Western District of North Carolina

CHARLOTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that a federal jury seated in Charlotte has returned guilty verdicts against three United Blood Nation (UBN or Bloods) gang members on multiple charges for crimes related to the gang’s racketeering activities, including three murders.  U.S. District Judge Max O. Cogburn, Jr. presided over the three-week trial, which began on September 21, 2017.

 

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department join U.S. Attorney Rose in making today’s announcement.

 

The jury convicted Randall Hankins, II, a/k/a “Foe,” 23, Nana Yaw Adoma, a/k/a “Ratchet,” 22, and Akheem Tahja McDonald, a/k/a “Lil Keem” or “Savage,” 23, of racketeering conspiracy charges.  Hankins was also convicted of two counts of murder in aid of racketeering, for his role in the 2014 murders of Douglas and Deborah London, and two counts of use or 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 Douglas and Deborah London.

 

Adoma and Akheem McDonald were convicted of one count of murder in aid of racketeering for the 2013 murder of Kwamne Donqurius Clyburn, and one count of use or 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 was also convicted of one count of assault with a dangerous weapon in aid of racketeering and one count of use or carry of a firearm in relation to a crime of violence and possession of firearm in furthertance of a crime of violence, for his role in the armed robbery of a business owned by the Londons.

 

Two co-defendants, Jamell Lamon Cureton and Malcolm Jarrel Hartley, were previously sentenced to life in prison for the murders of the Londons and related racketeering activity charges.  Cureton received a second life sentence for his involvement in the murder of Kwamne Clyburn.  Seven co-defendants have pleaded guilty to racketeering conspiracy charges and are currently awaiting sentencing.  They are: David Lee Fudge a/k/a “Flames” or “Flame;” Daquan Lamar Everett a/k/a “Day Day;” Nehemijel Maurice Houston a/k/a “Mijel” or “Swagg Out;” Briana Shakeyah Johnson a/k/a “Breezy B” or “Breezy V;” Ibn Rashaan Kornegay a/k/a “IB;” Centrilia Shardon Leach a/k/a “CeCe;” and Rahkeem Lee McDonald a/k/a “Hitman” or “Big Keem.”

 

According to court filings, trial evidence, witness testimony, admissions contained in filed plea documents and other court proceedings:

 

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.  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 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 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, Adoma and Fudge robbed “The Mattress Warehouse,” in Pineville, N.C., owned by Douglas and Deborah London.  A federal indictment charged 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 Everrett, Hankins, Houston, Johnson, Kornegay, Leach, and Rahkeem McDonald to plan the murders of the Londons.  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.” 

 

According to evidence presented at trial and witness testimony, after the gang’s leadership authorized Hartley to proceed with the murder, Hankins gave Hartley the gun he used to carry out the murders.  Hankins also gave Hartley a plastic shopping bag and instructed him to wrap the bag around the gun so the spent cartridges would fall in the bag and would not be found at the murder scene.  On or about October 23, 2014, Johnson drove Hartley to South Carolina, where Hartley shot and killed Douglas and Deborah London at their home.  According to trial evidence and witness testimony, sometime after the murders, Hankins sent Kornegay a text with a link to a news story about the couple’s murders.

 

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.  Witnesses testified that Hankins was upset that other gang members had been “ranked-up,” or promoted within the ranks of the gang, as a result of the murders, except him. 

 

Trial evidence also established that on August 22, 2013, Cureton, Adoma and Akheem McDonald murdered Kwamne Donqurius Clyburn, after luring him to Pressley Road Neighborhood Park, in Charlotte.  According to evidence presented at trial, Clyburn sustained seven gunshot wounds by two different firearms.  Two of the gunshot wounds were to the back of Clyburn’s head.  According to witness testimony and as Cureton previously admitted in court papers, Cureton, Adoma and Akheem McDonald 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. 

 

Hankins, Adoma and Akheem McDonald are currently in federal custody.  The maximum penalty associated with the charges of which they were convicted is life in prison.  The defendants’ sentences will be determined by the Court, taking into consideration the federal sentencing guidelines and statutory sentencing factors.  A sentencing date has not been set yet.

                     

In making today’s announcement, U.S. Attorney Rose commended the FBI for their investigation of the case and thanked CMPD for their assistance.  U.S. Attorney Rose also thanked the York County Sheriff’s Office and York County Solicitor Kevin Brackett for their assistance throughout the investigation and prosecution of this case.

 

Assistant U.S. Attorneys Elizabeth Greene and Don Gast are prosecuting the case.

 

 

CHARLOTTE, N.C. – Today, a Charlotte woman pleaded guilty to wire fraud for embezzling money from a non-profit organization that provides charitable assistance to individuals experiencing financial hardships, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Leah S. Belk, 48, of Charlotte, entered a plea of guilty before U.S. Magistrate Judge David S. Cayer.

 

Matthew Quinn, Acting 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 the filed plea agreement and other court documents, from August 2010 to March 2017, Belk engaged in a scheme to defraud her employer (the Company), and an affiliated non-profit organization (the Foundation), of which she was a board member, by embezzling funds intended to provide charitable assistance to employees faced with financial hardships.  According to court records, the Foundation received funding primarily from donations made by the Company’s employees through payroll deductions.

 

Court records show that members of the Foundation’s board of directors, which was comprised of Company employees, evaluated applications received from Company employees to determine whether to award financial assistance based on the employee’s need and the events that contributed to the hardship.  The Foundation typically paid an approved employee’s expenses directly by issuing checks payable to the employee’s mortgage or utility companies to cover the employee’s bills.  The Foundation also purchased Company gift cards to provide to awarded applicants in times of need.

 

According to court records, Belk was an employee of the Company from 1992 until her termination in March 2017.  From 2006 until her termination, Belk was also a member of the Foundation’s board of directors and acted as the Foundation’s secretary.  Court records show that Belk performed administrative tasks in connection with the Foundation’s operations, including: assembling and logging applications reviewed by the board; communicating directly with applicants; coordinating the initiation and processing of checks to be paid on behalf of awarded applicants; and maintaining control over Company gift cards purchased by the Foundation to provide employees in need. 

 

Belk admitted in plea documents and in court today that, beginning in August 2010 through March 2017, she used Foundation funds intended for needy Company employees to pay for personal expenses, including her mortgage and utility bills.  Belk also admitted to falsifying and modifying applications and other Foundation documents to cover the fraud. Specifically, Belk admitted to modifying approved applications and documents after payments had been made to awarded applicants, to cause the issuance of additional checks to cover her own personal expenses using Foundation funds.  Belk also diverted applications from the board, and falsified and reused board approval forms, to approve payments and the issuance of checks to cover personal expenses.  Belk also modified rejected applications to falsely reflect that they had been approved, and, based on the falsified approvals, Belk directed the issuance of checks to pay for her personal expenditures.  Court records also show that Belk used Company gift cards intended for needy employees to make purchases for herself.

 

Over the course of the scheme, Belk falsified documents and diverted payments for her own benefit in approximately 45 separate incidents.  In total, Belk fraudulently diverted more than $77,000 in Foundation funds.

 

Belk pleaded guilty today to one count of wire fraud and was released on bond. The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine.  A sentencing date has not been set yet.

 

U.S. Secret Service led the investigation.  Assistant United States Attorney William Miller, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

 

 CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that $5,270,994 in federal grants have been awarded to local law enforcement agencies, non-profit organizations, and tribal government programs in the Western District of North Carolina.  The federal grants are administered by multiple awarding agencies, which are components of the Justice Department’s Office of Justice Programs (OJP).

 

“Federal grants are an important funding source for a broad spectrum of agencies in the Western District.  Local law enforcement, non-profit service providers, community organizations and tribal governments count on federal grants to supplement their resources, launch new initiatives, support existing programs, and provide important services to their communities.  The awarded grants will be used to enhance the Justice Department’s and my Office’s efforts to reduce violent crime, assist victims of crime, enhance access to services and increase public safety throughout this district,” said U.S. Attorney Rose.    

