Western District of North Carolina

ASHEVILLE, N.C. – Santiago Sanchez, 39, of Mexico, was sentenced today to 210 months in prison followed by five years of supervised release for trafficking large quantities of crystal methamphetamine, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Sanchez pleaded guilty in December 2015 to one count of possession with intent to distribute methamphetamine.

U.S. Attorney Rose is joined by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Janie Sutton, Acting Director of the North Carolina State Bureau of Investigation; Sheriff Charles S. McDonald of the Henderson County Sheriff’s Office; Sheriff Donald J. Hill of the Polk County Sheriff’s Office; Sheriff Dudley Greene of the McDowell County Sheriff’s Office; Chief Allen Lawrence of the Marion Police Department; and Chief Tammy Hooper of the Asheville Police Department.

“Through the homemade meth production operation Sanchez devised and ran, he was able to produce and sell large quantities of crystal meth.  Sanchez even involved his own children in his illegal activities using them to translate to further his drug manufacture and distribution. Sanchez illegally entered our country and began to poison our citizens through distribution of this illegal and devastating drug,” said U.S. Attorney Rose.  “We now welcome him to the confines of the United States Bureau of Prisons where he will serve a lengthy and well-deserved sentence.”

Special Agent in Charge Salter stated, “All participating agencies played a crucial role in the eradication of this criminal network. Sanchez’s methamphetamine trafficking activities posed a significant threat to the quality of life in Buncombe, Henderson, Polk Counties and surrounding areas. The removal of this dangerous individual makes these communities safer today. I want to thank our federal, state and local law enforcement counterparts and the United States Attorney’s Office, who had a direct impact in making this investigation a success.”

According to filed court documents and statements made in court, from at least March 2015 to May 2015, Sanchez was responsible for trafficking large amounts of crystal methamphetamine in Buncombe, Henderson and Polk Counties and elsewhere.  Over the course of the investigation, law enforcement observed Sanchez conducting numerous drug transactions, at times using his minor children as translators on the phone or even handing him the container with the narcotics.  Law enforcement executed a search warrant at Sanchez’s residence and an adjacent outbuilding located in Polk County and seized more than a pound of crystal methamphetamine, an Igloo thermos containing 1,680.9 grams of liquid methamphetamine, a burner, a pot with a lid, cutting agents and other drug paraphernalia used by Sanchez to convert the liquid methamphetamine into crystal methamphetamine.  Law enforcement also seized from the residence several firearms, ammunition and $3,200 in cash.

Sanchez is in federal custody and will be transferred to custody of the Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole.  In addition to the imposed sentence, U.S. District Judge Martin Reidinger ordered the defendant be deported to Mexico upon completion of his prison term.

In making today’s announcement, U.S. Attorney Rose noted that multiple agencies worked together to bring this prolific crystal methamphetamine trafficker to justice and thanked the DEA, the SBI, the Henderson County Sheriff’s Office, the Polk County’s Sheriff’s Office, the McDowell County Sheriff’s Office, the Marion Police Department and the Asheville Police Department for investigating this case.

Assistant United States Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville handled the prosecution.

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced a Henderson County marijuana grow operator to 54 months in prison, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Gary Maxwell Lee, 48, of Hendersonville, was also ordered to remain under court supervision for three years after his release from prison.

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Janie Sutton, Acting Director of the North Carolina State Bureau of Investigation; and Sheriff Charles S. McDonald of the Henderson County Sheriff’s Office.

According to filed court documents and today’s sentencing hearing, in May 2015, law enforcement began their investigation into Lee, after receiving information that he was operating an extensive indoor marijuana growing operation.  According to court records, Lee ran the marijuana grow house from two structures located next to the main home owned by Lee.  Court records indicate that as part of the investigation law enforcement searched Lee’s house and the two structures located on the property, seizing 66 marijuana plants, 10.4 pounds of marijuana in various stages of drying and processing, and $4,245 in cash.  Court records indicate that one of the structures was used as a “nursery” for the younger plants, whereas the larger, more mature plants were stored in the second structure.  Lee had set up in the structures extensive lighting, air filtration, and hydration systems to assist in the growth of the plants. Law enforcement also seized numerous firearms, including shotguns and semi-automatic rifles, as well as twelve ammo cans containing thousands of rounds of ammunition.

According to court records, Lee took steps to avoid detection of his marijuana grow operation by law enforcement, including taking his trash to the dump or burning it, and using carbon filters to cut down on the odor emanating from the grow.   Court records show that Lee has a previous conviction in Florida related to the manufacture of marijuana. 

Lee pleaded guilty in December 2015 to manufacturing marijuana and being a felon in possession of firearms.  He is currently in federal custody and will be transferred to custody of the Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole. 

DEA, SBI, and the Henderson County Sheriff’s Office investigated the case.  Assistant United States Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville handled the prosecution.

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Jimmy Lee Williams, 48, of Charlotte to 105 months in prison for orchestrating a fraudulent check scheme that netted the conspiracy more than $650,000 in postage stamps and other merchandise, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Whitney also ordered Williams to serve two years under court supervision following the prison term and to pay $646,993.61 to the United States Postal Service as restitution.

Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division;  and Janie Sutton, Acting Director of the North Carolina State Bureau of Investigation join U.S. Attorney Rose in making todays’ announcement.

According to court documents and statements made in court, in two separate time periods between November 2010 to present, Williams used a network of 16 accomplices to defraud U.S. Post Offices and other businesses in North and South Carolina, Virginia, Maryland and the District of Columbia. Court records show that Williams and/or his accomplices used counterfeit or fraudulent checks and fraudulent identification to purchase postage stamps, gift cards and other merchandise with a total face value of more than $650,000. 

To execute the fraudulent scheme, Williams used counterfeit checks and checks drawn on his own closed accounts and the bank accounts of accomplices he met in prison and through youth football leagues in the Concord, North Carolina area.  According to court records, Williams’ accomplices gave the stamps they obtained to Williams, who then sold them to an Internet company in California as well as a North Carolina pawn shop, typically for 50%-70% of the face value.  Williams recruited his accomplices from prison and wrote instructions on how to commit the charged postal fraud while serving a prison sentence for violating conditions of his supervised release from a previous federal conviction. 

Williams pleaded guilty to two counts of conspiracy and one count of money laundering. 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.

USPIS, the FBI, and NC SBI investigated the case.Assistant U.S. Attorney Michael Savage, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

CHARLOTTE, N.C. – A federal jury delivered a guilty verdict yesterday against Kenwaniee Vontorian Tate, 40, of Charlotte, for sex trafficking of a minor by fraud, force and coercion and sex trafficking of a minor while being required to register as a sex offender under North Carolina law, announce announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Rose is joined making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).

In making today’s announcement U.S. Attorney Rose stated, “Tate preyed upon a vulnerable young girl, lured her into a world of sex and violence and exploited her in the worst possible way.  Sex trafficking and victimizing minors for financial gain is a reprehensible crime.   My office will continue to work closely with our law enforcement partners to identify and prosecute sex traffickers who profit from prostituting minors.”

According to filed documents, statements made in court and evidence presented during the two-day trial:

Between September 2014 and February 2015, Tate caused a minor female to engage in commercial sex acts, namely prostitution.  Tate met the victim when she was only 15 years old and became her pimp shortly after they met.  Tate and the victim moved from hotel to hotel while she worked as a prostitute.  Testimony at trial established that Tate controlled all of the profits from the prostitution of the minor victim and used it to support himself.  Tate advertised the minor victim for sex on an Internet website and arranged sexual encounters for her.  Testimony at trial also revealed that Tate slapped and hit the victim when she did not do as Tate instructed, but Tate was careful not to hit her in the face because it may affect her ability to earn money through prostitution.  Trial evidence established that the sex trafficking came to an end when CMPD officers arrested Tate on February 17, 2015 while looking for a different missing minor.  During that operation, CMPD officers found the minor victim hiding in a hotel closet.

Trial evidence also established that at the time that Tate caused the minor victim to engage in prostitution, Tate was registered as a sex offender in North Carolina based upon previous state convictions in Minnesota for criminal sexual conduct.  Tate was also convicted previously in Minnesota federal court for conspiracy to commit sex trafficking of a minor for his involvement in a sex trafficking ring that trafficked juvenile females from Minnesota to Las Vegas, Nevada, to engage in commercial sex acts.  The judge in that case ordered Tate to serve a 16-month sentence.

Tate has been in federal custody since his arrest in November 2015.  At sentencing, he faces a mandatory minimum term of 15 years and a maximum of life in prison and a $250,000 fine for sex trafficking of a minor by force, fraud and coercion, and a consecutive term of 10 years in prison for sex trafficking of a minor while required to register as a sex offender.  A sentencing date has not been set.

The investigation was handled by HSI and CMPD. Assistant U.S. Attorney Kimlani M. Ford is in charge of the prosecution.

CHARLOTTE, N.C. –The President and Chief Financial Officer (CFO) of a Charlotte-based payroll services company were sentenced to prison today by Chief U.S. District Judge Frank D. Whitney, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Jerry Wayne Overcash, 67, of Charlotte, and John Bernard Thigpen, 60, of Rock Hill, S.C., were sentenced to 46 months and 21 months in prison, respectively, for stealing over $2 million from client companies and using the money to fund exorbitant salaries.  In addition to the prison term, they were each ordered to serve two years of supervised release and to jointly pay $1.3 million as restitution to the victim client companies.  The Court will enter a final restitution amount in 90 days, to allow any additional eligible victims to submit their claims.

The company’s co-founder and Chairman of the Board, Frank Alton Moody, II, 56, of Arden, N.C., was indicted in March 2016 for his role in the fraudulent scheme.

U.S. Attorney Rose is joined in making today’s announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

“Overcash and Thigpen were integral members of an elaborate financial scheme that ripped off their clients’ money and defrauded the federal government.  A prison sentence is the only punishment befitting of these two professional scam artists,” said U.S. Attorney Rose.

“The fraud scheme executed by the conspirators is an egregious story of countless lies and endless greed. They ignored their fiduciary responsibilities to their clients and left many of them holding the bag, while they stuffed their pockets. They were entrusted as professionals and to represent their client’s interests with respect to the Internal Revenue Service, and they abused this trust by ignoring their responsibilities and engaging in theft.  IRS Criminal Investigation with our law enforcement partners remain committed to pursuing individuals like Overcash and Thigpen, and seeing that they face justice,” said Special Agent in Charge Holloman.  

“The U.S. Postal Inspection Service is committed to investigating and bringing to justice those who prey on innocent victims for their selfish gain.  We value the collaboration with our law enforcement partners to protect the American Public,” said Inspector in Charge Noyes.

According to documents filed in court and today’s sentencing hearings, Thigpen, a Certified Public Accountant, was hired in December 2010 to serve as the CFO of CenterCede Services Inc. (CenterCede), a payroll services company with clients in Charlotte and elsewhere.  CenterCede was established in August 2010 by Overcash and Moody, to assume the business operations of another payroll services company the two men previously owned and operated, “The Resource Solutions Group” (TRSG).  TRSG had been shut down by IRS in August 2010, for failing to pay more than $9 million in federal payroll taxes TRSG collected from its clients. 

Court documents show that from November 2010 to November 2011, CenterCede purportedly provided payroll preparation and processing services to its clients.  As such, CenterCede collected funds from its clients to pay the client companies’ federal tax obligations, gross payroll for the clients’ employees, worker’s compensation, and unemployment insurance, among other moneys, as well as fees due to CenterCede.  According to court records, throughout the relevant time period, Thigpen, with oversight from Overcash and Moody, supervised the preparation of tax returns on behalf of client companies. Contrary to their representations to clients, the conspirators did not pay the clients’ federal taxes in appropriate amounts and by the applicable deadlines.  Instead, according to court records, Moody, Overcash and Thigpen diverted the funds to pay their own exorbitant salaries and to cover growing liabilities, including the tax liabilities of other CenterCede clients.  To keep the scheme afloat, the conspirators paid only those obligations necessary to keep their ongoing cash flow crisis a secret from clients. 

As reflected in court documents, the conspirators favored what they called “priority” clients and attempted to keep those priority clients from learning about monthly cash shortfalls by frequently paying those clients’ obligations ahead of other non-priority clients.  “Priority” clients generally had large payrolls with deposits necessary to fund CenterCede’s short-term cash needs and to keep the scheme afloat.  Court records show that when clients inquired about failures to pay their obligations, the three conspirators took steps to conceal the fraud by providing false excuses and misleading explanations.  Court records show that in the second and third quarters of 2011, Thigpen, Overcash and Moody defrauded CenterCede’s payroll clients of more than $2 million dollars.  At the same time that the conspirators failed to pay the tax obligations of CenterCede’s clients, Overcash and allegedly Moody each continued to draw a $240,000 annual salary from CenterCede.

In announcing today’s sentences, Judge Whitney said that the Court wanted to “send a message to others entrusted with third parties’ money, and anyone who is a fiduciary of other people’s money.”  Judge Whitney noted that Thigpen “learned his lesson the hard way.”  Judge Whitney also said that Overcash “committed a serious crime that victimized a lot of businesses and individuals, and the Internal Revenue Service” and that Overcash’s conduct resulted in “a lot of people being severely hurt.”

Thigpen and Overcash previously pleaded guilty to wire fraud charges.  Moody is currently charged with one count of conspiracy and one count of wire fraud and has been released on bond. The conspiracy charge carries a maximum of 5 years in prison and a $250,000 fine.  The wire fraud charge carries a maximum of 20 years in prison and a $250,000 fine.  All charges against Moody are allegations and he is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.

The investigation for the case is being handled by USPIS and IRS-CI.  Assistant U.S. Attorneys Corey F. Ellis and Taylor Phillips of the U.S. Attorney’s Office, in Charlotte are in charge of the prosecution.

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced to 33 months in prison a Fayetteville, N.C. woman responsible for creating fake patient records in a Medicaid fraud conspiracy, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Tanisha Melvin, 36, was also ordered to serve three years under court supervision and to pay $392,159.81 as restitution to Medicaid.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Rose in making today’s announcement. 

According to information in filed court documents and today’s sentencing hearing, between October 2012 and August 2013, Melvin was involved in a Medicaid fraud conspiracy organized by the ring’s leader, Cynthia Harlan.  Harlan owned and operated “Heartland Consulting and Marketing, Inc.,” a Charlotte-area company, purportedly specializing in the operation of mental health companies and Medicaid reimbursement.  According to court records, Harlan executed a Medicaid fraud scheme involving the fraudulent submission of fake reimbursement claims to Medicaid for services that were never actually provided to beneficiaries.  Court records show that Harlan relied on a network of conspirators, including Melvin, whom she had recruited to carry out the scheme.

According to court records, as part of the healthcare fraud conspiracy, Melvin was responsible for creating fraudulent patient records for companies purported to provide outpatient mental and behavioral health services, including “Kings of Carolina Care 1” (Carolina Care 1) in Rockingham, N.C., and “United Rehabilitation Services” (URS) in Erwin, N.C.  At the direction of Harlan, Melvin fabricated and compiled the sham paperwork in patient files to support the false Medicaid reimbursement claims submitted on behalf of the two companies.  These patient files included fabricated intake packets, non-existent mental health problems and made-up treatment for the problems.  The patient files were intended to deceive Medicaid auditors in case there was an inquiry about the accuracy of the fake claims.  According to court records, during the relevant time period the conspirators attempted to obtain from Medicaid over $1.6 million in fraudulent reimbursement claims. Melvin, Harlan and the other conspirators received a portion of the fraud proceeds for their respective roles in the scheme. 

