnes’ conspirator, Kristine Louise Johnson of Aurora, Colorado, was sentenced previously to 21 months in prison for her role in the scheme.
Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Rose in making today’s announcement.
According to filed court documents and today’s sentencing hearing, Barnes was the owner of “Work with Troy Barnes, Inc.” (WWTB), which did business over the Internet under the name of “The Active Community” (TAC). Barnes was the President and Marketing Director of WWTB responsible for promoting the online scheme. Johnson served as TAC’s Chief Financial Officer, and managed TAC’s day-to-day operations, including the company’s bank accounts.
Filed court documents indicate from about April 2014 to February 2015, Barnes induced victims to invest money in TAC, claiming “Achieve is the answer to all of our prayers…” and falsely promising investors would receive a bogus 700% return on their investment. According to the indictment to which he pleaded guilty, Barnes also told his victims they could make as much money as they wanted claiming the investment was “never-ending,” when, in fact, TAC operated solely as a pyramid scheme and initial investors were paid with later victims’ money. According to the criminal information to which she pleaded guilty, Johnson told victims that TAC was not a pyramid scheme when, in truth and in fact, TAC operated solely as a pyramid scheme.
According to court filings, as the scheme grew in size and scope, Barnes and Johnson concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors, “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.” Even when TAC was unable to operate because their payment processor concluded that TAC was indeed operating a Ponzi scheme and ceased doing business with the company, Barnes and Johnson lied to victims, falsely stating that, “The only reason that [TAC] is not paying out today is that our processor can’t handle the volume of money we are paying our members.”
According to court records, in order to sustain the scheme, Barnes and Johnson encouraged investors to “re-purchase” positions in the matrix, thereby reducing the amount of money needed to pay out to early investors and enabling the fraudsters to prolong the scheme. As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors. By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte area and worldwide. According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment and Johnson misappropriated over $200,000 for her own personal use.
Barnes will be ordered to 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.
The U.S. Secret Service led the investigation. In making today’s announcement, U.S. Attorney Rose thanked the Denver Regional Office of the U.S. Securities and Exchange Commission for its assistance with the case.
Assistant U.S. Attorneys Corey F. Ellis, Daniel Ryan, and Taylor J. Phillips, of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Charlotte Man Sentenced to Two Years in Connection with Jamaican-based Lottery Fraud SchemeRead the Press Release
CHARLOTTE, N.C. –Jahnoy Davis, 25, of Charlotte, was sentenced today to 24 months in prison for his involvement in a Jamaican-based lottery fraud scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also sentenced Davis to two years of supervised release and ordered the defendant to pay $216,619 as restitution to 12 victims.
According to today’s sentencing hearing and documents filed in the case, from January 2015 to March 2016, Davis was part of a Jamaican-based lottery fraud scheme. Court records show that co-conspirators operating in call centers in Jamaica and elsewhere contacted victims and falsely told them they were the winners of sweepstakes and other prizes. These victims were usually elderly and located throughout the United States. According to court records, the co-conspirators told the victims that they needed to pay various fees in order to claim the prizes and directed the victims to mail cash to co-conspirators, including to Davis.
Court records indicate that the cash frequently was concealed in a magazine inside the postal package. Davis recruited a number of individuals to receive packages and conspired with a U.S. Postal employee to divert packages from that employee’s route. For example, in or about August and September 2015, a victim identified as “W.R.” was contacted by the co-conspirators and informed that he was the winner of a $7.5 million sweepstakes prize. The victim was told that in order to claim the prize, he needed to pay fees in advance. On at least seven occasions, the victim mailed cash via the U.S. mail to various addresses within Charlotte, as instructed by the co-conspirators. The victim was never awarded the $7.5 million “prize.”
Court records indicate that, generally, once Davis received the mailed cash from the sweepstakes victims, he would wire the money in small increments to co-conspirators in Jamaica. In order to conceal the nature of the proceeds, as well as the owner of the proceeds, Davis would also recruit other individuals to send the cash to Jamaica in their names. Davis lied to those individuals about the source of the cash and the purpose of the transfers. According to court records, Davis defrauded at least 12 victims between $250,000 and $500,000.
Davis pleaded guilty in January 2017 to one count of money laundering conspiracy. He will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
On April 3, 2017, Antonio Terrell Brown, a former Charlotte-area mail carrier, pleaded guilty to mail theft charges for his involvement the conspiracy. He is currently awaiting sentencing.
In making today’s announcement, U.S. Attorney Rose thanked the U.S. Postal Inspection Service in Charlotte, under the direction of Inspector in Charge David M. McGinnis, and the U.S. Postal Service, Office of Inspector General, under the direction of Area Special Agent in Charge Paul L. Bowman, for leading the investigation into Davis.
Assistant U.S. Attorney Kelli Ferry, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Six Additional Individuals Indicted for $2.5 Million High-Yield Investment FraudRead the Press Release
Six additional individuals were charged in an indictment unsealed today for their roles in a $2.5 million high-yield investment fraud scheme, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
Ludmilda O. Stencil, 46, of Charlotte, North Carolina; Martin Delainie Lewis, 50, of Frisco, Texas; Nicholas Fleming, 63, of Northridge, California; Michael Allen Duke, 48, of Richardson, Texas; Paula Sacccomanno, 59, and Dennis Swerdlen, 61, both of Boca Raton, Florida, were charged with one count of conspiracy to commit wire fraud and mail fraud, 14 counts of mail fraud and 14 counts of wire fraud in a superseding indictment returned on April 19, 2017, in the Western District of North Carolina. Ludmilda Stencil, Lewis and Duke also were each charged with five counts of money laundering.
This superseding indictment also includes previously charged co-defendants Robert Leslie Stencil, Daniel Thomas Broyles Sr. and Kristian F. Sierp. Sierp was previously arrested in Fort Lauderdale, Florida, on separate charges and has been detained pending trial. A trial date has not been set. Defendants Ludmilda Stencil, Martin Delainie Lewis, Nicholas Fleming, Paula Saccomanno and Denis Swerdlen have all been arrested. Michael Allen Duke remains a fugitive.
The indictment alleges that since January 2012, Leslie Stencil, Broyles, Sierp, Ludmilda Stencil, Lewis, Fleming, Duke, Saccomanno and Swerdlen worked to sell stock in Niyato Industries Inc., a Nevada corporation that Robert Stencil owned and operated from Charlotte. Through various publications and sales pitches, the defendants allegedly marketed Niyato as a manufacturer of compressed natural gas (CNG) automobiles and a distributor of CNG fuel that had patented technology, valuable contracts and high-profile executives. According to the indictment, the defendants also sold investors on a promise that Niyato was planning an imminent stock IPO that would reap pre-IPO investors a tenfold return on their investments.