 

The recipients of the grants are:

 

City of Charlotte: Two federal grants totaling $1,431,708 were awarded to the Charlotte-Mecklenburg Police Department (CMPD). Specifically, $1,125,606 will be used to sustain and expand CMPD’s current testing of Sexual Assault Kits (SAKs), to reduce the existing number of SAKs in its inventory, and to update CMPD’s current technology related to SAKs.  Another $306,102 has been awarded to enhance CMPD’s current DNA analysis process, to reduce the current number of DNA cases and to maintain CMPD’s laboratory capabilities.

Mecklenburg County: The County will receive a total of $718,794 in federal grants, of which $368,798 will be used to support the County’s implementation of the Mecklenburg County Systemic Response Plan to the opioid crisis, including, to gather information about and enhance services to targeted populations. The Mecklenburg County Community Support Services Department will receive a $349,996 federal grant, to provide housing and supportive services to 20 victims of domestic violence, sexual assault, dating violence or stalking and their families.

Eastern Band of Cherokee Indians (EBCI): As the recipients of three federal grants totaling $1,720,442, EBCI will apply the awarded funds to combat violence against women in Indian Country, improve public safety, serve victims of crime, increase access to victim services including housing and legal assistance, coordinate outreach and awareness activities, and support youth programs in Indian Country. 

30th Judicial District Domestic Violence-Sexual Assault Alliance: The grantee has been awarded $600,000 toward increasing victim advocacy and providing comprehensive legal services to victims of domestic violence, sexual assault, dating violence and stalking in Cherokee, Clay, Graham, Haywood, Jackson, Macon and Swain Counties in Western North Carolina. 

Haywood County:  As recipient of a $450,000 grant, the County will collaborate with the 30th Judicial District Domestic Violence-Sexual Assault Alliance to provide centralized and comprehensive services to victims of domestic violence, sexual assault, dating violence and stalking.  A portion of the funds will be used to provide sexual assault training for law enforcement officers, technical assistance related to investigations, and services to specific victims.

Helpmate, Incorporated:  Awarded $350,000, Helpmate, in cooperation with the Housing Authority of the City of Asheville, will use the grant to provide, among other things, permanent housing and supportive services to 20 survivors of domestic violence, sexual assault, dating violence or stalking and their families.

 

Office of Justice Programs (OJP) and current OJP funding opportunities can be found at: https://ojp.gov/funding/index.htm

 

The Office on Violence Against Women (OVW) administers grant programs authorized by the Violence Against Women Act (VAWA) of 1994 and subsequent legislation.  For a list of OVW grant programs and additional grant funding information please visit: http://www.justice.gov/ovw/grant-programs.

 

The Bureau of Justice Assistance (BJA) provides leadership and assistance to local criminal justice programs that improve and reinforce the nation’s criminal justice system.  BJA’s goals are to reduce and prevent crime, violence, and drug abuse and to improve the way in which the criminal justice system functions. BJA works closely with programs that bolster law enforcement operations, expand drug courts, and provide benefits to safety officers. BJA Funding announcements are posted at: https://www.bja.gov/funding.aspx.

 

The National Institute of Justice (NIJ) is the research, development and evaluation agency of the U.S. Department of Justice, dedicated to improving knowledge and understanding of crime and justice issues through science. For additional information and to locate a funding opportunity please visit:

http://www.nij.gov/funding/Pages/welcome.aspx.

Today, Attorney General Jeff Sessions announced several Department of Justice actions to reduce the rising tide of violent crime in America. Foremost of those actions is the reinvigoration of “Project Safe Neighborhoods,” a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.

 

In announcing this recommitment to Project Safe Neighborhoods, the Attorney General issued a memo directing United States Attorneys to implement an enhanced violent crime reduction program that incorporates the lessons learned since Project Safe Neighborhoods launched in 2001.

 

In a statement on the program, the Attorney General said:

"According to the FBI, the violent crime rate has risen by nearly seven percent over the past two years, and the homicide rate has risen by more than 20 percent. We cannot be complacent or hope that this is just an anomaly: we have a duty to take action.

 

“Fortunately, we have a President who understands that and has directed his administration to reduce crime. The Department of Justice today announces the foundation of our plan to reduce crime: prioritizing Project Safe Neighborhoods, a program that has been proven to work.

 

“Let me be clear – Project Safe Neighborhoods is not just one policy idea among many. This is the centerpiece of our crime reduction strategy.

 

“Taking what we have learned since the program began in 2001, we have updated it and enhanced it, emphasizing the role of our U.S. Attorneys, the promise of new technologies, and above all, partnership with local communities. With these changes, I believe that this program will be more effective than ever and help us fulfill our mission to make America safer."

 

The Attorney General also announced the following Department of Justice initiatives to help reduce violent crime:

-Additional Assistant United States Attorney Positions to Focus on Violent Crime – The Department is allocating 40 prosecutors to approximately 20 United States Attorney’s Offices to focus on violent crime reduction.

 

-More Cops on the Streets (COPS Hiring Grants) – As part of our continuing commitment to crime prevention efforts, increased community policing, and the preservation of vital law enforcement jobs, the Department will be awarding approximately $98 million in FY 2017 COPS Hiring Grants to state, local, and tribal law enforcement agencies.

 

-Organized Crime and Drug Enforcement Task Force’s (OCDETF) National Gang Strategic Initiative –The National Gang Strategic Initiative promotes  creative enforcement strategies and best practices that will assist in developing investigations of violent criminal groups and gangs into enterprise-level OCDETF prosecutions.  Under this initiative, OCDETF provides “seed money” to locally-focused gang investigations, giving state, local, and tribal investigators and prosecutors the resources and tools needed to identify connections between lower-level gangs and national-level drug trafficking organizations.

 

-Critical Training and Technical Assistance to State and Local Partners –The Department has a vast array of training and technical assistance resources available to state, local and tribal law enforcement, victims groups, and others.  To ensure that agencies in need of assistance are able to find the training and materials they need, OJP will make available a Violence Reduction Response Center to serve as a “hot line” to connect people to these resources. 

 

-Crime Gun Intelligence Centers (CGIC) – The Department has provided grant funding to support a comprehensive approach to identifying the most violent offenders in a jurisdiction, using new technologies such as gunshot detection systems combined with gun crime intelligence from NIBIN, eTrace, and investigative efforts.  These FY 2017 grants were awarded to Phoenix, AZ, and Kansas City, MO. 

 

-Expand ATF’s NIBIN Urgent Trace Program – The Department will expand ATF’s NIBIN Urgent Trace Program nationwide by the end of the year.  Through this program, any firearm submitted for tracing that is associated with a NIBIN “hit” (which means it can be linked to a shooting incident) will be designated an “urgent” trace and the requestor will get information back about the firearm’s first retail purchaser within 24 hours, instead of 5 to 6 business days.

CHARLOTTE, N.C. – The former Treasurer of a Fraternal Order of Police Lodge, Timothy James Brewer, 63, of Newton, N.C., has been indicted on wire fraud charges for embezzling more than $110,000 from the non-profit organization, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  The federal grand jury returned the criminal indictment on September 19, 2017, and it was unsealed this morning following Brewer’s court appearance before U.S. Magistrate Judge David C. Keesler.

 

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.

According to allegations contained in the bill of indictment, from 2005 to 2016, Brewer worked for the Catawba County Fraternal Order of Police Lodge #26 (FOP), located in Newton, and was elected to serve as its Treasurer.  As fiduciary of the FOP, Brewer was responsible for the financial affairs of the organization to include acting as the custodian of the funds.