Court records show that after Harlan became aware that she was being investigated for Medicaid fraud, Harlan instructed Melvin to destroy records relevant to the scheme.  Melvin destroyed documents and, as directed by Harlan, contacted other members of the conspiracy to alert them to the investigation and to instruct them to destroy documents, emails and text messages for the purpose of obstructing the investigation. 

Melvin pleaded guilty in December 2015 to one count of health care fraud conspiracy.  Today, she was released on bond following her sentencing hearing and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

In announcing today’s sentence Judge Whitney noted that the crime involved “Scarce taxpayer funds that are to be used to assist those that are the most needy.”

In addition to Melvin, three other members of the conspiracy have already been sentenced to prison.  The owners of URS, Alexander Bass and Torrey Darnell Moton, were previously sentenced to 32 and 25 months in prison, respectively, three years of supervised release and were ordered to pay $370,372.37 as restitution to Medicaid.  LaChanda Clotiel Parks, who was also responsible for generating some of the fake patient paperwork, was sentenced to 28 months in prison, followed by three years of supervised release, and was ordered to pay $352,565.69 in restitution for her role in the conspiracy.  The owners of Carolina Care 1, Tyree Craig Jones and Claude Bernard McCray, have been charged with one count of health care fraud conspiracy.  Cynthia Harlan is currently in federal custody on health care fraud conspiracy, aggravated identity theft and obstruction charges. 

The investigation was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. Assistant U.S. Attorney Kelli Ferry is in charge of the prosecution.

The investigation is the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil 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 focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].  To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

CHARLOTTE, N.C. – A federal jury delivered guilty verdicts today against four members of the street gang “La Mara Salvatrucha,” or “MS-13,” who were on trial for participating in a racketeering conspiracy, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  The convictions stem from the multiple acts of violence committed by the defendants for the benefit of the criminal enterprise, including murder and attempted murder.  U.S. District Judge Robert J. Conrad Jr. presided over the trial.

Miguel Zelaya, 20, of Charlotte, Luis Ordonez-Vega, 36, of Concord, N.C., Jorge Sosa, 24, of Charlotte, and William Gavidia, 23, of Kannapolis, N.C. were each convicted of one count of conspiracy to participate in racketeering activity (RICO). 

Zelaya was also convicted of murder in aid of racketeering and 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 Jose Orlando Ibarra.  

Ordonez-Vega was also convicted of murder in aid of racketeering and 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 Noel Navarro Hernandez.

Sosa was convicted of attempted murder in aid of racketeering and 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, that being attempted murder in aid of racketeering. 

According to filed court documents, witness testimony, trial evidence and statements made in court:

From at least in or about 2009 to about May 2015, the four defendants along with 33 others named in a federal indictment, were members of the MS-13 gang, a criminal organization with over 6,000 members in the United States and 30,000 members internationally.  MS-13 originated in Los Angeles, California, and has spread to states across the country, including in North Carolina.  The gang’s members are mostly immigrants or descendants of immigrants from El Salvador and other Central and Latin American countries.  In North Carolina, some of the active MS-13 members are divided into different groups, or “cliques,” which include the “Trece Locos Salvatrucha,” the “Hollywood Locos Salvatrucha,” the “Charlotte Locotes Salvatrucha,” the “Centrales Locos Salvatrucha,” and the “Coronados Little Cycos Salvatrucha,” among others.  The different cliques work together to carry out criminal acts, to protect the interests of the criminal enterprise, and to assist each other in avoiding law enforcement detection. 

MS-13 members adhere to a set of gang rules and pay dues which fund the gang’s criminal activities and support other gang members or their families in the U.S and abroad.  Gang members are also expected to protect the name, reputation, and status of the gang and its members, and to punish through acts of violence and intimidation those who disrespect the gang.  Some MS-13 members signify their affiliation with the gang by wearing blue, black and white color clothing and certain “Mara Salvatrucha,” or “MS-13” tattoos.

Members of MS-13 in Charlotte participated in multiple meetings at various times to discuss gang-related matters and to plan the commission of future crimes for the benefit of the gang.  They were also responsible for numerous criminal acts including murder and attempted murder. 

Zelaya, a/k/a “Most Wanted” and “Ne Ne”, is a member of the “Coronados Little Cycos Salvatrucha” clique.  On December 18, 2013, Zelaya shot and killed Jose Orlando Ibarra, an associate of a rival gang, “The Latin Kings.”  According to trial evidence and testimony, Zelaya admitted to law enforcement that he shot Jose Ibarra because Ibarra owed him money for a gun and because Ibarra and his brother, a Latin King member, had been looking for one of Zelaya’s “homies” with a shotgun. 

Ordonez-Vega, a/k/a “Big Boy,” is a self-admitted member of MS-13 from Nassau County, New York, and a member of the “Brentwood Locos Salvatrucha” clique.  Ordonez-Vega has “MS” tattooed across his stomach and “La Mara Salvatrucha” tattooed across his chest. On June 6, 2013, Ordonez-Vega shot and killed Noel Navarro Hernandez in a strip mall parking lot in Charlotte.  Evidence presented at trial showed that Ordonez-Vega and other MS-13 members targeted Navarro because they believed that Navarro was a rival gang member because of the way he talked, wore red, and his haircut.

Sosa, a/k/a “Koki” and “Loco” is a member of the “Charlotte Locotes Salvatrucha” clique.   According to trial evidence, Sosa has been involved in multiple gang-related incidents on numerous occasions.  For example, on February 1, 2008, Sosa flashed MS-13 gang hand signs at a rival gang member’s mother and pointed a handgun at her while they were stopped in traffic.  On October 15, 2011, Sosa warned a man who asked him to leave a party that he would return with other MS-13 gang members to shoot the victim.  Also, on July 5, 2013, Sosa and other MS-13 members tried to break into a vehicle then attempted to run over with a car the officers who tried to arrest them.  And on June 30, 2013, Sosa was involved in a gang-related shooting, when he and another person followed their victims in a neighborhood in Charlotte and opened fire with a high caliber rifle. 

Gavidia, a/k/a “Duro,” is also a member of the “Coronados Little Cycos Salvatrucha” clique.  According to evidence presented at trial and witness testimony, Gavidia has carried out criminal acts in support of the gang and has often fought rival gang members in clubs.  For example, Gavidia admitted that he taxed drug dealers in MS-13 dominated clubs.  Gavidia was also involved in a shooting on August 11, 2013, when another MS-13 gang member and indicted co-conspirator, Albert Vela-Garcia, shot a victim in the back following a bar fight started by Gavidia.  Gavidia has also attacked a victim for falsely claiming to be a member of MS-13.

“A federal jury has rightfully convicted four gang members responsible for committing multiple acts of violence, including murder,” said U.S. Attorney Rose in making this announcement.  “Today’s guilty verdicts underscore that even though gang membership may in some ways ‘protect’ gangsters from outsiders, it certainly won’t protect them from the vast reach of the U.S. Attorney’s Office and our law enforcement partners.  Together, we will continue to identify and prosecute gang offenders who carry out violent acts for the benefit of their criminal enterprise,” said U.S. Attorney Rose.

The four defendants convicted today will remain in federal custody until their sentencing, which has not been set.

Thirty of the 37 MS-13 gang members previously charged with RICO conspiracy by federal criminal indictment in connection with this case have entered guilty pleas and are currently awaiting sentencing.  They are: Carlos Almonte, Jose Danny Argueta, Juan Bergamasco-Suarez, Milton Chavarria, Raul Contreras, Luis Erazo, Marvin Fuentes-Canales, Luis Funes-Rivera, Jorge Garcia, Cesar Garcia-Perez, Saul Gavidia, Raul Guardado, Angel Hernandez, Jose Manuel Linares, Rene Lopez-Ventura, Jose Moran-Celis, Daniel Navarro, Jonathan Noble, Christian Pena, Jorge Perez, Victor Pineda, Rosendo Rivas, Fec Rodriguez-Vareal, Oscar Trejo, Jaime Turcios, Jose Vasquez, Marlon Vasquez-Maldonado, Albert Vela-Garcia, and Alexis Villalta-Morales.  Four others remain fugitives.  They are: Neris Gutierrez, Salvador Ruiz, Luis Villalta, and Miriam Barilles-Escamilla.  

Following today’s guilty verdicts, U.S. Attorney Rose commended the Charlotte Division of the FBI, ICE’s Homeland Security Investigations, the Charlotte-Mecklenburg Police Department and thanked them for working together to investigate this case.

This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF).  OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

Assistant U.S. Attorneys Elizabeth Greene and William Miller are in charge of the prosecution.

CHARLOTTE, N.C. – Charles Caleb Fackrell, 36, of Booneville, N.C. appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to one count of securities fraud for operating a $1.4 million Ponzi scheme, 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 (FBI), Charlotte Division, and North Carolina Secretary of State Elaine F. Marshall.

According to filed court documents and today’s plea hearing, beginning from in or about May 2012 to about December 2014, Fackrell executed a Ponzi scheme using approximately $1.4 million in funds he solicited from at least 20 victim investors in Wilkes County and elsewhere.  According to court records, Fackrell was a stockbroker who used his position of trust to solicit victim investors and steer them away from legitimate investments to purported investments with “Robin Hood, LLC,” “Robinhood LLC,” “Robin Hood Holdings, LLC,” “Robinhood Holdings, LLC” and related entities (collectively, “Robin Hood”).  These were entities Fackrell controlled and through which he could access the victims’ funds.

Court records indicate that Fackrell solicited his victim investors by making false and fraudulent representations, including that the investors’ money would be invested in, or secured by, gold and other precious metals, when in fact Fackrell spent only a fraction of investor money on such assets.  According to court records, Fackrell also falsely told victims that Robin Hood was a very safe investment, paying guaranteed annual returns of 5% to 7%.  According to court records, contrary to the promises he made to his victims and instead of investing the victims’ funds as promised, Fackrell used the majority of the money to cover personal expenditures, including hotel expenses, groceries, and medical bills, to make purchases at various retail shops and to make large cash withdrawals.  Fackrell also used a portion of the victims’ money to make purported “interest” payments to investors who demanded their money back and to induce further investments from existing investors and their friends and family members.  In all, according to court records, Fackrell diverted over $700,000 of his victims’ money – nearly half of the investor money he obtained – back to other investors in Ponzi fashion payments. 

According to court records, in an attempt to conceal his fraud, Fackrell asked a third party to destroy a computer and documents related to the Ponzi scheme, explaining that he was in trouble with the U.S. Securities and Exchange Commission.    

“Fackrell is an unscrupulous scammer that betrayed those who trusted him with their nest egg.  Instead of using his clients’ money for legitimate investments, as he promised he would, Fackrell focused on enriching himself and perpetuating his fraud through lies.  Thanks to the great work of our law enforcement partners Fackrell’s business of siphoning his clients’ money is over,” said U.S. Attorney Rose.  “This case is an example of how financial predators will use lies and deceit to get their hands on people’s hard-earned money, quickly turning trusting investors into financial fraud victims,” Rose added.   

“At its most basic level, this is a case about greed and the abuse of trust. Charles Fackrell had no regard for the victims he betrayed, making empty promises for big investment returns.  Now he will be held accountable for his actions because of the agents and prosecutors who worked so diligently to bring him to justice,” said Special Agent in Charge Strong.

“This case is particularly egregious because unlike the majority of registered stock brokers, this scam artist betrayed the trust of his clients for his own personal gain and benefit,” Secretary Marshall said. “We are extremely proud of assembling a case that has resulted in a guilty plea today.”

Fackrell was detained following his guilty plea. The securities fraud charge carries a maximum prison term of 20 years and a $5 million fine.  A sentencing date for the defendant has not been set.

The case is being investigated FBI and the Securities Division of the North Carolina Department of the Secretary of State.  U.S. Attorney Rose also thanked the North Carolina State Bureau of Investigation, the Yadkinville Police Department and Kinston’s Department of Public Safety for their invaluable assistance in this investigation. 

The prosecution is being handled by Assistant United States Attorney Daniel Ryan of the U.S. Attorney’s Office in Charlotte. 

STATESVILLE, N.C. – Two men responsible for the armed robbery of an area fast food restaurant were sentenced to prison yesterday, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Dashawn Raquan Hunt, 27, and Davon Santario McKnight, 26, both of Charlotte, were sentenced to 192 and 87 months in prison, respectively.   They were also each ordered by U.S. District Judge Richard L. Voorhees to spend three years under court supervision after they are released from prison.

“Over the past year, efforts have been aimed at crime prevention. However, the vigorous prosecution of violent criminals who spread fear in our communities and put innocent lives at risk remains a priority for my office. I would like to thank our local and federal law enforcement partners for their thorough investigation of this case that resulted in two dangerous criminals being taken off our streets,” said U.S Attorney Rose. 

According to filed court documents and court proceedings, on February 5, 2014, Hunt and McKnight, wearing hoodies, masks, gloves, and brandishing handguns, entered a Firehouse Subs restaurant located at 14039 East Independence Boulevard in Indian Trail, N.C. The two men ordered some restaurant employees and patrons to get on the floor at gunpoint and told other employees to hand them money from the cash register and the safe.  Hunt and McKnight then then fled the scene in a Ford Crown Victoria with $1,000 in cash.  According to court records, a concerned citizen saw the pair leaving the restaurant and thinking their behavior was suspicious called 9-1-1.  A police officer responding to the call stopped the vehicle and after approaching the car he noticed that one person was in the driver’s seat and another was lying down in the back seat.  Court records show while the police officer called for back-up the two robbers took off in their car and sped away toward Charlotte.  According to court records, Hunt and McKnight were arrested shortly thereafter, after the driver crashed his car into another vehicle. 

According to court records, four days prior to this armed robbery, Hunt, assisted by Toburia Qunita Bennett, robbed at gunpoint a McAllister’s Deli located in Mooresville, N.C.  According to court documents, on February 1, 2014, at about 4:00 a.m., Hunt approached a deliveryman who was making a delivery at the restaurant.  Court records show that Hunt pointed his gun at the deliveryman and directed him inside the restaurant, where he ordered the victim to put the store’s safe on a dolly and wheel it out to the parking lot.  Hunt then tied up the deliveryman inside the store and fled. Court records indicate that the deliveryman was able to get loose and call the police.  Officers later found the store’s safe still sitting on the dolly in the restaurant’s parking lot. 

According to court records, law enforcement located Bennett’s vehicle at a nearby gas station.  Bennett denied to law enforcement any involvement in the robbery and was arrested at the scene for driving with an expired license.  Court records indicate that while Bennett was sitting in her car, Hunt went to a nearby QT gas station, pointed a gun at the cashier and demanded the keys to the attendant’s car.  The attendant handed over the keys to Hunt, who fled the scene in the stolen vehicle. 

Bennett, 28, of Charlotte, later admitted to knowing that Hunt had committed other robberies and that he used a gun to carry out those robberies.  She pleaded guilty to conspiracy to commit armed robbery and was sentenced in February 2016 to 43 months in prison and three years of supervised release.

Hunt and McKnight pleaded guilty to robbery charges in April 2015.  Hunt also pleaded guilty to carjacking and use of a firearm in furtherance of a crime of violence in connection with the McAllister’s Deli robbery.  They are both 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 John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Chief Damon Williams of the Mooresville Police Department; Sheriff Eddie Cathey of the Union County Sheriff’s Office; Chief M.E. Plyler, Jr. of the Stallings Police Department; Chief Kerr Putney of the Charlotte-Mecklenburg Police Department; and Chief Rob Hunter of the Matthews Police Department for investigating the case.

Assistant U.S. Attorney Robert Gleason of the U.S. Attorney’s Office in Charlotte was in charge of the prosecution.