Leslie Stencil, Broyles, Sierp, Ludmilda Stencil, Lewis, Fleming, Duke, Saccomanno and Swerdlen are alleged to have known that, in reality, Niyato had no facilities, products, patents or plans for an imminent IPO, but rather was merely a vehicle for inducing investor funds. Broyles, Sierp, Lewis, Fleming, Duke, Saccomanno and Swerdlen allegedly directed investors to mail or wire funds to Leslie and Ludmilda Stencil, who then allegedly paid half the funds to the investment salespersons and kept the remainder for personal expenses. In addition, Broyles, Sierp, Lewis, Fleming, Duke, Saccomanno and Swerdlen are alleged to have used high-pressure sales tactics to encourage investments from their victims, many of whom were elderly. According to the superseding indictment, Sierp, Lewis, Fleming and Duke operated under fake names while marketing Niyato stock subscriptions.
According to the superseding indictment, Leslie Stencil, Broyles, Sierp, Ludmilda Stencil, Lewis, Fleming, Duke, Saccomanno, Swerdlen and their co-conspirators were responsible for causing at least $2.5 million in losses to more than 140 U.S. citizens and businesses.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The U.S. Postal Inspection Service and Internal Revenue Service-Criminal Investigation are investigating this case, which was supervised by the Criminal Division’s Fraud Section. Fraud Section Trial Attorneys William Bowne, Gustav Eyler and Christopher Fenton are prosecuting the case.
Federal Indictment Charges A Charlotte Man, His Wife, and His Mother with Conspiracy to Sex Traffic Three Minors and Related ChargesRead the Press Release
CHARLOTTE, N.C. – A Charlotte man, his wife, and his mother are facing federal charges for engaging in a conspiracy to sex traffic three minor victims and related charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. A federal grand jury returned the eight count indictment on April 20, 2017, charging Zerrell Ross Fuentes, 22, Brianna Leshay Wright, a.k.a. Brianna Fuentes, 24, and Tanya Marie Fuentes, 53, all of Charlotte, with one count of sex trafficking conspiracy, two counts of sex trafficking of a minor, and three counts of transportation of a minor to engage in prostitution. Brianna Wright and Tanya Fuentes are also charged with one additional count of sex trafficking of a minor.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department join U.S. Attorney Rose in making today’s announcement.
The federal indictment alleges that between April 28, 2016 and May 8, 2016, the three defendants conspired with each other to recruit, entice, harbor, transport, provide and obtain by any means three minors, for the purpose of engaging in commercial sex act. The indictment also alleges that the minors were transported across state lines for the purposes of prostitution.
Specifically, the indictment alleges that Zerrell Fuentes, while in jail, used a telephone to recruit three minor victims living in Charlotte to engage in commercial sex acts for his benefit, knowing the minor victims were not yet 18 years of age. The indictment further alleges that Zerrell Fuentes used the telephone to arrange for the minor victims’ transportation from Charlotte to Myrtle Beach to engage in commercial sex acts for his benefit. Specifically, according to allegations contained in the indictment, the proceeds from the conspiracy would be used to pay Zerrell Fuentes’ bond so he could get out of jail.
According to the indictment, Brianna Wright, accompanied by Tanya Fuentes, transported the minor victims from Charotte to Myrtle Beach by car, so the minor victims could engage in commercial sex acts. While in Myrtle Beach, Tanya Fuentes paid for lodging for the two adult women and the minor victims. The indictment also alleges that Brianna Wright facilitated the placement of advertisements on the Internet, advertising the minor victims for commercial sex acts. She also provided her own telephone number on the ads, as a means of communication to arrange “dates” between the minor victims and customers, where the minor victims would be caused to engage in commercial sex acts. Brianna Wright also transported the minor victims to and from the arranged prostitution “dates.”
Zerrell Fuentes is currently in custody on a federal firearms violation and will appear in court on the sex trafficking charges. Brianna Wright and Tanya Fuentes will have their court appearances this morning before U.S. Magistrate Judge David Cayer.
The penalty for each of the eight sex trafficking related offenses is a mandatory minimum of 10 years and a maximum of life in prison and a $250,000 fine. Zerrell Fuentes is also facing a maximum penalty of up to 10 years in prison and a $250,000 fine for the unrelated firearms offense.
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.
The investigation was handled by the FBI, HSI and CMPD. Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte, is prosecuting the case.
Federal Collection Action Against Convicted Fraud Defendants Nets 177-Acre Addition to Pisgah National ForestRead the Press Release
ASHEVILLE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that 177 acres of land have been added to the Pisgah National Forest, as a result of efforts of law enforcement in collaboration with the Carolina Mountain Land Conservancy (CMLC). The land, known as the “Hoot Owl Tract,” was pursued by the Department of Justice in a criminal action.
“The acquisition of 177 acres of land connects approximately 100,000 acres of the Pisgah National Forest with a previously isolated 1,500 acres of national forest land. I want to thank the USDA and the Carolina Mountain Land Conservancy for partnering with my Office to make this transfer possible. As a result of this collaboration, the added acreage of national forest land ensures the protection of viable natural resources. It will also bring enjoyment to visitors for generations to come,” said U.S. Attorney Rose in a statement today.
The action resulted from the 2003 prosecution of Robert and Viki Warren, and others. In that case, the court sentenced the Warrens for their role in a massive crop insurance fraud. As a result of the fraud, the Federal Crop Insurance Corporation administered by the U.S. Department of Agriculture (“USDA”) paid millions of dollars to the conspirators for fraudulent crop damage claims by Warren Farms, including claims related to tomato damage. As part of the sentence, the Court ordered defendants to pay $9,150,603 in restitution to USDA for its losses, as well as a $7.3 million forfeiture money judgment representing the proceeds of the fraud as agreed upon by the parties.
In and around 2015 and 2016, in an effort to collect on the forfeiture money judgment and restitution, law enforcement identified that the Warrens owned the Hoot Owl Tract under the name of a limited liability company known as Mountaintop Farms, LLC. Ultimately, through negotiations with defendants, the United States obtained an agreement for transfer of the land from defendants, through CMLC, to USDA, in partial satisfaction of restitution owed as a result of the fraud.