Over the course of his employment at the FOP, the indictment alleges that Brewer engaged in a scheme to defraud the FOP by fraudulently diverting the organization’s funds for his personal benefit. As alleged in the indictment, Brewer fraudulently obtained approximately $110,134.64 from the FOP and converted the funds for his personal gain without any authority from the FOP.  Brewer was the sole recipient of bank and credit card statements which were mailed directly to his residence, thereby concealing the nature of the purchases from the FOP. 

 

The indictment alleges that Brewer misused an FOP credit card, of which Brewer was an authorized user, for personal use, and successfully converted approximately $61,875.03 for his personal gain.  Brewer also used an FOP bank account to pay the balance on a personal credit card, and converted approximately an additional $48,259.61 for his own personal gain without any authority from the FOP.  According to allegations in the indictment, Brewer used the fraudulently converted funds to pay for, among other things, restaurants, hotels and medical bills.

 

Brewer has been released on bond.  The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine.

 

The details contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

 

The investigation was handled by USPIS assisted by the Newton Police Department.  Assistant United States Attorney Jenny Sugar, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

A pharmacy manager from Burnsville, North Carolina, pleaded guilty for her role in the fraudulent diversion of prescription drugs and money laundering, the Department of Justice announced today.

 

Karen Ann Turner, 37, pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit wire fraud and one count of money laundering.  Turner was charged in connection with a fraudulent scheme that operated out of pharmacies in Burnsville, North Carolina, and Travelers Rest, South Carolina.  As a part of that scheme, Turner bought prescription drugs at lower prices by falsely stating that the drugs would be used to fill patient prescriptions through the pharmacies that she operated.  Instead of using the drugs for patient prescriptions, Turner sold them at higher prices to unauthorized drug wholesalers.  Some of the prescription drugs that Turner bought and sold were in short supply.  Turner laundered the profits of her fraud scheme by transferring them through bank accounts that she controlled.  Sentencing will be scheduled at a later date. 

 

“The Department of Justice is committed to prosecuting those who fraudulently divert prescription drugs from their authorized and controlled distribution system,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “These fraud schemes increase the risk that patients will receive ineffective or unsafe drugs, and can expose hospitals to exorbitant prices for drugs that are in short supply.”

 

“We rely on pharmacies to safeguard the integrity of our prescription drug system and to protect public safety.  Turner’s financially motivated scheme is particularly troubling because it removed prescription drugs from lawful distribution channels, potentially putting consumers’ health at risk,” said U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina.

 

As part of her guilty plea, Turner admitted that she operated two pharmacies to fraudulently obtain prescription drugs at low prices that were only available to pharmacies that agreed to use the drugs to fill patient prescriptions.  Instead of using the drugs to fill prescriptions as she said she would, Turner sold the drugs to drug wholesalers for more than she paid, taking the drugs out of their controlled distribution system.

 

“When prescription drugs are diverted from the legal supply chain, there is no longer any assurance that the products are safe and effective for their intended uses,” said Special Agent in Charge Justin D. Green of the Food and Drug Administration’s (FDA) Office of Criminal Investigations’ Miami Field Office.  “Today’s announcement should serve as a reminder of the FDA’s continued focus on criminals that put profits ahead of the U.S. public health by distributing prescription drugs outside the legitimate supply chain.”

 

This case is being prosecuted through the coordinated efforts of the U.S. Attorney’s Office for the Western District of North Carolina and the Civil Division’s Consumer Protection Branch, with assistance from FDA’s Office of Chief Counsel.  The criminal investigation was conducted by FDA’s Office of Criminal Investigations.

 

For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Western District of North Carolina, visit its website at https://www.justice.gov/usao-wdnc.

WASHINGTON - A pharmacy manager from Burnsville, North Carolina, pleaded guilty for her role in the fraudulent diversion of prescription drugs and money laundering, the Department of Justice announced today.

Karen Ann Turner, 37, pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit wire fraud and one count of money laundering.  Turner was charged in connection with a fraudulent scheme that operated out of pharmacies in Burnsville, North Carolina, and Travelers Rest, South Carolina.  As a part of that scheme, Turner bought prescription drugs at lower prices by falsely stating that the drugs would be used to fill patient prescriptions through the pharmacies that she operated.  Instead of using the drugs for patient prescriptions, Turner sold them at higher prices to unauthorized drug wholesalers.  Some of the prescription drugs that Turner bought and sold were in short supply.  Turner laundered the profits of her fraud scheme by transferring them through bank accounts that she controlled.  Sentencing will be scheduled at a later date. 

“The Department of Justice is committed to prosecuting those who fraudulently divert prescription drugs from their authorized and controlled distribution system,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “These fraud schemes increase the risk that patients will receive ineffective or unsafe drugs, and can expose hospitals to exorbitant prices for drugs that are in short supply.”

“We rely on pharmacies to safeguard the integrity of our prescription drug system and to protect public safety.  Turner’s financially motivated scheme is particularly troubling because it removed prescription drugs from lawful distribution channels, potentially putting consumers’ health at risk,” said U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina.

As part of her guilty plea, Turner admitted that she operated two pharmacies to fraudulently obtain prescription drugs at low prices that were only available to pharmacies that agreed to use the drugs to fill patient prescriptions.  Instead of using the drugs to fill prescriptions as she said she would, Turner sold the drugs to drug wholesalers for more than she paid, taking the drugs out of their controlled distribution system.

“When prescription drugs are diverted from the legal supply chain, there is no longer any assurance that the products are safe and effective for their intended uses,” said Special Agent in Charge Justin D. Green of the Food and Drug Administration’s (FDA) Office of Criminal Investigations’ Miami Field Office.  “Today’s announcement should serve as a reminder of the FDA’s continued focus on criminals that put profits ahead of the U.S. public health by distributing prescription drugs outside the legitimate supply chain.”

This case is being prosecuted through the coordinated efforts of the U.S. Attorney’s Office for the Western District of North Carolina and the Civil Division’s Consumer Protection Branch, with assistance from FDA’s Office of Chief Counsel.  The criminal investigation was conducted by FDA’s Office of Criminal Investigations.

 

CHARLOTTE, NC – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina announced today a settlement reached with Bank of America (the Bank) to resolve the United States’ investigation of certain trading activity by the Bank’s New York “Swaps Desk” involving trading ahead of, or “pre-hedging,” block futures trades with its counterparties and then obstructing the CME Group Inc.’s (CME) investigation of the trading.  As part of the settlement, the Bank, among other things, agreed to pay $2.5 million, to report certain suspected misconduct to the United States, and to improve and enhance the Bank’s compliance risk management program.

 

The Bank’s settlement with the United States was reached in 2015 and is announced today in conjunction with the announcement made by the Commodity Futures Trading Commission (CFTC) of its settlement with Merrill, Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), following its investigation into Merrill Lynch’s supervision and recordkeeping failures for conduct related to the Bank’s trading activity (See CFTC Press Release http://www.cftc.gov/PressRoom/PressReleases/pr7615-17).   

 

“The settlement underscores the expectation that everyone, from Wall Street to main street, act honestly and ethically in their financial transactions.  The financial system depends on the integrity of everyone involved in it.  The settlement reinforces our expectation that firms effectively monitor their employees and deal candidly with all regulators and law enforcement agencies,” said U.S. Attorney Rose. 

 

According to the Statement of Facts admitted to by the Bank as part of the settlement, at least three former traders on its New York Swaps Desk eavesdropped on calls between certain large financial institution counterparties and Bank salespersons about block futures trades without announcing their presence and then used information obtained by eavesdropping to enter into transactions to hedge the Bank’s expected risk from those block futures trades.  This practice was referred to as, among other things, “pre-hedging.”  The traders pre-hedged by executing trades in the same contract as the block futures trades and in other correlated products. 