CHARLOTTE, NC - With the deadline for filing income tax returns rapidly approaching, Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge, Charlotte Field Office, IRS Criminal Investigation, jointly announce recent tax fraud prosecutions and sentencings, and deliver a powerful warning to those who are thinking about breaking the law by committing tax crimes.

“During this time of the year, IRS will receive millions of tax returns from honest taxpayers who file their returns on time and pay taxes they owe,” said U.S. Attorney Rose.  “Today’s warning is not for them.  Today’s warning is for tax cheats who break tax laws and abuse our tax system. If you belong in this category, pay close attention.  My office will hold accountable anyone who participates in a tax fraud scheme that puts an added tax burden on honest taxpayers and drains our public finances.”   

“Tax fraud exists in many forms, from unscrupulous tax preparers filing false and fraudulent returns, to identity thieves, and to those that go complex lengths to hide their income and evade paying the taxes they owe. If you are considering engaging in this criminal activity, you will be caught.” said Special Agent in Charge Holloman. “There is no offseason for IRS Criminal Investigation, as we continue to engage in a year-round effort to investigate potential criminal violations of the Internal Revenue Code and other financial related crimes, in a manner that fosters confidence in the tax system and compliance with the laws. IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves through tax fraud schemes.” 

On March 16, 2016, Frank Alton Moody, II, an operator of Charlotte-area payroll services company CenterCede Services, Inc., was indicted for failing to pay more than $9 million in federal payroll taxes to the IRS that had been withheld on behalf of CenterCede’s clients.  According to the indictment which was unsealed yesterday, Moody instructed and supervised others to prepare, sign and file employer’s quarterly federal tax return, Forms 941 and thereafter did not remit payment of taxes reflected.  (3:16-cr-00070).

The prosecution of Moody for his role in failing to pay over employment taxes is just one example of our district’s commitment to prosecuting tax cheats including those who cheat on their own taxes, those who prepare false tax returns for others, and those who file fraudulent tax returns using stolen identity information.

TAX EVASION AND FILING FALSE TAX RETURNS.

Over the last year, the U.S. Attorney’s Office has prosecuted and convicted numerous individuals for omitting income from their individual tax returns, and defendants have received substantial sentences for tax charges, ranging from several years in prison to home confinement.  For example, the following individuals were sentenced for lying to the IRS about their taxable income:

Amy Hilty (3:15-cr-00233), an accountant and former resident of Stanley, N.C., was sentenced to 18 months in prison in February 2016.  Hilty pleaded guilty to tax evasion for hiding more than $520,000 in personal income from the IRS and failing to file tax returns for years 2008 through 2011.  Hilty also pleaded guilty to wire fraud.

Jarrett Mitchem (1:14-cr-00035), a resident of Hendersonville, N.C. maintained a UBS bank account with a balance of approximately $4M and failed to report the earnings from the foreign investments on his 2005 - 2008 tax returns.  He was sentenced in February 2016 to nine months in prison and three months of home confinement.

Sammie Marks (3:15-cr-00125), a resident of Matthews, N.C., owned and operated a metal and salvage business and failed to report more than $1.1 million of income he received from his business during years 2009 through 2013.  Marks was sentenced in December 2015 to one year and one day in prison.

Janice Terry-Kidd (3:14-cr-00243), a resident of Huntersville, N.C., embezzled approximately $526,000.00 from her employer, Wilburn Auto Body, from 2008 to 2013.  As a Human Resource Officer responsible for payroll, Terry-Kidd used the social security number of a previous employee to create fraudulent payroll checks and direct them to be deposited into her personal bank account.  In addition, Terry-Kidd failed to report income from the embezzled payroll checks on her own personal income tax return resulting in approximately $106,000.00 of tax due and owing. Terry-Kidd was sentenced in November 2015 to 33 months in prison.

Teng Lor (3:15-cr-00080), a resident of Matthews, N.C., and the owner of T&C Equipment, Inc. and LOR Enterprises, Inc. which operated Laundromats in the Charlotte area concealed gross receipts and taxable income of more than $545,000 from the IRS for the 2010 through 2012 years.  Lor was sentenced in October 2015 to six months in prison and six months of home confinement.

Mark Le (3:14-cr0010), a Huntersville physician, hid approximately $2.4 million in personal income from the IRS in 2009 and 2010 by falsely claiming that certain payments were business expenses of his medical practice.  Le used these funds to purchase and construct a $2.4 million 8000-square foot residence on Lake Norman.  Le, who pled guilty to tax evasion and health care fraud, was sentenced to 18 months in prison in September 2015.

FRAUDULENT RETURN PREPARERS

Our office diligently works to investigate and prosecute unscrupulous tax return preparers.   Examples of prosecutions of tax return preparers during the last year include:

Malik Shropshire (3:15-cr-00025), a resident of Charlotte, he was sentenced in February 2016 to 51 months in prison for filing false tax returns and lying on a loan application.   Shropshire worked as a tax return preparer and aided and assisted in the preparation of hundreds of false tax returns, that included, among other things, false Schedule C businesses, false dependents, and false refundable education credits.

Fitzroy Lawrence (3:15-cr-00057), a resident of Charlotte, he was sentenced in February 2016 to 27 months in prison for filing false tax returns.  Lawrence aided and assisted in the preparation of hundreds of false tax returns which were filed with the IRS, seeking fraudulent tax refunds totaling approximately $2.6 million. 

STOLEN IDENTITY REFUND FRAUD

In addition to prosecuting tax evaders and fraudulent tax return preparers, our office also investigates and prosecutes those individuals who steal the identities of taxpayers to file fraudulent tax returns.  Examples include:

Yolanda Tiess Kitson (1:13-cr-00031), was sentenced to 72 months in prison and ordered to pay restitution of more than $3.9 million for her role in a fraudulent tax refund scheme involving using stolen identities to obtain fraudulent tax refunds. 

Cara Michelle Banks (1:15-cr-00032) pleaded guilty for her role in the same fraudulent tax refund scheme as Kitson and is awaiting sentencing. 

Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims.  Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.

The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud.  Illegal scams can lead to significant penalties and interest and possible criminal prosecution.  IRS Criminal Investigation works closely with the Department of Justice to shutdown scams and to prosecute the criminals behind them. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season.  Taxpayers are urged look out for, and to avoid, the following common schemes:

• Identity Theft

• Phone Scams

• Phishing

• Return Preparer Fraud

• Offshore Tax Avoidance

• Inflated Refund Claims

• Fake Charities

• Falsely Padding Deductions on Returns

• Excessive Claims for Business Credits

• Falsifying Income To Claim Credits

• Abusive Tax Shelters

• Frivolous Tax Arguments

Education is the best way to avoid these common schemes.  To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov.  Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.

STATESVILLE, N.C. – A Taylorsville, N.C. man with multiple past felony convictions was sentenced yesterday to 92 months in prison for breaking into homes and stealing the owners’ firearms, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term, Andrew Ray Jonas, 34, was sentenced to three years of supervised release by U.S. District Judge Richard L. Voorhees, who presided over the sentencing hearing. 

“Over the course of his criminal career Jonas had been warned many times to stay away from guns.  Instead, Jonas went on a break-in spree, stealing numerous firearms from innocent homeowners which he then traded for money.  As a result, he will spend the next seven years behind bars.  Jonas should have paid closer attention to those who tried to warn him,” said U.S. Attorney Rose.

According to filed court documents and statements made in court, on May 19, 2014, law enforcement were notified that a residence in the Taylorsville area had been broken into.  A A revolver, a pistol and jewelry were among the items stolen from the residence.  According to court records, eye witnesses stated that prior to the break-in a gold SUV had been parked outside the residence, occupied by what appeared to be two females wearing bandanas.  Later the same day, law enforcement located the vehicle which displayed a license plate that belonged to a different vehicle. Court records show that Jonas, who was a passenger, was wearing a bandana on his head.  According to court records, Jonas was arrested after law enforcement found the two stolen firearms inside the car by Jonas’ feet. 

Court records show that during the investigation law enforcement found evidence tying Jonas to multiple break-ins of homes in Taylorsville.  According to court records, Jonas was also found in possession of tools stolen from the home break-ins, and in possession of pawn tickets for stolen lawn and power tools that he had pawned.  Court records indicate that one person told law enforcement that he had purchased multiple firearms from Jonas and had paid $340 to $360 for each one. Jonas pleaded guilty in September 2015 to one count of theft of a firearm.  Jonas’ previous convictions prohibit him from possessing a firearm and ammunition.

In handing down the sentence, Judge Voorhees stated that the sentence was to “protect the public from further crimes of the defendant.”  Judge Voorhees expressed “grave concern for further criminality of particularly the breaking and entering sort.”  Judge Voorhees observed, “hard working people work hard to get a house, and want it to be a castle, a place of sanctity, security,” and that defendant’s acts had violated that sense of security.  Judge Voorhees also noted that Jonas has “’Villain’ tattooed on his right arm, it does not make him a villain, but speaks to his state of mind.”

Jonas 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 C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Sheriff Chris Bowman of the Alexander County Sheriff’s Office for investigating the case.

Assistant U.S. Attorney Robert Gleason of the U.S. Attorney’s Office in Charlotte was in charge of the prosecutions.

STATESVILLE, N.C. – One of the leaders and seven co-conspirators of a major drug ring responsible for trafficking more than 450 kilograms of cocaine to Western North Carolina and funneling millions in drug proceeds back to Mexico were sentenced earlier this week, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Richard L. Voorhees presided over the sentencing hearings.

The eight men sentenced on Monday and Tuesday in federal court in Statesville are:

• David Maldonado-Rendon, 33, of Mexico – Sentenced to 210 months and five years of supervised release.

• Pedro Maldonado-Sanchez, 24, of Mexico – Sentenced to 87 months and five years of supervised release.

• Larry Woodley, 26, of Landon, S.C. – Sentenced to 66 months and three years of supervised release.

• Juan Pablo Diaz-Herrera, 26, of Troutman, N.C. – Sentenced to 57 months and three years of supervised release.

• Germaine Woodley, 42, of Waxhaw, N.C. – Sentenced to 48 months and three years of supervised release.He was also ordered to forfeit $1.2 million in drug proceeds.

• Miguel Ibarra-Espinoza, 35, of Mexico – Sentenced to 46 months and five years of supervised release.

• Alberto Pedraza, 56, of Farmville, N.C. – Sentenced to 46 months and three years of supervised release.

• Brian Maldonado-Reyes, 22, of Madera, California – Sentenced to eight months and three years of supervised release.

Three more main participants of the drug conspiracy, Fortino Maldonado-Guillen, James Davis, and the drug ring’s co-leader Maria Abernethy, aka Rosy Maldonado, will be sentenced on June 8, 2016.  Two other indicted co-conspirators, Saloman Maldonado and Saul Maldonado-Guillen, aka Valeria Maldonado-Guillen, remain fugitives.  Over the course of the investigation, law enforcement also seized approximately $750,000 in U.S. currency, six vehicles and five properties.

According to filed documents and statements made during court proceedings:

Over the course of the conspiracy, which lasted from about 2010 to about November 2014, David Maldonado, at first working with his uncle, Fortino Maldonado, and later with his wife, Rosy Maldonado, established a drug trafficking operation responsible for distributing approximately 450 kilograms of cocaine to Western North Carolina, South Carolina and elsewhere.  James Davis, Germaine Woodley and his brother, Larry Woodley, were David Maldonado’s main buyers.  At different times, the remaining co-conspirators operated as drivers, or “drug mules,” for the drug conspiracy.

February to July 2011 – David Maldonado and Fortino Maldonado

From about February 2011, David Maldonado and Fortino Maldonado began trafficking cocaine that Fortino Maldonado obtained from a source in Virginia.  The two men trafficked between two and 10 kilograms of cocaine at a time, and resold it mainly to James Davis, Germaine and Larry Woodley and other local cocaine dealers.  Between February and July 2011, David and Fortino Maldonado trafficked approximately 100 kilograms of cocaine and received approximately $3.2 million in drug proceeds.

December 2011 to November 2014 – David Maldonado and Rosy Maldonado

In or about December 2011, David Maldonado and his wife, Rosy Maldonado, began trafficking large amounts of cocaine supplied by a source in Mexico known to Rosy Maldonado.  From about December 2011 to about November 2014, David and Rosy Maldonado and their co-conspirators trafficked approximately 350 kilograms of cocaine and received more than $11 million in drug proceeds.  David and Rosy Maldonado funneled most of the drug proceeds back to Mexico, after keeping a portion of the money for running the drug conspiracy. 

Over the course of the conspiracy, Rosy and David Maldonado made multiple trips to Texas to pick up the packaged cocaine from their Mexican supplier, which they transported back to North Carolina hidden in compartments the pair had installed in numerous vehicles.  These secret compartments were located at different areas of the vehicles, depending on the type of car used, including under the front passenger seat, the rear bench seat, the vehicle’s truck bed and elsewhere.  Some of the hidden compartments were large enough to transport as much as 19 kilograms in a single trip.  Each time the pair picked up the packaged cocaine from Texas, they delivered large cash payments to their Mexican supply source.  For example, between August and November 2012, the pair transported approximately 65 kilograms of cocaine from Texas and delivered approximately $1.7 million in U.S. currency.

Sometime after September 2013, Rosy and David Maldonado hired Juan Pablo Diaz-Herrera and Brian Maldonado-Reyes as drivers for the conspiracy.  Juan Diaz and Brian Maldonado began transporting the cocaine and cash to and from Texas in the same manner.  The conspiracy began to unravel when, in November 2013, law enforcement in Gulfport, Mississippi stopped the vehicle Juan Diaz and Brian Maldonado were driving to Texas, seizing more than $392,000 in cash.  

“This highly active drug ring was responsible for trafficking hundreds of kilos of cocaine to the area,” said U.S. Attorney Rose in making today’s announcement.  “I want to thank the multiple law enforcement agencies in North Carolina and other states for their hard work over the course of this investigation.  Working with our law enforcement partners, we effectively traced and dismantled this poisonous pipeline of cocaine that has undoubtedly destroyed many lives and has affected the families of those addicted to the drug.”

In addition to the prison terms, the Judge Voorhees ordered David Maldonado, Pedro Maldonado and Miguel Ibarra to be deported to Mexico upon completion of their respective prison terms. All federal sentences are served without the possibility of parole.

The case is the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation.       OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement, U.S. Attorney Rose thanked the multiple agencies involved in this case for their investigative efforts and assistance in dismantling this major drug trafficking ring.  Specifically, U.S. Attorney Rose commended the work of the Drug Enforcement Administration (DEA); the Internal Revenue Service, Criminal Investigation Division; the United States Marshals Service; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the Matthews Police Department; the Pineville Police Department; the Monroe Police Department; the Gastonia Police Department; the Charlotte-Mecklenburg Police Department; the Cornelius Police Department; the Gaston County Sheriff’s Office; the Union County Sheriff’s Office; the Iredell County Sheriff’s Office; the Beaufort County Sheriff’s Office; the Gilford County Sheriff’s Office; the Charleston County Sheriff’s Office; the Mississippi Highway Patrol; and the Gulf Coast High Intensity Drug Trafficking Area (HIDTA) Intelligence Center.

Assistant U.S. Attorney Elizabeth Greene led the prosecution for the U.S. Attorney’s Office.  Assistant U.S. Attorney Sanjeev Bhasker handled the sentencings of the defendants.