The Hoot Owl Tract includes trout waters and tributaries to the Mills River, which supply drinking water to residents of Henderson and Buncombe Counties. The deal reached in the criminal case for transfer of the Hoot Owl Tract to USDA protects vital natural resources for this generation and beyond.
In making today’s announcement, the U.S. Rose commended the work of the U.S. Forest Service, and CMLC.
The Civil Division of the U.S. Attorney’s Office represented the United States in the forfeiture action. Assistant U.S. Attorneys Richard Edwards and Don Gast handled the criminal prosecution of the defendants.
Man Sentenced to 10 Years for Using an Improvised Explosive Device to Damage A BuildingRead the Press Release
ASHEVILLE, N.C. – United States Attorney Jill Westmoreland Rose announced today that Larry Dean Bowlsby, 49, of Warrenton, Missouri, was sentenced by U.S. District Judge Martin Reidinger to 10 years in prison for detonating an improvised explosive device inside a Walmart store in 2007. Bowlsby was arrested in Missouri on May 24, 2016, and pleaded guilty to the charges in the Western District of North Carolina on October 2016.
C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Robert Schurmeier, Director of the North Carolina State Bureau of Investigation; Chief Davis Woodard of the Sylva Police Department; and Sheriff Chip Hall of the Jackson County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.
According to filed court documents and today’s sentencing hearing, sometime prior to September 26, 2007, Bowlsby constructed a destructive device, that being a pipe bomb. Court records indicate that on September 26, 2007, Bowlsby entered the Walmart in Sylva, N.C., accompanied by two minors. Once inside, Bowlsby took and used a shopping cart. He had placed the pipe bomb in the bag of one of the minors, but removed it once he was inside the store. According to court records, Bowlsby separated from the minors and took the cart and the pipe bomb to the camping supplies section of the store. He placed the pipe bomb among the small propane cylinders for camp stoves, ignited the device, and left the area. The device detonated and caused an explosion. Court records show that five people were nearby when the device exploded and had to be taken to the hospital for minor injuries inflicted by the explosion. Also, the Walmart store and some merchandise were damaged by the bomb. Bowlsby and the two minors drove away in Bowlsby’s vehicle.
According to court records, investigators captured video footage from the store security cameras that depicted Bowlsby and the two minors inside the store, and his vehicle in the parking lot. Law enforcement were also able to recover Bowlsby’s fingerprint from the shopping cart. Law enforcement ran the print against national databases in 2007 with no success; however, they ran it again in 2016 and the print matched Bowlsby.
According to court records, on January 9, 2008, the Colorado State Patrol stopped Bowlsby’s vehicle, which was the same as the one driven by Bowlsby during the 2007 incident in Sylva. Law enforcement located four incendiary devices made from tennis balls, black powder, electrical tape, and fuses. Bowlsby was arrested and eventually pleaded guilty to charges relating to the tennis ball bombs. Bowlsby’s fingerprints were entered into the national database, which enabled the successful fingerprint search in 2016.
Bowlby 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 Rose praised the work the ATF, SBI, the Sylva Police Department and the Jackson County Sheriff’s Office, which handled the investigation.
Assistant U.S. Attorney Don Gast of the U.S. Attorney’s Office in Asheville prosecuted the case.
Federal Indictment Charges Council Member and Fire Chief for the City of Tryon, N.C. with Conspiracy to Commit FraudRead the Press Release
ASHEVILLE, N.C. – A federal indictment was unsealed in U.S. District Court today, charging Leroy Miller, Jr., 51, and Joseph Samuel Davis, 42, both of Tryon, N.C., with federal program fraud conspiracy, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The indictment also charges Miller with three additional counts, including federal program fraud, extortion under color of official right and witness tampering. The indictment was returned under seal by a federal grand jury sitting in Asheville on April 4, 2017, and remained under seal until Miller’s arrest earlier today.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation join U.S. Attorney Rose in making today’s announcement.
“Violating the trust of the public deserves swift and sure action by prosecutive authorities,” said U.S. Attorney Rose. “Today, on behalf of the citizens of Tyron, my office responded with an indictment against these two individuals who egregiously abused the trust bestowed upon them by the people.”
“The individuals arrested today are accused of stealing from the very system they were entrusted to support. The FBI and our law enforcement partners will investigate those who prey on programs that provide essential services to our citizens for their personal gain,” said Special Agent in Charge Strong.
“The public holds government officials to a high standard, and when that public trust is broken, we all suffer,” said SBI Director Schurmeier. “The SBI will continue to place a high priority on public corruption cases such as this one in Polk County, and we sincerely appreciate the diligent work of the U.S. Attorney’s Office in prosecuting this case.”
According to allegations in the indictment, over the course of the alleged conduct, Davis served the fire chief of the Tryon Fire Department. Beginning in January 2012, Davis was also appointed as Tryon’s interim, and later permanent, town manager. The indictment alleges that during the relevant time period, Davis received an increase in his salary of more than $5,000 per year, for serving as fire chief and town manager. The indictment further alleges that during this time, Miller was an elected member of the Tryon town council. In his position as a town council member, Miller had the power to affect and influence appointments, including that of Davis as interim and permanent town manager.
As detailed in the indictment, from at least April 2012, Miller began soliciting money from Davis. The two defendants reached an agreement whereby Davis would pay some of Miller’s personal bills in exchange for Miller’s championing within the town council for Davis to receive a higher salary, among other things. Miller sometimes made his solicitations for money in person or by telephone, and sometimes by text and email messages. The indictment alleges that from time to time, when he made these solicitations of money, Miller reminded Davis that Miller was in a position to help the fire department with a budget increase, that he had the power to affect Davis’s appointment as town manager and his retention of that position, and that Miller had the power to affect Davis’s salary in both positions.
Until in or about April 2016, Davis gave money to Miller out of Davis’s personal funds. Beginning in or about April 2016, Davis had insufficient personal funds to pay Miller when Miller solicited money from him. Davis therefore wrongfully used the town’s credit cards, on multiple occasions, to pay for Miller’s personal expenses, including to pay Miller’s utilities and cable bills and Miller’s auto insurance premiums.
The indictment alleges in September 2016, Tryon’s new town manager would assume that post, and as a result Davis would return to being solely the fire chief and therefore his salary would be lowered. On or about October 21, 2016, Davis sent Miller a text message discussing the strategy and language that Miller should use in attempting to protect Davis’s salary. Miller responded a few minutes later, asking Davis to send him what Davis wanted him to say. On the same day, Miller sent a text message to the new town manager stating that they needed to meet to discuss a budget amendment about salaries, and “specifically to Joey Davis [sic] salary.”