 

The Bank also admitted in the Statement of Facts that during the period from at least January 1, 2009 through at least December 31, 2010, the CME began investigating numerous block futures trades entered into by the Swaps Desk.  In response to the CME’s inquiries, an internal spreadsheet identifying several potential instances of pre-hedging was generated by the business unit, but it was not shared with the Bank’s Legal and Compliance professionals.  Further, the traders did not disclose to the Bank that they had eavesdropped on calls and pre-hedged their expected risk before the block futures trades were executed.  Rather, the traders promoted within the Bank the explanation that any appearance of pre-hedging resulted from inaccurate timestamps.

 

The Statement of Facts also acknowledged that during interviews with the CME, the traders provided misleading answers by, among other things, failing to disclose that they pre-hedged block trades and, instead, again suggesting that the appearance of pre-hedging resulted from inaccurate timestamps.  Following these interviews, the Bank submitted a letter to the CME falsely stating that, among other things, the traders “did not have advance knowledge of a block trade such as to enable them to engage in any trading prior to the execution of the block.”

 

After learning of the government’s investigation, the Bank retracted its December 6, 2010 letter and informed the CME that the traders had traded ahead of block futures trades.

 

The investigation was led by the Federal Bureau of Investigation (FBI), Charlotte Division, and the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), Northeast Region.  In making today’s announcement, U.S. Attorney Rose thanked the CFTC and the National Futures Association for their assistance. 

 

Assistant U.S. Attorneys Daniel Ryan and Taylor Phillips, of the U.S. Attorney’s Office in Charlotte, represented the United States in the matter.

 

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that a Charlotte area jeweler has been indicted on fraud charges in connection with a $3.5 million investment scheme involving jewelry, precious metals and gemstones.  A federal grand jury returned the 18-count indictment against Benjamin Abraham, 59, on Tuesday, September 19, 2017, charging him with one count of wire fraud, and multiple counts of concealment money laundering and transactional money laundering.  The indictment was unsealed today, following Abraham’s initial appearance.

 

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Office and David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service join U.S. Attorney Rose in making today’s announcement.

 

According to allegations contained in the indictment, Abraham operated a number of businesses engaged in the wholesale and retail sale of diamonds, precious metals and jewelry, including Benjamin Diamonds, LLC, Benjamin Jewelers, LLC, Global Trading LLC, G&I USA, LLC and other related entities.  The indictment alleges that from at least December 2012 through at least May 2017, Abraham executed a financial fraud scheme involving investments in jewelry, precious metals and gemstones, among other things.  During the course of the scheme, Abraham induced at least seven victim-investors to invest over $3.5 million, resulting in losses of more than $2 million.  The indictment alleges that instead of investing the victims’ money as promised, Abraham used it to fund his lifestyle, to keep his struggling businesses afloat, to pay pre-existing debts, and to make Ponzi-style payments to other victim-investors.

 

According to court records, to induce his victims to part with their money, Abraham made a number of fraudulent representations, including that the victims’ money would be used for short-term investments in gold or other precious metals, to invest in diamonds and jewelry obtained from estates, and to buy other large diamonds which would be sold for profit.  The indictment alleges that Abraham also lied to investors about his past successes and profits from engaging in such investments, misrepresented the security of the investments and made false representations about the rate of return and the duration of the investments.  At times, Abraham also induced victims by falsely representing that he had unique access to estate sales due to his connections and that he would be also be investing his own money.

In order to continue the fraud scheme and to avoid detection, the indictment alleges that when victims asked about the status of their investments, Abraham gave numerous false explanations.  He also provided victims with checks from accounts that Abraham knew did not have sufficient funds to cover the checks, and continued to lie when he was confronted about the dishonored checks.

 

According to allegations contained in the indictment, in or around early 2016, after a number of banks refused to maintain bank accounts over which Abraham had signatory authority, Abraham began using bank accounts not associated with his name.  The indictment alleges that Abraham formed Global Trading LLC, and caused his wife and an employee to open several bank accounts in the name of that business. The charging document alleges that Abraham did not have signatory authority over the accounts but nevertheless caused financial transactions to be conducted in those accounts. The indictment also alleges that Abraham directed several financial transactions in one of those accounts to conceal information about the proceeds of the investment scheme, including the nature, ownership and source of the funds.

 

Abraham appeared today before U.S. Magistrate Judge David C. Keesler.  The wire fraud count carries a maximum prison term of 20 years and a $250,000 fine.  The concealment money laundering charges carry a maximum prison term of 20 years and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, per count.  The transactional money laundering charges carry a maximum prison term of 10 years and a $250,000 fine per count. 

 

The details contained in this indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

 

In making today’s announcement U.S. Attorney Rose thanked USPIS and the FBI for their investigation which led to today’s charges.  Assistant United States Attorneys Daniel Ryan and Dallas Kaplan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution. 

CHARLOTTE, N.C. – Carl Lee Ferrell, 53, of Waxhaw, N.C. appeared in court today and admitted to running a real estate investment scheme that defrauded victims of over $400,000, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Ferrell pleaded guilty to one count of wire fraud 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, from 2012 to 2016, Ferrell executed a financial scheme involving fraudulent real estate investments, that defrauded victims of over $400,000. To induce victims to invest in his scheme, Ferrell falsely told victim-investors that he was the managing member and president and CEO of Wholesale Properties International, LLC (“Wholesale Properties”), purportedly a large international real estate investment company involved in multimillion dollar investment deals, with several locations in North Carolina, South Carolina, and Washington, D.C. In reality, Wholesale Properties was run by Ferrell, his girlfriend, and another individual, from a rented home in Waxhaw, and had never consummated a million-dollar deal.

 

Court records also show that, to further induce victims, Ferrell created a company webpage which contained numerous false and fraudulent representations regarding the nature and scope of Wholesale Properties’ business, and created false testimonials on the website, with the Better Business Bureau, and in emails. Filed court documents reflect that when victims began demanding their money back, Ferrell made various excuses, including that “the check was in the mail,” that Wholesale Properties had been sold to another company, and that “the accounting department only sends checks out in big batches.”

 

Instead of investing the victims’ money as promised, Ferrell often used it to pay for personal expenditures such as rent, food, and entertainment, to pay for properties other than those in the investment agreements with the victims, and to pay other victims in Ponzi fashion.

 

Ferrell was released on bond following his guilty plea. The charge carries a maximum prison term of 20 years and a $250,000 fine. A sentencing date for the defendant has not been set yet.

 

The investigation was led by the FBI. Assistant United States Attorneys Maria Vento and Dallas J. Kaplan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.

CHARLOTTE, N.C. – Courtney Wayne Littlejohn, 41, of Virginia Beach, Virginia, was sentenced late Friday, September 15, 2017, to 100 months in prison on bank robbery charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Littlejohn to serve three years under court supervision after he is released from prison.

 

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, Charlotte Office, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).

 

According to court documents and the sentencing hearing, on the morning of January 28, 2016, an individual later identified as Littlejohn entered the Fifth Third Bank branch located at 7530 Pineville-Matthews Road in Charlotte. Littlejohn walked up to a bank teller and passed her a handwritten note indicating a bank robbery and that he was armed. The teller complied and Littlejohn fled the bank with $1,045 in cash. Court records show that at approximately 9:40 a.m. on February 13, 2016, Littlejohn robbed a branch of PNC Bank located at 7852 Arboretum Drive in Charlotte. Littlejohn again approached the bank teller and handed her a handwritten note that read generally, “Give me all the cash so I don’t have to use this weapon.” The teller gave Littlejohn $1,216 in cash and he fled the scene.

 

According to court records, the tellers of both banks indicated that the perpetrator had a distinctive birthmark under one of his eyes. Over the course of the investigation and based on information gathered from the victims and other sources, law enforcement determined that Littlejohn had two tiny teardrop-shaped tattoos under his left eye, and that it appeared Littlejohn had attempted to cover them before committing the robberies.

 

Littlejohn pleaded guilty in March 2017 to two counts of bank robbery. He is currently in federal custody and will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

 

The investigation was led by the FBI and CMPD. Assistant U.S. Attorney Robert Gleason, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

A Jamaican citizen charged in connection with the operation of a Jamaica-based fraudulent lottery scheme was sentenced to two years in prison by the federal court in Charlotte, North Carolina, the Department of Justice announced today.