CHARLOTTE, N.C. – A South Carolina man was sentenced today to 52 months in prison for a firearms violation, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.   In addition to the prison term handed down by U.S. District Judge Max O. Cogburn, Jr., Buster Marshall, 44, of Fort Mill, S.C. was also ordered to serve a three-year term of supervised release.  Marshall pleaded guilty in November 2015 to one count of unlawful possession of a firearm. Marshall’s previous felony convictions prohibit him from possessing a firearm.    

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; Chief Rob Hunter of the Matthews Police Department; Sheriff Eddie Cathey of the Union County Sheriff’s Office; and Chief J. Bryan Gilliard of the Monroe Police Department.

According to filed court documents and statements made in court, on March 25, 2015, Marshall confronted his ex-girlfriend at the parking lot of a fast food restaurant located in Matthews, N.C. Court records show that when the woman refused to speak with Marshall, he pulled out a revolver, pointed it at her and pulled back the hammer.  When Marshall’s ex-girlfriend called 9-1-1, Marshall drove off in his car.  According to court records, law enforcement attempted to pull over Marshall’s vehicle, but Marshall eluded the officers driving at high speed, eventually striking another vehicle in Monroe, N.C.  Court records indicate that after hitting the other car, Marshall fled from law enforcement on foot with the silver revolver tucked in his waistband.  Marshall then unsuccessfully tried to take another vehicle and he was arrested by law enforcement shortly thereafter.

Marshall has been in federal custody since July 2015 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation was handled by ATF, the Matthews Police Department, the Union County Sheriff’s Office and the Monroe Police Department.  Assistant U.S. Attorney Craig Randall of the U.S. Attorney’s Office in Charlotte was in charge of the prosecutions.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that U.S. District Judge Max O. Cogburn, Jr. revoked the U.S. citizenship of a man charged with concealing his criminal history on his naturalization application.  Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (ICE/HSI) in Georgia and the Carolinas joins U.S. Attorney Rose in making today’s announcement.

Wilson Rene Cagua-Anzules, 34, of Charlotte, pleaded guilty in July 2015 to one count of making false and misleading statements during the application process to become a United States citizen.  Yesterday, Judge Cogburn sentenced Cagua-Anzules to a year of probation stemming from that conviction and granted the government’s motion to revoke the defendant’s American citizenship.  The defendant was also ordered to return to the government his certificate of naturalization, his American passport, his voting card and any other documents evidencing American citizenship.   The Court also ordered that Cagua-Anzules must leave the United States voluntarily on or before Friday, April 8, 2016, or otherwise be arrested by immigration agents.

According to the sentencing hearing and court documents filed in the case, Cagua-Anzules was born in Ecuador in 1982, and entered the United States in 1999 as a lawful permanent resident.  In June 2010, Cagua-Anzules filed an application for naturalization, and answered “No” on the application form’s question, “Have you ever committed a crime or offense for which you were not arrested?”  In February 2011, Cagua-Anzules’ naturalization application was approved, following an oral interview with a United States Citizenship and Immigration Services (USCIS) officer.  Cagua-Anzules received his certificate of naturalization in March 2011. 

According to court records, on or about February 15, 2012, Cagua-Anzules pleaded guilty in Mecklenburg County Superior Court to one count of taking indecent liberties with a child and received a sentence of 15 to 18 months in prison.  Court records show that in his state court proceedings, Cagua-Anzules admitted that he had committed this crime in August 2010.  Court records indicate that the criminal act occurred during Cagua-Anzules’ naturalization process, but the defendant failed to reveal this material information both on his naturalization application form and during his interview with a USCIS officer. 

 “Today, a federal judge stripped the U.S. citizenship of a man who did not deserve such privilege,” said U.S. Attorney Rose.  “Cagua-Anzules violated our immigration laws and compromised the integrity of our naturalization proceedings.  The United States has always been a welcoming country to honest, law-abiding foreign nationals in search of freedom, prosperity and the pursuit of the American dream.  But make no mistake that we will prosecute those who try to cheat their way into an American citizenship.  Liars and cheats need not apply,” Rose added.

The investigation was handled by ICE/HSI.  Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte was in charge of the prosecutions.

CHARLOTTE, N.C. – Xavier Shiheen Mills, 23, of Charlotte, was sentenced today to 161 months in prison for carjacking a family at gunpoint, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max O. Cogburn, Jr. also ordered Mills 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 or about January 7, 2015, Mills carjacked a woman, her teenage son, and her other two young children, ages three and four, at a gas station located in Charlotte.  According to court records, the family had stopped at the gas station to refill their car, when Mills approached the female victim who was standing by the gas pump, pointed a firearm at her and demanded the car keys, which were inside the vehicle.  Court records show that Mills got inside the car to look for the keys, pointed the gun at the male victim seating in the passenger seat, and hit him in the head with the firearm.  According to court records, once the male victim was out of the car, Mills fired his gun and the bullet entered a nearby parked unoccupied vehicle, passing through a child’s car seat and driver’s headrest.  At that time, the male victim reached into the car, retrieved the keys and gave them to Mills.  The male victim was able to pull the two young children out of the car before Mills drove off with the stolen vehicle. 

Court records show that Mills was captured on surveillance video and was identified by an individual who knew him and recognized the red backpack Mills was carrying at the time of the carjacking.  Law enforcement recovered the stolen vehicle a few days later.  Court records indicate that inside the stolen vehicle, law enforcement found Mills’ backpack, ammunition and the firearm he had used to carry out the carjacking.  In November 2015, Mills pleaded guilty to one count of carjacking and one count of possession of firearm in furtherance of a crime of violence. 

“Mills turned a family’s quick stop at a gas station into a nightmare, terrorizing them and carelessly putting their lives, and the lives of other bystanders, in danger.  Thankfully, no loss of life occurred.  Mills is headed to federal prison but this family will continue to feel the effects of this harrowing experience for a long time. We are grateful to them for their cooperation in the investigation and prosecution,” said U.S. Attorney Rose.  

“This case is another example of ATF’s commitment to ensure the public’s safety by removing violent criminals from our communities.  This result could not have happened without the outstanding partnership between ATF and the Charlotte Mecklenburg Police Department,” said Special Agent in Charge Hyman.

Mills 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 handled by ATF and CMPD.  The prosecution for the government was handled by Special Assistant U.S. Attorney Rebecca McNerney and Assistant U.S. Attorney Craig Randall of the U.S. Attorney’s Office in Charlotte.

ASHEVILLE, N.C. – Today, the U.S. Attorney’s Office for the Western District of North Carolina hosted a conference in Asheville to address the growing threat of heroin addiction and opioid drug abuse in the western part of the district.  The conference was the first-ever held in the area and was co-sponsored by the Drug Enforcement Administration (DEA), the Buncombe County Sheriff’s Office, the Asheville Police Department and Smoky Mountain LME/MCO, a local management entity/managed care organization. 

Each year more than 46,000 people in the U.S. die from a drug overdose and half of those deaths are related to opioid abuse, including prescription pain medication. People who take prescription painkillers, which are prescribed by a physician, can become addicted with just one prescription. Most first-time abusers of painkillers obtain them from a friend or relative.  A 2014 national survey reported an estimated 1.4 million people in the United States abused a prescription pain killer for the first time that year.  In the 1960’s, more than 80% of opioid abusers began using heroin first.  In the 2000’s, 75% of opioid abusers started with prescription opioids.  More than 10 million people in the United States, age 12 and older, reported non-medical use of prescription opiates in 2014.

“Heroin addiction and opioid drug abuse are public health threats we must tackle head on,” stated U.S. Attorney Jill Westmoreland Rose, who delivered opening remarks this morning.  “As heroin is quickly becoming the number one cause of overdose deaths in the area, the consequences of opioid drug abuse are taking a tremendous toll on our communities.  Today’s summit puts a spotlight on the devastating impact of heroin and opioid addiction and the importance of combining our resources to address this public health crisis, focusing on awareness, prevention, treatment and developing a coordinated community response to this epidemic.”

Approximately 200 professionals from the fields of law enforcement, medicine, substance abuse and treatment, as well as interested community members attended the summit, held on the campus of the University of North Carolina in Asheville.  Speakers from federal and local law enforcement agencies, medical experts and representatives of community organizations presented on a broad range of topics including: the alarming rise in heroin and opioid addiction; heroin trafficking trends and law enforcement efforts to stem the flow of opiates; prevention and medical treatment; and ways community organizations can support combating opioid addiction in western North Carolina and promote second chances for individuals in recovery.  Audience members also heard a first-hand account from a parent’s perspective on dealing with the death of a child from heroin overdose and the impact of the loss on the family. 

U.S. Attorney Rose thanked the DEA, the Buncombe County Sheriff’s Office, the Asheville Police Department and Smoky Mountain LME/MCO for their co-sponsorship and emphasized importance of the conference stating that, “Today’s summit is not a one-time event.  It is the beginning of a focused collaboration between law enforcement, the healthcare field and our community partners to confront heroin addiction and opioid drug abuse, address the problem in real and meaningful ways, and develop a systematic response to this dangerous epidemic.”

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today a methamphetamine dealer to 84 months in prison, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Paul Corbi, 35, of Asheville, N.C. was also ordered to serve four years of supervised release following his prison term. 

Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Sheriff Van Duncan of the Buncombe County Sheriff’s Office (BCSO) join U.S. Attorney Rose in making today’s announcement.

According to filed documents and statements made in court, on July 18, 2014, law enforcement conducted a traffic stop of the vehicle Corbi was driving.  During the course of the traffic stop, law enforcement recovered methamphetamine, some of which was packaged in a manner consistent with re-distribution, and a set of scales.  They also found a plastic bag containing methamphetamine and $3,130 in cash in Corbi’s pockets.  In total, law enforcement seized approximately 47 grams of methamphetamine, with an approximate street value of $4,700.  According to court records, at the time of his arrest Corbi had several outstanding state arrest warrants, including one for assaulting a government employee in state court.   In June 2015, Corbi pleaded guilty to one count of possession with intent to distribute methamphetamine. 

Corbi is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.   All federal sentences are served without the possibility of parole.

The investigation was handled DEA and the Buncombe County Sheriff’s Office.  Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville prosecuted the case.

CHARLOTTE, N.C. – Winston Sherif Richards, 40, a citizen of Jamaica, appeared in federal court and pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. Magistrate Judge David S. Cayer presided over today’s plea hearing. 

Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Patti Fitzpatrick, Port Director of the U.S. Customs and Border Protection (CBP) Area in Charlotte join U.S. Attorney Rose in making today’s announcement. This investigation is a direct result of HSI’s Airport Drug Interdiction initiative.

According to filed plea documents and today’s plea hearing, on October 24, 2015, Richards flew into Charlotte Douglas International Airport directly from Montego Bay, Jamaica.  Upon entering the United States, Richards presented himself to CBP agents at the airport.  Richards, who acknowledged packing his own luggage, had in his possession a suitcase and a computer bag.  After initial questioning, Richards was sent to secondary inspection.  According to filed court documents, at secondary inspection, CBP agents opened Richards’ luggage and discovered an orange-and-grey colored backpack. Agents examined these items and discovered anomalies within the lining of the backpack.  Court records show that upon further inspection, the agents discovered two bags of cocaine hidden within the backpack lining, weighing approximately eight-hundred-twenty-two (822) grams with a street value, after sale and distribution, of approximately $100,000.

According to court records, upon discovery of the drugs, Richards was interviewed by HSI agents and gave multiple inconsistent statements about his luggage and eventual destination in the United States. Over the course of interview, Richards told HSI agents that he was hired by a man to bring some “stuff” to the United States and to deliver this bag to an unknown man in New York.  In court today, Richards admitted to actively participating to the drug conspiracy. 

Richards is currently in federal custody.  The charge levied against him carries a maximum prison term of 20 years and a $1,000,000 fine.  Richards also faces deportation proceedings upon completion of his prison term, which will be determined by the Court at sentencing.  A sentencing date has not been scheduled yet.

In making today’s announcement U.S. Attorney Rose thanked HSI, CBP and the North Carolina Department of Public Safety, Alcohol and Law Enforcement, for their investigation of the case. The prosecution for the government is being handled by Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Jemichael Lovelle Strong, 34, of Charlotte, to seven years in prison, followed by two years of supervised release on firearms charges for robbing a Charlotte-area bank in July 2015, 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 (FBI), Charlotte Division and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).

According to court documents and today’s sentencing hearing, on July 27, 2015, Strong robbed a First Citizen’s Bank branch located at 4325 Randolph Road, in Charlotte, stealing $3,871 in cash.  Court records show that Strong walked into the branch, pointed a handgun at a teller and showed her a note that read, “Put 100s, 50s, and 20s in a bag.”  Court records indicate that the teller retrieved money from the drawer and attempted to hand it to Strong.  Strong pushed his gun more in the teller’s direction, shook his head “no” and pointed his gun back at the teller’s drawer, nodding “yes” when the teller asked Strong if he wanted more money.  Court records show after the teller began walking toward Strong’s direction to hand him the cash, he shook his head “no” again, and nodded “yes” when the teller asked him if he wanted a bag for the money.  Strong fled the scene after the teller handed him the bank bag containing the cash.

According to court records, law enforcement retrieved Strong’s fingerprints from a bank deposit slip he had used to cover his gun at the time of the robbery.  A bank employee also told CMPD officers that she believed Strong had visited the bank on a previous occasion, wearing what looked like a security guard’s uniform.  Court records show that on July 31, 2015, CMPD officers arrested Strong at his residence, and recovered a security guard uniform matching the description of the bank employee, which they determined belonged to Strong’s girlfriend.  Law enforcement also seized from the residence the handgun that Strong used to carry out the bank robbery.   

Strong pleaded guilty in December 2015 to one count of possession of a firearm in furtherance of a crime of violence.    He remains in federal custody and will be turned over to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation was handled by the FBI’s Safe Streets Task Force and CMPD.  The prosecution for the government was handled by Assistant U.S. Attorney George Guise of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, pleaded guilty yesterday to engaging in an elaborate obstruction of justice scheme to conceal millions of dollars—which were subject to a freeze order and seizure warrant—from the government using a series of offshore accounts, domestic and foreign nominee accounts, a shell company and related bank and brokerage accounts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.

Jaymes Meyer, aka James Meyer, 47, of Napa, pleaded guilty yesterday before U.S. Magistrate Judge David S. Cayer of the Western District of North Carolina in Charlotte to obstruction of justice. 

According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts.  As a result of its investigation, the SEC filed a civil enforcement action against RVG, after which the court entered a freeze order that appointed a receiver and froze all of RVG’s assets.  Among other things, the receiver was responsible for marshaling, managing and distributing remaining RVG assets to impacted RVG investors.  In addition to the freeze order, the U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants.  Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the court order freezing RVG’s assets and requested that Meyer freeze any RVG assets in his possession, custody or control. 

According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets.  Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control within an hour of learning about the SEC’s investigation.  Over the next 10 months, Meyer used that money to purchase homes in Napa and the Turks and Caicos, to which he subsequently made $1.5 million in improvements, and withdrew approximately $195,000 in cash.  He also established a Cook Islands-based trust account, formed a shell company and opened a brokerage account in the shell company’s name to further conceal the trail of RVG assets subject to the freeze order and seizure warrant.

Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.

In connection with his plea agreement, Meyer agreed to pay an approximately $4.8 million money judgment and to forfeit the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense. 

The U.S. Secret Service and the IRS-CI investigated the case. 

Assistant U.S. Attorney Mark T. Odulio of the Western District of North Carolina and Trial Attorney Kevin Lowell of the Criminal Division’s Asset Forfeiture and Money Laundering Section-Bank Integrity Unit are prosecuting the case. 