On or about November 8, 2016, Miller sent a text message to Davis asking if he could possibly pay one utility. That same day, Davis told Miller via text message that he could not “run anything through the town anymore with [the new town manager] checking behind me on all my expenditures.”
The indictment further alleges that in addition to obtaining payments of his personal bills using the town’s credit cards, Miller also solicited Davis to participate in a bill-padding and kickback scheme. On or about March 23, 2016, a private contractor (“the contractor”) submitted a bid for construction work on municipal buildings of the town. Davis, as town manager, was responsible for choosing a contractor, and he approved the contract. As a town council member, Miller was aware of the contract. In May 2016, Miller asked Davis for $2,500, and suggested Davis inflate the contractor’s bill by that amount and give the extra money to Miller. Davis, however, did not inflate the contract, and Miller therefore received no money from this proposed scheme.
According to the indictment, beginning in January 2017, Davis told Miller that he had been contacted by the SBI regarding Tryon town funds being used to pay for Miller’s personal bills. Miller advised Davis not to say anything, but that the money was from the town’s “needy fund” and that Davis anticipated the money would be repaid. Miller also advised Davis to get rid of his emails and text messages and to make sure that he did not “have a trail.” Later the same month, the indictment alleges that Davis again met with Miller and told him that the FBI as well as the SBI had now contacted him and wanted to speak with him. Miller again told Davis several times during this meeting to inform the FBI and SBI that Davis made the payments out of the “needy fund” and that he thought the money would be reimbursed. When Davis said that he had “things” on his phone, Miller told him he to wipe it clean.
Miller’s initial appearance is scheduled for 12:00 p.m. today in federal court before U.S. Magistrate Judge Dennis Howell. Davis is also expected to appear in court on the charges pending against him.
The conspiracy charge carries a maximum prison term of five years and a $250,000 fine. The federal program fraud charge carries a maximum prison term or 10 years and a $250,000 fine. The extortion under color of official right charges carries a 20-year maximum prison term and a $250,000 fine. And the witness tampering charge carries a maximum prison term of 20 years and a $250,000 fine.
The charges contained in the indictment are allegations. The defendants are innocent until proven guilty, beyond reasonable doubt, in a court of law.
In making today’s announcement, U.S. Attorney Rose commended the FBI and SBI for their investigation of this case. U.S. Attorney Rose also thanked District Attorney Greg Newman of North Carolina’s Judicial District 29B, which encompasses Henderson, Polk and Transylvania counties, for his office’s assistance with this case.
Assistant U.S. Attorney Richard Edwards, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution.
Federal Prosecutors Warn Potential Tax Cheats: Tax Crimes Result in Criminal Prosecution, Lengthy Prison Sentences, and FinesRead the Press Release
CHARLOTTE, NC - With the deadline for filing income tax returns rapidly approaching, Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office, jointly announce recent tax fraud prosecutions and sentencings, and deliver a powerful warning to those who are thinking about breaking the law by committing tax crimes.
“As tax filing season reaches its peak, we are putting would-be tax cheats on notice: My office will prosecute those who try to cheat the tax system at the expense of honest taxpayers who file their returns on time and pay the taxes they owe. Our tax system is built on voluntary compliance and tax criminals who do not pay their fair share increase the tax burden on law-abiding taxpayers,” said U.S. Attorney Rose.
“The 2017 income tax filing season is soon coming to a close, however, special agents of the IRS – Criminal Investigation work year-round to combat criminal violations of the Internal Revenue Code and related financial crimes. Agents in the Charlotte Field Office have pursued, and will continue to pursue, those who prepare returns fraudulently, steal and misuse identities, and those who take extraordinary measures to conceal their income in an effort to evade their tax responsibility,” said Special Agent in Charge Thomas J. Holloman, III. “To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share and we will work vigorously to pursue those who do not.”
TAX EVASION AND FILING FALSE TAX RETURNS
Over the last year, the U.S. Attorney’s Office has prosecuted and convicted numerous individuals for omitting income from their individual tax returns, and defendants have received prison sentences for tax charges. For example, the following individuals have been prosecuted for lying to the IRS about their taxable income:
Matthew Moretz, 31, of Taylorsville, N.C., pleaded guilty to one count of filing a false tax return. From April 2010 to March 2011, Moretz collected unemployment income from the North Carolina Division of Employment. However, beginning in or about March 2010 and continuing through in or about 2013, Moretz was self-employed as the owner of MJM Recycling, a scrap metal business. From tax year 2010 through tax year 2013, Moretz earned additional personal income totaling approximately $529,622.44 that Moretz failed to report on his U.S. Individual Income Tax Returns Form 1040 filed with the IRS. As a result of the unreported taxable income, Moretz had additional tax due and owing of approximately $116,409.38 from 2010 to 2013. Moretz is currently awaiting sentencing.
Patrick Emanuel Sutherland, 48, of Charlotte, was convicted of filing false tax returns and obstructing a federal grand jury investigation. Court documents and trial evidence showed that, from at least 2007 to 2015, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries. Between 2007 and 2010, Sutherland engaged in an elaborate scheme to conceal a substantial amount of income, including filing false tax returns with the IRS which underreported business receipts and personal income of approximately $2 million in income received from an offshore bank account in Bermuda, as well as from domestic sources. Sutherland is currently awaiting sentencing.
Reuben T. DeHaan, 44, of Kings Mountain, N.C., was sentenced to 24 months in prison for tax evasion and possession of an unregistered firearm. DeHaan owned a holistic medicine business, which he operated out of his residence in Kings Mountain under the names Health Care Ministries International Inc. and Get Well Stay Well. During the years 2008 through 2014, DeHaan earned more than $2.7 million in gross receipts from his holistic medicine business, but failed to file income tax returns for those years and evaded approximately $678,000 in income taxes due and owing. DeHaan was also ordered to pay 567,665 in restitution to the IRS and $110,449 to the state of North Carolina.
FRAUDULENT RETURN PREPARERS AND STOLEN IDENTITY REFUND FRAUD
Our office diligently works to investigate and prosecute unscrupulous tax return preparers. Examples of prosecutions of tax return preparers during the last year include:
Ramos, formerly of Lincolnton, N.C., was previously sentenced to 48 months in prison for her role in a false claims conspiracy. The conviction stemmed from Ramos’s role in a conspiracy to defraud the government by filing fraudulent tax returns seeking refunds totaling more than $5 million, by using stolen identity information of individuals in Puerto Rico. Ramos fled the United States and failed to report to federal prison after the sentencing. She is awaiting sentencing on charges of obstruction of justice and failure to report and faces additional jail time and fines.