 

Shashana Stacyann Smith, 34, was sentenced to serve 24 months in prison by U.S. District Court Judge Robert J. Conrad Jr. Smith was also ordered to pay $167,532.95 in restitution.

 

Smith pleaded guilty on March 31, to one count of conspiracy to commit mail and wire fraud in the Western District of North Carolina. As part of her guilty plea, Smith acknowledged that from in or about early 2015 through at least in or about August 2016, she was a member of a lottery fraud conspiracy that targeted victims in the United States.

 

“Today’s sentencing demonstrates the Justice Department’s commitment to combatting foreign-based lottery fraud schemes targeting individuals in the United States,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Financial schemes designed to defraud unsuspecting victims will be prosecuted to the fullest extent of the law.”

 

Smith was arrested in Florida on Dec. 14, 2016 after being indicted by a grand jury in Charlotte, North Carolina. As part of her guilty plea, Smith acknowledged that victims of the scheme received a telephone call stating that they had won money in a sweepstakes or lottery. Victims were instructed to send money for fees or other expenses in order to release their purported lottery winnings. The victims of the scheme sent hundreds of thousands of dollars to Smith, who then sent, transported, or facilitated payment of a portion of the money to Jamaica. Smith acknowledged there was no lottery, that there were no winnings, and that she kept some the victims’ money for her own benefit.

 

“Engaging in a fraud scheme targeting Americans carries serious consequences, including time in prison,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “Particularly insidious are those who target victims in the sanctity of their home and those who unfortunately do not quite understand the consequences of providing information to these fraudsters. We consider today's sentence a win for all Americans who are weary of these phone call scammers.”

 

“The Postal Inspection Service is dedicated to investigating and combating fraud on American citizens, many of whom are older,” said Inspector in Charge Daniel Brubaker of the U.S. Postal Inspection Service’s Philadelphia, Pennsylvania Division. “Today’s sentencing demonstrates our efforts to catch criminals who use the U.S. mail to commit their criminal activity.”

 

This prosecution is part of the Department of Justice’s effort to work with federal and local law enforcement to combat fraudulent lottery schemes in Jamaica that prey on U.S. citizens.

 

Acting Assistant Attorney General Readler and U.S. Attorney Rose commended the investigative efforts of the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation. The case was prosecuted by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch, with the assistance of Assistant U.S. Attorney Kelli H. Ferry of the Western District of North Carolina.

 

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Western District of North Carolina, visit its website at https://www.justice.gov/usao-wdnc.

CHARLOTTE, N.C. – Cedric Lamar Turner, 31, of Charlotte, was sentenced today to 164 months in prison on carjacking charges and related firearms violations, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Turner to serve three years under court supervision after he is released from prison.

 

U.S. Attorney Rose is joined in making today’s announcement by 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).

 

According to court documents and today’s sentencing hearing, on August 8, 2016, Turner approached the male victim who was exiting a BB&T Bank branch, and, while brandishing a black pistol, he carjacked the victim’s 1999 Toyota Camry. Court records show that Turner also stole the victim’s wallet, checkbook and cellular phone. Shortly after the carjacking, law enforcement located Turner driving the stolen vehicle and attempted to conduct a traffic stop. Turner did not stop, and, after crashing the stolen car into a power pole, he exited the vehicle and fled on foot. According to court records, law enforcement arrested Turner shortly thereafter. At the time of the arrest, Turner had the victim’s wallet in the pocket of his pants. Law enforcement also found nearby a Haskell, model JHP, .45 caliber pistol.

 

According to court records, Turner told law enforcement that he had been “caught red handed.” Turner also admitted that he had been at a convenience store next to the bank branch, watching the bank in order to target someone to rob. As reflected in court documents, Turner admitted that he saw the victim go into the bank, and, thinking the victim would have money when he exited the bank, Turner approached the victim at his vehicle, pointed his gun at the victim and demanded the victim’s money and car. According to court records, while driving in the stolen vehicle, Turner threw the victim’s cellular phone out of the car because he believed that he could be tracked by the phone. Over the course of the investigation, law enforcement also determined that the firearm Turner brandished during the carjacking was stolen.

Turner pleaded guilty in February 2017 to one count of carjacking; one count of using, carrying and brandishing a firearm in relation to a crime of violence; and one count of possession of a firearm by a convicted felon. Turner is currently in federal custody and will be transferred to 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 ATF and CMPD. Assistant U.S. Attorney Robert Gleason, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

CHARLOTTE, N.C. – Three men who burglarized a gun store in Cornelius, N.C. were sentenced to prison today, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

 

Maceo Royster, 20, Emmanuel Hargrove Guy, 19, and Lacedric McMillon, 23, all of Charlotte, were sentenced to 60 months, 57 months, and 40 months in prison, respectively. The defendants were also ordered by U.S. District Judge Robert J. Conrad, Jr. to serve three years under court supervision upon completion of their prison terms.

 

According to filed court documents and court proceedings, McMillon, Guy, Royster and a fourth individual conspired to burglarize The Range at Lake Norman, located in Cornelius. Court records reflect targeted this particular gun store because a picture on the store’s website showed it did not have bars on its windows. According to court records, on October 23, 2016, the four men drove to the gun store after it had closed for the day. McMillon waited in the car while Guy, Royster and their co-conspirator broke into the store, grabbed rifles and pistols and fled the scene.

 

According to court records, shortly after the robbery, law enforcement attempted to stop the getaway vehicle but McMillon sped away. After evading law enforcement, the vehicle stopped at a cul-de-sac in a neighborhood and the men fled on foot. McMillon, Guy, and Royster were later arrested. Law enforcement officers also recovered two bags which contained 22 firearms stolen from the gun store.

 

Royster, Guy, and McMillon pleaded guilty to one count of theft from the premises of a person licensed to engage in the business of importing, manufacturing, and dealing in firearms. They 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 sentences are served without the possibility of parole.

 

In making today’s announcement, U.S. Attorney Rose thanked C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Chief Bence Hoyle of the Cornelius Police Department for investigating the case.

 

Assistant U.S. Attorney Jennifer Dillon of the U.S. Attorney’s Office in Charlotte was in charge of the prosecution.

STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down yesterday lengthy prison terms to five methamphetamine traffickers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

 

Carlos Antonio Flores, 34, of El Salvador, was sentenced to life in prison; Randy Lee Bivens, 35, of Hickory, N.C. was sentenced to 169 months in prison and five years of supervised release; Franklin Martinez Hernandez, 46, of Mexico was sentenced to 135 months in prison and five years of supervised release; Jerico Nathaniel Chapman, 29, of Valdese, N.C. was sentenced to 130 months in prison and five years of supervised release; and Nathan Ray Bumgarner, 55, of Connelly Springs, N.C. was sentenced to 130 months in prison and five years of supervised release.

 

According to court documents and yesterday’s sentencing hearings, the drug conspiracy was responsible for trafficking more than 15 kilograms of crystal methamphetamine, with a street value of approximately $1.5 million. Flores and Hernandez had leadership roles within the drug ring. According to evidence presented at Flores’s trial, law enforcement officials seized one kilogram of 96% pure crystal methamphetamine which Flores was transporting hidden in a box of cat litter.

 

All of the defendants were charged as part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. According to court documents, since 2015, more than 170 individuals have been prosecuted as a result of the investigation. Court records show that the members of the drug trafficking organizations involved have trafficked several millions worth of methamphetamine. 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.

 

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 ICE-Homeland Security Investigations (HSI); the Charlotte Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; the North Carolina State Bureau of Investigation; the North Carolina State Highway Patrol; the Boone Police Department; the Hickory Police Department; the Mooresville Police Department; the Wilkesboro Police Department; the Caldwell County Sheriff’s Office; the Catawba County Sheriff’s Office; the Iredell County Sheriff’s Office; the Wilkes County Sheriff’s Office; and the Burke County Sheriff’s Office for their investigative efforts.

 

The prosecution is being handled by Assistant U.S. Attorney (AUSA) Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte. Carlos Flores’s trial was conducted by Assistant U.S. Attorneys Steven R. Kaufman and Sanjeev Bhasker.

CHARLOTTE, N.C. B Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Fernando Morales-Matos to 188 months in prison followed by four years of supervised release on drug trafficking offenses, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Morales-Matos, 45, of Carlsbad, California, pleaded guilty in February 2017 to one count of conspiracy to distribute and to possess with an intent to distribute methamphetamine and three counts of possession with an intent to distribute methamphetamine.

 

U.S. Attorney Rose is joined in making today’s announcement by 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 filed court documents and today’s sentencing hearing, from in or about June 2016 until July 27, 2016, Morales-Matos and his cousin and co-defendant, Mario Canino-Morales, were involved in a drug conspiracy with the Mexican cartel responsible for trafficking large amounts of crystal methamphetamine in Mecklenburg County. According to court records, the co-conspirators admitted to being part of the Mexican cartel, with intentions to expand methamphetamine distribution in Charlotte. Court records show that the co-conspirators were responsible for trafficking more than 2.5 kilograms of 96% pure methamphetamine. In addition to the methamphetamine, when the two men were arrested, law enforcement recovered a loaded 9mm handgun.

 

Morales-Matos 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. Canino-Morales was previously sentenced to 109 months in federal prison for his involvement in this conspiracy.

 

In making today’s announcement U.S. Attorney Rose thanked ATF and CMPD for leading the investigation.

 

Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, prosecuted this case.

 

 

 

ASHEVILLE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced yesterday a South Carolina man to 17 ½ years in prison and a lifetime of supervised release, on the charge of interstate transportation of a minor with the intent to engage in criminal sexual activity, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. As part of his sentence, Joseph Harold Patterson, 58, of Anderson, S.C. was also ordered to register on the sex offender registry, to pay a $20,000 court fine and $4,538.42 as restitution.

 

Chief Ranger Steven Kloster of the Great Smoky Mountains National Park Service joins U.S. Attorney Rose in making today’s announcement.

 

“Mr. Patterson has received a well-deserved lengthy prison sentence for abusing these young men. Some say there is a special place in hell for child abusers and we cannot promise Mr. Patterson will receive that just punishment, but we can guarantee that he will receive a place in the federal penitentiary and for now, that’s the best we can do,” said U.S. Attorney Rose.

 

“We are thankful to see justice prevail and hope that the individuals impacted by these despicable crimes are able to find some measure of solace in Mr. Patterson’s punishment,” said Great Smoky Mountains National Park Chief Ranger Steven Kloster.

 

According to court documents and information introduced at the sentencing hearing, in April 2015, a concerned parent contacted law enforcement to report that his child had been the victim of inappropriate sexual activity by Patterson, and that the conduct had occurred during camping trips arranged by the defendant. Court records show that between 2009 and 2011, Patterson had made at least three camping trips transporting at least three minor victims from Anderson, S.C. to the Smokemont Campground, located within the Great Smoky Mountains National Park. Court records also show that Patterson knew the minors through his affiliation with a church in Anderson. According to court records, during the camping trips Patterson encouraged the minors to engage in sexual activities in his presence. At times, Patterson also exposed himself to the minors and/or engaged in sexual activities in front of the minors.

 

In addition to the out-of-state camping trips, court records show that Patterson had regular contact with the three victims and other children in his own home. During those encounters, Patterson gave the minors alcohol, shared pornography, discussed sexual topics and encouraged them to engage in sexual activities. Patterson also bought gifts for some of the children and took them out to restaurants, among other things. Court records show that on one occasion, Patterson attended an evening church event, during which he showed pornography to three minor children and encouraged them to engage in a sexual activity in the church bathroom.

 

Patterson pleaded guilty in February 2017 to one count of interstate transportation of a minor to engage in sexual activity. Patterson is currently in the custody of the United States Marshal pending his designation to a Federal Bureau of Prisons facility. All federal sentences are served without the possibility of parole.

 

In making today’s announcement U.S. Attorney Rose commended the National Park Service Investigative Services Branch for leading the investigation. U.S. Attorney Rose also thanked the Anderson Police Department in South Carolina and the South Carolina Attorney General’s Office for their assistance in this case. The U.S. Attorney’s Office in Asheville prosecuted the case.

 

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children. By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov

 

CHARLOTTE, N.C. – The owner of Charlotte-area scrap metal business pleaded guilty to tax evasion today, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Tony Marks, 47, of Matthews, N.C., appeared before U.S. Magistrate Judge David Keesler and admitted to concealing from the Internal Revenue Service (IRS) personal earnings derived from his business.

 

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 Division, Charlotte Field Office (IRS-CI).

 

According to the filed court documents and today’s plea hearing, from in or about 2011 to the present, Marks was self-employed as a scrap metal broker. From in or about tax year 2011 through in or about tax year 2014, Marks concealed from the IRS significant personal earnings from his scrap metal broker business. According to court records, during the relevant time period, Marks deposited checks and cash receipts from his business and its customers into his personal bank accounts at various banks. Marks’ deposits or cashed checks totaled approximately $313,372, and were not included in gross receipts reported to the IRS. During the relevant time period, Marks failed to disclose or provide to his tax return preparer records from all of the bank accounts, as well as other information about his income from his business.

 

According to the filed court documents and today’s plea hearing, for years 2011 through 2014, Marks earned additional personal income which the defendant failed to report on his U.S. Individual Income Tax Return Form 1040 filed with the IRS. As a result of the unreported taxable income and the unreported gross receipts, Marks had additional tax due.

 

Marks pleaded guilty to one count of tax evasion. The charge carries a maximum penalty of five years in prison and a $250,000 fine. Marks was released on bond following today’s court appearance. A sentencing hearing for Marks has not been set yet.

The investigation was led by IRS-CI. Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.

 

CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Robert Louis Winecoff, 37, of Huntersville, N.C. to 51 months in prison for operating an investment fraud scheme involving bogus investment products, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Winecoff was also ordered to serve two years under court supervision after he is released from prison and to pay more than $175,000 as restitution.

 

North Carolina Secretary of State Elaine F. Marshall and David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) join U.S. Attorney Rose in making today’s announcement.

 

According to documents filed with the court and today’s sentencing hearing, from June 2013 to May 2014, Winecoff executed a scheme to defraud victim-investors by inducing them to invest in a variety of bogus investment instruments and products. Rather than invest his victim-investors’ money as promised, Winecoff diverted the funds for his own personal use. According to court records, Winecoff presented himself to victims as the principal of Winecoff Financial Consulting Group (WFCG), a purported financial consulting firm, and marketed his bogus investment products through a website associated with the firm, www.wfcgnc.com.

 

Court records show that Winecoff, along with others, recruited victim-investors by making a series of false and fraudulent representations. In particular, Winecoff and his recruiters told victim-investors that Winecoff would use their money as a deposit to obtain a financial instrument known as a “standby letter of credit.” Winecoff fraudulently represented to investors that the investment in the standby letter of credit would result in large payouts within a set period of time, typically between 20 and 30 days. Winecoff falsely assured victim-investors the investments were safe, legal, short-term, and guaranteed.

 

According to court records, once victim-investors agreed to invest in the fraudulent scheme, Winecoff typically presented them with an “MOU Agreement” and instructed the victim-investors to wire their investment funds, typically between $20,000 and $60,000, to a bank account he controlled. Despite promises of early returns, court records show that Winecoff never invested any money or made any payments to investors.

When victims contacted Winecoff or one of his recruiters to complain about not receiving the promised returns or to otherwise question their investments, Winecoff sent emails providing excuses about why payments had not been made, including that “[p]ayouts were made to some and not others,” and false assurances that victims would receive their money by a certain date.

 

During the course of the 11 month-scheme, Winecoff induced approximately 12 investors from several different countries to invest a total of approximately $343,000. Winecoff did not invest any of the victim-investors’ funds as promised, he did not make any payments to any victim-investors and he did not return their principal when requested.

 

Rather, than invest the victim-investors’ funds, Winecoff used the stolen money to fund his personal lifestyle. Court records show that Winecoff made purchases totaling nearly $65,000 at hotels, airlines, gas stations, and retail stores. He also made cash withdrawals totaling nearly $308,000 from the account into which victims had wired their money.

 

Winecoff pleaded guilty in March 2017 to one count of wire fraud. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

 

The investigation of the case was led by the Securities Division of the North Carolina Secretary of State and USPIS.

 

Assistant U.S. Attorney William Miller, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

CHARLOTTE, N.C. – Demario Bernard Austin, 29, of Charlotte, was sentenced yesterday to 103 months in prison followed by three years of supervised release for robbing a convenience store and a bank, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

According to court documents and information presented during the sentencing hearing, on March 25, 2016, Austin robbed the Kangaroo Express convenience store, located at 8008 Harris Boulevard in Charlotte. Austin entered the convenience store wearing a bandana over his face and brandishing what appeared to be a firearm. Austin pointed the firearm at the cashier and demanded money from the register. The cashier handed Austin approximately $100 in Kangaroo Express cash and Austin fled in his vehicle.

On April 17, 2017, court records show that Austin, armed with what appeared to be the same firearm, entered the BB&T bank branch located at 6609 Marshville Boulevard in Marshville, pointed the handgun at one bank teller and demanded money. While the teller was putting the cash in Austin’s bag, Austin threatened to shoot the teller. Then, Austin turned to a second bank teller, pointed the firearm at her, and demanded more money. Austin fled the bank with approximately $3,273 in cash. Court records indicate that law enforcement arrested Austin a short time later. Over the course of the investigation, law enforcement determined that Austin’s firearm was an Airsoft BB gun.

Austin pleaded guilty to one count of Hobbs Act robbery and one count of bank robbery. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.

In making today’s announcement, U.S. Attorney Rose thanked the FBI, the Charlotte Mecklenburg Police Department, the Marshville Police Department, and the Union County Sheriff’s Office for investigating the case.

Assistant U.S. Attorney Casey Arrowood, of the U.S. Attorney’s Office in Charlotte, is in prosecuted the case.

 

CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. sentenced to prison two men and a woman responsible for committing a string of armed robberies in North and South Carolina, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

 

Joining U.S. Attorney Rose in making today’s is Chief J. Bryan Gilliard of the Monroe Police Department

 

Jerfrontys Clyburn, 22, of Pageland, S.C. was sentenced to 276 months in prison; Detrez Lamar Timmons, 21, of Wingate, N.C., was sentenced to 144 months in prison; and Yamilez Matos, 21, of Pageland, S.C., was sentenced to 84 months in prison. The defendants were also each ordered to serve three years of supervised release and to pay $2,465 as restitution.

 

In January 2016, Clyburn, Timmons and Matos pleaded guilty one count of conspiracy to commit robbery of businesses affecting interstate commerce or “Hobbs Act” robbery. Clyburn also pleaded guilty to five counts of Hobbs Act robbery and one count of carrying and brandishing a firearm.

 

According to filed documents and statements made in court, between July 5, and July 12, 2015, Clyburn, Matos and Timmons robbed six convenience stores located in North and South Carolina. Court records show that Clyburn and Timmons were primarily responsible for robbing the stores at gunpoint and Matos was the get-away driver. According to court records, over a seven-day period, the defendants robbed four businesses in Monroe, N.C., including an On-the-Run gas station, a Marathon gas station, a T&M Foodmart, and a Stop-n-shop convenience store. The co-conspirators also robbed at gun point the M&R Minimart convenience store located in Lancaster, S.C. and the Kountry Korner convenience store located in Pageland, S.C. According to court records, when Clyburn entered the M&R Mini Mart he was carrying a 9mm handgun, which he used to shoot a victim who was inside the store when the robbery occurred.

 

All three defendants have been in local federal custody. Upon designation of a federal facility they will be transferred to the custody of the Federal Bureau of

CHARLOTTE, N.C. – Timothy Alan Overcash, 52, of Gold Hill, N.C. was sentenced today by U.S. District Judge Robert J. Conrad, Jr. to 150 months in prison for enticement of a minor using a means and facility of interstate commerce, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Conrad also ordered Overcash to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison.

 

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.

 

According to court documents and today’s court proceedings, Overcash responded to an online posting soliciting individuals interested in engaging in sexual contact with a minor. From August to September 2016, Overcash had multiple communications with an FBI undercover employee posing as the minor’s parent, during which Overcash discussed his interest in engaging in sexual contact with the minor and made arrangements to meet the minor. Law enforcement arrested Overcash when he arrived at the agreed-upon location to meet whom he thought was an 11-year-old girl, for the purpose of engaging in sexual activities.

 

Overcash pleaded guilty in February 2017 to one count of online enticement of a minor. He is currently in federal custody and he will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.

 

The investigation was led by the FBI. The U.S. Attorney’s Office is in charge of the prosecution.

 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

CHARLOTTE, N.C. – Cassell Anthony Kuoh, a/k/a “Tim Borrol,” was sentenced today to 87 months in prison in connection with an investment fraud scheme involving gold and diamonds, that defrauded victims of more than $9.5 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. presided over today’s sentencing hearing and ordered Kuoh to pay $16.2 million as restitution. Kuoh will also be subject to deportation proceedings upon the completion of his federal sentence.

 

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.

 

“Kuoh was an extremely sophisticated fraudster who utilized Liberian government connections to help effectuate his fraud,” said U.S. Attorney Rose. “Many of his victims, who are located in our district and throughout the world, will never recover from the devastating financial losses wrought by Kuoh’s fraudulent scheme. On behalf of those victims, we are delighted that Mr. Kuoh will be serving a significant sentence in the Federal Bureau of Prisons.”

According to public records and statements made in open court, from June 2012 to December 2016, Kuoh orchestrated a fraudulent scheme involving the purchase, shipment and export of unrefined gold and rough diamonds allegedly located in Liberia. Kuoh was a Liberian national who lived in Liberia and owned Phoenix Mining and Investment Group (Phoenix Mining), which purported to be in the precious metal and gemstone business.

 

According to court records, Kuoh convinced victims to invest with Phoenix Mining by promising, among other things, that their money would be used to purchase, ship, and transfer gold and diamonds from Liberia into the United States, to be refined or cut and sold for profit. As part of the scheme, Kuoh and his co-conspirators invited victims to Africa to visit the mining operations, which had been set up by Kuoh to look legitimate and profitable, and to inspect the gold and diamonds, which Kuoh had borrowed from others.

While in Liberia, Kuoh and his co-conspirators also arranged meetings between potential victim investors and alleged custodians of gold. In at least one instance, Kuoh set up armed personnel to deliver large quantities of gold bars for inspection by potential investors, which convinced multiple victims that Kuoh did in fact own large quantities of gold. Kuoh also visited victims in the United States, bringing with him samples of gold to lull potential investors into believing that the gold and diamond import scheme was legitimate.

According to court records, once he received the funds from his victims for the purported purchase of gems and precious metals, Kuoh began to use stall tactics and to make up lies about the location and U.S. Customs status of the purported shipments of gold and diamonds. For example, Kuoh created a website for a fake shipping company, McDan Shipping Company, Ltd., and provided victims with false tracking information, showing that the packages were purportedly proceeding to their final destination in the U.S. Kuoh and his co-conspirators updated the website with “new” tracking information, which frequently showed that the packages were encountering problems and impediments along that way and required victims to pay additional fees, which increased the fraud proceeds for Kuoh and others. These concocted problems included things such as: airport storage fees, additional permits and certificates, and the need for additional official documents and stamps from Liberian officials.

Kuoh and his co-conspirators also provided victim investors with false, forged and fraudulent documents purported to be from various organizations in the U.S, Liberia and elsewhere. Kuoh and others used the fraudulent documents to create the false impression that the Liberian government required additional monies be paid, before the necessary approvals were given to allow the shipment of the gold and diamonds to proceed.

According to court records, contrary to Kuoh’s representations to his victims, the gold and diamonds never arrived in the United States, and were never held by U.S. Customs or any other agency. In reality, Kuoh used the investors’ money to fund his personal lifestyle, including to purchase a house in Harrisburg, North Carolina, and to pay for other expenditures.

On March 8, 2017, Kuoh pled guilty to one count of conspiracy to commit wire fraud. 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.

Kuoh’s co-defendant, Emmanuel Tarr, 30, of Liberia, has also pleaded guilty to wire fraud conspiracy and is currently awaiting sentencing.

The investigation was led by ICE-HSI. Assistant United States Attorney Corey Ellis, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced the leader of a cocaine trafficking ring to 235 months in prison, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Florencio Apreza-Guerrero, 38, of Mexico, was also sentenced to five years of supervised release.

 

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 and Eddie Cathey of the Union County Sheriff’s Office.

 

According to filed documents and court proceedings, from 2013 to 2016, Apreza-Guerrero was the leader of a drug conspiracy responsible for trafficking large amounts of cocaine into Union and Mecklenburg Counties. Court records indicate that, over the course of the investigation, law enforcement seized approximately 35 kilograms of cocaine, seven firearms, and $138,000 in cash. Court records also show that Apreza-Guerrero’s drug network was responsible for trafficking 40 to 50 kilograms of cocaine per month. In March 2017, Apreza-Guerrero pleaded guilty to one count of drug trafficking conspiracy and one count of money laundering conspiracy.

 

Apreza-Guerrero’s co-conspirators have already been sentenced as follows:

 

1. Pedro Valle-Barrera, 38, of Mexico, was sentenced to 135 months, followed by five years of supervised release.

2. Ivan Ortiz Lezama, also known as Tomas Barajas-Rodriguez, 30, of Mexico, was sentenced to 120 months, followed by five years of supervised release.

3. Juan Cesar Valle-Barrera, 33, of Mexico, was sentenced to 78 months, followed by one year of supervised release.

4. Alberto Manuel Arreola, 38, of Mexico, was sentenced to 66 months, followed by two years of supervised release.

5. Hever Garcia-Delgado, 33, of Monroe, NC, was sentenced to 45 months, followed by three years of supervised release.

6. Alfonso Guevera-Garcia, 23, of Monroe, NC, was sentenced to 24 months, followed by two years of supervised release.

Apreza-Guerrero 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. Apreza-Guerrero and his co-conspirators will also be subject to deportation proceedings upon the completion of their federal sentences.

This case is the result of 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.

In making today’s announcement U.S. Attorney Rose thanked the FBI and UCSO which led the investigation.

 

Assistant U.S. Attorney Steven R. Kaufman, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

 

CHARLOTTE, N.C. B Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Mario Canino-Morales to 109 months in prison followed by four years of supervised release on drug trafficking and firearms offenses, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Canino-Morales, 44, of Puerto Rico, pleaded guilty in December 2016 to one count of conspiracy to distribute and to possess with an intent to distribute methamphetamine and one count of possession of a firearm by a convicted felon.

 

U.S. Attorney Rose is joined in making today’s announcement by 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 filed court documents and today’s sentencing hearing, from in or about June 2016 until July 27, 2016, Canino-Morales and his co-defendant, Fernando Morales-Matos, were involved in a drug conspiracy responsible for trafficking large amounts of crystal methamphetamine in Mecklenburg County. According to court records, the co-conspirators admitted to being part of the Mexican cartel, with intentions to expand methamphetamine distribution in Charlotte. Court records show that the co-conspirators were responsible for trafficking more than 2.5 kilograms of 96% pure methamphetamine. In addition to the methamphetamine, when Canino-Morales was arrested, law enforcement recovered a loaded 9mm handgun. Canino-Morales has a previous felony conviction and is prohibited from possessing a firearm.

 

Canino-Morales 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. Morales-Matos previously pleaded guilty to drug trafficking charges and is currently awaiting sentencing.

 

In making today’s announcement U.S. Attorney Rose thanked ATF and CMPD for leading the investigation.

 

Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.

CHARLOTTE, N.C. – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, has made the following statement regarding allegations against Word of Faith Fellowship:

 

“The U.S. Attorney’s Office has an ongoing investigation into allegations against Word of Faith Fellowship and we continue to work with our law enforcement partners to gather and evaluate all available information. The review of such information can be lengthy, however, our ultimate goal is to assess the facts and to avoid compromising an ongoing investigation. Ultimately, the evidence and law will determine the appropriate course of action. And, while my office cannot provide additional information or updates on this or any other ongoing federal investigation, we want the public to understand that safeguarding the integrity of the process is foremost.”

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.

 

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.

 

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:

• 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.”

• “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:

• 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.

• 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.

• 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.

• 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:

• Harassing family members and friends to get the purported debtor to call them and pay them.

• Threatening that imminent civil and/or criminal charges would be filed if the debtor did not make arrangements to pay during the call.

• 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.

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.

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.

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

 

 

 

 

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.

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.

 

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.

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.

 

 

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.

 

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

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.

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, 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.

 

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

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.

 

 

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.

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.

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.

 

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:

 

1. Jerry Wayne Grant, 45, of Mooresville, was sentenced to 216 months, followed by 5 years of supervised release. (5:16-cr-48)

2. James Edward Russell, III, 38, of Hudson, was sentenced to 188 months, followed by 5 years of supervised release. (5:16-cr-13)

3. Teddy Dwane McGee, 41, of Hickory, was sentenced to 120 months, followed by 5 years of supervised release. (5:16-cr-48)

4. Larry Chad Roberts, 39, of Taylorsville, was sentenced to 120 months, followed by 5 years of supervised release. (5:16-cr-47)

5. Richard Lee Knight, 41, of China Grove, was sentenced to 120 months, followed by 3 years of supervised release. (5:16-cr-42)

6. Jason Mathew Beasley, 36, of North Wilkesboro, was sentenced to 120 months, followed by 5 years of supervised release. (5:16-cr-39)

7. Davey Yang, 35, of Conover, was sentenced to 110 months, followed by 5 years of supervised release. (5:15-cr-73)

8. Troy Lynn Bell, 48, of Taylorsville, was sentenced to 108 months, followed by 4 years of supervised release. (5:16-cr-66)

9. Jamie Lee Grigg, 44, of Kings Mountain, was sentenced to 100 months, followed by 5 years of supervised release. (5:16-cr-46)

10. Steven Matthew Donaldson, 25, of Charlotte, was sentenced to 96 months, followed by 4 years of supervised release. (5:16-cr-45)

11. Josue Abraham Robles, 19, of Mexico, was sentenced to 86 months, followed by 5 years of supervised release. (5:16-cr-62)

12. Jesus Cristino-Perales, 26, of Mexico, was sentenced to 78 months, followed by 5 years of supervised release. (5:15-cr-73)

13. Norberto Macedo, Jr., 23, of Charlotte, was sentenced to 78 months, followed by 5 years of supervised release. (5:16-cr-55)

14. Wendy Michelle Pennington, 39, of Hickory, was sentenced to 46 months, followed by 5 years of supervised release. (5:16-cr-48)

15. Ritchie Allen Shook, 38, of Granite Falls, was sentenced to 37 months, followed by 5 years of supervised release. (5:16-cr-58)

16. 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.

 

 

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, 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.

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.