The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, pleaded guilty yesterday to engaging in an elaborate obstruction of justice scheme to conceal millions of dollars—which were subject to a freeze order and seizure warrant—from the government using a series of offshore accounts, domestic and foreign nominee accounts, a shell company and related bank and brokerage accounts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.

Jaymes Meyer, aka James Meyer, 47, of Napa, pleaded guilty yesterday before U.S. Magistrate Judge David S. Cayer of the Western District of North Carolina in Charlotte to obstruction of justice. 

According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts.  As a result of its investigation, the SEC filed a civil enforcement action against RVG, after which the court entered a freeze order that appointed a receiver and froze all of RVG’s assets.  Among other things, the receiver was responsible for marshaling, managing and distributing remaining RVG assets to impacted RVG investors.  In addition to the freeze order, the U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants.  Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the court order freezing RVG’s assets and requested that Meyer freeze any RVG assets in his possession, custody or control. 

According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets.  Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control within an hour of learning about the SEC’s investigation.  Over the next 10 months, Meyer used that money to purchase homes in Napa and the Turks and Caicos, to which he subsequently made $1.5 million in improvements, and withdrew approximately $195,000 in cash.  He also established a Cook Islands-based trust account, formed a shell company and opened a brokerage account in the shell company’s name to further conceal the trail of RVG assets subject to the freeze order and seizure warrant.

Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.

In connection with his plea agreement, Meyer agreed to pay an approximately $4.8 million money judgment and to forfeit the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense. 

The U.S. Secret Service and the IRS-CI investigated the case. 

Trial Attorney Kevin Lowell of the Criminal Division’s Asset Forfeiture and Money Laundering Section-Bank Integrity Unit and Assistant U.S. Attorney Mark T. Odulio of the Western District of North Carolina are prosecuting the case. 

ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced a Hendersonville, N.C. man to 60 months in prison and three years of supervised release on firearms related offenses, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In June 2014, a federal jury convicted Warren Rosslyn Newell, 49, of two counts of possession of ammunition by a convicted felon.

C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Sheriff Charles S. McDonald of the Henderson County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.

According to filed court documents and evidence presented at Newell’s trial, on July 30, 2013, law enforcement conducted a traffic stop of Newell’s vehicle and determined he was driving with a suspended license.  During the same traffic stop, law enforcement also recovered from Newell a non-functioning .22 caliber apparatus (commonly referred to as a “pen gun”), which was loaded with one round of .22 caliber ammunition.  Law enforcement also found in the trunk of Newell’s car his backpack, which contained a black mask, gloves, ligatures, and five knives.  Following Newell’s arrest, law enforcement retrieved another round of .22 caliber ammunition from his pocket. According to court records, Newell’s prior convictions in Texas and South Carolina prohibit him from possessing a firearm and/or ammunition. 

According to trial evidence and witness testimony, Newell told law enforcement that he needed the pen gun for protection, because he frequently worked for drug dealers as a debt enforcer.  According to evidence presented at trial, Newell told law enforcement that because of his reputation after serving 17 years in the Texas prison system, those who owed money to drug dealers usually agreed to make a payment without delay.  Newell also told law enforcement that he used the items inside the backpack in connection with collecting on the drug debts.  

“We are grateful for the excellent investigative work by the Henderson County Sheriff’s Office and ATF,” said U.S Attorney Rose.  “While Newell’s ultimate plans are unknown, what is clear is that he was in possession of the means and mechanisms to engage in unlawful conduct.  His sentence today reflects the seriousness of his crimes.” 

“ATF is committed to actively investigating and apprehending criminals who illegally acquire firearms or use firearms to commit violent crimes.  We will continue to work with our law enforcement partners in the Carolinas to keep our communities safe,” said Special Agent in Charge Hyman.   

“While I certainly support the right of law abiding citizens to own and carry firearms, convicted felons have lost that right as a result of their life choices. I applaud the work of our Henderson County Sheriff’s Office investigators, ATF and the U.S. Attorney’s Office as we partner to minimize criminal activity in our community,” stated Chief McDonald.  

Newell will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.   

The investigation was handled by ATF and the Henderson County Sheriff’s Office.  The case was prosecuted by Assistant United States Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville.

CHARLOTTE, N.C. – A Charlotte, North Carolina, area resident was sentenced to 41 months in prison today for his involvement in a fraudulent tax return scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

According to court documents and statements in court, in early 2011, Daniel Heggins, 44, and Joan Clark operated Guarantor Manufactures Inc. (GMI), a business that purported to help individuals who were in debt.  Heggins and his co-conspirators, including Clark, prepared and filed false tax returns on behalf of GMI’s clients claiming fraudulent tax refunds from the Internal Revenue Service (IRS) in the amount of their clients’ debts.  The intended loss of the conspiracy exceeded $4 million.  Heggins also charged GMI’s clients bogus filing fees of $2,500 to $5,000 in order to prepare and file the fraudulent returns.  Heggins and Clark pleaded guilty to conspiracy to defraud the United States in November 2015.

“While taxpayers are ultimately responsible for the information reported on their returns, they also are entitled to honest and accurate assistance from those paid to prepare their returns,” said Acting Assistant Attorney General Ciraolo.  “Heggins and Clark took advantage of clients seeking such assistance, and used their fraudulent scheme to line their own pockets.  The Department will continue to work with our partners in the Internal Revenue Service to investigate, prosecute and incarcerate such individuals for their criminal conduct, and seek restitution for the victims.”

“As we are in the midst of the annual tax season, it is important for consumers to be cognizant of fraudsters who charge exorbitant fees to prepare tax returns and engage in the submission of fraudulent tax returns,” said U.S. Attorney Rose.  “Taxpayers are urged to be wary of using tax return preparation businesses which make unusual or extreme promises and to exercise caution when selecting a tax preparation service.”

“During filing season, I’d like to encourage the taxpayers to heed the old warning, ‘Buyer beware,’” said Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation Division (IRS-CI), Charlotte Field Office. “Heggins and Clark perpetrated a scheme in which they offered assistance to clients and then victimized them, through their crimes. While the methods utilized by criminals may change, the constant is that we will be there to make sure they are brought to justice.”

In addition to the prison term, U.S. District Judge District Max O. Cogburn Jr. ordered Heggins to serve three years of supervised release and pay $ 24,325 in restitution to victims of the fraud, which included former clients and the IRS.  Clark was sentenced in February to 20 months in prison for her involvement in the fraudulent refund scheme and for a separate scheme in which she filed fraudulent tax returns in the name of trusts.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Rose commended special agents of IRS-Criminal Investigation and the FBI, who investigated the case and Assistant U.S. Attorney Mike Savage of the Western District of North Carolina and Trial Attorney Todd Kostyshak of the Tax Division, who prosecuted the case.

CHARLOTTE, N.C. – On Tuesday, March 15, 2016, U.S. District Judge Max O. Cogburn, Jr. sentenced Gerald Lynn Weir, Jr., 45, of Monroe, N.C., to 216 months in prison on transportation of child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Weir was also ordered to serve a lifetime of supervised release and was ordered to register as a sex offender.

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

According to filed documents and statements made in court, on or about November 29 2013, law enforcement became aware that an individual, later identified as Weir, was using an e-mail address to send and receive child pornography.  In December 2013, law enforcement executed a federal search warrant for Weir’s email account.  A review of Weir’s email account revealed at least 66 emails related to child exploitation, including 42 videos and 136 images of children being sexually abused.  Weir pleaded guilty to transportation of child pornography in October 2015.

Weir has been in federal custody since June 2015, and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole.

The investigation was handled by HSI assisted by the Union County Sheriff’s Office.  Assistant U.S. Attorney Cortney S. 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.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that the leader of a drug trafficking conspiracy was sentenced to 135 months in prison.  U.S. District Judge Max O. Cogburn, Jr. also ordered Laurentino Benitez, 45, of Huntersville, N.C., to serve four years under court supervision after he is released from prison. 

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office.

According to filed court documents and today’s sentencing hearing, from at least 2013 to about May 2015, Benitez was the leader of a drug ring responsible for trafficking large amounts of narcotics, including cocaine, heroin and marijuana, to the Charlotte area.  Court records show that the drugs were sent to North Carolina from Texas and Mexico by other members of the conspiracy, usually concealed in vehicles or inside electronic goods.  Once delivered to Charlotte, court records show that the drugs were redistributed locally to other members of the conspiracy.  Benitez previously admitted in court documents that he was responsible for trafficking between 15 to 50 kilograms of cocaine. 

According to court records, over the course of the conspiracy law enforcement seized from Benitez multiple firearms, including a shotgun, six pistols and ammunition, and over $866,820 in illegal drug proceeds. Benitez pleaded guilty in October 2015 to one count of conspiracy to distribute and to possess with intent to distribute controlled substances. 

Benitez has been in federal custody since April 2015 and will be transferred to the custody of Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

Five others have been charged in connection with the drug conspiracy.  They are: Henry Adams, Jr., Roberto Pineda-Alberran, Charles Potts, Jason Taylor, and Sidney Truesdale.  Adams was previously sentenced to 24 months in prison and three years of supervised release after pleading guilty to one count of conspiracy to distribute and to possess with intent to distribute controlled substances.  Potts, Taylor and Truesdale have also each pleaded guilty to the same charge and are currently awaiting sentencing.  Pineda-Alberran has pleaded guilty to one count of money laundering conspiracy and is awaiting sentencing.

The investigation was handled by DEA.  Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. handed down a 20-year prison sentence today to Joseph Michael Osborne on drug conspiracy and firearms offenses, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Cogburn also ordered Osborne, 38, of Charlotte, to serve five years under court supervision after he is released from prison.

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

According to court proceedings and filed court documents, beginning in at least 2014 continuing through April 2015, Osborne was part of a drug conspiracy involving the distribution of methamphetamine in and around Mecklenburg County.  According to court records, Osborne sold methamphetamine to an undercover officer.  On April 2, 2015, law enforcement executed a search warrant at Osborne’s residence and seized 254 grams of 98.1% pure methamphetamine, five handguns, one of which was stolen, an AR-15 assault-style firearm, and $35,733 in cash.  Osborne pleaded guilty in October 2015 to conspiracy to distribute methamphetamine and possession of firearms in furtherance of drug trafficking. 

Osborne 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 HSI and CMPD for their investigative efforts.  The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

A dual U.S.-Costa Rican citizen was sentenced yesterday to 108 months in prison for his role in a $1.88 million sweepstakes fraud scheme that victimized hundreds of elderly U.S. residents, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Geoffrey Alexander Ramer, 36, formerly of Falls Church, Virginia, was sentenced today by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina.  Ramer was also ordered to pay $2,871,430.35 in restitution and to forfeit $1,886,018.

On Sept. 15, 2014, Ramer pleaded guilty to one count of conspiracy to commit wire fraud, eight counts of wire fraud, one count of conspiracy to commit money laundering and four counts of international money laundering in connection with the telemarketing fraud scheme.   

According to the plea documents, from 2008 through December 2013, Ramer owned and operated call centers located in Costa Rica.  Ramer admitted that he and his co-conspirators called U.S. residents, many of whom were elderly, and falsely informed the victims that they had won a substantial cash prize in a sweepstakes, and that, in order to receive their prize money, the victims were to send money to Costa Rica for a purported refundable insurance fee.  After receiving the victims’ money, the co-conspirators would contact the victims to falsely inform them that the prize amount had increased and the victims needed to send additional money for more purported fees, Ramer admitted.  According to the plea, Ramer and his co-conspirators would continue these attempts to collect additional money until the victims went broke or discovered the fraud.  Ramer admitted that he and his co-conspirators utilized VoIP phones that displayed a Washington, D.C., area code in order to conceal that they were calling from Costa Rica, and sometimes falsely claim to be from a U.S. federal agency to give victims a false sense of security.  The co-conspirators kept the victims’ funds, never provided any winnings to the victims and used the funds to continue the call centers’ operation and for the co-conspirators’ personal benefit, Ramer admitted.

Plea documents state that, along with his co-conspirators, Ramer was responsible for causing more than $1.88 million in losses to hundreds of elderly Americans.

The U.S. Postal Inspection Service, the Internal Revenue Service-Criminal Investigation, the FBI, the Federal Trade Commission and the Department of Homeland Security are investigating the case.  Senior Litigation Counsel Patrick M. Donley and Trial Attorney William H. Bowne of the Criminal Division’s Fraud Section are prosecuting the case.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that Eric Bernard Mitchell, 44, of Charlotte, was sentenced to 37 months in prison for defrauding Medicaid of over $2 million.  U.S. District Judge Max O. Cogburn, Jr. also ordered Mitchell to serve one year under court supervision and to pay $ 2,049,932.12 as restitution to Medicaid.  Mitchell pleaded guilty October 2015 to health care fraud and money laundering charges. 

U.S. Attorney Rose is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID), Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General for the region including North Carolina, and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to filed court documents and today’s sentencing hearing, from about 2007 to about 2009, Mitchell co-owned and operated Angelic Community and Family Services, L.P. (Angelic), which provided alternative care in a non-institutional setting to Medicaid recipients with intellectual/developmental disabilities.  Angelic later became defunct, and in 2009, Mitchell assisted in the creation of another company, identified in court documents as “Company #1,” which provided the same type of services as Angelic.  Mitchell operated significant portions of Company #1’s business and had exclusive control of the company’s bank accounts.  According to court records, both Angelic and Company #1 were approved by Medicaid to provide such services to beneficiaries and to receive reimbursement from the government program.

Court records show that that from about October 2009 to about June 2014, Mitchell submitted fraudulent claims to Medicaid on behalf of Company #1, seeking reimbursement for services which were never provided to beneficiaries with developmental disabilities.  According to court records, Mitchell submitted the fraudulent claims using the Medicaid beneficiary information of former clients of Angelic, who Mitchell knew were approved to receive such services.  Over the course of the scheme, Mitchell submitted at least $2.5 million in fraudulent claims using the beneficiaries’ stolen information and to receiving over $2 million in payments from Medicaid. 

According to court records, Medicaid directed payments for Company #1’s reimbursement claims, including the fraudulent ones, to multiple bank accounts exclusively controlled by Mitchell.  Over the course of the conspiracy, Mitchell used portions of the Medicaid funds to cover personal expenses, including to make multiple car payments to a Mercedes dealer and to pay for various car repair services.  

Mitchell will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation was handled by HHS-OIG, IRS-CI and MID.   Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil 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 focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the 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 E-Mail at [email protected].  To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

CHARLOTTE, N.C. – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, provided the below statement regarding the recent U.S. Court of Appeals decision in U.S. v. Ragin:

“Mr. Ragin’s prosecution, conviction and incarceration kept the community safe.  While we are disappointed that the Court of Appeals did not accept the findings of fact by the trial judge who we believe was in the best position to observe the conduct of defense counsel during the trial, public safety continues to be our priority and we are committed to retrying Mr. Ragin for the crimes he committed.” 

A copy of this press release and the court’s opinion may be found on the website of the U.S. Attorney’s Office for the Western District of North Carolina.

ASHEVILLE, N.C. – U.S. District Judge Max O. Cogburn, Jr. today sentenced four men to prison terms ranging from 63 months to 39 months for their involvement in a methamphetamine trafficking ring operating in the Henderson county area, 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 Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Sheriff Charles S. McDonald of the Henderson County Sheriff’s Office.

Judge Cogburn sentenced Nahuan Solano, 27, of Hendersonville, N.C. to 63 months in prison followed by five years of supervised release; Eric Lee Garber, 41, of Saluda, N.C. to 60 months in prison followed by four years of supervised release; Benjamin Nelson, 31, of Hendersonville, to 57 months in prison followed by five years of supervised release; and Allan Collado-Raudez, 23, of Asheville, N.C. to 39 months in prison followed by four years of supervised release.  They each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute methamphetamine.