In addition to prosecuting tax evaders and fraudulent tax return preparers, our office also investigates and prosecutes individuals who steal taxpayers’ identities to file fraudulent tax returns. Examples include:
Cara Michelle Banks, Carmichael Cornilus Hill, and Priscilla Lydia Turner conspired with Senita Dill and Ronald Jeremy Knowles, and others, to file false federal and state tax returns using stolen personal identifying information. From 2009 to 2012, this conspiracy defrauded the United States Treasury of over $3.5 million. Banks, Hill, Turner and others stole personal identifying information and then provided it to Dill to file the false returns in exchange for payment. Dill and Knowles used stolen personal information to file over 1,000 false tax returns. Court records show that Hill provided approximately 26 percent of the stolen identifications used to file the fraudulent returns. In 2016, Banks and Hill were sentenced to 70 months and 75 months in prison, respectively. In November 2016, Turner pleaded guilty to aggravated identity theft and is currently awaiting sentencing. Senita Dill was sentenced to 324 months and Knowles to 70 in prison for their roles in the conspiracy.
EMPLOYMENT TAX FRAUD
Our office further investigates the abuse of employment tax fraud such as:
Frank Alton Moody, II, 57, of Arden, the co-founder and former Chairman of the Board of CenterCede Services, Inc., a payroll services company, was ordered to serve 30 months in prison, two years in supervised release, and to pay $2,146,380.97 as restitution, for conspiring to steal over $2 million from client companies. Moody’s co-conspirators, Jerry Wayne Overcash and John Bernard Thigpen, were previously sentenced to 46 months and 21 months in prison, respectively. The three men used the more than $2 million they stole from client companies to fund their exorbitant salaries. Overcash and Thigpen were also ordered to jointly pay $1.3 million as restitution to the victim client companies.
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud. Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shutdown scams and to prosecute the criminals behind them. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
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Phishing
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Phone Scams
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Identity Theft
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Return Preparer Fraud
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Fake Charities
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Inflated Refund Claims
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Excessive Claims for Business Credits
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Falsely Padding Deductions on Returns
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Falsifying Income To Claim Credits
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Abusive Tax Shelters
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Frivolous Tax Arguments
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Offshore Tax Avoidance
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Education is the best way to avoid these common schemes. To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov. Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.
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Fourteen Methamphetamine Traffickers Sentenced to PrisonRead the Press Release
STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down prison terms ranging from 188 months to 24 months to 14 methamphetamine traffickers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) in Atlanta and the Carolinas; Robert Schurmeier, Director of the North Carolina State Bureau of Investigation; Colonel Glenn McNiel of the North Carolina State Highway Patrol;Chief Thurman Whisnant of the Hickory Police Department; Sheriff Coy Reid of the Catawba County Sheriff’s Office; Sheriff Chris Bowman of the Alexander County Sheriff’s Office; Chief Damon D. Williams of the Mooresville Police Department; and Sheriff Darren Campbell of the Iredell County Sheriff’s Office
The 14 defendants sentenced over the past three days in U.S. District Court in Statesville are:
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Irving E. Rodriguez-Munguia, 24, of Mexico, was sentenced to 188 months, followed by five years of supervised release. (5:15-cr-77)
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Reginald Jerry Shaw, 42, of Charlotte, was sentenced to 151 months, followed by five years of supervised release. (5:16-cr-46)
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Alexis Noe Bautista, 36, of Mexico, was sentenced to 121 months, followed by five years of supervised release. (5:16-cr-13)
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Steven Glenn Burke, 32, of West Jefferson, was sentenced to 120 months, followed by five years of supervised release. (5:16-cr-40)
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Zachary Robert Testerman, 27, of Millers Creek, was sentenced to 77 months, followed by five years of supervised release. (5:16-cr-46)
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Gary Joseph Phipps, 31, of West Jefferson, was sentenced to 65 months, followed by three years of supervised release. (5:16-cr-47)
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Christopher Gray Young, 34, of McMinnville, Tennessee, was sentenced to 65 months, followed by five years of supervised release. (5:16-cr-53)
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Hanna Lee Raymer, 38, of Mooresville, was sentenced to 60 months, followed by four years of supervised release. (5:16-cr-48)
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Kenneth Otto Jones, 51, of Hickory, was sentenced to 60 months, followed by four years of supervised release. (5:16-cr-60)
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Heather Lynne Bostian, 32, of Statesville, was sentenced to 57 months, followed by three years of supervised release. (5:16-cr-61)
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Mark Monroe Goings, 45, of Mount Airy, was sentenced to 50 months, followed by two years of supervised release. (5:16-cr-59)
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Rhiannon Nicole Forrest, 33, of Statesville, was sentenced to 46 months, followed by three years of supervised release. (5:16-cr-56)
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Tammy Lynn Paris, 50, of Jasper, Georgia, was sentenced to 46 months, followed by three years of supervised release. (5:16-cr-44)
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Kristy Hope Eastridge, 33, of Crumpler, was sentenced to 24 months, followed by six years of supervised release. (5:16-cr-47)
All of the defendants were charged as part of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) investigation, which, since 2015, has resulted in the prosecution of more than 150 individuals. Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars. Over the course of the investigation, law enforcement seized far in exces s of 20 kilograms of crystal methamphetamine, $500,000 in U.S. currency and other assets, and dozens of firearms.
OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
In making today’s announcement U.S. Attorney Rose thanked all the law enforcement agencies for their investigative efforts. Assistant U.S. Attorney Steven R. Kaufman, of the U.S. Attorney’s Office in Charlotte, prosecuted the cases.
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Charlotte Man Convicted of Murder and Robbery Following Two-Week TrialRead the Press Release
CHARLOTTE, N.C. – A federal jury has convicted Damarcus Donte Ivey, 35, of Charlotte, of Hobbs Act robbery and committing murder while using and possessing a firearm during and in furtherance of the robbery, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr. presided over the two-week trial, which ended yesterday afternoon.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.
According to court documents, evidence presented at trial and witness testimony:
On September 10, 2009, Ivey and Kevin Bishop robbed Club Nikki’s, located at 3001 Little Rock Road, in Charlotte. Over the course of the robbery, Ivey and Bishop pointed guns at the club’s patrons and staff, ordered them on the floor, and took personal items from the patrons and cash from the club. Trial evidence showed Ivey take items from the male victim before he fired a shot that killed him. Ivey and Bishop then fled the scene in a Ford F-150. Six minutes after the initial 9-1-1 call, a CMPD officer observed Ivey and Bishop exiting I-85 onto Beatties Ford Road. A chase ensued that ended in a vehicle crash and Ivey and Bishop attempted to flee from CMPD officers on foot. Both men were apprehended by CMPD officers within minutes and were found in possession of proceeds from the robbery. Inside the Ford F-150, officers located the wallet of one of the club’s patron and $355 in cash scattered about the floorboard.
Ivey is currently in federal custody. The Hobbs Act robbery charge carries a maximum prison term of 20 years, and a $250,000 fine. The murder while using a firearm in furtherance of a crime of violence charge carries a mandatory penalty of life in prison. A sentencing date for Ivey has not been set. Kevin Bishop was convicted on state charges in 2014 and was given a 16-20-year sentence for his role in the robbery.
In making today’s announcement, U.S. Attorney Rose said, “I want to thank the Mecklenburg County District Attorney’s Office for their coordination and partnership with my Office in the successful prosecution of this case.”
U.S. Attorney Rose also commended CMPD, the FBI, and the ATF for their investigation of the case.
Assistant U.S. Attorneys Craig Randall and William Bozin, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Former Charlotte-Area Mail Carrier Pleads Guilty to Mail Theft in Connection with Jamaican-based Lottery Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – Antonio Terrell Brown, 31, of Charlotte, a former Charlotte-area mail carrier, appeared before U.S. Magistrate Judge David Keesler today and pleaded guilty to mail theft for his involvement in a Jamaican-based lottery fraud scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
According to today’s guilty plea and court documents filed in the case, from 2005 to June 2016, Brown was employed as a mail carrier with the U.S. Postal Service, and was assigned to deliver mail on a rural route in Charlotte. Court records show that in or about January 2015, Brown was approached by an individual about the possibility of diverting packages from his mail route. Brown agreed to divert the packages in exchange for cash, and provided the individual with a list of addresses to be used for the intercepted packages. According to court records, the intercepted packages contained drugs and cash, which was the proceeds of a Jamaican-based sweepstakes lottery scam.
According to the factual basis filed with his plea agreement, Brown received text messages from the individual, alerting Brown when drug- or cash-laden packages were placed in the mail for delivery to Brown’s route. These texts contained the postal service tracking numbers and delivery addresses for the packages, and instructions on how to deliver the packages to other individuals. Brown intercepted the packages and delivered them to various individuals who approached him on his route. Court records indicate that Brown received approximately $200-$250 for each package he intercepted on his mail route.
According to court records, in or about January 2016, a victim referred to in court documents as “M.A.,” mailed approximately $41,000 in cash to Peter Brown, at an address on Pinewood Drive in Charlotte. The address was one of the addresses that Brown had provided to the individual to be used for the intercepted packages. Brown intercepted the package and delivered it to someone else. Brown then falsely marked the package as “delivered.” The $41,000 contained in the intercepted package was the proceeds of a Jamaican-based lottery sweepstakes scam.
Brown agreed in court documents that the amount of loss that was known or personally foreseeable to him was between $150,000 to $250,000. The offense involved 10 or more victims, court documents indicate.
Brown is currently released on bond. The mail theft charge carries a maximum prison term of five years and a $250,000 fine. Brown has also agreed to pay restitution, the amount of which will be determine by the Court. A date for Brown’s sentencing hearing has not been set yet.
In making today’s announcement, U.S. Attorney Rose thanked the U.S. Postal Inspection Service in Charlotte, under the direction of Inspector in Charge David M. McGinnis, and the U.S. Postal Service, Office of Inspector General, under the direction of Area Special Agent in Charge Paul L. Bowman, for leading the investigation into Brown.
Assistant U.S. Attorney Kelli Ferry, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Former Chairman of the Board of Payroll Services Company Sentenced to 30 Months for ConspiracyRead the Press Release
STATESVILLE, N.C. – Frank Alton Moody, II, 57, of Arden, N.C., the former Chairman of the Board of a payroll services company, was sentenced today to 30 months in prison for conspiring to steal over $2 million from client companies, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Moody was ordered to spend two years under court supervision after he is released from prison and to pay $2,146,380.97 as restitution.
Two of Moody’s conspirators, Jerry Wayne Overcash and John Bernard Thigpen, were previously sentenced to 46 and 21 months, respectively, for their roles in the conspiracy.
U.S. Attorney Rose is joined in making today’s announcement by David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
According to filed court documents and today’s sentencing hearing, Moody was the Chairman of the Board of CenterCede Services Inc. (CenterCede), a payroll services company with clients in Charlotte and elsewhere. CenterCede was established in August 2010 by Overcash and Moody, to assume business operations of The Resource Solutions Group (TRSG). Court documents in related cases indicate that, similar to CenterCede, TRSG had been a payroll services company until it was shut down by IRS in August 2010, for failing to pay more than $9 million in federal payroll taxes TRSG collected from its clients. Moody served as Chairman of the Board at TRSG.
According to court documents, from November 2010 to November 2011, CenterCede purportedly provided payroll preparation and processing services to its clients. As such, CenterCede collected funds from its clients to pay the client companies’ federal tax obligations, gross payroll for the clients’ employees, worker’s compensation, and unemployment insurance, among others, as well as fees due to CenterCede. Contrary to their representations to clients, the conspirators did not pay the clients’ federal taxes in appropriate amounts and by the applicable deadlines.
According to court records, Moody and his conspirators did not remit to the IRS the full tax liabilities of CenterCede’s clients. Instead, the conspirators diverted client funds, which were used to pay the exorbitant salaries of Moody, Overcash and others, and to cover CenterCede’s growing liabilities.
To keep the scheme afloat, the conspirators paid only those obligations necessary to keep their ongoing cash flow crisis a secret from clients. As reflected in court documents, the conspirators favored what they called “priority” clients, attempted to keep those priority clients from learning about monthly cash shortfalls and frequently paid those clients’ obligations ahead of other non-priority clients. “Priority” clients generally had large payrolls with deposits necessary to fund CenterCede’s short-term cash needs and keep the scheme afloat.
Court records show that when clients inquired about failures to pay obligations, the conspirators took steps to conceal the fraud by providing false excuses and misleading explanations. Moody pleaded guilty to one count of conspiracy in October 2016.
Moody will be ordered to 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.