According to filed court documents and today’s sentencing hearing, from about May 2014 to May 2015, the four men were involved in a drug trafficking conspiracy, responsible for distributing significant quantities of methamphetamine in Henderson county and surrounding areas.  According to court records, Maria Del Ruiz-Zazueta was the leader of the drug ring and was assisted by her daughter, Stephanie Alvarenga, in supplying the methamphetamine to their co-conspirators.  Solano was a methamphetamine trafficker and acted as a runner for Ruiz-Zazueta and Alvarenga.  According to court records, the ring’s customers included area methamphetamine traffickers Garber and Nelson.   Ruiz-Zazueta and other members of the ring utilized Antonio Barbosa as an alternate source of supply, who was assisted by Collado-Raudez.

Court records show that, on or about May 4, 2015, law enforcement in Oklahoma conducted a traffic stop of the vehicle in which Alvarenga was a passenger.  According to court records, Alvarenga and the driver of the vehicle were headed from California to North Carolina, to meet Alvarenga’s mother.  During the traffic stop, law enforcement seized nearly 10 pounds of methamphetamine from a backpack located in the trunk of the car. 

The four men sentenced today are 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.

Four others, Maria Del Ruiz-Zazueta, Stephanie Alvarenga, Daniel Alfaro, and Antonio Barbosa have also entered guilty pleas for their involvement in the drug conspiracy and are currently awaiting sentencing.

Two more conspirators, Wade Henderson and Edwardo Lopez are currently charged with one count of conspiracy to distribute and to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine.  

The investigation was handled by the DEA and the Henderson County Sheriff’s Office.  Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s office in Asheville is in charge of the prosecution.

ASHEVILLE, N.C. – U.S. District Judge Max O. Cogburn, Jr. today sentenced Jamie Lynn Swartz, 36, formerly of Sylva, N.C. N.C. to serve 70 months in prison followed by five years of supervised release on drug conspiracy 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 Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; B.W. Collier, Director of the North Carolina State Bureau of Investigation; and Sheriff Chip Hall of the Jackson County Sheriff’s Office.

According to filed court documents and today’s sentencing hearing, from about August 2013 to March 2015, Swartz engaged in a drug conspiracy and was responsible for trafficking crystal methamphetamine to Jackson County and surrounding areas.  According to court records, Swartz was utilizing a source of supply in Atlanta, Georgia for larger quantities of crystal methamphetamine.  Court records show that Swartz made frequent trips to Atlanta and purchased the drugs from her co-defendant, Lisa Keith Jenkins. 

Swartz pleaded guilty in October 2015 to one count of conspiracy to possess with intent to distribute methamphetamine.  She has been in federal custody since August 2015 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.

Lisa Jenkins was sentenced on February 2, 2016 to 78 months in prison and five years of supervised release, after pleading guilty to conspiracy to possess with intent to distribute methamphetamine. 

The investigation was handled by the DEA, SBI and the Jackson County Sheriff’s Office.  Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s office in Asheville is in charge of the prosecution.

STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down lengthy prison terms to two methamphetamine traffickers today, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Roger Dale Franklin, 54, of Bogart, Georgia, was sentenced to 40 years and Mario Alberto Mondragon, 38, of Mexico, was sentenced to 30 years in prison.  They were each ordered to serve five years under court supervision, following their prison terms.

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Nick Annan, Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) in Atlanta and the Carolinas.

According to court proceedings, filed documents and evidence presented at each defendant’s trial:

Franklin was involved in a methamphetamine trafficking conspiracy, from about 2007 to about 2014, and, along with his conspirators, Franklin sold approximately five kilograms of methamphetamine.  Over the course of the conspiracy, in 2013, law enforcement officials in Lenoir and Caldwell County, as well as in Morganton, seized methamphetamine from Franklin’s vehicle on four occasions.  On two of those occasions, Franklin was in possession of handguns.

From 2012 to June 2014, Mondragon was responsible for trafficking over 4.5 kilograms of high-quality crystal methamphetamine “ice” - which has a street value of more than $150,000.

The defendants will be transferred to the custody of the Federal Bureau of Prisons upon designation to a federal facility.  All federal sentences are served without the possibility of parole.

The sentencings are the result of two parallel and coordinated Organized Crime Drug Enforcement Task Force (OCDETF) investigations, codenamed “Lay Low” (involving Mondragon) and “Dixie Crystal” (involving Franklin) led by DEA and HSI, with the assistance of the North Carolina State Bureau of Investigation, North Carolina State Highway Patrol, Alexander County Sheriff’s Office, Alleghany County Sheriff’s Office, Ashe County Sheriff’s Office, Boone Police Department, Caldwell County Sheriff’s Office, Catawba County Sheriff’s Office, Hickory Police Department, Iredell County Sheriff’s Office, Lenoir Police Department, Lincoln County Sheriff’s Office, Mooresville Police Department, Pineville Police Department, Statesville Police Department, Burke County Task Force, and other law enforcement agencies throughout North Carolina and Texas, Georgia, and Tennessee.       

According to court documents, to date, more than 80 individuals have been convicted as a result of the two related investigations.  Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars.  Over the course of the investigation, law enforcement seized more than 10 kilograms of crystal methamphetamine, $100,000 in U.S. currency and other assets, and numerous firearms. 

OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement U.S. Attorney Rose thanked all the law enforcement agencies for their investigative efforts.  The prosecution for both investigations is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – Robert Michael Milton, 51, of Blacksburg, S.C., was sentenced yesterday on wire fraud charges and was ordered to serve 45 months in prison for committing a 29-month fraudulent refund scheme targeting Walmart stores in North Carolina, South Carolina, Georgia and Florida, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term, Chief U.S. District Judge Frank D. Whitney also ordered Milton to serve two years of supervised release. 

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 yesterday’s sentencing hearing, Milton engaged in the fraudulent scheme from December 2010 to April 2013.  Court records show that Milton manufactured counterfeit Walmart paper sales receipts to appear substantially similar to previously-issued genuine Walmart paper sales receipts that Milton obtained when he purchased one or more prepaid debit cards totaling from $500 to $1,000.  Court records show that, using transaction numbers from the original Walmart store receipts, Milton printed counterfeit Walmart receipts that replaced the actual purchased products associated with the transaction codes with UPC-barcodes and descriptions of substituted counterfeit Microsoft software and counterfeit DVDs.  Court records show that Milton took advantage of a glitch in Walmart’s system, which the company has since fixed, and used the counterfeit Walmart receipts and counterfeit software and DVDs to get full refunds for the retail price of the original transaction.    In addition to using counterfeit software and DVDs, Milton also used low-priced fishing rods and reels affixed with barcodes for high-priced fishing rods and reels to obtain fraudulent refunds. 

According to court records, Milton targeted and obtained fraudulent refunds from numerous Walmart stores in North Carolina, South Carolina, Georgia and Florida, as reflected in a Walmart Store Atlas seized from Milton’s warehouse.  Court records show that Milton’s warehouse contained thermal receipt printers, a barcode reader, 85 fake driver’s licenses for Ohio, South Carolina and Nebraska, and 1,600 counterfeit holograms for Ohio driver’s licenses.  Milton’s warehouse also contained a Mapquest printout that mapped out a 786-mile, two-day Georgia road trip with 70 waypoints associated with Walmart stores.  

At Milton’s sentencing, the government introduced published National Retail Federation reports that estimated the “amount of fraudulent returns” in the retail industry ranged from $9.1 billion to $14.3 billion during the time period from 2010 through 2013.  According to court records, the combined losses were estimated at approximately $400,000 for fraudulent refunds paid to Milton and the value of seized counterfeit software and seized DVDs Milton used in his fraudulent refund wire fraud scheme. Milton pleaded guilty to a wire fraud charge in July 2014.

Milton has been in custody since his arrest in April 2013, and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole. 

The investigation was handled by the HSI.  The prosecution for the government was handled by Assistant United States Attorney Thomas O’Malley of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that over $7.7 million in federal grants were awarded in 2015 to local law enforcement agencies, non-profit organizations, educational institutions and tribal government programs in the Western District.  The federal grants were awarded by the Office of Justice Programs (OJP), the Office of Violence against Women (OVW), the Office of Community Oriented Policing Services (COPS Office), and the Bureau of Justice Assistance (BJA).

In making today’s announcement, U.S. Attorney Rose stated, “Federal grant funding is an important resource for local law enforcement, community groups and non-profit service providers.  The much-needed funding is used to support law enforcement initiatives, fund tribal programs, enhance public safety, and provide victim assistance services within local and tribal communities.”  

Grantees in 12 of the western district’s 32 counties received federal funding.  The funding will be used by local law enforcement to support a broad range of activities, including conducting state and local initiatives, technical assistance, training, equipment, supplies, court programs, prevention and education programs, drug treatment and enforcement programs and crime victim and witness programs, among others.  Grants provided to educational institutions will be used for research purposes to assist law enforcement and to fund outreach and public awareness efforts, such as combating violence against women on campus. 

Funding allocated to non-profit organizations will be used for comprehensive victim-centered services, including victim assistance and advocacy, and legal services to victims of sexual assault and dating violence.  Funding provided to tribal government programs will be used to enhance civil and criminal tribal court systems and to improve access to those systems, as well as creating a domestic program to improve the support services available to Indian women victims, to develop ongoing education and prevention campaigns, to provide community outreach and legal assistance to Indian women.

The Office of Justice Programs (OJP) provides innovative leadership to federal, state, local, and tribal justice systems, by disseminating state-of-the art knowledge and practices across America, and providing grants for the implementation of these crime fighting strategies.  Current OJP funding opportunities can be found at: http://ojp.gov/funding/Explore/CurrentFundingOpportunities.htm.

The Office on Violence Against Women (OVW) currently administers 24 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 Office of Community Oriented Policing Services (COPS Office) is the component of the U.S. Department of Justice responsible for advancing the practice of community policing by the nation’s state, local, territorial, and tribal law enforcement agencies through information and grant resources.  Since 1995, COPS Office has invested over $14 billion to advance community policing.  For the latest applicant and grantee information please go to: http://www.cops.usdoj.gov/grants.

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. In order to achieve such goals, BJA programs illustrate the coordination and cooperation of local, state, and federal governments. 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

CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced that 10 individuals are facing multiple federal drug charges for their involvement in a drug conspiracy operating in Union County.  Nine of the 10 charged are in custody.  A criminal indictment was returned on February 17, 2016, and was unsealed in federal court following today’s arrests.  

C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina; Sheriff Eddie Cathey of the Union County Sheriff’s Office; and Chief Bryan Gilliard of the Monroe Police Department join U.S. Attorney Rose in making today’s announcement.

According to allegations contained in the criminal indictment, from on or about May 2003 to November 10, 2015, the defendants operated as a drug conspiracy responsible for trafficking at least 136 kilograms of cocaine and 53 kilograms of crack cocaine, primarily in and around Union County.During this morning’s round-up, law enforcement also recovered six handguns.

The 10 defendants named in the 67-count indictment are each charged with conspiracy to distribute crack cocaine and related drug offenses.  They are:

• Ernest Cuevas Bivens, 34, of Waxhaw, N.C. (arrested today)

• Robert Doneil Clyburn, Jr., 26, of Monroe, N.C. (arrested today)

• Jeffrey Darrell Crowder, Jr., 29, of Wingate, N.C. (arrested today)

• Ruthus Azam Ivey, 31, of Monroe. (arrested today)

• Dario Kinta Richardson, 30, of Mineral Springs, N.C. (arrested on 2/22/16)

• Quantravis Lavar Richardson, 28, of Monroe. (arrested today)

• Reginald Donovan Richardson, 31, address unknown, (arrested today).

• Adrian Lamar Sanders, 33, of Monroe. (previously in state custody)

• Maurice Dupree Starnes, 36, of Monroe. (arrested today)

• Eric Scott Truesdale, 45, address unknown. (not arrested yet)

(See chart below for federal charges and penalties for each defendant).

The arrests are the result of mutgny investitontargeted the trafficking of cocaine and crack cocaine in and around Union County ondutedy, the Union County Sheriff’s Office, and the Monroe Police Department, with the assistance of the North Carolina State Bureau of Investigation (SBI) and the North Carolina Division of Community Corrections.

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 said, “This morning’s arrests are part of my office’s ongoing effort to combat drug trafficking throughout our district.The law enforcement agencies that participated in this OCDETF investigation joined forces to fight drug distribution and to put an end to the violence that comes with drug trafficking.”

“These individuals were the target of our joint investigation because they distributed large quantities of cocaine and crack in the Union County area.  ATF will continue to work with our federal, state and local law enforcement partners to remove drug traffickers and their co-conspirators from our communities,” said ATF Special Agent in Charge Hyman.   

“These federal charges should send a clear message to drug traffickers in North Carolina.  The FBI and our law enforcement partners will not tolerate the damage that drugs do in our communities because some drug dealer wants to make a quick buck,” said FBI’s Special Agent in Charge Strong.   

“I am grateful for all the federal, state and local agencies that assisted in this investigation,” said Sheriff Cathey.“I want to assure the public that the Sheriff’s Office will continue to partner with other agencies to eradicate drug traffickers from Union County and to make our county a safer place to live.”

“This investigation was a great team effort and I credit all agencies involved for its successful outcome.  Everyone’s hard work and cooperation enabled us to conduct a thorough investigation across jurisdictional boundaries with outstanding results.  I would also like to remind citizens that anyone with information concerning drug activity is encouraged to contact anonymously the Monroe Police Department at 704-282-4700,” said Chief Gilliard.

The defendants will appear in federal court before a U.S. Magistrate Judge in Charlotte. The charges contained in the indictment are allegations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

U.S. Attorney Rose thanked all the law enforcement agencies for their assistance in this ongoing investigation.

Assistant U.S. Attorney Jennifer Dillon of the U.S. Attorney’s Office in Charlotte is handling the prosecution.

CHARLOTTE, N.C. – Amy Hilty, 38, formerly of Stanley, N.C. and now residing in Dalton, Ohio, was sentenced yesterday to 18 months in prison for stealing nearly $400,000 from her former employer and for tax evasion, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max O. Cogburn, Jr. ordered Hilty to serve three years of supervision following her prison term, and to pay restitution to her former employer and the IRS. 

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 (IRS-CI).

According to filed documents and yesterday’s court proceedings, from 2008 to 2012, Hilty was employed as accounting manager for a company located in Huntersville, N.C.  As the company’s accounting manager, Hilty’s responsibilities included preparing the company’s financial statements, maintaining QuickBooks, preparing payroll and making bank deposits.  According to court records, Hilty used her access to the company’s accounting system to divert company funds to bank accounts she controlled.  According to court records, Hilty covered her fraud by falsely recording the stolen funds in the company’s books and records as supplies, owner withdrawals and travel expenses, among others.  In this manner, court records show that Hilty embezzled $390,156.73 from the company during the relevant time period and used the money to purchase a new home and a BMW vehicle.  Court records also show that for tax years 2008 through 2011, Hilty did not file federal income tax returns, and failed to report the diverted income and her salary from the victim company, totaling $520,976.17. 

Hilty will be ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

The investigation was handled by the IRS-CI and the Huntersville Police Department.  The prosecution for the government is being handled by Assistant U.S. Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte.  

CHARLOTTE, N.C. – The leader of a drug trafficking network responsible for transporting more than one ton of marijuana to the Charlotte area and laundering over $1.7 million in drug proceeds was sentenced today by Chief U.S. District Judge Frank D. Whitney, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Ryan Tucker, 31, of Charlotte, was ordered to serve 292 months in federal prison, to be followed by 10 years of supervised release.

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; Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.  

According to filed court documents and court proceedings, from in or about 2008 to in or about 2014, Tucker used individuals operating as “couriers” to transport well in excess of 2,000 pounds of marijuana from California to the Charlotte area.  Court records indicate that Tucker’s network of drug couriers included Tucker’s father, Frederick Elwood Tucker, a retired SBI narcotics agent, and an unindicted commercial pilot who used a private jet to transport a shipment. According to court records, in most instances, Tucker’s couriers transported the packaged marijuana in vehicles and commercial freight carriers. 

Court documents show that Tucker also utilized his and other individuals’ bank accounts to launder more than $1.7 million of the proceeds of his drug trafficking.  In court today, Tucker’s prison sentence was enhanced, based on other relevant factors, including Tucker’s possession of firearms, his leadership role, his extensive criminal history, and an incident in which he shot and killed a person who was attempting to rob his residence of drugs or drug money.

Ryan Tucker’s father, Frederick Elwood Tucker, 69, of Lead, South Dakota, was previously sentenced to 37 month in prison, and three years of supervised release for his role in the drug conspiracy. 

The defendant 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.

This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation, codenamed “All Tuckered Out,” which is being led by HSI, IRS, and CMPD.  OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

The ongoing investigation and prosecution for the government is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

ASHEVILLE, N.C. – On Friday, February 19, 2016, U.S. Attorney Jill Westmoreland Rose convened a roundtable discussion with police chiefs, sheriffs and other law enforcement representatives of the district’s westernmost counties, to discuss law enforcement related issues impacting their communities. 

The meeting was held at the Eastern Band of Cherokee Indians Justice Center in Cherokee, N.C., and was attended by C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and representatives of The Yancey County Sheriff’s Office, the Swain County Sheriff’s Office, the Jackson County Sheriff’s Office, the Haywood County Sheriff’s Office, the Macon County Sheriff’s Office, the Maggie Valley Police Department, the Brevard Police Department and the Cherokee Police Department. 

“As the district’s chief federal law enforcement officer and a representative of the Justice Department, it is important to reach out to our local police departments and sheriffs’ offices to discuss some of the law enforcement issues they are currently facing,” said U.S. Attorney Rose, following Friday’s roundtable discussions.  “Local law enforcement agencies know and understand the unique needs of their communities, and their input ensures that we are effectively deploying federal resources to maximize the positive impact on the lives of the people in those communities.”

Among the issues discussed was the need for additional law enforcement training; the impact of crime in small and rural communities; conducting collaborative investigations and focusing on law enforcement initiatives that deliver greater local impact; joint terrorism-related investigations; as well as the epidemic of opiate and heroin overdose deaths.  Over the course of the meeting, U.S. Attorney Rose emphasized the importance of developing and maintaining strategic partnerships with local law enforcement agencies and reiterated her office’s commitment to ensuring their needs are met.          

“We rely on the dedicated service and assistance of our partners in local law enforcement agencies to keep our communities safe.  They are important partners and teammates and I have tremendous respect and gratitude for their professionalism, partnership and hard work.  Following today’s discussion, I am confident that we all have an increased understanding of each other’s needs in accomplishing our common goal: the safety and well-being of the people in our communities.”

CHARLOTTE, N.C. – Malik Shropshire, 43, of Charlotte was sentenced today to 51 months in prison for filing false tax returns and lying on a loan application, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Chief U.S. District Judge Frank D. Whitney ordered Shropshire to serve 3 years under court supervision following his prison term, and to pay $582,933 as restitution to IRS and $7,749.24 to a credit union he defrauded.

U.S. Attorney Rose is joined by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), in making today’s announcement.

According to filed court documents and today’s sentencing hearing, Malik Shropshire worked as a tax preparer and a financial advisor in the Charlotte area, and aided and assisted in the preparation of hundreds of false tax returns which were filed with the IRS.  Court records show that Malik Shropshire’s sister, Nkhenge Shropshire, was the owner of “Tax Connections,” a tax return preparation business also located in Charlotte.  According to court records, from 2010 through 2012, Malik Shropshire conspired with his sister and others, to execute a fraudulent tax fraud scheme involving the filing of fraudulent tax returns.  Court records indicate that Malik Shropshire recruited individuals to have their tax returns prepared and filed through his sister’s business and elsewhere, promising in exchange large tax refunds.  Court records show that Malik Shropshire obtained the fraudulent refunds by filing tax returns that contained fraudulent information, including false Schedule C businesses, false dependents, and false refundable education credits.  As a result of using the fraudulent information, court records show that the taxpayers’ tax liabilities decreased, they received larger tax refunds, and they qualified for the Earned Income Tax Credit.  According to court records, the tax loss associated with the fraudulent returns is $582,933.00.

In addition to the fraudulent tax scheme, court records show that Malik Shropshire, assisted by his sister, lied on loan applications and was able to obtain a credit card and a car loan, using fake social security numbers, false income information and false employment information.  According to court records, Malik Shropshire used the auto loan to purchase a Land Rover vehicle.  Subsequently, he defaulted both on the auto loan, and the credit card, after he maxed out its $10,000 limit.  Malik Shropshire pleaded guilty to conspiracy to defraud the IRS and to making false statements on a loan application in June 2015. 

In handing down Malik Shropshire’s sentence today, Judge Whitney emphasized that this was a very serious, sophisticated crime and noted the importance of general deterrence so “would be fraudsters” would not participate in tax refund fraud schemes.               

Malik Shropshire has been in federal custody since August 2015.  Upon designation of a federal facility he will be transferred to the custody of the Federal Bureau of Prisons. Nkhenge Shropshire was previously sentenced for her participation in the scheme.

The investigation was handled by IRS-CI.  Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte prosecuted the case. 

An Ohio man was sentenced to 108 months in prison for his role in laundering money for a Costa Rica-based “sweepstakes fraud” scheme that victimized U.S. residents, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Paul R. Toth Jr., 41, of Wintersville, Ohio, was sentenced yesterday by U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina.  In addition to imposing the prison sentence, Judge Conrad ordered Toth to pay $307,702 in restitution and to forfeit the same amount.

Toth was convicted on Aug. 4, 2015, following a two-day jury trial, of one count of conspiracy to commit money laundering and six counts of international money laundering stemming from his role in laundering money for a scheme to defraud two U.S. residents over the age of 55 out of more than $300,000 in savings.  The evidence at trial showed that telemarketers in Costa Rica, who were the defendant’s co-conspirators, posed as federal agents and deceived the two victims, who were husband and wife, into believing that they had won a large monetary prize in a sweepstakes contest.  The co-conspirators falsely told the victims that in order to receive the “prize,” the victims had to wire thousands of dollars to Costa Rica for a “refundable insurance fee.” 

The evidence at trial showed that, between approximately November 2009 and November 2010, Toth was a U.S.-based “smasher,” an individual who arranges to pick up victims’ money and take it to the fraudulent telemarketing organization, who facilitated the laundering of funds received from the elderly victims.  Specifically, according to trial evidence, Toth and others he recruited and supervised received more than $300,000 from victims and, using various individuals as senders and recipients to conceal the fraudulent nature of the transactions, wired more than $200,000 to co-conspirators in Costa Rica.  The evidence further demonstrated that Toth kept the remainder as his profit.

The U.S. Postal Inspection Service, Internal Revenue Service, FBI, Federal Trade Commission and Department of Homeland Security investigated the case.  Senior Litigation Counsel Patrick M. Donley and Trial Attorneys William H. Bowne and Anna Kaminska of the Criminal Division’s Fraud Section prosecuted the case.

CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. today sentenced eight men convicted of drug trafficking charges to prison terms ranging from 12 to 110 months, 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 (FBI), Charlotte Division and Chief Kerr Putney, of the Charlotte-Mecklenburg Police Department (CMPD).

The nine defendants sentenced today are:

• Noel Rondell Alexander, a/k/a “Floyd,” 26, of Charlotte – sentenced to 16 months followed by 3 years of supervised release.

• Akanni Butler, a/k/a “KB,” 30, of Charlotte – sentenced to 110 months followed by 3 years of supervised release.

• Anthony Carter, a/k/a “Sanchez,” 27, of Charlotte – sentenced to 24 months followed by 3 years of supervised release.

• Isaac Hampton, a/k/a “Ike,” 27, of Charlotte – sentenced to 12 months followed by 3 years of supervised release.

• William Kee, III, 21, of Charlotte – sentenced to 24 months followed by 3 years of supervised release.

• Rodney Smith, a/k/a “Man,” 23, of Charlotte – sentenced to 33 months followed by 3 years of supervised release.

• Antonio Sullivan, a/k/a “Pooh,” 37, of Charlotte – sentenced to 52 months followed by 3 years of supervised release.

• Vincent Thompson, 33, of Charlotte – sentenced to 12 months followed by 3 years of supervised release.

According to today’s sentencing hearings and court documents filed in the case, from about May 2014 to February 2015, the defendants were involved in a drug trafficking conspiracy.  Court records show that the defendants were all part of an open-air drug market that formed in, and operated around, the area of Beatties Ford Road and Catherine Simmons Avenue in Charlotte.  According to court records, the defendants carried out their illegal drug trading mainly out of the parking lots for two small strip shopping centers on Beatties Ford Road or in several other locations on Catherine Simmons Avenue, which intersects with Beatties Ford Road.  According to court records, the conspirators sold drugs, mostly “crack” cocaine, all hours of the day and night and frequently engaged in acts of violence, greatly impacting the residents and business owners in this community.

Over the course of today’s sentencing hearings, Judge Conrad noted that all of the residents of that community suffered as a result of these ongoing drug sales.

The investigation was handled by the FBI’s Safe Streets Task Force, of which CMPD is a partner member.  The prosecution is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – A coin and precious metals dealer and his company responsible for defrauding more than 380 customers of over $15 million were sentenced in federal court late Wednesday, February 17, 2016, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max O. Cogburn, Jr. sentenced Hannes Tulving, Jr., 60, of Newport Beach, California to 30 months in prison and three years of supervised release.  The company was ordered to pay a $10 million fine and was placed on a probationary period of two years.  Judge Cogburn reserved his ruling on the amount of restitution owed by Tulving and the company for 90 days.

Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division joins U.S. Attorney Rose in making today’s announcement.

According to the filed court documents and statements made in court, Hannes Tulving was the sole owner, shareholder and president of The Tulving Company, Inc. (Tulving Co.), a California-based business that sold coins, bullion, and other precious metals over the Internet.  Court records show that from about August 2013 to January 2014, Tulving and his company executed a scheme to defraud customers nationwide by inducing them to place orders for coins and other merchandise knowing those orders could not be fulfilled.  Court records show that the customers paid for the merchandise expecting their orders to be delivered within a certain time frame as advertised on the company’s website. 

Court documents show that Tulving and his company accepted the customers’ payments but failed to deliver some of the merchandise.  Instead, they diverted the customers’ payments to fulfill other customers’ orders, to pay company debts and to return the money to previous customers who did not receive their merchandise.  According to court documents filed in the case, the defendants defrauded more than 380 victims nationwide of over $15 million.  Hannes Tulving and the Tulving Co. each pleaded guilty to one count of wire fraud in August 2015.

In handing down Tulving’s sentence, Judge Cogburn noted what a staggering amount of money was stolen from the victims in such a short period of time.  He also noted the seriousness of the offense and said that, “People were seriously harmed and their lives are affected.  These people saved up money and they were hurt.”  

Hannes Tulving 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.

The U.S. Secret Service handled the investigation.  Assistant U.S. Attorney Kevin Zolot prosecuted this case.

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today Jarrett D. Mitchem, 66, of Hendersonville, N.C. to 9 months in prison on tax evasion charges, Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Mitchem was also ordered to serve 2 years under court supervision after he is released from prison, plus an additional 3 months of home confinement.  The court ordered that he pay $151,089 as restitution to the Department of Treasury.

U.S. Attorney Rose is joined in making today’s announcement Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

“Hiding money in secret offshore accounts and failing to report the income generated from those accounts is a crime that my office takes very seriously.  Tax cheats like Mitchem who choose not to pay their fair share and increase the burden on honest taxpayers will be prosecuted for their actions.  Citizens must ask themselves, is it worth a stint in federal prison to be a tax cheat?” said U.S. Attorney Rose.

“The Internal Revenue Service, Criminal Investigation is committed to ensuring respect for our laws; particularly with taxpayers who would use Swiss banks to conceal their foreign investments and income,”  said IRS-CI Special Agent in Charge Holloman.

In February 2009, the Union Bank of Switzerland (UBS) entered into a deferred prosecution agreement with the United States on charges of conspiring to defraud the United States by impeding the IRS, by helping U.S. taxpayer clients hide funds from the IRS in secret offshore accounts.  As part of its deferred prosecution agreement, UBS also agreed to provide to the government the identities of, and account information for, of persons who likely had engaged in actions designed to evade United States income tax liabilities, including Mitchem’s.

According to court records, beginning on or about November 1995, Mitchem opened a Swiss bank account at UBS.  Court records show that in 2005, Mitchem transferred to his UBS account approximately $4 million he inherited from his parents, who also maintained a bank account at UBS. 

Court documents indicate that in or about May 2011 an IRS revenue agent contacted Mitchem regarding the UBS accounts.  According to court records, Mitchem initially withheld some information pertaining to his UBS accounts but agreed to provide the UBS bank records after he was confronted by the IRS agent.  However, court records show that Mitchem only provided bank records for his parents’ UBS account and not his personal UBS account. 

In November 2011, Mitchem filed his federal tax return forms for tax years 2004 through 2007, in which he failed to claim capital gains and substantial interest income from money held in his UBS bank account.   Mitchem admitted in court and in filed documents that he knew his earnings should have been claimed and that he willfully omitted reporting them to avoid the payment of additional income tax.  Mitchem also admitted that the tax loss associated with the unclaimed income from his Swiss bank account is over $150,000. 

Mitchem will be ordered to report to the Federal Bureau of Prison upon designation of a designation of a federal facility.  All federal sentences are served without the possibility of parole.   

The investigation was handled by IRS-CI.  The case was prosecuted by Assistant United States Attorney Don Gast of the U.S. Attorney’s Office in Asheville.

CHARLOTTE, N.C. – A federal judge today handed down a 120-month prison term to a Charlotte woman convicted of a murder-for-hire plot against her ex-husband, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Fathia Davis, a/k/a Fathia-Anna Davis, 48, was also sentenced to two years of supervised release.  U.S. District Judge Robert J. Conrad, Jr. presided over the sentencing.  Judge Conrad also ordered Davis to undergo mental health treatment. 

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.

“Fathia Davis was willing to pay someone to take the life of another human being, and even though she had plenty of opportunities to change her mind, she never did.  Instead, she made sure the men she hired to carry out the murderous plot knew who the victim was and then tried to cover up her role in orchestrating this horrendous crime.  Thanks to a concerned citizen and great law enforcement coordination Davis’s true, calculated and menacing behavior was discovered, a life was spared, and now Davis will spend the next 10 years behind bars for the crime she committed, said U.S. Attorney Rose.

“Today’s sentence is a result of our proactive efforts to reduce violent crime in our communities.  In this case, law enforcement was able to prevent the tragic loss of human life.  We will continue to work closely with CMPD to apprehend and prosecute those who choose to commit heinous crimes like this,” said ATF Special Agent in Charge Hyman.

According to filed court documents, evidence presented at Davis’s trial and statements made during the sentencing hearing:

On or about January 2015, a concerned citizen informed law enforcement that Davis had asked him repeatedly to find her someone she could hire to kill her ex-husband.  On February 15, 2015, undercover officers posing as potential hitmen met Davis in a parking lot in Charlotte.  During that meeting, Davis agreed to pay the undercover officers $4,000 to shoot her ex-husband in the head.  Davis drove with the undercover officers to the victim’s residence and pointed out his apartment and vehicles.  Davis also told the officers that the victim had visitation with their daughter that week, and indicated that she was willing to have the victim killed during that time. Davis further told the officers that she wanted the victim out of her and her daughter’s lives, and that she had been trying for the last two years. 

Using a prepaid cell phone, Davis set up a meeting on February 22, 2015, with undercover officers and gave them $500 as a down-payment for the murder.  Davis told the officers that she had asked a friend withdraw the money from the bank so “it wouldn’t look funny.”  Davis also told the undercover officers that she would give them the rest of the money after they had killed her ex-husband.  The undercover officers told Davis that they would complete the job the following week and that she had until then to change her mind, to which she responded that she knew it was final.

On February 24, 2015, Davis met with the undercover officers and paid them $3,500 in cash after they told her that her ex-husband had been murdered.  Davis asked the undercover officers where the murdered had happened and expressed no emotion.  At the same meeting, the undercover men asked Davis to hand them the prepaid cell phone she had used to communicate with them.  Davis did not want to hand over the phone and told them that a friend of hers was going to get rid of it.  Davis reluctantly gave the phone to the undercover officers when they told her that they would break the phone.

On June 16, 2015, a federal jury convicted Davis of one count of use of interstate commerce facilities in the commission of murder-for-hire. 

In announcing today’s sentence, Judge Conrad said this was not a suggested crime and went on to say that this is not the first time that Davis had tried to kill a human being, noting that he believed the defendant tried to poison her ex-husband on a previous occasion. Judge Conrad also said that, “Ms. Davis was very serious about committing this crime,” and added that the crime was “Cold, calculated, intentional and the Court has to take that into account.” 

Davis has been in in federal custody since June 2015. Upon designation of a federal facility she will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.

ATF and CMPD investigated the case.  Assistant U.S. Attorneys Robert Gleason and Jennifer Dillon prosecuted the case.

CHARLOTTE, N.C. – A Charlotte man is facing federal charges for illegally obtaining and attempting to smuggle and export munitions to Ghana, West Africa, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The nine count indictment against Richmond Akoto Attah, 33, of Charlotte, was unsealed today in court, charging him with one count of violating the Arms Export Control Act (AECA), one count of illegal firearms dealing, two counts of smuggling goods from the United States and four counts of making false statements to a firearms dealer. 

C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas; and Patti Fitzpatrick, Port Director of the U.S. Customs and Border Protection (CBP) Area in Charlotte join U.S. Attorney Rose in making today’s announcement. 

“The indictment unsealed today alleges that Attah went to great lengths to carry out and conceal his gun trafficking scheme.  He falsified information to obtain firearms illegally and then tried to evade our country’s export restrictions on munitions by attempting to smuggle guns to West Africa.  Fortunately, our law enforcement partners detected and intercepted Attah’s dangerous plot,” said U.S. Attorney Rose.  “The consequences of gun trafficking can be grave.  Firearms illegally exported overseas can end up in the wrong hands, and potentially be used for criminal acts against innocent victims, including Americans.  The vigorous prosecution of gun traffickers ensures the safety not only of our citizens but people abroad,” Rose added.

“ATF is committed to using any and all resources to apprehend firearm traffickers and keep firearms out of the hands of violent criminals both domestic and abroad.  The successful conclusion of this investigation could not have occurred without the outstanding partnerships we have with our law enforcement partners,” said ATF Special Agent in Charge Hyman.

“The FBI’s technical expertise and global reach in this case proves our dedication to fighting weapons smuggling both in the United States and overseas. This investigation is yet another example of what can be accomplished when we join forces with our federal law enforcement partners and work toward a common goal,” said FBI Special Agent in Charge Strong.     

“Firearms regulations exist to ensure weapons crossing international borders are properly accounted for to preserve public safety and to keep them out of the hands of dangerous criminals,” said Special Agent in Charge Anna of HSI in Atlanta. “This case shows the significant consequences awaiting individuals who attempt to illegally smuggle weapons and ammunition across U.S. borders.”

“This is another example of the broad scope of U.S. Customs and Border Protection operations here in North Carolina and beyond,” said Patti Fitzpatrick, U.S. Customs and Border Protection Area Port Director in Charlotte.  “CBP officers remain committed to working with local, state and federal law enforcement agencies in an effort to keep all safe.”

According to allegations contained in the indictment, beginning in at least 2013 and continuing to the present, Attah purchased numerous firearms and ammunition he intended to smuggle and illegally export to Ghana.  The indictment alleges that Attah obtained the firearms by misstating on the required federal forms that he was the actual buyer and transferee of the firearms.  According to the indictment, Attah is not a federally licensed firearms dealer and does not possess a license to export firearms or ammunition to Ghana or any other country.

According to allegations in the indictment, from on or about September 2013 to December 2015, Attah purchased approximately 63 firearms and 3,500 rounds of ammunition from various stores, Internet vendors and at gun shows.  On or about September 4, 2015, Attah travelled from Charlotte to Ghana, returning on October 10, 2015.  According to the charges, during his return trip Attah hid $30,100 dollars in his luggage, falsely declaring on his customs paperwork that he was only bringing $350 back into the United States.  The indictment also alleges that from on or about November 2015, to December 13, 2015, Attah purchased approximately 22 firearms and ammunition from dealers in North Carolina and online.  Attah then hid 27 firearms, including semi-automatic pistols and revolvers, inside a washing machine and a dryer, and 3,500 rounds of ammunition inside a barrel.  The indictment alleges that Attah placed the washer, dryer, and barrel inside a shipping container and attempted to have it shipped from Charlotte to Ghana.  The indictment alleges that U.S. Customs officers recovered the firearms and ammunition before it was shipped outside the United States.

Attah had his initial appearance in federal court today.  The penalty for violating the AECA is a maximum of 20 years in prison and a $1 million fine or twice the amount of the criminally derived proceeds, whichever is greater.  The penalty for illegal firearms dealing is a maximum of five years in prison and a $250,000 fine.  The penalty for smuggling goods from the U.S. is a maximum of 10 years in prison and a $250,000 fine per count, and the penalty for making false statements in connection with the acquisition of a firearm is a maximum of 10 years in prison and a $250,000 fine per count.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceeding.

ATF, FBI, HSI and CBP are handling the investigation. In making today’s announcement U.S. Attorney Rose also thanked the North Carolina Highway Patrol, the Charlotte Mecklenburg Police Department and the Chatham County Sheriff's Office in Georgia for their assistance in this case.

Assistant United States Attorneys Michael Savage and Kevin Zolot of the U.S. Attorney’s Office in Charlotte are prosecuting the case.

ASHEVILLE, N.C. – U.S. Attorney Jill Westmoreland Rose announced that a Buncombe County man convicted of possession of a firearm by a convicted felon was sentenced today in Asheville by U.S. District Judge Martin Reidinger.  Jeremy Scott Powell, 31, of Leicester, N.C. was ordered to serve 63 months in prison, followed by three years of supervised release upon completion of the prison term.     

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 Sheriff Van Duncan, of the Buncombe County Sheriff’s Office.

According to filed court documents and statements made in court, on September 4, 2014, law enforcement conducted a traffic stop of the car Powell was driving, after it was determined that the license plate of Powell’s car belonged to another vehicle.  Following a search of the vehicle, court records show that law enforcement recovered a semi-automatic handgun, which was loaded with 13 rounds of ammunition.  According to documents filed in the case, Powell is prohibited from possessing a firearm, stemming from his 2008 North Carolina conviction of two counts of drug trafficking and one count of possession of a firearm by a felon.

Powell has been in federal custody since September 2014. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.   

The investigation was handled by ATF and the Buncombe County Sheriff’s Office.  The case was prosecuted by the U.S. Attorney’s Office in Asheville.

CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. ordered Jerry Lee Edwards, 30, of Charlotte, to serve 130 months in prison and three years of supervised release on drug and firearm 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 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 filed court documents and statements made in court, on August 15, 2013, while investigating criminal activity near the Sugar Creek/Interstate 85 corridor, law enforcement arrested Edwards, who was in a vehicle parked in a hotel parking lot in the area.  According to court records, at the time of his arrest, Edward possessed cocaine, crack cocaine, and a set of digital weight scales.  Law enforcement also recovered three firearms, one of which was later determined to be stolen.  According to court records, Edwards has a prior North Carolina conviction of robbery with a dangerous weapon and is prohibited from possessing a firearm. 

Court records show that in May 2014, Edwards was found guilty by a bench trial of one count of possession with intent to distribute crack cocaine, one count of possession with intent to distribute cocaine, one count of possession of a firearm during and in relation to a drug trafficking crime and one count of possession of a firearm by a convicted felon. 

In handing down today’s sentence, Judge Cogburn stated that, “Edwards had a very serious criminal record, and a 130-month sentence will hold him responsible for his criminal actions. Individuals with that many firearms in their vehicle are up to no good.”

Edwards has been in federal custody since August 2013.  He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.   

The investigation was handled by ATF and CMPD.  The case was handled by Assistant United States Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte.

ASHEVILLE, N.C. – On Thursday, February 11, 2016, U.S. District Judge Martin Reidinger sentenced Gordie Leroy Penson, 38, of Asheville, to 161 months in prison for the August 2014 armed robbery of a fast food restaurant, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Reidinger also sentenced Penson to five years of supervised release. 

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 Tammy Hooper of the Asheville Police Department.

According to filed court documents, evidence presented at Penson’s trial and yesterday’s sentencing hearing, on August 2, 2014, Penson robbed at gunpoint a Bojangle’s restaurant located on Merrimon Avenue in Asheville.  Court records show that Penson entered the restaurant at approximately 9:55 in the evening and proceeded to demand money, first from the drive-thru cashier, threatening to shoot her if she did not open the cash drawer. According to court records, Penson then escorted the manager to the store’s safe and fired his gun once when the manager was unable to open the safe on the first attempt. According to court records, Penson fled the restaurant with $1,019 in cash. 

A federal jury convicted Penson of one count of Hobbs Act Robbery, one count of unlawful use and carry of a firearm in furtherance of a crime of violence and one count of possession of a firearm by a convicted felon.  According to trial evidence and yesterday’s sentencing hearing, Penson has prior convictions in North Carolina for robbery with a dangerous weapon. 

Penson has been in federal custody since April 2015.  He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.   

The investigation was handled by ATF and the Asheville Police Department.  The case was prosecuted by Assistant United States Attorney John Pritchard of the U.S. Attorney’s Office in Asheville.        

STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down prison terms ranging from 21 to 120 months to 12 methamphetamine traffickers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) in Atlanta and the Carolinas; Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; and C. J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division

The 12 defendants sentenced today and yesterday in U.S. District Court in Statesville are:

• Chang Cheng Vang, 20, of Hickory, NC, was sentenced to 120 months, followed by 5 years of supervised release. (5:15-cr-38)

• Christopher Dwayne Helton, 31, of Connelly Springs, NC, was sentenced to 120 months, followed by 5 years of supervised release. (5:15-cr-25)

• Shannon Marie Williams Greene, 37, of Hickory, NC, was sentenced to 105 months, followed by 3 years of supervised release. (5:15-cr-49)

• Moises Valdovinos, 33, of Mexico, was sentenced to 97 months, followed by 5 years of supervised release. (5:14-cr-66)

• Adrian Demarcus Perkins, 21, of Montezuma, GA, was sentenced to 97 months, followed by 3 years of supervised release. (5:15-cr-53)

• Juan Jesus Santellan, 24, of Hickory, NC, was sentenced to 78 months, followed by 3 years of supervised release. (5:15-cr-47)

• Bobby James Testerman, 31, of Jefferson, NC, was sentenced to 60 months, followed by 4 years of supervised release. (5:15-cr-42)

• Jamie Martinez-Benitez, 27 of Mexico, was sentenced to 60 months, followed by 4 years of supervised release. (5:15-cr-62)

• Travis Layden Bare, 39, of West Jefferson, was sentenced to 60 months, followed by 4 years of supervised release. (5:15-cr-52)

• Anthony Ray Mauney, 30, of Maiden, NC, was sentenced to 51 months, followed by 5 years of supervised release. (5:15-cr-40)

• Jose Luis Zavala, 20, of Hickory, NC, was sentenced to 46 months, followed by 3 years of supervised release. (5:14-cr-60)

• Gerardo Espino Albarran, 25, of Mexico, was sentenced to 21 months, followed by 1 year of supervised release. (5:14-cr-66)

The sentencings are the result of two parallel and coordinated Organized Crime Drug Enforcement Task Force (OCDETF) investigations, codenamed “Dixie Crystal” and “Lay Low,” handled by HSI, DEA, and ATF, with the assistance of the North Carolina State Bureau of Investigation, North Carolina State Highway Patrol, Alexander County Sheriff’s Office, Alleghany County Sheriff’s Office, Ashe County Sheriff’s Office, Boone Police Department, Caldwell County Sheriff’s Office, Catawba County Sheriff’s Office, Hickory Police Department, Iredell County Sheriff’s Office, Lenoir Police Department, Lincoln County Sheriff’s Office, Mooresville Police Department, Pineville Police Department, Statesville Police Department, Burke County Task Force, and other law enforcement agencies throughout North Carolina and Texas, Georgia, and Tennessee. 

According to court documents, to date, more than 80 individuals have been convicted as a result of the two related investigations.  Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars.  Over the course of the investigation, law enforcement seized more than 10 kilograms of crystal methamphetamine, $100,000 in U.S. currency and other assets, and numerous firearms. 

OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement U.S. Attorney Rose thanked all the law enforcement agencies for their investigative efforts.  The prosecution is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. ordered Mateo Meraz, 42, of Rockford, Illinois and leader of a drug ring responsible for trafficking cocaine to the Charlotte area to serve 97 months in prison and three years of supervised release, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Meraz pleaded guilty in November 2015 to one count of conspiracy to distribute and to possess with intent to distribute cocaine. 

Mateo Meraz’s conspirators, Sarah Christine Lapp, 38, of Jonesville, Wisconsin, and his son, Hector Meraz, 23, also of Rockford, have each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine and are currently awaiting sentencing.  

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, Steven M. Watkins, Director of the North Carolina Division of Motor Vehicles License and Theft Bureau (NC DMV L&T), and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.

According to filed court documents and today’s sentencing hearing, Mateo Meraz was the leader of a Drug Trafficking Organization (DTO) responsible for trafficking cocaine from Chicago, Illinois to the Charlotte area.  Court records show that in October 2015, Mateo Meraz, Hector Meraz and Sarah Lapp travelled to Charlotte to deliver approximately nine kilograms of cocaine with a street value of $476,145.  According to court records, the cocaine had been packaged in eighteen (18) bundles and was prepared and ready for sale.  To avoid detection, the conspirators transported the cocaine hidden in a secret compartment under the rear seat of the vehicle.  Law enforcement arrested the three defendants shortly after the drug delivery had been made.

In announcing the sentence, Judge Conrad noted that “The defendant is an illegal alien that continues to return to the United States and traffic drugs.  A 97-month prison sentence will adequately protect the community.”

Mateo Meraz has been in custody since October 2014 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. Mateo Meraz is an undocumented alien and will be deported to Mexico upon completion of his sentence.  

The case was investigated by DEA, NCDMV&T and CMPD. Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s office in Charlotte is in charge of the prosecution.