The investigation was led by USPIS and IRS-CI. Assistant U.S. Attorneys Corey F. Ellis and Taylor J. Phillips, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Federal Indictment Charges Murphy, N.C. Man with Wire Fraud for $800,000 Investment Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – A criminal indictment was returned by a federal grand jury charging Alan Peter Darcy, 78, of Murphy, N.C., with wire fraud for orchestrating an $800,000 investment fraud scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
North Carolina Secretary of State Elaine F. Marshall and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the indictment, in or about February 2012 through at least June 2016, Darcy engaged in a scheme to defraud multiple victims of more than $800,000 by inducing them to invest in a variety of bogus financial instruments and products, such as fraudulent “cash flow contracts,” “Joint Participation Agreements,” and leased “Bank Guarantees.” As alleged in the indictment, Darcy claimed to provide various types of project funding and private banking services through Sceptre LLC (Sceptre), Mission 1, LLC (Mission 1), and related entities which Darcy controlled. Darcy further claimed that he had access to, and multiple successes with, specialized opportunities for obtaining private banking instruments and engaging in lucrative trading opportunities not available to the general public.
The indictment alleges that, through multiple lies and deception, Darcy stole approximately $250,000 from a charitable foundation (Victim Foundation) by falsely representing that the Victim Foundation’s money would be used “to leverage an arbitrage-styled financial investment,” which would result in substantial ongoing monthly payments to the Victim Foundation. The indictment also alleges that Darcy stole approximately $49,000 from a victim-investor by falsely promising he would use her money to create a “private, passive Trust” to generate substantial monthly distributions totaling approximately $1,000,000. The indictment further alleges that Darcy stole approximately $100,000 from another victim and his affiliates by falsely promising that, among other things, the money would be used to lease a “Bank Guarantee” from an international bank to obtain monthly distributions totaling over $10 million. Similarly, Darcy fraudulently induced a victim-investor and his affiliates to send him via wire transfers approximately $60,000 by falsely promising to generate a return of $1.5 million using a “private bank guarantee.”
According to the charges, Darcy also induced victims to part with their money by making false and fraudulent representations about the manner in which victims’ money would be used or invested, and about when and how Darcy and his businesses would be compensated. For example, the indictment alleges that Darcy falsely told certain victims that their investments were fully refundable and that they would be placed in a safe escrow or custodial account. Darcy also told victims that his businesses would be contributing money to the proposed transactions, and that Darcy and his businesses would be compensated only out of profits from the successful completion of the proposed transactions.
As alleged in the federal indictment, contrary to his representations, Darcy did not hold the victims’ money in escrow or create trust accounts for the victims. Instead, Darcy deposited the money into bank accounts he controlled and spent more than $400,000 of the victims’ money to fund his personal lifestyle, including through large amounts of cash withdrawals and personal expenditures such as pet care, entertainment, travel and the purchase of a used Jaguar automobile.
When questioned by victims as to why he was not able to return their money, the indictment alleges that Darcy gave a number of false excuses, including that all international banks had taken “annual holiday.”
The indictment charges Darcy with one count of wire fraud, and he has been ordered to appear in court on a summons. The maximum statutory penalty for the offense is 20 years in prison, a $250,000 fine, or both. All the charges contained in the indictment are allegations. The defendant is presumed innocent until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Rose thanked the North Carolina Secretary and the FBI for leading the joint investigation. Assistant U.S. Attorneys Daniel Ryan and Daniel Bradley of the U.S. Attorney’s Office are in charge of the prosecution.
U.S. Attorney’s Office to Host Seminar in Asheville on Friday, March 31, 2017, on Investment Fraud Schemes Targeting Elderly Investors
The U.S. Attorney’s Office, together with invited guest speakers from the U.S. Securities and Exchange Commission, will host a seminar on Friday, March 31, 2017, from 10:00 a.m. to 12:00 p.m., at the University of North Carolina – Asheville, Highsmith Student Union, Suite 220. The purpose of the seminar is to educate elderly investors on avoiding investment fraud schemes and safeguarding their savings from potential fraudsters.
“There are many types of financial fraud scams that target seniors. As a result, millions of older Americans become victims of financial fraud each year. Perpetrators of financial investment schemes often prey upon older investors, and use a number of tactics and false promises of high returns on investments to convince victim-investors to hand over large portions, if not all, of their savings. Often, by the time the fraud is uncovered, the financial losses sustained by the older investors are devastating and with little hope of financial recovery,” said U.S. Attorney Jill Westmoreland Rose, in announcing the seminar. “That is why financial fraud education is so important. The upcoming seminar is an opportunity to educate seniors about different types of financial investment schemes, the red flags to look out for and some of the ways they can protect themselves from financial investment fraud. Sadly, we come across too many financial fraud victims who might have avoided getting ripped off if they had only known to ask, and insisted upon receiving answers to, some basic question from the beginning.”
The seminar will cover a broad range of topics, including the most common types of investment fraud scams targeting the elderly, red flags to watch out if approached by someone touting an investment opportunity, tips on how to avoid becoming the victim of an investment scheme, and who to contact to report a suspicious investment offer or if you have been the victim of an investment scam. An open discussion and Q&A session will follow the speakers’ presentations.
The seminar is open to the public. Registration is not required. RSVPs are encouraged to ensure adequate seating. To RSVP attendance please email [email protected]. For questions please call Lia Bantavani at (704) 338-3140.
Two Sentenced to Life in Prison for the Armed Robbery, Kidnapping and Murder of Charlotte ManRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that Carlos Antoine Benson and Jacob Ivan Hill were sentenced to life in prison by Chief U.S. District Judge Frank D. Whitney, in connection with the 2014 armed robbery, kidnapping and murder of a Charlotte man. Benson was ordered to serve two consecutive life sentences, and both defendants were ordered to pay $6,750 as restitution.
Benson, 37, and Hill, 36, both of Charlotte, were convicted by a federal jury in September 2016 of all charges in the federal indictment, including Hobbs Act robbery and crimes resulting in murder.
C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department join U.S. Attorney Rose in making today’s announcement.
According to filed court documents, trial evidence, witness testimony and information introduced at the sentencing hearing:
On November 12, 2014, Benson and Hill robbed an individual at gunpoint from whom Hill had been purchasing small amounts of cocaine. Benson and Hill told the individual they wanted to get in touch with his supplier (the victim), causing the individual, at gunpoint, to hand over his cell phone to Hill. Pretending to be the individual, Hill called the victim and arranged to meet on the same day at the parking lot of an apartment complex in Charlotte to purchase drugs. Benson and Hill warned the individual they would “off him” if he tried to alert the victim to the plan.
At the designated location, Benson, armed with a handgun, hid in the back of the individual’s parked vehicle, while Hill walked to a wooded area nearby to serve as lookout for the robbery. When the victim arrived, he entered the parked vehicle and sat in the front passenger seat. Benson sat up behind him and pointed the gun at the victim. Benson told the victim not to flinch, and began to demand the victim’s rings. When the victim reached for a handgun tucked in his pocket, Benson fired his gun, shooting the victim six times, including once in the back of the head. Benson was also wounded.
Immediately after the shooting, Benson approached the victim’s vehicle and observed the victim’s girlfriend seated in the driver’s seat. Benson raised his gun to shoot. The woman, who at the time was four months pregnant, managed to drive away unharmed and called 9-1-1. Benson and Hill fled the scene in Hill’s vehicle. Hill then drove to a secluded cul-de-sac, dropped off Benson in the grass and drove away. Hill was arrested later that same day with firearms and drugs inside his vehicle. Paramedics located Benson in the grass and transported him to the hospital. Upon discharge from the hospital, Benson was arrested.
In announcing today’s sentence, U.S. Attorney Rose said, “Benson and Hill planned and carried out a scheme to rob a suspected narcotics trafficker, ultimately killing him over a small amount of drugs and cash. The two men will now have to spend the rest of their lives in prison for their violent crime. I want to thank the ATF and CMPD for their investigation of this case and for their collaborative efforts to protect our communities from this type of criminal activity.”
“ATF’s mission is to combat violent crime and this investigation achieved that goal. The arrests and subsequent life sentences for Benson and Hill send a clear message that ATF and its law enforcement partners will not allow violent criminals to continue victimizing our communities and neighborhoods,” said Special Agent in Charge Hyman.
Following a two-week trial, Benson and Hill were each convicted of nine charges, including: Hobbs Act robbery and aiding and abetting; conspiracy to commit kidnapping; kidnapping and aiding and abetting; conspiracy to possess with intent to distribute cocaine; possession with intent to distribute cocaine and aiding and abetting; brandishing/discharging a firearm during and in relation to a crime of violence or drug trafficking crime and aiding and abetting; causing death in the course of using, carrying and possessing a firearm and in relation to a crime of violence or drug trafficking crime and aiding and abetting; and possession of a firearm by a convicted felon.
Benson and Hill are 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 sentenced sentences are served without the possibility of parole.
The investigation was led by the ATF and CMPD. Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Forsyth Co. Man Sentenced to Prison for Conspiracy to Distribute Marijuana Through the U.S. Mail and Postal Robbery ChargesRead the Press Release
CHARLOTTE, N.C. – Dorian Dent Williams, 25, Kernersville, N.C., was sentenced late yesterday to 100 months in prison on conspiracy to distribute marijuana through the U.S. mail and postal robbery charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Chief U.S. District Judge Frank D. Whitney ordered Williams to serve three years under court supervision after he is released from prison.
U.S. Attorney Rose is joined in making the announcement by David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.
According to documents filed in the case and yesterday’s sentencing hearing, from about November 2015 to January 9, 2016, Williams operated a marijuana trafficking conspiracy, in which he paid people to receive mailed packages containing marijuana. The packages were sent from Arizona to residential addresses in Charlotte and High Point, N.C. using the U.S. Postal Service. According to court records, on January 9, 2016, a U.S. mail carrier was delivering mail and parcels to a residential neighborhood in Charlotte. Court records indicate that the mail carrier had two parcels addressed to a residence, and was in the process of leaving a delivery notice on the door of the residence when he was approached by a female from a neighboring residence. The female asked for the two packages. The mail carrier refused to give her the packages, indicating they were not addressed to her. The mail carrier was then approached by a male, who stood at the doorway of the postal vehicle and demanded the parcels. The mail carrier again refused to hand them over, threatened to call the police and resumed his mail delivery after the man left.
According to court records, while the mail carrier was still on his delivery route, Williams pulled in front of him in a pick-up truck, blocking his postal vehicle. Then, Williams and another male, who was brandishing a handgun, demanded the two parcels. Court records show that the mail carrier handed over the parcels and the two men drove off in the pick-up truck. Williams previously admitted in court documents that he had arranged for the two packages containing marijuana to be mailed to the residential address on the mail carrier’s delivery route, and that he had been waiting nearby for their delivery. According to court records, over the course of the conspiracy, Williams was responsible for shipping approximately 144 kilograms of marijuana from Arizona to North Carolina utilizing the postal service.
Williams pleaded guilty in October 2016 to one count of conspiracy to distribute and to possess with intent to distribute marijuana, and one count of postal robbery. He remains in the custody of the United States Marshals Service pending placement by the Federal Bureau of Prisons. All federal sentences are served without the possibility of parole.
The investigation was led by USPIS and CMPD. Assistant U.S. Attorney Dana Washington, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Registered Sex Offender Is Sentenced to 50 Years on Child Pornography ChargesRead the Press Release
CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Brady Leon Beck, Jr., 40, of Monroe, N.C. to 50 years in prison on child pornography and related charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Beck was also ordered to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.
Director Robert Schurmeier of the North Carolina State Bureau of Investigation, Chief Kerr Putney of the Charlotte-Mecklenburg Police Department, and Chief Robert C. Helton of the Gastonia Police Department join U.S. Attorney Rose in making today’s announcement.
According to filed court documents and information introduced at the sentencing hearing, in or around June 2014, Beck used his cellular phone to produce an image of child pornography of a three-year-old child victim. In November 2014, court records indicate that law enforcement became aware that Beck had shared child pornography via email with another individual. Law enforcement executed search warrants and seized electronic and computer devices that belonged to Beck. A forensic analysis of the devices revealed that Beck possessed images of children, ranging in age from infant to approximately 15 years of age, being sexually abused. Law enforcement also conducted a search of an email account associated with Beck, and discovered that Beck had sent and received child pornography with others, including sending the images of the three-year-old child victim.
Beck is a registered sex offender, which stems from his 2004 conviction of second-degree rape of a 10-year-old female victim. He pleaded guilty in December 2016 to one count of transportation of child pornography and one count of committing a felony offense involving a minor while registered as a sex offender. Beck 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 led by the SBI, CMPD and the Gastonia Police Department. The U.S. Attorney’s Office in Charlotte prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children. By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov