Western District of North Carolina
Press releases recorded for this federal judicial district.
Nine Methamphetamine Traffickers Sentenced to Federal PrisonRead the Press Release
STATESVILLE, N.C. – Nine methamphetamine traffickers have been sentenced over a two-day period to prison terms ranging from one to 17.5 years, as a result of two related Organized Crime Drug Enforcement Task Force (OCDETF) investigations, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in 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; Caldwell County Sheriff Alan C. Jones; Lenoir Police Chief Scott Brown; Catawba County Sheriff Coy Reid; and Hickory Police Chief Tom R. Adkins.
The following defendants were sentenced on Monday, November 30, 2015:
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Justo Manuel Gonzalez, 29, of Newton, N.C. was sentenced to 210 months in prison, followed by five years of supervised release (5:14-cr-59).
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Christopher Waylon Joyner, 31, of Sparta, N.C., was sentenced to 131 months in prison, followed by five years of supervised release (5:15-cr-69).
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Christopher Everett Triplett, 35, of Hudson, N.C. was sentenced to 75 months in prison, followed by four years of supervised release (5:14-cr-50).
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Marixa Dawn Hart, 27, of Warrensville, N.C., was sentenced to 31 months in prison, followed by three years of supervised release (5:15-cr-7).
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Paul Lewis King, Jr., 71, of North Wilkesboro, N.C. was sentenced to nine months in prison, followed by two years of supervised release, nine of which in home detention (5:15-cr-34)
The following defendants were sentenced on Tuesday, December 1, 2015:
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Anthony Lee Day, 40, of Crumpler, N.C., was sentenced to 130 months in prison, followed by five years of supervised release (5:15-cr-5).
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Brian Len Ledford, 39, of Newton, N.C. was sentenced to 78 months in prison, followed by three years of supervised release (5:15-cr-14).
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Miguel Angel Cerda-Rodriguez, 29, of Conover, N.C. was sentenced to 46 months in prison, followed by five years of supervised release (5:14-cr-77)
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Rene Antonio Garcia, 54, of Hickory, N.C. was sentenced to time served (approximately one year) followed by four years of supervised release (5:14-cr-82).\
The two OCDETF investigations, codenamed “Dixie Crystal” and “Lay Low,” are being led by HSI and DEA, respectively, with the assistance of the Caldwell County Sheriff’s Office, Lenoir Police Department, Catawba County Sheriff’s Office, and Hickory Police Department, and 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.
Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.
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Former Charlotte Resident Sentenced to 14 Years in Prison for Transporting Child PornographyRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Paul Edward Baalerud, 56, formerly of Charlotte, to 14 years in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Baalerud was also sentenced to 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 John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.
According to filed documents and statements made in court, from about December 2013 to January 2014, law enforcement became aware that an individual, later identified as Baalerud, was sharing child pornography using peer to peer software. The investigation revealed that Baalerud possessed a collection of child pornography, consisting of 99 images and videos depicting children, including toddlers, being sexually abused. According to today’s court proceedings, Baalerud also molested three children, all under the age of three. Baalerud pleaded guilty in July 2015 to one count of transportation of child pornography.
Baalerud has been in federal custody since October 2014 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 CMPD and FBI. 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.
New York Man Sentenced to 37 Months in Prison for Credit Card ConpsiracyRead the Press Release
CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Lonnie Shawn Hopson, 33, of Brooklyn, New York to 37 months in prison for a wire fraud conspiracy involving 453 gift cards containing stolen credit and debit card numbers, announced Jill Westmoreland Rose, United States Attorney for the Western District of North Carolina. Judge Whitney also ordered Hopson to serve two years of supervised release and to pay restitution totaling $1,083, which Hopson paid prior to his sentencing.
According to information contained in filed documents and statements made in court:
On July 21, 2013, Homeland Security Transportation Safety Administration (TSA) employees at Charlotte Douglas International Airport (Charlotte airport) discovered numerous mag-stripe payment cards while searching outbound checked luggage. Officers with the Charlotte Mecklenburg Police Department (CMPD) responding to the call recovered approximately 453 gift/prepaid mag-stripe payment cards in Hopson’s luggage, who was scheduled to board an outbound flight. Law enforcement also seized from Hopson $1,816 in cash and two driver’s licenses – a New Jersey driver’s license in the name of another person baring Hopson’s photo, and a New York driver’s license with Hopson’s name and photo. Subsequent investigation revealed that the New Jersey driver’s license was a counterfeit license and had a driver’s license number assigned to another person. Further investigation also revealed that the recovered gift/prepaid cards in Hopson’s luggage had been re-encoded with stolen credit or debit account numbers. Hopson pleaded guilty in May 2015 to one count of wire fraud conspiracy.
Hobson will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Rose thanked the United States Secret Service, TSA and CMPD for their assistance with this investigation. Assistant U.S. Attorney Tom O’Malley of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Gastonia Woman Sentenced to 40 Months in Prison for Embezzling More Than $590,000 from Former EmployerRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney today sentenced Jennifer Ann Champagne, 40, of Gastonia, N.C. to 40 months in prison, for stealing more than $590,000 from her former employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Whitney also ordered Champagne to serve one year of supervised release and to pay restitution in the amount of $594,208.01. Champagne pleaded guilty in July 2015 to making and possessing forged and counterfeit securities, wire fraud and access device fraud.
U.S. Attorney Rose is joined in making today’s announcement by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division.
According to filed court documents and today’s sentencing hearing, from 2006 to 2013, Champagne worked as an office manager and bookkeeper at a Charlotte-based company specializing in the construction and repair of tennis courts and running tracks. In that capacity, Champagne had access to the company’s safe, computer accounting programs, online bank accounts, security passwords and other confidential information, but was not authorized to sign company checks, or use the company’s bank accounts or credit card accounts outside of the normal course of business.
According to court records, Champagne stole money from her former employer by signing the company’s President’s name on forged checks and then altering the company’s books and records to hide the theft. Among other things, court records show that Champagne embezzled over $260,000 by forging 100 company checks in her name and her husband’s landscaping business. She also used the company’s credit card to make more than 400 unauthorized charges totaling over $40,000. In total, court records show that Champagne’s scheme caused the company a loss of more than $590,000.
In handing down Champagne’s sentence, Judge Whitney said that in the interest of general deterrence he gave the defendant a tough sentence because he did not want “people taking the risk of embezzling over one-half million dollars and thinking they’re only going to do a small amount of time in prison.” Judge Whitney also noted that that a sentence involving breach of trust should reflect the amount of money taken and the length of time involved in the fraudulent scheme, in Champagne’s case, seven years.
Champagne 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 investigation was handled by the U.S. Secret Service. The prosecution for the government was handled by Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte.
Monroe Construction Company, Its President and Four Codefendants Sentenced for Government Contract FraudRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Boggs Paving, Inc. (Boggs Paving), its president and part-owner, Carl Andrew “Drew” Boggs, III, and four others on charges stemming from the illegal use of a disadvantaged business enterprise to obtain government-funded construction contracts, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
Marlies T. Gonzalez, Regional Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General (DOT-OIG), Region IV; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation (IRS-CI), join U.S. Attorney Rose in making today’s announcement.
Drew Boggs, 51, of Waxhaw, N.C. was sentenced to 30 months in prison and two years of supervised release, and received a $15,000 fine after pleading guilty to conspiracy to defraud the United States Department of Transportation (USDOT) and money laundering conspiracy. Kevin Hicks, 44, of Monroe, N.C., was sentenced to two years of probation and was ordered to pay a $2,000 fine, after pleading guilty to conspiracy to defraud USDOT and money laundering conspiracy. Greg Miller, 61, of Matthews, N.C., was sentenced to 15 months in prison and two years of supervised release, Greg Tucker, 42, of Oakboro, N.C., was sentenced to two years of probation and was ordered to pay a $1,000 fine, and John Cuthbertson (a/k/a Styx Cuthbertson), 70, of Monroe, was sentenced to two years of probation, three of which will be served in home confinement, and was ordered to pay a $2,000 fine. They each pleaded guilty to one count of conspiracy to defraud USDOT. Judge Cogburn sentenced the company, Boggs Paving, to pay a $500,000 fine. A fifth codefendant, Arnold Mann, 56, of Fort Mill, S.C., was previously sentenced to a term of probation, after pleading guilty to one count of conspiracy to defraud USDOT.
According to documents filed in the case, statements made in court and today’s sentencing hearings, from 2003 through 2013, Boggs Paving, Drew Boggs, and their codefendants engaged in a scheme by which they fraudulently obtained federally and state funded construction contracts by falsely certifying that a disadvantaged business enterprise (DBE), or a small business enterprise (SBE) would perform and be paid for portion of the work on those contracts. The purpose of USDOT’s DBE program is to increase the participation of such businesses in federally-funded public construction and transportation-related projects.
According to court records, Boggs Paving and the codefendants used Monroe-based Styx Cuthbertson Trucking Company, Inc. (“Styx”), a road construction hauler and a certified DBE and SBE, to help obtain the government-funded construction contracts. Court documents show that the codefendants took steps to conceal their fraud, including running payments for the work performed through a nominee bank account in Styx’s name and using magnetic decals bearing the “Styx” company logo to cover the “Boggs” logo on company trucks, among others. According to court records, the majority of the money was funneled back to Boggs Paving and its affiliates, and John Cuthbertson, owner of Styx, received kickbacks for allowing his company’s name and DBE status to be used by Boggs Paving.
Court records show that from June 2004 to July 2013, Boggs Paving was the prime contractor on 35 federally-funded contracts, and was a subcontractor for two additional contracts, worth over $87.6 million. Boggs Paving claimed DBE credits of approximately $3.7 million on these contracts for payments purportedly made to Styx. Styx only received payments of approximately $375,432 for actual work on these contracts, court records show.
In court today, Judge Cogburn described the DBE program as laudable and emphasized the imortance of deterrence in sentencing the defendants.
The investigation of the case was handled by USDOT-OIG, FBI and IRS. Assistant United States Attorneys Jenny G. Sugar and Michael E. Savage of the U.S. Attorney’s Office in Charlotte handled the prosecution.
Charlotte Man Arrested on Wire Fraud Conspiracy Charges for Attempting to Steal More Than $1 Million Through Unauthorized Wire TransfersRead the Press Release
CHARLOTTE, N.C. – Jamel Ski Yates, a/k/a “Goo,” 42, of Charlotte, was arrested today on federal wire fraud conspiracy and wire fraud charges, for attempting to steal more than $1 million through unauthorized wire transfers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. A federal grand jury returned the superseding criminal indictment against Yates on Wednesday, November 18, 2015, and it was unsealed today, following Yates’ court appearance before U.S. Magistrate Judge David C. Keesler.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Rose in making todays’ announcement.
In addition to Yates, six others have already been charged or sentenced for their involvement in the conspiracy:
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Shaka Stayman, 34, of Atlanta, was sentenced to 84 months in prison, after pleading guilty to wire fraud conspiracy and wire fraud charges.
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Barry Shade, 38, of Tamarac, Florida, was sentenced to 24 months and was ordered to pay restitution of $251,147 after pleading guilty to wire fraud conspiracy charges.
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Dural Samuels, 43, of Charlotte, pleaded guilty in September 2015 to wire fraud conspiracy and wire fraud and is currently awaiting sentencing.
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Abiola O. Oginni, 34, of McDonough, Georgia, and Dwayne A. Reynolds, 30, of Snellville, Georgia, have each pleaded guilty to wire fraud conspiracy and are currently awaiting sentencing.
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Anthony Shawn Wilkerson, 45, of Riverdale, Georgia, is currently facing wire fraud conspiracy and wire fraud charges.
According to allegations contained in Yates’ indictment, other filed court documents in this and related cases, and statements made in court:
From at least in or about January 2010 through in or about January 2011, Yates and his conspirators engaged in a financial fraud scheme by which they unlawfully accessed multiple customer accounts maintained by a financial services company located in Charlotte. Yates was the insider who allegedly stole the account holders’ information and gave it to Samuels. Samuels then used a network of conspirators, including Stayman, Shade, Oginni, Wilkerson and Reynolds, who either used their own bank accounts or the bank accounts of other individuals also known as “money mule accounts,” into which the stolen funds were deposited. The conspirators executed numerous fraudulent wire transfers, taking money out of the compromised customer accounts and depositing it into the money mule accounts. The stolen money was then retrieved from the mule accounts through multiple cash withdrawals.
Yates had initial appearance today in federal court and was released on bond. The wire fraud conspiracy offense and the wire offense each carry a maximum prison term of 20 years and a $250,000 fine.
The charges contained in the indictment against Yates are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation is being handled by the FBI.Assistant U.S. Attorney Thomas O’Malley, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
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Former Accounting Manager Pleads Guilty to Embezzling Nearly $400,000 from Huntersville-Area EmployerRead the Press Release
CHARLOTTE, N.C. – Amy Hilty, 38, formerly of Stanley, N.C. and now residing in Dalton, Ohio, appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to stealing nearly $400,000 from her former employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Hilty pleaded to one count of wire fraud and one count of tax evasion.
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 today’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, Hitly 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 was released on bond after her plea hearing. The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine. The tax fraud charge carries a maximum prison term of five years and a $250,000 fine. As part of her plea agreement, Hilty has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the IRS-CI. 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 Business Owner Involved in Foreclosure Assistance Scheme Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
CHARLOTTE, N.C. — A resident of Charlotte, North Carolina, pleaded guilty on Tuesday in the U.S. District Court of the Western District of North Carolina to conspiracy to defraud the United States, 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, Daniel Heggins and his co-conspirator Joan Clark of Charlotte conspired to defraud the United States by filing false tax returns. Heggins recruited individuals with debts, such as home mortgages or car loans and created false Forms 1099-OID falsely characterizing the amount of the debts as income. Heggins and Clark then prepared and filed false Forms 1040 that requested refunds from the Internal Revenue Service (IRS) based on the false Forms 1099-OID. Heggins and Clark caused the returns to be filed at the IRS office in Charlotte. Sixteen false tax returns claiming more than $4 million in fraudulent refunds were filed with the IRS as part of the scheme. According to court documents, Clark and another individual, Marlowe Williams, filed three false tax returns, requesting $900,000 in fraudulent refunds from the IRS and received $601,780.
Heggins faces a statutory maximum sentence of five years in prison and a $250,000 fine. On Nov. 5, Clark, also pleaded guilty to two counts of conspiracy to defraud the United States. She faces a statutory maximum sentence of five years in prison and a $250,000 fine for each conspiracy count. On Nov. 9, Williams of New London, North Carolina, pleaded guilty to conspiring with Clark to defraud the United States. He faces a statutory maximum sentence of five years in prison and a $250,000 fine. On Sept. 24, Cheryl Jones of Chicago, Illinois, pleaded guilty to presenting a materially false document to the IRS. Jones submitted false tax returns to the IRS at the direction of Heggins and Clark. She faces a statutory maximum sentence of one year in prison and a $10,000 fine.
The court has not yet set sentencing dates for any of the defendants.
Acting Assistant Attorney General Ciraolo 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 P. Kostyshak of the Justice Department’s Tax Division, who prosecuted the case.
The U.S. Attorney's Office and the Department of Justice Announce 10 Tribes to Participate in Initial Phase of Tribal Access Program to Improve Exchange of National Criminal InformationRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney for the Western District of North Carolina Jill Westmoreland Rose and the Department of Justice announced today the first 10 tribes to participate in an initial User Feedback Phase of the Tribal Access Program for National Crime Information (TAP), a program to provide federally recognized tribes the ability to access and exchange data with national crime information databases for both civil and criminal purposes.
In the Western District of North Carolina, the Eastern Band of Cherokee Indians has been selected to participate in this initial phase of the TAP.
“As one of the tribes selected to participate in the initial phase of TAP, the Eastern Band of Cherokee Indians and its criminal justice agencies will gain greater access to federal crime information databases and crime solving tools that can be used to effectively serve and protect their communities. My office has a strong history of working closely with our tribal counterparts, and through this program we will continue to support our tribal partners’ mission of keeping the citizens of the Qualla Boundary safe,” said U.S. Attorney Rose.
The User Feedback Phase will grant access to national crime information databases and technical support to the following tribes: the Cherokee Nation of Oklahoma, the Eastern Band of Cherokee Indians of North Carolina, the Keweenaw Bay Indian Community of Michigan, the Oneida Indian Nation of New York, the Pascua Yaqui Tribe of Arizona, the Suquamish Indian Tribe of the Port Madison Reservation of Washington, the Shoshone-Bannock Tribes of the Fort Hall Reservation of Idaho, the Tulalip Tribes of Washington, the Confederated Tribes of the Umatilla of Oregon, and the White Mountain Apache Tribe of the Fort Apache Reservation of Arizona.
“This innovative program will allow an unprecedented sharing of critical information between tribal, state and federal governments, information that could help solve a crime or even save someone’s life,” said Deputy Attorney General Sally Quillian Yates. “This initial phase of TAP will help us understand the information gaps and the best ways to use this service to strengthen public safety in Indian country. The TAP program is a reflection of the Justice Department’s commitment to the government-to-government relationship, to overcoming barriers, and building strong partnerships with American Indian and Alaska Native people. The department will continue to work with Congress for additional funding to more broadly deploy the program.”
TAP will support tribes in analyzing their needs for national crime information and help provide appropriate solutions, including a state-of-the-art biometric/biographic computer workstation with capabilities to process finger and palm prints, take mugshots, and submit records to national databases, as well as the ability to access the FBI’s Criminal Justice Information Service (CJIS) systems for criminal and civil purposes through the Department of Justice. TAP will also provide specialized training and assistance for participating tribes.
This initial phase, funded by the Office of Justice Programs’ Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) and supported with technical assistance from the Office of the Chief Information Officer, will focus on assisting tribes that have law enforcement agencies. In the future, the department will seek to address the needs of the remaining tribes and find a long-term solution.
While in the Tribal Law and Order Act of 2010 Congress required the Attorney General to ensure that tribal officials that meet applicable requirements be permitted access to national crime information databases, the ability of tribes to fully participate in national criminal justice information sharing via state networks has been dependent upon various regulations, statutes and policies of the states in which a tribe’s land is located. Therefore, improving access for tribal law enforcement to federal crime information databases has been a departmental focus for several years. In 2010, the department instituted two pilot projects, one biometric and one biographic, to improve informational access for tribes. The biographic pilot continues to serve more than 20 tribal law enforcement agencies.
Departments of Justice and Interior Working Group
In 2014, the Departments of Justice and the Interior (DOI) formed a working group to assess the impact of the pilots and identify long-term sustainable solutions that address both criminal and civil needs of tribes. The outcome of this collaboration was the TAP, as well as an additional program by the DOI’s Bureau of Indian Affairs (BIA) that provides tribes with national crime information prior to making child placement decisions in emergency circumstances. Under the BIA Purpose Code X Program, social service agencies of federally recognized tribes will be able to view criminal history information accessed through BIA’s Office of Justice Services, which will conduct name-based checks in situations where parents are unable to care for their children.
For more information on TAP, visit: www.justice.gov/tribal/tribal-access-program-tap.
For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal.
Federal Jury Delivers Guilty Verdict Against Methamphetamine TraffickerRead the Press Release
STATESVILLE, N.C. B A federal jury sitting in Statesville delivered a guilty verdict against Eduardo Trejo-Munoz, a/k/a “Lalo,” 23, of Hickory, N.C., for trafficking high purity crystal methamphetamine worth over $5 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Following a two-day trial which ended late yesterday, Trejo-Munoz was convicted of five charges, including conspiracy to distribute and to possess with intent to distribute methamphetamine and possession of methamphetamine with intent to distribute.
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; Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas; Sheriff Coy Reid of the Catawba County Sheriff’s Office; and Chief Tom R. Adkins of the Hickory Police Department.
According to evidence presented at trial, from in or about 2013 through September 2014 in Catawba and Mecklenburg counties and elsewhere, Trejo-Munoz trafficked more than 50 kilograms of near-pure crystal methamphetamine, which constitutes approximately 500,000 dosage units, with a street value of more than $5 million. Evidence presented at trial established that, over the course of the investigation, law enforcement purchased 133 grams of methamphetamine from Trejo-Munoz. Law enforcement also seized another 54 grams of methamphetamine from the defendant, as well as drug paraphernalia and a handgun with laser site from his residence.
This prosecution stems from Operation “Lay Low,” codenamed after Trejo-Munoz’s nickname, which is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of more than 55 defendants on methamphetamine trafficking and firearms charges. 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.
Trejo-Munoz has been in federal custody since September 16, 2014, and will remain in custody until his sentencing date, which has not yet been set. Trejo-Munoz faces a statutory mandatory minimum sentence of 10 years to life in prison, as well as a fine of up to $10,000,000.
The case was investigated by the DEA, HSI, the Catawba County Sheriff’s Office, Hickory Police Department, North Carolina State Bureau of Investigation, and North Carolina State Highway Patrol.The prosecution of this OCDETF investigation is being handled by Assistant U.S. Attorney Steven R. Kaufman.
Michigan Man Charged with Wire Fraud Conspiracy for Operating $6.8 Million Internet Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – A criminal indictment was unsealed today in federal court charging Troy Barnes, 53, of Riverview, Michigan, with wire fraud conspiracy and wire fraud, for operating a $6.8 million Internet Ponzi scheme that defrauded more than 10,000 investor victims worldwide, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Barnes’ conspirator, Kristine Louise Johnson, of Aurora, Colorado, pleaded guilty in June 2015 to wire fraud conspiracy for her role in the scheme.
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 filed court documents, Barnes was the owner of “Work with Troy Barnes, Inc.” (WWTB), which did business over the Internet under the name of “The Active Community” (TAC). Barnes was the President and Marketing Director of WWTB responsible for promoting the online scheme. Johnson served as TAC’s Chief Financial Officer, and managed TAC’s day-to-day operations, including the company’s bank accounts. Filed court documents indicate from about April 2014 to February 2015, Barnes induced victims to invest money in TAC, claiming “Achieve is the answer to all of our prayers…” and falsely promising investors would receive a bogus 700% return on their investment. Barnes also told his victims they could make as much money as they wanted claiming the investment was “never-ending,” when, in fact, TAC operated solely as a pyramid scheme and initial investors were paid with later victims’ money. Barnes also falsely touted TAC as a “lifetime income plan,” with “limitless returns, even though by August 2014, Barnes and Johnson had discussed TAC’s inevitable shortfall and knew that TAC did not have sufficient funds to cover weekly payouts to investors, much less operating expenses.
According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.” Even when TAC was unable to operate because their payment processor concluded that TAC was indeed operating a Ponzi scheme and ceased doing business with the company, Barnes and his conspirators lied to victims, falsely stating that “The only reason that [TAC] is not paying out today is that our processor can’t handle the volume of money we are paying our members.”
According to court records, in order to sustain the scheme, Barnes and his conspirators encouraged investors to “re-purchase” positions in the matrix, thereby reducing the amount of money needed to pay out to early investors and enabling the fraudsters to prolong the scheme. As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors. By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million. According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.
Barnes had his initial appearance today and was released on bond. Johnson’s sentencing hearing has been set for November 19, 2015, before U.S. District Judge Max O. Cogburn, Jr.
The case was investigated by the U.S. Secret Service. In making today’s announcement, U.S. Attorney Rose thanked the Denver Regional Office of the Securities and Exchange Commission for its assistance with the case.
Assistant U.S. Attorney Corey F. Ellis is in charge of the prosecution.
Operator of Multi-Million Dollar Ponzi Scheme Sentenced to More Than Nine Years in Prison on Securities Fraud ChargesRead the Press Release
CHARLOTTE, N.C. – Daniel H. Williford, 57, of Fleetwood, N.C. was sentenced on Tuesday, October 27, 2015 to 110 months in prison for operating a Ponzi scheme that defrauded nearly 100 investors, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, U.S. District Judge Max O. Cogburn, Jr. ordered Williford to serve three years of supervised release and to pay $17,915,013.35 as restitution.
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) in North Carolina.
According to filed court documents and statements made in court, from January 2007 through July 2013, Williford operated a fraudulent investment scheme, through which he obtained more than $44 million from over 200 investors in Charlotte and elsewhere, causing nearly $18 million in losses to more than 100 investors by the time the scheme collapsed. Court records show that Williford lied to his victims, promising their money would be invested in wireless internet equipment, internet towers, and other facilities and companies. According to court records, rather than investing the victims’ money as promised, Williford used the majority of the funds to run a Ponzi-style scheme and used a portion to fund his personal lifestyle. Court records show that over course of the fraud, Williford invested only $7.7 million of the victims’ money and used approximately $32 million to pay some of his victims’ supposed “profits” on their investments and to cover personal expenses.
Court records also show that even after Williford ceased having any legitimate business operations, he continued to solicit money from investors for several years. One victim told the court yesterday evening that he was Williford’s co-pilot in a commercial airliner, and that Williford had literally defrauded him on the runway before takeoff. Other victims spoke about being unable to retire, declaring bankruptcy, losing children’s college savings, and one victim told the court he would have to sell his businesses, jeopardizing the jobs of over 50 employees as a result of the fraud. Williford pleaded guilty to securities fraud in July 2014.
Judge Cogburn said that Williford’s lengthy sentence was intended to “frighten those who will think about doing this, to make them think twice about stealing other people’s money” and to make such people realize “that going to prison for that long is not worth it.” Judge Cogburn also noted that the victims “will suffer a long time,” and pointed to the “callousness and huge period of time in which [Williford] took these people’s money” as a basis for the sentence.
The FBI investigated the case. Assistant U.S. Attorney Dan Ryan of the U.S. Attorney’s Office in Charlotte prosecuted the case.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
Rutherford Co. Man Sentenced to 57 Months in Prison on Securities Fraud Charges for Stealing over $2 Million from More Than 30 InvestorsRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Chuckie Beaver, 52, of Ellenboro, N.C. to 57 months in prison for defrauding more than 30 investors of over $2 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Beaver to serve three years under court supervision after he is released from prison.
Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) join U.S. Attorney Rose in making today’s announcement.
According to information contained in court documents and today’s sentencing hearing, Beaver was the sole owner of “Best Services, Inc.,” (Best Services), a company specializing in the repair of industrial electronic equipment. Court records show that from June 2012 to April 2014, Beaver induced over 30 victims, including friends, neighbors, and fellow church members, to invest in his fraudulent scheme, falsely claiming that his company needed additional capital to purchase materials to complete a large number of outstanding repair orders from major corporations. To further the scheme, Beaver created and showed his investors fake documents, including bogus repair orders indicating significant work activity, fake customer checks, and fake customer emails, giving a false impression he had strong relationships with major corporations.
Court records show that Beaver often gave his victims post-dated checks at the time of their initial investment, written for the full amount of the promised investment plus as much as 100% interest. According to court records, when the investors’ checks were returned by the bank for insufficient funds, Beaver made up a number of excuses to his victims, and, in some instances, he induced the victims to invest additional funds with the promise of even greater returns. Beaver previously admitted in court that contrary to what he promised his investors, he used their money to pay for personal expenses and to make payments to earlier investors, commonly referred to as Ponzi payments. In total, over the course of the scheme, Beaver defrauded more than 30 individuals from Mecklenburg, Gaston, Cleveland and Lincoln counties of more than $2 million. Beaver pleaded guilty to securities fraud in November 2014.
In announcing Beaver’s sentence, Judge Cogburn said that, “Everybody needs to watch out for this defendant” and stated that he did not trust anything the defendant said. “It is obvious he is a con man,” Judge Cogburn noted, adding, “Once a con man always a con man.”
Beaver 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 by the Secret Service and USPIS. Assistant United States Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Charlotte Man Pleads Guilty to $2 Million Health Care Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – The former co-owner and operator of a Charlotte-area company providing services to Medicaid beneficiaries with intellectual/developmental disabilities has admitted to defrauding the government program of over $2 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Eric Bernard Mitchell, 43, of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to health care fraud and money laundering charges.
U.S. Attorney Rose is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region 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 plea hearing, from about 2007 to about 2009, Mitchell co-owned and operated Angelic Community and Family Services, L.P. (Angelic), which provided alternative care to Medicaid recipients with intellectual/developmental disabilities in a non-institutional setting. 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. Both Angelic and Company #1 were approved by Medicaid to provide such services to beneficiaries and to receive reimbursement from the government program.
According to court records, in or about 2006, Mitchell created an unincorporated company, Mitchell Connor & Associates (MCA), which provided operational services to Company #1, including the submission of reimbursement claims to Medicaid. Mitchell admitted in court today that from about October 2009 to about June 2014, he submitted through MCA fraudulent claims to Medicaid on behalf of Company #1, seeking reimbursement for services which were never provided to beneficiaries with developmental disabilities. Mitchell also admitted that he 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 admitted to submitting 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 was released on bond after the plea hearing. The health care fraud charge and the money laundering charge each carry a maximum prison term of 10 years. A sentencing date for Mitchell has not been set yet.
The investigation was handled by HHS-OIG and IRS-CI. U.S. Attorney Rose also thanked the North Carolina Medicaid Investigations Division for their assistance. 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.
California-Based Marijuana Trafficker Handed Down 20 Year Prison SentenceRead the Press Release
CHARLOTTE, N.C. – Jose Delarosa, also known as “Chino” or “Pretty,” was sentenced on Monday, October 26, 2015, to 240 months in prison for his role as a major supplier of marijuana based in California, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Delarosa, 36, of Moreno Valley, California, was also ordered to forfeit $48,000 in cash seized, to pay a $25 million money judgment and to serve five years of supervised release upon his release from prison.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Atlanta and the Carolinas and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.
According to information contained in filed documents and court proceedings, Delarosa was involved in a marijuana trafficking conspiracy that spanned from coast to coast. According to court records, from about 2009 to about May 2014, Delarosa was a major marijuana supplier, responsible for trafficking 10 to 30 tons of marijuana from the Los Angeles area to the east coast, including to Charlotte, Florida, Georgia, and South Carolina, as well as other locations throughout the country. Court records show that Delarosa transported the drugs via a network of couriers flying on commercial flights. The couriers flew to California, each time carrying approximately $50,000 in cash in carry-on luggage and returned to Charlotte with approximately 100 pounds of marijuana per trip hidden in checked baggage.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation, code-named “Operation Goldilocks,” has resulted in the dismantling of the organization and the seizure of more than $1 million of drug proceeds, 600 pounds of marijuana, and 13 firearms. The investigation has also netted the successful prosecution of 65 defendants, with three fugitives remaining.
The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of illegal drugs by identifying and targeting the major trafficking organizations, eliminating the financial infrastructure of drug organizations by emphasizing financial investigations and asset forfeiture, redirecting federal drug enforcement resources to align them with existing and emerging drug threats, and conducting expanded, nationwide investigations against all the related parts of the targeted organizations.
This ongoing OCDETF investigation is being led by HSI and CMPD, assisted by several state and local law enforcement agencies, including the Gastonia Police Department, the Concord Police Department, the Mooresville Police Department, the Pineville Police Department, the Huntersville Police Department, the Kannapolis Police Department, the Cornelius Police Department, the Waxhaw Police Department, North Carolina Alcohol Law Enforcement, North Carolina State Bureau of Investigation, the Iredell County Sheriff’s Office, the Union County Sheriff’s Office, and the Culver City, California Police Department. The prosecution for the government is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
In addition to Delarosa, the following 68 defendants have been charged in connection with Operation Goldilocks:
3:10-cr-238, Coleman et al:
- Parker Coleman – 720 months in prison, followed by 10 years supervised release.
- Stephanie Peppers – 54 months in prison, followed by 4 years supervised release.
- Shaunda Shenal McAdoo – 36 months in prison, followed by 3 years supervised release.
- Ryann Chancler Lewis – 87 months in prison, followed by 5 years supervised release.
- Samantha Jo Schmidlin – 27 months in prison, followed by 3 years supervised release.
- Nolan Robertson – 41 months in prison, followed by 4 years supervised release.
- Leah Patience Davis – 24 months of probation.
- Leon Edgar Robertson –84 months in prison, followed by 4 years supervised release.
- Mark Eric Dorsey, II – 96 months in prison, followed by 5 years supervised release.
- Wendell Jerrod Robinson – 72 months in prison, followed by 4 years supervised release.
- Davon Clifton Harris – 60 months in prison, followed by 3 years supervised release.
- Christopher Seaton McKneely – 37 months in prison, followed by 4 years supervised release.
- Gerren Ezekiel Darty – 188 months in prison, followed by 5 years supervised release.
- Glenn O’Neil Carrera – 87 months in prison, followed by 3 years supervised release.
- William Pierce – 36 months in prison, followed by 3 years’ supervised release.
- Rico Lamont Grier – 36 months in prison, followed by 3 years supervised release.
- Harold Manigault – 30 months in prison, followed by 3 years supervised release.
- Mark Rene Hunt – 46 months in prison, followed by 4 years supervised release.
- Jason Lee Banks – 78 months in prison, followed by 3 years supervised release.
- Megan Amelia Baehr – 41 months in prison, followed by 4 years supervised release.
3:10-cr-245, Crockett et al:
- Ahmed Daniel Crockett – 235 months in prison, followed by 5 years supervised release.
- Goldie Frances Crockett – 60 months in prison, followed by 3 years supervised release.
- Sharon Kelsey-Brown – 60 months in prison, followed by 3 years supervised release.
- Robert Jonathan Brown – 58 months in prison, followed by 5 years supervised release.
- Shondu Lamar Lynch – 96 months in prison, followed by 4 years supervised release.
3:11-cr-18, Romero Lamont Massey – 60 months in prison, followed by 4 years supervised release.
3:11-cr-46, Lasonya White – 24 months of probation.
3:11-cr-85, Thomas Diggs, III – 12 months and 1 day in prison, followed by 2 years supervised release.
3:11-cr-09, Jerry Davis – 48 months in prison, followed by 3 years supervised release.
3:11-cr-256, Saulsberry et al:
- Kamia Arekai Saulsberry – 36 months of probation.
- Kisha Dorsey – 44 months in prison, followed by 4 years supervised release.
- Robert Earl Dorsey, Jr. –48 months in prison, followed by 3 years supervised release.
- Ashley Rae Williams – 6 months in prison, followed by 3 years supervised release.
- Tonisha Deshon Williams –70 months in prison, followed by 4 years supervised release.
- Vincent Talbot – 72 months in prison, followed by 4 years supervised release.
- Kevin Lamont Stanfield, Jr. – 42 months in prison, followed by 4 years supervised release.
- Danny Hance – 37 months in prison, followed by 3 years supervised release.
3:11-cr-287, Thomas Lavon Smith, Jr. – 168 months in prison, followed by 5 years supervised release.
3:11-cr-337, Logie et al:
- Tavarus Shamaco Logie – 210 months in prison, followed by 5 years supervised release.
- Crystal Alethea Easter – 36 months in prison, followed by 4 years supervised release.
- Don Levon Marsh – 48 months in prison, followed by 4 years supervised release.
- Anthony Silva Alegrete – 54 months in prison, followed by 5 years supervised release.
- Ronald C. Hargette – 60 months in prison, followed by 4 years supervised release.
- Sandra Anita Landers – 27 months in prison, followed by 3 years supervised release.
- Evelyn Chantell LaChapelle – 87 months in prison followed by 4 years supervised release.
- Natalia Christina Wade – 6 months in prison, followed by 3 years supervised release.
- Francine Vanessa Williams – 87 months in prison followed by 4 years supervised release.
- Marvin Ray Wilburn – 30 months in prison, followed by 2 years supervised release.
- Corvain T. Cooper –life in prison.
- Leamon Keishan Moseley – 36 months in prison, followed by 2 years supervised release.
- Gregory Wall – pled guilty; 46 months in prison, followed by 4 years’ supervised release
- Dana Lamont Adams –60 months in prison, followed by 4 years supervised release.
- Lamar Andrew Harris – 50 months in prison, followed by 3 years supervised release.
- Clyde Monroe Wilburn – currently a fugitive.
3:13-cr-18, Lopez et al:
- Octavio Lopez – 57 months in prison, followed by 5 years supervised release.
- Enrique Leonardo Lemus – 70 months in prison, followed by 3 years supervised release.
- Gustavo Campos Garcia – 84 months in prison, followed by 3 years supervised release.
- Roberto Mendoza – pending sentencing (3:14-cr-164)
- Edgar Milian – 57 months in prison, followed by 2 years supervised release.
- Cristian Deylah West – 24 months in prison, followed by 4 years supervised release.
3:13-cr-40, Andrew Scott Lowery – 46 months in prison, followed by 3 years supervised release.
3:13-cr-132, Darrick Leon Johnson – 120 months in prison, followed by 5 years supervised release.
3:14-cr-252, Sergio Arturo Ibarra – pending sentencing (3:15-cr-164)
3:15-cr-42, Erik J. Jeter – pending guilty plea hearing.
3:14-mj-72, Jose Rene Ibarra – currently a fugitive.
3:14-mj-73, Dennis Delarosa – currently a fugitive.
Convicted Felon Sentenced to Almost 17 Years in Prison for Illegal Possession of FirearmsRead the Press Release
CHARLOTTE, N.C. – A Charlotte gang member of the United Blood Nation, also known as “UBN” or “the Bloods,” was sentenced in federal court today for illegally possessing and selling stolen firearms, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad ordered Dominic Xavier McDonald a/k/a “Bombay,” 28, to serve 188 months in prison, followed by five years of supervised release. McDonald committed this offense while on supervised release for a previous federal gun conviction. McDonald received fifteen months imprisonment to run consecutively for his supervised release violations for a total of 203 months imprisonment.
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).
“Convicted felons who possess firearms pose a great threat to the community,” said U.S. Attorney Rose. “McDonald stole and sold firearms while he was still under court supervision for previous gun crimes. With today’s outcome, we’ve put an end McDonald’s continued disregard for the law and removed this brazen criminal from the community.”
“ATF is committed to keeping our communities safe by reducing firearms and violent crimes. This case is another example of how ATF actively investigates and apprehends individuals who acquire firearms through burglaries and subsequently sell them to criminals in the Charlotte Metro area. Today’s result could not have occurred without the outstanding partnership between ATF and the Charlotte Mecklenburg Police Department,” stated ATF Special Agent in Charge Hyman.
In December 2014, a criminal indictment charged McDonald with four counts of possession of a firearm by a convicted felon. According to filed documents and statements made in court, between October 15, 2014 and October 28, 2014, McDonald illegally obtained six firearms, which he then sold to other individuals. According to court records, the firearms included two pistols, two rifles, and two revolvers, one of which McDonald bragged about taking from the home of a Charlotte-Mecklenburg police officer. The two rifles McDonald sold were among several stolen from a residence McDonald and his conspirators burglarized during the relevant time period. McDonald pleaded guilty to the charges in March 2015.
McDonald has been in custody since January 2015. He will be transferred to the custody of the Federal Bureau of Prisons upon the designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the ATF and CMPD. The case was prosecuted by Assistant United States Attorney Jennifer L. Dillon of the U.S. Attorney’s Office in Charlotte.
United Blood Nation Gang Associate Pleads Guilty to Racketeering Conspiracy and Murder in Aid of RacketeeringRead the Press Release
CHARLOTE, N.C. – Briana Shakeyah Johnson, 19, of Concord, N.C., appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to conspiracy to participate in racketeering activity (RICO) and murder in aid of racketeering charges, for her involvement in the murders of Douglas and Deborah London, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Chief Kerr Putney of the Charlotte-Mecklenburg Police Department; and Sheriff Bruce Bryant of the York County Sheriff’s Office in South Carolina join U.S. Attorney Rose in making today’s announcement.
This is the sixth defendant this week pleading guilty to charges stemming from this investigation. Five other members of the United Blood Nation (UBN or Bloods) pleaded guilty on Tuesday, October 20, 2015 for their involvement in the conspiracy and murders. Ibn Rashaan Kornegay, Rahkeem Lee McDonald, Daquan Lamar Everett, Centrilia Shardon Leach and David Lee Fudge, pleaded guilty to RICO conspiracy. Fudge and McDonald also pleaded guilty to murder in aid of racketeering, for the murders of Douglas and Deborah London. Fudge also pleaded guilty to Hobbs Act Robbery for his role in the May 2014 armed robbery of the Pineville area mattress store owned by the Londons.
Federal charges against the remaining six gang members, Jamell Lamon Cureton, Nana Yaw Adoma, Randall Avery Hankins, Malcolm Jarrel Hartley, Nehemijel Maurice Houston and Ahkeem Tahja McDonald, are still pending.
According to filed court documents and court proceedings, Johnson, a/k/a “Breezy B” a/k/a “Breezy V,” was an associate of gang members of the Charlotte-area Valentine Blood set of the UBN. Court documents show that Johnson met Hartley in April 2014 and became his girlfriend. According to court documents, on or about May 25, 2014, Cureton, Adoma and Fudge robbed “The Mattress Warehouse,” store owned by the Londons. The three were later charged in connection with that robbery. According to court records, Cureton and other gang members discussed that Douglas London was the only eye witness that could identify Cureton and that he needed to be eliminated. As an associate of the Bloods, Johnson was present at gang meetings during which the murder of the Londons was discussed and planned.
In court documents filed with the plea agreement, Johnson admitted she agreed to drive Hartley to South Carolina to murder the Londons. Johnson also admitted that on October 23, 2014, she drove Hartley to the London’s residence in Lake Wylie, S.C., and that she waited in the car while Hartley shot both victims. According to court records, Johnson then drove Hartley back to Charlotte, first stopping at Rahkeem McDonald’s house to dispose of the gun. The two of them then returned to Hartley’s apartment where they met with other gang members. According to filed documents, while at the apartment, Hartley described the victims’ murders and the group celebrated. Hartley was ultimately “ranked up” within the gang for murdering the Londons.
Johnson is currently in federal custody. Her sentencing date has not been scheduled yet. The RICO conspiracy charge carries a maximum penalty of life in prison. The maximum penalty for murder in aid of racketeering is death or life in prison.
Charges against the remaining six gang members are still pending. Cureton, Adoma, Hankins, Hartley, Houston and Ahkeem Tahja McDonald are changed with RICO conspiracy. Cureton, Hankins and Hartley are also charged with two counts of murder in aid of racketeering and two counts of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in death, for the murders of the Londons. Hartley faces two additional charges of possession of a firearm by a felon. Cureton and Adoma are also charged with Hobbs Act Robbery, assault with a dangerous weapon in aid of racketeering activity, and use or carry a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence for their involvement in the mattress store robbery. Cureton and Ahkeem McDonald are also facing charges 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 death, in connection with the August 2013 murder of Kwamne Donqurius Clyburn, who was allegedly murdered for falsely claiming to be a member of the Bloods.
The FBI, CMPD and the York County Sheriff’s Office investigated the case.Assistant U.S. Attorneys Elizabeth Greene and Don Gast are in charge of the prosecution.
Two Assistant United States Attorneys Receive the Attorney General's Award for Distinguished ServiceRead the Press Release
CHARLOTTE, N.C. – Attorney General Loretta Lynch presented 279 Justice Department employees and 33 individuals, including two Assistant United States Attorneys in the Western District of North Carolina, with Attorney General Awards at a ceremony held today in Washington, D.C. These annual awards recognize department employees and other individuals for their dedication to carrying out the Department of Justice’s mission.
“The individuals being honored today stand out within a department that holds all of its employees and partners to an extremely high standard of excellence,” said Attorney General Lynch. “They have put in long hours, made immense sacrifices, and, in some cases, placed themselves in harm’s way. They have taken on issues that once seemed intractable, and made progress on problems that once seemed impossible. And their outstanding work is an inspiration to public servants everywhere.”
The Attorney General’s Award for Distinguished Service is the Justice Department’s second-highest award for employee performance. The recipients of this award exemplify the highest commitment to the department’s mission. Twelve Distinguished Service Awards were presented this year to individuals or teams of people. Two of those recipients are Assistant United States Attorneys (AUSAs) in the Western District of North Carolina, Mark T. Odulio and Daniel S. Ryan.
“Today, Mr. Odulio and Mr. Ryan were recognized for their exemplary work in advancing the critical mission of the Justice Department.This prestigious award symbolizes their skills as lawyers and their dedication as public servants to the pursuit of justice.Their work exemplifies our ongoing commitment to uphold the rule of law and to deliver justice to the people in our district,” said U.S. Attorney Rose.
Mr. Odulio and Mr. Ryan received the award for their exceptional service and outstanding legal work in connection with the Department of Justice’s record breaking $16.65 billion settlement with Bank of America (the Bank), concerning the Bank’s origination and securitization of residential mortgages.AUSAs Odulio and Ryan spearheaded the Western District’s investigation of the Bank as part of the broader efforts of the Attorney General’s Residential Mortgage Backed Securities (RMBS) Working Group. Mr. Odulio and Mr. Ryan worked with other U.S. Attorney’s Offices, Justice Department components and state officials across the United States to complete the investigation of the Bank’s fraudulent conduct which resulted in investors suffering millions of dollars in losses.The dedicated efforts of Mr. Odulio, Mr. Ryan and the RMBS Working Group ensured that Bank of America was held accountable for its fraudulent conduct, substantial compensation was provided for federal entities supported by American taxpayers, and impacted homeowners received much-needed financial relief.
AUSAs Odulio and Ryan handle complex financial fraud matters investigated and litigated in the Western District.In that capacity, Mr. Odulio and Mr. Ryan develop leads, direct investigations, and prosecute cases in federal court on behalf of the United States, both civilly and criminally.In performing their duties, AUSAs Odulio and Ryan work closely with federal and state law enforcement partners and numerous regulatory and administrative agencies.
Mr. Odulio received both his undergraduate and JD degrees from the University of Maryland.
Mr. Ryan received his undergraduate degree from the University of Notre Dame and his JD from Harvard School of Law.
In making today’s announcement, U.S. Attorney Rose thanked Mr. Odulio and Mr. Ryan for their tireless dedication to fulfilling the Justice Department’s mission and noted that it is an honor and a privilege to recognize them both for their accomplishments and public service.
Charlotte Man Indicted on Hobbs Act Robbery and A Related Gun Charge Resulting in DeathRead the Press Release
CHARLOTTE, N.C. – Demarcus Donte Ivey, 34, of Charlotte, has been indicted on robbery and gun charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. A federal grand jury sitting in Charlotte returned the two-count indictment on Tuesday, October 20, 2015, charging Ivey with Hobbs Act Robbery and use of a firearm during and in furtherance of a crime of violence resulting in death.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Chief Kerr Putney of the Charlotte-Mecklenburg Police Department; and Mecklenburg County District Attorney Andrew Murray join U.S. Attorney Rose in making this announcement.
“Crimes of violence uniquely affect the community and specifically the victims of such crimes. In this district, we work closely with our state counterparts and make prosecutorial decisions that maximize our options and ensure that the appropriate venue is utilized, whether it is state or federal court. Given the factors and circumstances of this case, Ivey’s federal prosecution will best meet the ends of justice,” said U.S. Attorney Rose, who is also handling Ivey’s prosecution.
“A man’s life was cut short because of the ruthless and callous actions of a violent killer. Today’s indictment is the result of an intense investigation between federal and local law enforcement agencies committed to holding accountable offenders who put the safety of our communities at risk,” said Strong, FBI’s Special Agent in Charge.
“The strong partnership between my office and the U.S. Attorney’s Office creates a coordinated effort between state and federal prosecutors working here in Mecklenburg County to ensure that our resources are shared to best protect this community and seek justice in every case,” said District Attorney Murray.
“This indictment sends a very strong message to those who engage in violent criminal activity. The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be steadfast in our focus to keep the community safe,” said CMPD Chief Putney.
According to the allegations contained in the charging document, in or about September 2009, Ivey robbed Club Nikki’s, which is located in Charlotte. The indictment alleges that over the course of the robbery, Ivey shot and killed Adrian Youngblood, who was a patron at Club Nikki’s.
The Hobbs Act Robbery offense carries a maximum of 20 years in prison, and the offense related to the use, carry, brandish and discharge of a firearm during and in furtherance of a crime of violence resulting in death carries a minimum of 10 years and a maximum of life in prison.
Ivey is currently in state custody and will be transferred to the custody of the U.S. Marshals to appear in court on the federal charges.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making this announcement, U.S. Attorney Rose praised the investigative work of the FBI and CMPD and thanked the Mecklenburg County District Attorney’s Office for their continued support and cooperation with this case.
U.S. Attorney Rose is in charge of Ivey’s prosecution.
California-Based Heroin Distributor Sentenced to More Than 10 Years in Prison on Drug Trafficking ChargesRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Alberto Gasca, 31, of Los Angeles, California, to serve 128 months in prison and five years of supervised release on drug trafficking charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Gasca pleaded guilty in February 2015 to conspiracy to possess with intent to distribute heroin.
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, beginning in 2012, Gasca was a major drug distributor based in California, responsible for smuggling bulk drug shipments from Mexico. Court records show that Gasca used an extensive transportation network of couriers to traffic the heroin and other drugs, including methamphetamine, from Los Angeles to distribution cells throughout the United States, including the Charlotte area. According to court documents, Gasca’s couriers typically transported the heroin hidden in false compartments of large rolling suitcases. Law enforcement arrested Gasca in September 2014 in California. According to court records, at the time of his arrest, law enforcement seized from Gasca’s residence $108,000 in cash, drug scales, plastic packaging, kilogram wrappers, two kilograms of heroin, more than five ounces of methamphetamine and a ledger. Gasca’s prosecution is part of an ongoing investigation into drug trafficking of heroin from Mexico. Over the course of the investigation, law enforcement seized approximately 50 pounds of heroin, and approximately $170,000 identified as drug proceeds.
Six other conspirators have been sentenced to date in connection with this investigation. Hector Manuel Castaneda Gastelo and Yolanda Gonzalez were each sentenced to 20 years in prison; Marcelino Rivera Vorquez was sentenced to 7.5 years in prison; Fernando Hernandez was sentenced to 7.25 years in prison; and Benjamin Villanueva Estrada was sentenced to 6.5 years in prison. Another conspirator, Omar Kamirez Lizama is awaiting sentencing.
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.
Gasca 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 case was investigated by the DEA in Charlotte.In making today’s announcement, U.S. Attorney Rose thanked the Ontario, California Police Department and the DEA’s Office in Los Angeles for their assistance with this investigation. Assistant U.S. Attorney Elizabeth Greene of the U.S. Attorney’s Office in Charlotte is handling the prosecution.
Two Former Swisher Hygiene, Inc. Executives Indicted on Securities Fraud and Obstruction of Justice ChargesRead the Press Release
Charlotte, N.C. – A federal grand jury has indicted two former executives of Swisher Hygiene Inc. (Swisher) on securities fraud and obstruction of justice charges, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Joining in today’s announcement is Special Agent in Charge John A. Strong of the FBI’s Charlotte Division.
Swisher’s former chief financial officer, Michael Kipp, 61, of Charlotte, and certified public accountant and Swisher’s former director of external reporting, Joanne Viard, 36, of Santa Rosa Beach, Florida, have been charged in connection with a securities fraud conspiracy allegedly carried out at Swisher throughout fiscal year 2011 and a subsequent obstruction of justice scheme in 2012. The federal indictment was returned late afternoon and Kipp and Viard are scheduled to make their initial appearances in federal court on Tuesday, Oct. 20, 2015.
“My office has a long record of holding corporate executives accountable for their criminal conduct,” said U.S. Attorney Rose. “Today’s charges continue to make clear that regardless of title or position, my office will prosecute corporate executives who engage in financial fraud schemes that defraud the investing public and undermine the integrity of our financial markets. We will work diligently to uncover such fraud, no matter how pernicious the cover-up.”
“As alleged in the indictment, these corporate executives were entrusted to fairly and accurately report the earnings of their employer; instead, they manipulated and falsified the numbers putting the hard earned money of shareholders at risk and undermining the laws in place to protect our financial markets,” said Special Agent in Charge Strong. “The FBI will root out corporate fraud wherever it exists and ensure those who engage in such practices are held accountable.”
Today’s charges follow the Oct.7, 2015, announcement that Swisher had entered into a deferred prosecution agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty. Formal charges were also filed on Oct. 7, 2015, against Swisher’s former senior-level accounting employee, John Pierrard, who is scheduled to enter his guilty plea on Tuesday, Oct. 20, 2015, for his role in the alleged accounting fraud conspiracy.
According to allegations contained in the indictment and documents filed in related cases:
Throughout fiscal year 2011, Kipp, Viard and their conspirators engaged in an accounting fraud scheme to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, Wells Fargo, the investing public and others. Some of the fraudulent methods Kipp, Viard and their conspirators used to manipulate Swisher’s books and records to fraudulently increase the company’s income included reducing expenses by moving them from the company’s profit and loss statement to its balance sheet as well as engaging in what is commonly referred to as “cookie jar” accounting.
The accounting fraud scheme began to unravel when Swisher’s then-controller pushed back on making a fraudulent entry during the year end close. The controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.” The controller persisted in his refusal to book the fraudulent entry and Kipp fired him. Swisher’s audit committee learned of the controller’s allegations and promptly commissioned an independent internal investigation. After the allegations of fraud were reported, Kipp and Viard almost immediately began to engage in misleading conduct to conceal the accounting fraud conspiracy and to obstruct justice by lying to the investigators hired by the audit committee.
Approximately 11 months following the announcement of the investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year. The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time period.
The indictment charges Kipp and Viard each with one count of conspiracy to commit securities fraud, to falsify books, records and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants; one count of securities fraud; one count of wire fraud; and one count of obstruction of justice. Kipp is also charged with one count of bank fraud. The conspiracy charge carries a maximum prison term of five years. The securities fraud, wire fraud and obstruction offenses each carry a maximum prison term of 20 years. The bank fraud charge carries a maximum prison term of 30 years.
The details 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 praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges. Rose also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.
Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are assigned to this case.
Two Former Swisher Hygiene Inc. Executives Indicted on Securities Fraud and Obstruction of Justice ChargesRead the Press Release
Former Senior Level Corporate Employee to Plead Guilty to Securities Fraud Conspiracy
A federal grand jury in Charlotte, North Carolina, has indicted two former executives of Swisher Hygiene Inc. (Swisher) on securities fraud and obstruction of justice charges, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Joining in today’s announcement is Special Agent in Charge John A. Strong of the FBI’s Charlotte Division.
Swisher’s former chief financial officer, Michael Kipp, 61, of Charlotte, and certified public accountant and Swisher’s former director of external reporting, Joanne Viard, 36, of Santa Rosa Beach, Florida, have been charged in connection with a securities fraud conspiracy allegedly carried out at Swisher throughout fiscal year 2011 and a subsequent obstruction of justice scheme in 2012. The federal indictment was returned late afternoon and Kipp and Viard are scheduled to make their initial appearances in federal court on Tuesday, Oct. 20, 2015.
“My office has a long record of holding corporate executives accountable for their criminal conduct,” said U.S. Attorney Rose. “Today’s charges continue to make clear that regardless of title or position, my office will prosecute corporate executives who engage in financial fraud schemes that defraud the investing public and undermine the integrity of our financial markets. We will work diligently to uncover such fraud, no matter how pernicious the cover-up.”
“As alleged in the indictment, these corporate executives were entrusted to fairly and accurately report the earnings of their employer; instead, they manipulated and falsified the numbers putting the hard earned money of shareholders at risk and undermining the laws in place to protect our financial markets,” said Special Agent in Charge Strong. “The FBI will root out corporate fraud wherever it exists and ensure those who engage in such practices are held accountable.”
Today’s charges follow the Oct.7, 2015, announcement that Swisher had entered into a deferred prosecution agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty. Formal charges were also filed on Oct. 7, 2015, against Swisher’s former senior-level accounting employee, John Pierrard, who is scheduled to enter his guilty plea on Tuesday, Oct. 20, 2015, for his role in the alleged accounting fraud conspiracy.
According to allegations contained in the indictment and documents filed in related cases:
Throughout fiscal year 2011, Kipp, Viard and their conspirators engaged in an accounting fraud scheme to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, Wells Fargo, the investing public and others. Some of the fraudulent methods Kipp, Viard and their conspirators used to manipulate Swisher’s books and records to fraudulently increase the company’s income included reducing expenses by moving them from the company’s profit and loss statement to its balance sheet as well as engaging in what is commonly referred to as “cookie jar” accounting.
The accounting fraud scheme began to unravel when Swisher’s then-controller pushed back on making a fraudulent entry during the year end close. The controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.” The controller persisted in his refusal to book the fraudulent entry and Kipp fired him. Swisher’s audit committee learned of the controller’s allegations and promptly commissioned an independent internal investigation. After the allegations of fraud were reported, Kipp and Viard almost immediately began to engage in misleading conduct to conceal the accounting fraud conspiracy and to obstruct justice by lying to the investigators hired by the audit committee.
Approximately 11 months following the announcement of the investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year. The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time period.
The indictment charges Kipp and Viard each with one count of conspiracy to commit securities fraud, to falsify books, records and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants; one count of securities fraud; one count of wire fraud; and one count of obstruction of justice. Kipp is also charged with one count of bank fraud. The conspiracy charge carries a maximum prison term of five years. The securities fraud, wire fraud and obstruction offenses each carry a maximum prison term of 20 years. The bank fraud charge carries a maximum prison term of 30 years.
The details 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 praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges. Rose also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.
Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are assigned to this case.
Former Treasurer Admits to Stealing Money from Charlotte Area Non-Profit Employer and Pleads Guilty to ChargesRead the Press Release
CHARLOTTE, N.C. – The former Treasurer of a Charlotte area non-profit organization appeared in court today and admitted to stealing more than $344,262 from his employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Floyd Kevan Weaver, 53, of Rock Hill, S.C. pleaded guilty to one count of uttering counterfeit and forged securities before U.S. Magistrate Judge David C. Keesler.
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.
According to filed court documents and today’s court proceedings, from 2000 to 2013, Weaver was employed by a non-profit organization located in Charlotte. As the non-profit’s elected Treasurer, Weaver was responsible for the organization’s financial affairs and acted as custodian of its funds. Weaver admitted in court today that from 2008 to 2013, he engaged in a scheme to defraud his employer by fraudulently diverting the organization’s funds for his personal benefit.
According to court records, Weaver executed the scheme by forging the name of one of the non-profit’s officers on the organization’s bank checks and depositing those checks into his own bank account. To conceal the fraud, Weaver mischaracterized the stolen funds as travel expenses, mileage reimbursement, office supplies and postage. Weaver admitted that he forged approximately 116 checks totaling more than $326,545. Weaver also admitted to using the non-profit’s debit card to steal more than $17,717 for his personal use. Court documents show that Weaver used the stolen money to purchase jewelry and a car, among other things.
Weaver was released on bond following his guilty plea. The charge carries a maximum prison term of 10 years and a $250,000 fine. As part of his plea agreement, Weaver has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the USPIS. The prosecution for the government is being handled by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.
Producer of Child Pornography Sentenced to 15 Years in Federal PrisonRead the Press Release
ASHEVILLE, N.C. – Patrick John Stone, 29, of Gloucester, Virginia was sentenced today by U.S. District Judge Martin Reidinger to serve 180 months in federal prison on child pornography production charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Stone was also placed on a lifetime of supervised release and was ordered to register as a sex offender.
Joining U.S. Attorney Rose in making today’s announcement is B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation.
According to filed court documents and today’s sentencing hearing, Stone maintained an Internet account which he used to communicate in chatrooms and via video conferencing. Stone admitted in filed court documents that while he resided in Cleveland County, N.C., he met the minor female via a chat website. Stone also admitted to telling the minor victim he was 17 years old. According to court records, between September 9, 2012, and November 1, 2012, Stone caused the minor to engage in sexually explicit conduct which Stone recorded without the minor’s knowledge. A forensic examination of Stone’s seized computers revealed that he possessed numerous images of child erotica and child pornography videos.
Stone pleaded guilty in February 2015 to one count of production of child pornography and is currently in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the SBI. The case was prosecuted by the U.S. Attorney’s Office in Asheville.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Man Sentenced to 12 Months and One Day in Prison for Sexual Contact in National ForestRead the Press Release
ASHEVILLE, N.C. – Ronald Shannon Sosebee, 38, of Brevard, N.C. was sentenced on Thursday, October 15, 2015, by U.S. District Judge Martin Reidinger to serve 12 months and one day in federal prison for sexually touching and propositioning another person without that person’s permission, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Sosebee was also ordered to serve a lifetime of supervised release and to register as a sex offender.
Joining U.S. Attorney Rose in making today’s announcement is Lee Boyd, United States Forest Service Patrol Captain.
According to filed court documents and the sentencing hearing, on or about June 24, 2014, Sosebee approached the male victim near Sleepy Gap Overlook, located on the Blue Ridge Parkway, while the male hiker was resting after hiking on a trail. Court records show that Sosebee asked the male hiker if they could hike down the trail together, to which the victim agreed, and the two proceeded to walk, crossing into the Pisgah National Forest. According to court records, after a short distance, Sosebee made an unsolicited sexual remark and touched the victim sexually without permission. The victim resisted Sosebee’s sexual contact, ran toward his campsite and reported the incident to law enforcement. Sosebee was arrested shortly thereafter.
Sosebee pleaded guilty to engaging in sexual contact with another person without that other person’s permission and is currently in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the United States Forest Service and the National Park Service. The case was prosecuted by the U.S. Attorney’s Office in Asheville.
Cherokee, N.C. Woman Sentenced to 15 Years in Prison in Connection with Robbery on Indian ReservationRead the Press Release
ASHEVILLE, N.C. – Ashlyn Nichole Carothers, 23, of Cherokee, N.C. was sentenced on Thursday, October 15, 2015, to 180 months in prison for her involvement in a robbery on the Indian reservation, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Martin Reidinger also ordered Carothers to serve three years of supervised release and to pay $30,166.45 as restitution.
U.S. Attorney Rose is joined by Interim Chief James Dike Sneed of the Cherokee Indian Police Department in making this announcement.
According to court records and yesterday’s sentencing hearing, on or about September 30, 2012, in Jackson County, George Lee Nobles robbed and killed a victim outside a motel located on the Eastern Band of Cherokee Indians Reservation. Carothers acted as Nobles’ get-away driver. According to filed court documents, Carothers admitted knowing Nobles had stolen the victims’ purse and that later she and Nobles burned the victim’s purse but kept the $5,000 cash they had found in the victim’s wallet. Carothers pleaded guilty in March 2014 to one count of robbery by force and violence within Indian Country and aiding and abetting. Nobles is currently facing charges for first degree murder and related offenses in state court.
Carothers has been in custody since October 2013. She will be transferred to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The Cherokee Police Department handled the investigation assisted by the North Carolina State Bureau of Investigation. Assistant U.S. Attorney Don Gast and Special Assistant U.S. Attorney Jason Smith prosecuted the case.
U.S. Attorney Announces Criminal Securities Fraud Charges Against Swisher Hygiene, Inc. and Former Senior-level Corporate AccountantRead the Press Release
CHARLOTTE, N.C. – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, announced the filing of criminal charges against Swisher Hygiene, Inc. (“Swisher”) and a former senior-level corporate accounting employee in connection with accounting fraud at Swisher. Joining in the announcement is John A. Strong, Special Agent in Charge of the FBI in North Carolina. The criminal charges relate to Swisher’s scheme to defraud the investing public by materially misrepresenting Swisher’s financial position throughout fiscal year 2011.
U.S. Attorney Rose also announced that Swisher, a publicly-traded hygiene and sanitation solutions company based in Charlotte, has entered into a deferred prosecution agreement with the government, in which it accepts responsibility for the accounting fraud scheme and agrees to pay a $2 million monetary penalty.
Former senior-level corporate accounting employee John Pierrard, 49, of Delray Beach, Florida, has also agreed to plead guilty for his role in Swisher’s scheme to manipulate its books and records to fraudulently inflate reported earnings.
“Our financial markets depend on corporate executives and employees honestly reporting their financial results. When they fail to do so, we all suffer. Today’s filings make clear that my Office will continue to work tirelessly to root out financial fraud. And, we will continue to hold criminally responsible both corporations and the individuals who run and work at those corporations when they cook the books. The investing public deserves nothing less,” said U.S. Attorney Rose.
“When companies fraudulently misrepresent their earnings and overall financial strength through illicit accounting practices, not only do shareholders suffer, but the integrity of our financial market is put at risk. Corporate fraud at any level will not be tolerated,” said FBI’s Special Agent in Charge Strong.
According to the bills of information filed for both Swisher and Pierrard, the purpose of the accounting fraud scheme was to ensure that Swisher consistently reported that its adjusted earnings had met or exceeded executive management’s forecasts and to conceal the existence of the fraud from, among others, its auditors, the financial institution with which it had an ongoing credit agreement and the investing public.
According to court filings, when adjusted earnings were falling short of the target, Swisher and its conspirators used various methods to fraudulently manipulate the books and records in order to hit certain adjusted earnings targets. For example, court documents show that in some instances Swisher took expenses that were supposed to be booked to Swisher’s profit and loss statement and moved them to the balance sheet, fraudulently reducing expenses and thereby increasing income. In other examples, when acquiring companies, Swisher inflated certain liabilities that were established for contingent earn-outs, and then fraudulently reduced those liabilities, resulting in increased income. In other instances, court documents show that Swisher engaged in what is commonly referred to as “cookie jar” accounting, by inflating reserves during the process of acquiring other businesses and then fraudulently reducing those reserves and increasing income. For example, according to court filings, as part of the process of closing the books for the third quarter of fiscal year 2011, Swisher made several fraudulent entries in its books and records on a Saturday, weeks into the close process, increasing in one day its September adjusted “earnings” from $2.4 million to $3.5 million.
According to filed documents, the accounting fraud scheme began to unravel when a Swisher employee, identified as Executive A, fired the Controller after he refused to book a fraudulent entry. When the Controller’s allegations were brought to the attention of Swisher’s Audit Committee approximately a month later, it promptly commissioned an independent internal investigation.
The filed bill of information for Pierrard also describes a conspiracy to obstruct justice by misleading the investigators Swisher retained to conduct the independent investigation into the allegations of accounting fraud. Charging documents filed against Swisher and Pierrard note that during the ensuing audit committee investigation executives provided false and/or misleading information in an effort to cover up the accounting fraud scheme.
In the deferred prosecution agreement, Swisher accepts and acknowledges responsibility for the conduct of its former employees as described in the bills of information and agrees to cooperate fully with the United States in its continuing investigation of the fraud. The agreement also recognizes Swisher’s substantial cooperation with the United States to date, including the steps promptly taken by the audit committee upon discovery of the unlawful conduct to thoroughly investigate the unlawful conduct, to take remedial measures to address the unlawful conduct and to minimize the chance that such unlawful conduct would reoccur, as set forth in more detail in the agreement.
In the agreement, Swisher also agrees to pay a $2 million financial penalty, such penalty reflecting the fact that Swisher’s auditors have noted a substantial doubt that the Company’s ability to continue as a going concern and the concern that a greater fine would jeopardize the solvency of the company and put at risk the employment of its approximately 1,000 employees who were not involved in the wrong-doing.
Both bills of information charge one count of conspiracy to commit securities fraud, to falsify books, records, and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants. Pierrard faces a maximum prison term of five years for the conspiracy charge. In determining a defendant’s actual sentence, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges. A plea agreement for Pierrard was also filed today and he is expected to appear before a U.S. magistrate judge to formally enter his guilty plea when the hearing is scheduled by the Court.
U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges. She also thanked the U.S. Securities & Exchange Commission for their assistance in the investigation.
Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.
Hickory, N.C. Physician Pleads Guilty to Health Care FraudRead the Press Release
CHARLOTTE, N.C. – A Hickory physician pleaded guilty today to health care fraud charges for submitting to Medicare and Medicaid over $467,376 in fraudulent reimbursement claims, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Wayne Vincent Wilson, 54, entered his guilty plea before U.S. Magistrate Judge David S. Cayer.
Acting U.S. Attorney Rose is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
According to filed court documents, Wilson is a licensed family practitioner and owner and operator of Wayne Wilson, MD Family Practice (the Practice) located in Hickory. At today’s plea hearing, Wilson admitted that from 2007 to 2014, he engaged in a scheme to defraud Medicare and Medicaid by submitting fraudulent reimbursement claims totaling more than $467,376 for services that were never provided to beneficiaries. The fraudulent claims resulted in payments of at least $210,120 to Wilson and the Practice.
According to plea documents, Wilson “added and padded” his Medicaid and Medicare reimbursements with these false claims because he believed that Medicaid did not pay him enough for his services. Court records show that in some instances Wilson perpetrated the fraud by adding non-existent services, such as nerve conduction studies, strep tests, and pulmonary stress tests among others, to actual patient office visits. In other instances, Wilson fabricated entire office visits and submitted fraudulent claims for dates that patients were not even seen at the office.
According to admissions reflected in the plea documents, beginning in 2005, Wilson contracted with an individual identified as “D.D.” to perform nerve conduction studies, and sought reimbursement for those services through the Practice. In February 2012, D.D. terminated his relationship with Wilson and the Practice. Court records show that Wilson continued to submit fraudulent reimbursement claims to Medicare and Medicaid, falsely stating that he had performed nerve conduction studies for beneficiaries, even though Wilson did not have the equipment or the expertise to provide such studies.
Wilson pleaded guilty to two counts of health care fraud and was released on bond after the hearing. The maximum prison term for each health care fraud count is 10 years and a $250,000 fine. Wilson has also agreed to pay restitution, the final amount of which will be determined by the Court at sentencing, which has not been set yet.
HHS-OIG conducted the investigation. HHS-OIG conducted the investigation. The prosecution of the case is handled by Assistant U.S. Attorney Kelli Ferry and Special Assistant U.S. Attorney Timothy Rodgers. Mr. Rodgers is a Special Deputy Assistant Attorney General with the North Carolina Department of Justice Medicaid Investigations Division. The SAUSA position is reflection of the partnership between the Medicaid Investigations Division and the United States Attorney that helps ensure the effective and vigorous prosecution of Medicaid fraud.
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 or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].
Chinese Businessman Charged with Theft of Trade SecretsRead the Press Release
CHARLOTTE, N.C. – A criminal bill of information was filed today in federal court in Charlotte, charging a Chinese businessman, Xiwen Huang, 55, of Charlotte, with one count of theft of trade secrets, announced Acting U.S. Attorney Jill Westmoreland Rose and Special Agent in Charge John A. Strong, of the FBI’s Charlotte Division. A plea agreement was also filed today and Huang is expected to appear in court on Friday, October 2, 2015, at 10:30 a.m. to enter his formal guilty plea.
“After having received the benefit of an American education, the defendant worked for companies in the U.S. which developed technology for the U.S. government and private enterprises. The defendant then stole secret information from these entities to bring back to China to benefit himself and others. For this reprehensible conduct the defendant is going to federal prison. We will do the same to other industry thieves in a continued effort to protect American intellectual property and maintain fairness in the marketplace,” said Acting U.S. Attorney Rose.
“For years Xiwen Huang targeted U.S. companies intending to steal the intellectual property others had worked so diligently to develop. The research and product development information he stole from a North Carolina business put our state’s economy and people’s jobs at risk. The FBI will work tirelessly to hold accountable the criminals who try to profit off the work of others,” said John Strong, Special Agent in Charge of the Charlotte Division of the FBI.
According to court documents filed today, from about 2006 through May 2015, Huang engaged in a scheme to steal trade secrets from multiple companies within the United States, and intellectual property from the United States government, to further his aspirations of forming and operating his own company in the People’s Republic of China (China). Huang is a native of China and naturalized U.S. Citizen.
Filed court documents show that prior to coming to the United States to obtain his doctorate degree in Chemical Engineering, Huang wrote that he “had a dream of learning more advanced technology to serve [his] homeland” of China and decided that to “fulfill [his] wish” he needed to go abroad and then “return to China with [his] newly acquired methodology and research skills to teach in China.”
According to court records, Huang came to the United States in 1998 to study and work. From approximately December 2004 until he was fired by his employer in approximately March 2014, court records show that Huang stole proprietary and confidential information, including trade secret information and other intellectual property belonging to a Government Research Facility and two United States companies, with the intent to use the stolen information for the economic benefit of himself, a Chinese company, and others.
Filed court documents show that Huang stole a large amount of intellectual property from the Government Research Facility, including technology related to military vehicle fuel cells. Court records also show that Huang stole from one U.S. company more than 500 documents containing confidential and proprietary information, including trade secret information related to 30 different products with research and development costs associated therewith of more than $65 million. According to court records, Huang stole from a second U.S. company, more than 100 documents containing trade secret, confidential and proprietary information with research and development costs associated therewith of more than $25 million.
Court documents filed today show that upon being fired from the second U.S. company in 2014, Huang returned to China and began working for a Chinese company in a managerial role. According to court records, Huang took with him to China all of the intellectual property and trade secrets he stole with the intent to use that stolen property to further his personal goals and the business interests of the Chinese company.
According to court records, after returning to China, upon attaining his goals first annunciated in 2003, Huang recounted his accomplishments of stealing U.S. intellectual property in a document he titled, “Trip of Dream Realization.” In the document, translated from Chinese, court records show that Huang states in sum and substance: “Throughout these 16 years, I always have a dream of returning to China to develop my ambition. In order to realize this dream, I have worked in US national research academies [laboratories], largest chemical companies in the world. I have also worked in small companies in the US. My goal was to learn, digest, accumulate, and make preparations for realizing the dream. . .Consequently, I started scheming, planning that last for close to 2 years, and returned to China formally in this year, and initiated my own ‘Trip of Dream Realization’. . . As the main thrust during the country’s development, it is necessary an obligatory for our generation to fulfill our share of responsibility in contributing towards the societal progress of China.”
Huang has been in federal custody since May 2015, when he was arrested following his return from China. He has agreed to plead guilty to stealing trade secrets from multiple U.S. companies. The theft of trade secrets charge carries a maximum term of 10 years in prison. In determining Defendant’s actual sentence, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges.
The Charlotte Division of the FBI is investigating the case. Assistant United States Attorneys Kevin Zolot and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are handing the prosecution for the government.
Man Sentenced to More Than Eight Years in Prison in Multi-million Dollar Stolen Goods CaseRead the Press Release
CHARLOTTE, N.C. – On Monday, September 28, 2015, U.S. District Court Judge Max O. Cogburn, Jr. sentenced the leader of an organized retail crime ring that sold and distributed over $12 million in stolen over-the-counter (“OTC”) drugs and health-and-beauty (HBA) products, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Steve Hale, 66, of Terrell, N.C., was sentenced to 97 months in prison followed by three years of supervised release after serving his prison term. Hale also was ordered to pay a $3,100 special assessment, to forfeit a sports boat and $332,195 in seized funds and to pay restitution to his victims, the amount of which will determined by the Court at a later date.
Acting U.S. Attorney Rose is joined in making today’s announcement by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division; Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Chief James W. Buie of Gaston County Police Department; and Chief Robert C. Helton of the Gastonia Police Department.
In April 2014, a federal jury convicted Hale of interstate transportation of stolen goods conspiracy, interstate transportation of stolen goods, making false statements in income tax forms, failure to collect employee income and FICA taxes, and obstruction of justice.
Hale was the last of eight defendants convicted and sentenced for organized retail crime offenses resulting from arrests made in “Operation Cash Back,” a multi-agency investigation into the buying and selling of stolen OTC drugs and HBA products that began in September 2010. Hale’s codefendants were previously sentenced to prison terms ranging from 18 to 86 months. In addition to the prison terms, prior forfeiture orders included more than $29,000 in seized cash, 20 motor vehicles, two real estate properties and a forfeiture money judgment of $7 million.
According to filed court documents, court proceedings and evidence submitted at Hale’s trial, Hale and his conspirators participated in what is known in the retail industry as Organized Retail Crime (“ORC”) and Organized Retail Theft (“ORT”). Court documents show that from 2006 to March 2011, the defendants engaged in a scheme whereby they bought and sold stolen over-the-counter products, including medications and dietary supplements, and health and beauty aid products. According to court records, organized retail theft begins with individuals, known as “boosters,” who shoplift popular OTC and HBA products from the shelves of various pharmacy and retail stores. The individuals who operated as “boosters” in this conspiracy stole OTC and HBA products from stores in North Carolina, South Carolina West Virginia, Georgia, Pennsylvania and Connecticut. The “boosters” then sold the shoplifted goods far below retail and wholes prices to first-level “fences.” First-level fences in turn served as middlemen between the “boosters” who stole the OTC and HBA products from retail merchant stores and second-level fences who further distributed the stolen goods to a higher-level fence or distributor, who then distributed the stolen products back into the retail marketplace.
According to court records and court hearings, Hale’s conspirators served as first-level fences, purchasing stolen OTC and HBA products from “boosters.” The first-level fence conspirators then sold the stolen OTC and HBA products to Hale, a second-level fence, at prices far below the retail and wholesale prices of the stolen goods. Hale paid cash to his first-level fence conspirators, who in turn paid cash to “boosters” for the stolen OTC drugs and HBA products.
According to court records and court hearings, OTC and HBA goods stolen by “boosters” must be “cleaned,” which means removing retail store security labels, tags, stickers, and pricing labels, before they can be reintroduced into the retail marketplace through the various levels of fences. Hale provided the necessary cleaning services for stolen OTC drugs and HBA products before shipping the stolen goods to higher-level fences in illegal distribution channels. One of Hale’s previously convicted conspirators, Jeff Telsey, owner and operator of JCA Enterprises in Boca Raton, Florida, served as a third-level fence who repacked the stolen goods in industry-standard “case packs” for resale into the retail marketplace. The amount of stolen property involved in the investigation from 2006 to 2011 exceeded $16 million.
Hale’s bond was revoked in April 2014, and remains in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the Secret Service, IRS-CI, the Gaston County Police Department and the Gastonia Police Department. This prosecution was handled by Assistant United States Attorneys Tom O’Malley and Ben Bain-Creed of the Western District of North Carolina.
Colorado Man Sentenced to 10 Years in Prison for Transporting A Minor for the Purpose of Engaging in Sexual ActivityRead the Press Release
ASHEVILLE, N.C. – Jacob Thomas Pearce, 23, of Golden, Colorado, was sentenced today by U.S. District Judge Martin Reidinger, to serve 120 months in prison for transporting a minor for the purpose of engaging in sexual activity, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Judge Reidinger also ordered Pearce to serve a lifetime of supervised release and to register as a sex offender.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to court documents and today’s sentencing hearing, on or about September 6, 2014, Pearce traveled from Golden, Colorado, to Asheville to meet a 13-year old female victim with whom he had been communicating online and via text messages. Court records show that Pearce picked up the minor from Asheville, and together they travelled through Tennessee, ultimately arriving in Austin, Texas, on September 8, 2014. According to court records, Pearce engaged in sexual acts with the minor over the two-day period they travelled across state lines. Law enforcement located Pearce’s vehicle near Brackettville, Texas, and Pearce was taken into custody. Court records indicate that Pearce admitted to knowing the victim was a minor prior to leaving Colorado. In April 2015, Pearce pleaded guilty to one count of transportation of a minor with intent to engage in sexual activity.
Pearce is currently in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was investigated by the FBI. Assistant U.S. Attorney Don Gast the case of the Western District of North Carolina prosecuted the case.
Charlotte Insurance & Financial Executive Indicted for Filing False Tax Returns and Obstructing Grand Jury InvestigationRead the Press Release
CHARLOTTE, N.C. – Patrick Emanuel Sutherland, 47, of Charlotte, was indicted by a federal grand jury sitting in Charlotte for filing false tax returns and obstructing a federal grand jury investigation, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. The indictment was returned on September 17, 2015, and was unsealed today in federal court.
Acting 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 allegations contained in the indictment, from 2007 to the present, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries. The indictment alleges that between 2007 and 2010, Sutherland and his affiliated companies received deposits from domestic and foreign sources exceeding $2.5 million, yet Sutherland fraudulently underreported his business receipts and his personal income to the IRS by more than $1.5 million. For example, despite receiving substantial income for years 2007 to 2010, Sutherland reported a combined income of approximately $276,697, and paid a mere $12,483 in total federal income taxes. During the same three-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, the indictment alleges.
According to allegations in the federal indictment, to conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister and her company. In reality, the indictment alleges, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda which Sutherland controlled.
The indictment alleges that because Sutherland worked with offshore insurance companies, some of his commissions had to be paid to an offshore intermediary. The indictment alleges that Sutherland used his Bermuda-based shell company, Steward Technology Services Limited (STS) to funnel personal and business funds to Sutherland’s U.S. bank accounts. According to allegations contained in the indictment, on numerous occasions, Sutherland mischaracterized the wire transfers from STS’s bank account in Bermuda to Sutherland’s various domestic accounts as capital contributions and loans.
According to the indictment, on several occasions between June 2012 and September 2012, Sutherland attempted to obstruct a federal investigation by providing fraudulent documents, including fictitious loan agreements and documents purportedly alleging his lack of control over STS’s bank account in Bermuda.
Sutherland had his initial appearance today in federal court. The penalty for filing a false tax return is a maximum term of three years in prison and a $250,000 fine per count. The obstruction of official proceedings charge carries a maximum term of 20 years in prison and a $250,000 fine.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
IRS-CI is handling the investigation. Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.
Federal Indictment Charges 16 with Narcotics Conspiracy Operating in Swain, Cherokee & Surrounding CountiesRead the Press Release
ASHEVILLE, N.C. – A federal criminal indictment unsealed today in Asheville charges 16 men and women with narcotics conspiracy operating in Swain, Cherokee and surrounding counties, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Of the 16 defendants named in the indictment, 15 have been arrested by law enforcement. The indictment is the result of a joint federal, state and local investigation, targeting the distribution of methamphetamine in Western North Carolina.
Acting U.S. Attorney Rose is joined in making today’s announcement with Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Charles Addington, Deputy Associate Director of the Bureau of Indian Affairs, Division of Drug Enforcement; C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Christopher Kuvlesky, Assistant Special Agent in Charge, Atlantic Field Office, National Park Service, Investigative Services Branch; Colonel William J. Grey, Commander of the North Carolina State Highway Patrol; Sheriff Curtis A. Cochran of the Swain County Sheriff’s Office; Chief Ben Reed of the Cherokee Indian Police Department; Sheriff Robert L. Holland of the Macon County Sheriff’s Office; and Sheriff Danny Millsaps of the Graham County Sheriff’s Office.
In announcing the charges, Acting U.S. Attorney Rose said, “Drug dealers think they can operate under the radar in smaller, rural areas, and evade detection. They are wrong. We will partner with law enforcement agencies throughout Western North Carolina to protect all communities, large and small, and crackdown on drug traffickers that threaten the safety and well-being of the people living there.”
“The success of this investigation speaks to the continued dedication between our local, state and federal law enforcement partners in targeting and dismantling meth distribution rings that profit by spreading their poison in our communities. Strong partnerships such as this one underscore the power of our combined forces and demonstrate our collective impact on the war against meth,” said Special Agent in Charge Salter, with DEA’s Atlanta Field Division.
All defendants are charged with one count of engaging in a conspiracy to distribute and to possess with the intent to distribute methamphetamine, with some facing additional drug and firearms violations.(Please see the attached chart for a list of all charges and penalties for each defendant). The 16 charged are:
- James Dee Ball, 36, of Bryson City, N.C. (arrested)
- Kelsie Marie Burch, 23, of Sylva, N.C. (not arrested yet)
- Theresa Lorene Burns, 55, of Bryson City. (arrested)
- Anna Marie Postell Cochran, 21, of Bryson City. (arrested)
- Thomas Bart Cochran, 35, of Bryson City. (arrested)
- Jeremiah Jerome Gibby, 35, of Bryson City. (arrested)
- Hoke Benjamin Caleb Hayes, 24, of Hoschton, Georgia. (arrested in Georgia)
- Bryan Keith Jenkins, 35, of Robbinsville, N.C. (in state custody)
- Ray Chad Lequire, 34, of Bryson City. (arrested)
- Amanda Brooke McKinney, 34, of Bryson City. (arrested)
- Miranda Nations, 21, of Bryson City. (arrested)
- Tammie Lynn Payne, 44, of Waynesville, N.C. (arrested)
- Brandi Lynn Smith, 30, of Cleveland, Georgia. (arrested)
- Gregory Daniel Steedly, 48, of Lawrenceville, Georgia. (arrested in Georgia)
- Cain Hamilton Strickland, 34, of Atlanta, Georgia. (in state custody)
- Sebern Todd Wyatt, 50, of Bryson City. (arrested)
According to allegations contained in the indictment, from about April 2013 to about July 2015, in Cherokee, Haywood, Jackson, Macon, and Swain Counties, the defendants conspired with each other to distribute and to possess with intent to distribute methamphetamine. According to court records and statements made in court, over the course of the investigation law enforcement recovered more than three pounds of methamphetamine, drug paraphernalia, approximately $43,000 in cash, 11 firearms, including semi-automatic pistols and rifles, and ammunition.
All defendants named in the indictment are in currently in custody, except Kelsie Marie Burch, who remains a fugitive.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until they have been proven guilty beyond a reasonable doubt in a court of law.
Acting U.S. Attorney Rose thanked all the law enforcement agencies involved in this investigation for their continued cooperation and assistance. The case is being prosecuted by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.
Three Men Handed Down Prison Sentences on Child Pornography Charges in Separate CasesRead the Press Release
CHARLOTTE, N.C. – On Wednesday, September 16, 2015, U.S. District Judge Max O. Cogburn sentenced an Indian Trail, N.C. man to 20 years in prison on transportation of child pornography charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Jason Michael Brown, 41, was also sentenced to a lifetime of supervised release and was ordered to register as a sex offender.
Acting U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division.
According to court documents and statements made in court, on or about December 2011, law enforcement became aware that an individual with the username “Gigatribal007,” later identified as Brown, was sharing child pornography using peer to peer software. The investigation revealed that Brown possessed a collection of child pornography, consisting of more than 10,000 images and videos depicting children being sexually abused. Brown was also found to have sexually abused a child under the age of five. According to court records, Brown pleaded guilty in September 2014 to one count of transportation of child pornography and one count of possession of child pornography.
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In a separate case, on Tuesday, September 15, 2015, Chief U.S. District Judge Frank D. Whitney sentenced John Moore, Jr., 56, of Monroe, N.C. to 108 months in prison and 20 years of supervised release. According to filed documents and statements made in court, in September 2009, law enforcement became aware of Moore’s collection of child pornography after it was discovered by a computer repair technician who was repairing Moore’s computer. Court documents indicate that a forensic examination of the seized computer revealed that Moore possessed an extensive collection of child pornography, consisting of more than 1,200 images of child pornography and videos. Moore pleaded guilty in April 2013 to one count of possession of child pornography. Judge Whitney also ordered Moore to register as a sex offender once he is released from prison.
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In a third case sentenced this week, on Monday, September 14, 2015, Judge Cogburn sentenced Clinton Williams, Jr., 35, of Charlotte, to 72 months in prison and a lifetime of supervised release. According to court records, between February and August 2013, Williams accessed and downloaded on his computer child pornography using a peer to peer network. Court records indicate that Williams, who at the time was a detention officer with the Mecklenburg County Sheriff’s Office, downloaded more than 100 images and videos of child pornography, some of which included children as young as four years old. Williams pleaded guilty to one count of receiving child pornography and one count of possession of child pornography.
All three defendants are currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
These investigations were handled by the FBI. The Charlotte-Mecklenburg Police Department also assisted with the investigation into Williams.
These cases were 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.
Gaston County Man Charged with Conspiracy to Violate Firearms Laws , and Related Gun and Drug ChargesRead the Press Release
CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte has indicted Walter Eugene Litteral, 50, of Gastonia, N.C. for conspiring to violate federal firearms laws and related gun and drug charges, announced Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Litteral’s conspirators, Christopher Todd Campbell, 30, of Mt. Holly, N.C., and Christopher James Barker, 41, of Gastonia, were charged separately today and have agreed to plead guilty for their involvement in the conspiracy.
Special Agent in Charge John A. Strong of the FBI’s Charlotte Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to allegations contained in filed court documents and statements made in court:
In June 2015, law enforcement became aware that Litteral was conspiring with other individuals, including Campbell and Barker, to acquire firearms and components necessary to manufacture improvised explosive devices. Litteral, Campbell and others believed that the United States government intended to use the armed forces to impose martial law, which the conspirators planned to resist with violent force. Litteral and Campbell purchased smokeless gun powder, dummy grenades, fuses and other material needed to manufacture the explosive devices, stating that they would use them against law enforcement personnel who attempted to disarm them. In addition to manufacturing his own explosive devices, Litteral also helped Campbell reconstruct a dummy grenade into a live grenade and advised Campbell on how to maximize the success and impact of an explosion.
Litteral had also recruited Barker, who had access to plumbing supplies through his work, to provide him with pipe and pipe fittings needed to manufacture pipe bombs. Litteral also agreed to act as a “straw” firearm buyer for Barker, and attempted to purchase an assault rifle in his name for Barker’s use. Litteral also advised Barker on the type of ammunition Barker should purchase for the assault rifle, knowing that Barker’s prior felony convictions prohibited him from possessing or receiving a firearm or firearm ammunition.
To help finance his activities, Litteral sold prescription drugs which had been prescribed to him for his own use. Litteral was receiving approximately 240 hydrocodone and 90 oxycodone pills per month, which are both controlled substances, and sold approximately 150 pills per month to Barker. Litteral also sold prescription drugs to Campbell.
The six-count indictment charges Litteral with conspiracy to violate laws governing firearms and explosive devices which carries a maximum penalty of five years in prison; making a false statement during the attempted purchase of a firearm, which carries a maximum penalty of 10 years in prison; aiding and abetting the possession of ammunition by a prohibited person; which carries a maximum penalty of 10 years in prison; aiding and abetting the making of a firearm in violation of the National Firearms Act (NFA, that being a grenade, which carries a maximum penalty of 10 years in prison; conspiracy to distribute and possess Schedule II controlled substances, which carries a maximum penalty of 20 years in prison; and illegal distribution and possession with intent to distribute Schedule II controlled substances, which carries a maximum penalty of 20 years in prison.
Criminal bills of information were also filed in federal court against Litteral’s conspirators, Campbell and Barker. The two men have agreed to plead guilty to federal charges for their involvement in the conspiracy, and will appear before a U.S. magistrate judge in the coming days to formally enter their guilty pleas.
Campbell has agreed to plead guilty to one count of possession of an unregistered firearm, and one count of making a firearm in violation of the NFA, that being a grenade. Each charge carries a maximum of penalty of 10 years in prison. Barker has agreed to plead guilty to conspiracy to violate laws governing firearms and explosive devices which carries a maximum penalty of five years in prison, and one count of possession of ammunition by a prohibited person, which carries a maximum penalty of 10 years in prison.
All three men have been in federal custody since they were arrested on August 1, 2015.
The charges contained in Litteral’s indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and the Joint Terrorism Task Force (JTTF) of which the North Carolina Highway Patrol, the Federal Air Marshal Service, the Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Customs and Border Protection, the Union County Sheriff’s Office and the Charlotte Mecklenburg Police Department are members. In making today’s announcement, Acting U.S. Attorney Rose thanked the Belmont Police Department, the Mount Holly Police Department, Gaston County Police Department, the Gastonia Police Department, and the Mecklenburg County Sheriff’s office for their assistance with the investigation.
The case is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Michael E. Savage of the Western District of North Carolina.
Real Estate Agent Sentenced to 7 Years and Promoter Sentenced to 2 Years for Their Roles in Federal Racketeering ConspiracyRead the Press Release
CHARLOTTE, N.C. – Nathan Shane Wolf, 44, and John Wayne Perry, Jr., 34, both of Charlotte, were sentenced this week by Senior U.S. District Judge Graham C. Mullen on federal racketeering charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. An additional defendant, Purnell Wood, 44, was sentenced on Friday, July 31, 2015 for his role in the federal racketeering Enterprise.
Acting 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, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, 89 defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives. Of the 89 defendants convicted, two remain to be sentenced.
Wolf, a licensed real estate agent, was sentenced to 7 years in prison followed by three years of supervised release. Wolf was convicted by a jury in October 2013. According to trial evidence, Wolf was a participant in the enterprise’s mortgage fraud operations, accounting for over $13 million in fraudulently-obtained loans, with losses of more than $7 million. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loans from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. Trial evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000. According to today’s sentencing hearing, Defendant Wolf received more than $200,000 in commissions on the fraudulent transactions, which represented the vast majority of his income during the years he was committing fraud.
Perry was sentenced to 24 months in prison followed by two years of supervised release. According to court records and today’s sentencing hearing, Perry served the Enterprise as a promoter in its mortgage fraud operations, arranging a fraudulent transaction that resulted in a loss of approximately $500,000. More than $200,000 in kickbacks were then funneled through Perry’s bank account following the closing. Defendant and his co-conspirators falsely represented the kickback money was for brick work done on the property.
Wood was sentenced to 21 months in prison followed by one year supervised release. According to court records and the sentencing hearing, Wood also served the Enterprise as a promoter in its mortgage fraud operations, arranging two mortgage fraud transactions with losses of more than $1.5 million, funneling nearly a half million dollars in kickbacks through his sham company following closing. Defendant and his co-conspirators falsely represented that this kickback monies were for payment for home improvements.
In pronouncing these sentences Senior Judge Mullen noted that the calculated losses did not include the effects on the neighborhoods where houses purchased through fraud were located and that the victims of this fraud extended beyond the lending institutions to other people who lived in those neighborhoods and saw their property values negatively impacted by the fraud.
Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento. The Mehr case was tried by Assistant United States Attorneys Maria K. Vento and Jenny G. Sugar.
“The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
Three Men Sentenced for Counterfeit Credit Card ConspiracyRead the Press Release
CHARLOTTE, N.C. – On Thursday, August 27, 2015, U.S. District Judge Robert J. Conrad, Jr. sentenced three members of a conspiracy involving the sale of over 69,000 counterfeit credit cards, announced Jill Westmoreland Rose, Acting United States Attorney for the Western District of North Carolina. Judge Conrad imposed prison terms on the three defendants ranging from 12 to 36 months and ordered restitution totaling $61,696.
Acting 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 and Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division.
Vinicio Joseph Gonzalez, 32, of Palm Bay, Florida, was sentenced to 36 months in prison followed by two years of supervised release and was ordered to pay $61,696 in restitution. Judge Conrad also ordered Gonzalez to forfeit seized computers and electronic devices, including high-end color printers and embossing equipment, Bitcoins and $4,800 in seized cash. Gonzalez pleaded guilty to wire fraud conspiracy.
Nashancy Johnny Colbert, 39, of Charlotte, was sentenced to 30 months in prison followed by three years of supervised release, and was ordered to pay $61,696 in restitution. Colbert also pleaded guilty to wire fraud conspiracy.
Hugo Rebaza, Jr., 33, of Palm Bay, Florida, was sentenced to 12 months in prison, followed by two years of supervised release. Rebaza pleaded guilty to conspiracy to traffic in counterfeit goods. A fourth related defendant, Sean Roberson, 40, of Palm Bay, is awaiting sentencing in the District of New Jersey.
According to information contained in filed documents and statements made in court:
In 2012 and 2013, Roberson owned and operated a membership-only, e-commerce business and website, known as Fakeplastic.net. The website sold counterfeit credit cards and counterfeit debit cards to its members-only customers, as well as holographic overlays used to make fake identification cards. The Fakeplastic website enabled criminals involved in credit and debit card fraud and identity theft fraud to browse, order and purchase from an extensive inventory of genuine-looking, but counterfeit, magnetic-stripe plastic credit and debit cards. The Fakeplastic counterfeit payment cards were ready to be encoded with stolen payment card data, known in underground carding forums as “track data” or “card dumps,” onto the magnetic stripes of the counterfeit payment cards. New Fakeplastic customers had to be sponsored by existing Fakeplastic members or others involved in illegal online carding forums dealing in stolen credit and debit card track data.
Fakeplastic customers, totaling approximately 400 in December 2013, were able to select the type and quantity of counterfeit payment cards and counterfeit holographic overlays they wanted to purchase. For an additional fee, Fakeplastic customers could order custom embossing on the face of the counterfeit payment cards to include information typically associated with genuine payment cards, including cardholder names, payment card account numbers, and payment card expiration dates. Fakeplastic customers were required to pay for their orders in Bitcoin, Liberty Reserve (a now-defunct online payment service) and, in some cases, cash.
Approximately 23,000 embossed counterfeit payment cards, costing $12 each, and approximately 46,000 unembossed counterfeit payment cards, costing $15 each, were sold and distributed through the Fakeplastic website. Fakeplastic sales also included more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate, and more than 30,000 state identification card holographic overlays. Fakeplastic shipments exceeded 3,600 parcels shipped through the U.S. mail.
Gonzalez worked in Fakeplastic’s warehouse, processing purchase orders compiled by Roberson. Gonzalez manufactured the counterfeit payment cards and packaged the completed orders in U.S. Express Mail envelopes for overnight delivery to Fakeplastic customers. Rebaza’s role was limited to money pickups at a mail delivery service, sent by a group of New York-based Fakeplastic customers who paid cash, for approximately 16,000 unembossed counterfeit payment cards over a nine-month time period. Colbert was a Charlotte-based Fakeplastic customer. Colbert purchased approximately 230 counterfeit credit and debit cards from the Fakeplastic website, the bulk of which Colbert purchased soon after his release from a four-month state jail sentence for obtaining property by false pretenses.
Acting U.S. Attorney Rose credited inspectors of USPIS, special agents of the Charlotte Division of the U.S. Secret Service and Chief Kevin Lovelace and the Rutherfordton, N.C. Police Department for the investigation, and thanked the U.S. Attorney’s Office for the District of New Jersey, and Newark-based agents with USPIS and the FBI for their assistance.
The government is represented in the Western District of North Carolina by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed.
Union County Man Sentenced to 25 Years in Prison for Producing Child PornographyRead the Press Release
CHARLOTTE, N.C. – A Union County man was sentenced today in U.S. District Court to 25 years in federal prison for producing child pornography, announced Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Chad Landon Blume, 34, of Waxhaw, N.C., was also ordered to serve a lifetime of supervised release and to register as a sex offender. The sentence was imposed by U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Union County Sheriff Eddie Cathey join Acting U.S. Attorney Rose in making today’s announcement.
According both to admissions made in connection with Blume’s guilty plea and to information introduced at sentencing, law enforcement recovered an SD Card that contained visual depictions of a minor engaging in sexually explicit conduct. Court records indicate that law enforcement determined the SD Card came from Blume’s cellular phone, which he had used to produce the child pornography on or about November 2012. During a subsequent search of Blume’s residence, agents seized Blume’s computer and other devices. A forensic analysis of those devices revealed that Blume had produced numerous sexually explicit pictures of a female minor under the age of 10. After Blume’s arrest, a second minor female came forward and disclosed that she had been molested by Blume. Blume pleaded guilty to one count of production of child pornography in December 2013.
Blume has been in federal custody since April 2013. Upon designation of a federal facility, he will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
The FBI’s Crimes Against Children Squad investigated the case, assisted by the Union County Sheriff’s Office. Assistant U.S. Attorney Cortney Randall of the U.S. Attorney’s Office in Charlotte handled the prosecution.
Charlotte Area Club Owner and Promoter Sentenced for Filing A False Tax Return and Money LaunderingRead the Press Release
CHARLOTTE, N.C. –U.S. District Judge Robert J. Conrad, Jr., sentenced a Charlotte area club owner and entertainment promoter on tax fraud and money laundering charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Adolph R. Shiver, 52, of Charlotte, was sentenced to nine months in prison followed by three years of supervised release, during which he will serve an additional nine months of home confinement. Shiver was also ordered to pay $28,635 as restitution to the Internal Revenue Service, and a $25,000 fine. Additionally, Judge Conrad ordered Shiver to perform 50 hours of community service. Finally, Shiver must close his nightclub, Club 935, and must not own or manage another nightclub for the duration of his sentence.
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 Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CID), join Acting U.S. Attorney Rose in making today’s announcement.
According to filed court documents and today’s sentencing hearing, Shiver is the owner and operator of two Charlotte-based party promotion businesses, “L.A. Inc.” and “Adof Entertainment Group,” and the owner and operator of Club 935, also located in Charlotte. Court records indicate that in or about December 2013, Shiver knowingly conducted a financial transaction involving $50,000, represented to be the proceeds of unlawful activity. According to court records, Shiver planned to launder those illegal proceeds through his businesses. In addition to engaging in money laundering, in or about October 2013, Shiver filed a false tax return for tax year 2012, which understated his taxable income. According to court records, Shiver omitted from his personal and corporate tax returns gross receipts totaling $102,270, with a corresponding tax loss of $28,635.
Shiver pleaded guilty in December 2014 to one count of filing a false tax return for tax year 2012 and one count of money laundering. At today’s sentencing hearing, Shiver was ordered to report to the Federal Bureau of Prisons upon designation of federal facility. All federal sentences are served without the possibility of parole.
This prosecution is part of “Operation Jailhouse Productions,” an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional 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.
The case was investigated by DEA and IRS-CID. Assistant U.S. Attorney Steven R. Kaufman coordinated on the investigation and handled the prosecution in this case.
Mexican Drug Kingpin Sentenced to 11 Years in Prison for Trafficking Black Tar HeroinRead the Press Release
CHARLOTTE, N.C. – The head of a Mexican drug trafficking organization (DTO) responsible for producing and distributing vast quantities of heroin into the United States was sentenced today by U.S. District Judge Robert J. Conrad, Jr., announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Carlos Ramon Castro-Rocha, a/k/a “Cuate,” 41, of Sinaloa, Mexico, was handed down a 135-month sentence, followed by a five-year term of supervised release.
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 Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD), join Acting U.S. Attorney Rose in making today’s announcement.
According to court documents and court proceedings, between 2005 and 2008, Castro-Rocha, a Mexican drug kingpin, ran an extensive drug trafficking network and oversaw all aspects of his drug operation, from production in Mexico, to smuggling the narcotics across the border, to distribution in cities throughout the U.S. In September 2007, law enforcement seized more than two and a half kilograms (approximately six pounds) of black tar heroin that had been trafficked to Charlotte through Castro-Rocha’s drug distribution network, as well as over $110,000 in cash and a handgun. Court records indicate that in August 2008, law enforcement made two additional seizures of approximately one kilogram of black tar heroin each. According to court records, between 2005 and 2008, Castro-Rocha’s network trafficked up to 10 kilograms of black tar heroin in the Charlotte area alone, with an approximate street value of $1.2 million.
The U.S. Department of Justice designated Castro-Rocha as a Consolidated Priority Organization Target, or “CPOT,” a designation reserved for the highest command and control level drug traffickers, who run organizations that smuggle large quantities of narcotics into the United States. There are only 42 individuals in the world designated as a CPOT.
Castro-Rocha was charged by a criminal complaint and later formally indicted in the Western District of North Carolina in June 2009. The indictment was unsealed after Mexican authorities arrested Castro-Rocha in Mexico, on May 30, 2010, pursuant to extradition proceedings initiated by the Justice Department. Castro-Rocha filed several unsuccessful appeals in the Mexican judicial system, and was eventually extradited to the United States in October 2012.
In April 2014, Castro-Rocha pleaded guilty to one count of conspiracy to import heroin and one count of conspiracy to possess with intent to distribute heroin. In addition to prosecution of the organization’s leader, this investigation has resulted in the prosecution of 11 defendants associated with Castro-Rocha’s DTO. Following today’s sentencing in the Western District of North Carolina, Castro-Rocha will be transferred to Arizona to face federal drug trafficking and related charges pending against him in that district.
Castro-Rocha’s prosecution stems from “Operation Dirty Girl II,” which is the local portion of a national anti-drug initiative, “Project Deliverance,” aimed at stemming the flow of illegal narcotics into the U.S. Led by the DEA and other members of the Western District’s Organized Crime Drug Enforcement Task Force (OCDETF), Dirty Girl II focused on disrupting and dismantling the infrastructure of Castro-Rocha’s drug trafficking network, which was responsible for producing and smuggling in the U.S. vast quantities of heroin, including a highly dangerous form, black tar heroin. “Dirty Girl” is the street name for black tar heroin.
In making today’s announcement Acting U.S. Attorney Rose commended the DEA and CMPD for handling the investigation. She also thanked the FBI, the Gastonia Police Department and the Union County Sheriff’s Office for their assistance. Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte coordinated in the investigation and prosecuted the case.
Coin and Precious Metals Dealer and His Company Plead Guilty to Wire FraudRead the Press Release
CHARLOTTE, N.C. – A coin and precious metals dealer and his company pleaded guilty to wire fraud charges for defrauding more than 400 customer-victims of over $15 million, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. The Tulving Company, Inc., and its owner, Hannes Tulving, Jr., 60, of Newport Beach, California, entered their guilty pleas today before U.S. Magistrate Judge David Keesler.
Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to the filed plea documents and statements made in court, 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 according to the timetable advertised on the company’s website. According to information contained in plea documents, 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 the company’s debt, and to return the money to previous customers who did not receive their merchandise. Today, the defendants admitted to defrauding more than 400 victims of over $15 million.
As stated in Hannes Tulving’s plea agreement, the wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. As part of his plea with the government, the defendant has agreed to pay restitution to his victims. Tulving was released on bond after entering his guilty plea.
According to the company’s plea agreement, the Tulving Co. faces at sentencing a fine in the amount $500,000, or twice the gross pecuniary gain derived from the crime or twice the gross pecuniary loss to the victims of the crime, whichever is greatest. The company also faces a minimum of one year of organizational probation and will be required to pay full restitution to the victims.
The U.S. Secret Service handled the investigation. Acting U.S. Attorney Rose also thanked the Commodities Futures Trading Commission for their assistance in this case. Assistant U.S. Attorney Kevin Zolot is in charge of the prosecution.
Three Sentenced for Stealing Millions from MedicaidRead the Press Release
CHARLOTTE, N.C. – Three Charlotte women were sentenced today for conspiring to steal millions from Medicaid, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. All three defendants appeared before Chief U.S. District Judge Frank D. Whitney and were sentenced as follows: Aliya Boss, 36, of Charlotte, was sentenced to 44 months in prison, followed by three years of supervised release and was ordered to pay $1,135,302.27 as restitution to Medicaid; Sakeenah David Davis, 38, of Charlotte, was sentenced to 42 months in prison, three years of supervised release and was ordered to pay restitution in the amount of $506,124; and Kino Legette Williams, 37, of Charlotte, was handed down a 35-month sentence, was ordered to serve three years under court supervision and to pay $506,124 as restitution to Medicaid.
Acting U.S. Attorney Jill Westmoreland Rose is joined by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to filed court documents in each case and today’s sentencing hearings:
From 2012 to June 2013, Boss was involved in a scheme to defraud Medicaid of more than $4.3 million by submitting false reimbursement claims for mental and behavioral health services that she did not provide. Boss, a licensed social worker and owner of “Boss Counseling and Consulting, LLC.,” was approved by Medicaid to bill for and receive reimbursement for therapy services provided to Medicaid recipients. Boss conspired with others and agreed to allow at least two mental health companies to submit fraudulent reimbursement claims to Medicaid using her provider number for sham mental and behavioral health services that Boss never provided.
Court documents indicate that, in some instances, the fraudulent reimbursement claims submitted to Medicaid claimed that Boss had provided as many as 140 hours of therapy during a single 24-hour day. In exchange for lending her Medicaid provider number Boss received monthly payments from the companies, even though she knew she never provided those services. In addition to “renting out” her provider number, Boss also submitted false claims to Medicaid for fraudulent counseling services through her own company, using the Medicaid numbers of beneficiaries collected by another member of the conspiracy working as a “patient recruiter.”
Boss and her conspirators filed fraudulent claims, in some instances claiming that therapy services were provided to more than 200 Medicaid recipients in a single day or billing for more than 64 hours of therapy over the course of a 24-hour period. Of the fraudulent claims filed, $306,965.56 of the reimbursement funds was paid out directly to Boss.
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From October 2012 to July 2013, Sakeenah Davis and Kino Williams were involved in a scheme to defraud Medicaid of more than $1.6 million by submitting fraudulent reimbursement claims for mental and behavioral health services that were not provided. Davis and Williams owned and operated “New Choices Youth and Family Services,” (New Choices), a Medicaid-approved company that purportedly provided outpatient mental and behavioral therapy services. During the relevant time period, Davis, Williams and others hired a conspirator as the director of New Choices and agreed to pay her $4,000 per month for her services. Court records show that the director-conspirator billed Medicaid for fraudulent services that never provided by New Choices. Court records show that all the fraudulent claims listed “S.B.” as the attending clinician, even though S.B. did not provide the claimed services. In some instances, New Choices’ billing claimed that the hours of therapy S.B. had provided over the course of a single day far exceeded a 24-hour period, in one instance claiming more than 77 hours of therapy in one day. As a result of the fraudulent claims, over the course of the conspiracy Medicaid paid out $506,124 to Williams and Davis. The two women used some of the stolen funds to pay for personal expenses, including jewelry and to pay for Davis’s wedding.
All three defendants previously pleaded guilty to one count of health care fraud conspiracy. They 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 FBI conducted the investigations with the assistance of MID. The prosecution of the cases is handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Charlotte Office.
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 or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].
Bryson City Man Sentenced for Poaching over 500 Ginseng RootsRead the Press Release
ASHEVILLE, N.C. – U.S. Magistrate Judge Dennis L. Howell sentenced Billy Joe Hurley, 47, of Bryson City, N.C. for illegally possessing ginseng, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Hurley was convicted at trial on Wednesday, August 12, 2015, and was ordered today to serve six months in jail for the illegal possession or harvesting of American ginseng from the Great Smoky Mountains National Park.
Joe Pond, Acting Chief Ranger of the Great Smoky Mountains National Park and Cassius Cash, Superintendent of the Great Smoky Mountains National Park join Acting U.S. Attorney Rose in making today’s announcement.
“The illegal harvesting of American Ginseng poses a threat to this precious national resource and it is a crime our office takes very seriously,” said Acting U.S. Attorney Rose. “We will continue to work closely with the Rangers of the Great Smoky Mountains National Park to protect wild ginseng from extinction and to prosecute those who profit from the illegal harvesting of ginseng roots.”
According to Acting Chief Ranger Pond, “Ginseng is a threatened natural resource, protected by law within Park boundaries. Unfortunately, Rangers are finding that poached ginseng roots seized during criminal investigations are younger than in years past, as older roots become much harder to find. This is not good for the viability of the plant. Rangers work extremely hard to thwart the efforts of those who steal from public lands and we hope that this case serves as a deterrent for anyone considering this activity.”
According to filed court documents and court proceedings, on June 28, 2015, in Swain County, Hurley Illegally possessed more than 500 American Ginseng roots he had illegally dug from areas in the Great Smoky Mountains National Park. Court records show that Hurley had filled a backpack with the roots and attempted to hide it behind a guardrail beside a hiking trail.
According to court records, in August 2014, Hurley was sentenced to five months and fifteen days in jail for the illegal possession or harvesting of American ginseng from the Great Smoky Mountains National Park. Today’s conviction marks Hurley’s fifth such conviction. Staff of the National Park Service replanted the recovered viable roots but estimate that at best, 50% of the replanted roots are likely to survive.
At Hurley’s 2014 sentencing hearing, a National Park Service botanist testified that the American ginseng species is under severe pressure from poachers in the Great Smoky Mountains National Park and may not be sustainable if it continues to be harvested illegally. During that same hearing, a special agent with of the U.S. Fish and Wildlife Service also testified that financial gain is likely to continue to drive poachers and that fresh ginseng can bring up to $200 per pound on the black market.
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American ginseng is a native plant in the Smoky Mountains. These wild roots are also a highly prized tonic, particularly in Asian markets. Dried ginseng roots are used in medicines, teas, and other health products. American ginseng was recently placed in North Carolina’s Watch Category 5B, which includes generally widespread species that are in commercial demand and are often collected and sold in high volume. This category was created to bring attention to the issue, since such high volume collection is unsustainable in the long run.
Ginseng harvest in the park has always been illegal. It is legal to harvest ginseng outside the park on private lands or with a permit in certain Forest Service areas during the harvesting season. Park scientists have realized these slow-growing native plants could disappear because harvesting means taking the entire ginseng root. Each year law enforcement rangers seize between 500 and 1000 illegally poached ginseng roots. Over the years, park biologists have marked and replanted over 15,000 roots seized by law enforcement. Monitoring indicates that many of these roots have survived and are again thriving in these mountains.
The U.S. Attorney’s Office and the National Park Service remind the public that gathering ginseng on federal lands, such as the Great Smoky Mountains National Park, is a federal crime. The Smokies are the largest fully protected reserve known for wild ginseng. This plant was formerly abundant throughout the eastern mountains, but due to overharvesting, populations have been significantly reduced to isolated patches. The roots poached in this park are usually young, between the ages of 5 and 10 years, and have not yet reached their full reproductive capacity. In time, the park’s populations might recover if poaching ceases.
Hurley has been in custody since July 2015.
The investigation of the case was handled by Park Rangers of the Great Smoky Mountains National Park. The U.S. Attorney’s Office in Asheville handled the prosecution.
To report illegal harvesting activities of American ginseng within the Smokies, please call the Law Enforcement Desk of the Great Smoky Mountains National Park at 1-865-436-1230.
Two Men Sentenced to Prison for Producing Child Pornography in Separate CasesRead the Press Release
STATESVILLE, N.C. – A Lincoln County man was sentenced today in U.S. District Court in Statesville to 180 months in federal prison for producing child pornography, announced Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. U.S. District Judge Richard L. Voorhees also ordered Antony Alexander Gonzalez Solorzano, 28, of Lincolnton, N.C. to serve a lifetime of supervised release and to register as a sex offender.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to the criminal indictment, from January to March 2013, Solorzano did employ, use, persuade, induce, entice, and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. Court records show that Solorzano possessed both images and videos of the underage victim which he kept stored on his computer. According to court records and today’s sentencing hearing, law enforcement became aware of Solorzano’s conduct while investigating him for sharing files containing child pornography over the Internet.
Solorzano pleaded guilty to the one count of production of child pornography in June 2014. He has been in federal custody since November 2013. Upon designation of a federal facility, he will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
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Judge Voorhees also sentenced a Mooresville man to 15 years in prison for producing and possessing child pornography, and ordered him to serve a lifetime of supervised release and to register as a sex offender. According to court documents, evidence presented at trial and statements made in court, James Douglas Brown, 54, had sexually abused a minor female repeatedly between May 2009 and January 2011. Court records show that Brown filmed and photographed some of the sexual abuse of the minor victim. In May 2014, a federal jury convicted Brown of eight counts of production and one count of possession of child pornography. He has been in federal custody since November 2013. Brown’s case was investigated by the FBI and the Iredell County Sheriff’s Office.
Assistant U.S. Attorney Cortney Randall of the U.S. Attorney’s Office in Charlotte handled the prosecution of both cases.
These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Haywood Co. Man Sentenced to Prison on Theft ChargesRead the Press Release
ASHEVILLE, N.C. – Keith Alan Franklin, 27, of Waynesville, N.C. was sentenced today to 27 months in prison on theft charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. U.S. District Judge Martin Reidinger also ordered Franklin to serve three years of supervised release and to pay $475,000 as restitution to Harrah’s Cherokee Casino (Harrah’s).
Acting U.S. Attorney Rose is joined by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Chief Ben Reid of the Cherokee Indian Police Department in making today’s announcement.
According to court records and today’s sentencing hearing, from October 2013 to April 2014, Franklin embezzled money from Harrah’s, a gaming establishment operated by and for and licensed by the Eastern Band of Cherokee Indians. Court records show that at the time of the offense Franklin was employed at Harrah’s and had direct access to the casino’s funds. According to court records, Franklin routinely stole money while working at Harrah’s by exploiting a flaw in the casino’s security system. Court records indicate that Franklin stole more than $400,000 from the casino in this manner and used the money to buy numerous cars and to support his personal lifestyle. Franklin was fired in April 2014 after Harrah’s discover the theft and pleaded guilty in October 2014 to one count of theft by an employee of gaming establishments on Indian lands.
Franklin is currently in federal custody and will be transferred 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 assisted by the Cherokee Police Department. Assistant U.S. Attorney Don Gast prosecuted the case.
Charlotte Man Sentenced to More Than 12 Years on Child Pornography ChargesRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Justin Vang, 28, of Charlotte, to 151 months in prison on child pornography charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Vang was also ordered to serve a lifetime of supervised release and to register as a sex offender.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to court records, between March and May 2013, Vang did knowingly receive visual depictions of minors engaging in sexually explicit conduct. A forensic examination of Vang’s seized computer revealed that the defendant possessed 20 videos depicting the sexual abuse of children, including children under the age of 12.
In handing down Vang’s sentence, Judge Whitney described the videos as “heinous.” Judge Whitney also acknowledged the pain and suffering of the victims, stating “The victims of child pornography are not just victimized one time, they are victimized hundreds and thousands of times.” Judge Whitney added that the circumstances of the offense are reprehensible.
Vang pleaded guilty in March 2015 to one count of receiving child pornography. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.
All federal sentences are served without the possibility of parole.
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In a separate case, on Monday, August 10, 2015, U.S. District Judge Max O. Cogburn Jr. sentenced Byron Boswell Hess, IV, 48, of Charlotte, to 60 months in prison, a life time of supervised release and was ordered to register as a sex offender. According to filed documents, in or about February 2014, Hess did knowingly possess and access with intent to view images depicting child pornography that involved prepubescent minors. Hess pleaded guilty in March 2015 to one count of possession of child pornography and has been in federal custody since January 2015.
Both cases were investigated by the FBI. Assistant U.S. Attorney Cortney E. Randall handled the prosecution of both cases.
The cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
California Woman Sentenced to over 10 Years for Her Role in Defrauding Elderly Through Offshore Sweepstakes SchemeRead the Press Release
A California woman was sentenced to 130 months in prison for her role in a half-million dollar Costa Rica-based “sweepstakes fraud” scheme that victimized hundreds of U.S. residents.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina made the announcement.
Patricia Diane Clark, 57, of Sacramento, California, was sentenced today by Chief U.S. District Judge Frank D. Whitney of the Western District of North Carolina for conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering. Clark was also ordered to pay $642,032 in restitution and to forfeit the same amount jointly and severally with her co-defendants.
In connection with her guilty plea, Clark admitted that, from approximately 2007 through February 2013, her co-conspirators called U.S. residents from Costa Rican call centers, falsely informing them that they had won a substantial cash prize in a “sweepstakes.” The victims, many of whom were elderly, were told that in order to receive the prize, they had to send money for a purported “refundable insurance fee.” Clark admitted that she picked up money from the victims and sent it to her co-conspirators in Costa Rica. Clark also admitted that she managed others who picked up money from the victims in the United States and that she kept a portion of the victims’ payments.
Clark also admitted that, once the victims sent money, her co-conspirators contacted the individuals again and falsely informed them that the prize amount had increased, either because of a clerical error or because another prize winner was disqualified. The victims then had to send additional money to pay for new purported fees to receive the now larger sweepstakes prize. The attempts to collect additional money from the victims continued until an individual either ran out of money or discovered the fraudulent nature of the scheme.
Clark admitted that, along with her co-conspirators, she was responsible for approximately $640,000 in losses to more than a hundred U.S. citizens.
This case is being investigated by the U.S. Postal Inspection Service, Internal Revenue Service, FBI, Federal Trade Commission and Department of Homeland Security. The case is being prosecuted by Senior Litigation Counsel Patrick M. Donley and Trial Attorney William H. Bowne of the Criminal Division’s Fraud Section.
Individual Convicted of Conspiracy and Money Laundering for Role in Costa Rican Telemarketing SchemeRead the Press Release
An Ohio man was convicted yesterday after a two-day jury trial in the Western District of North Carolina for his role in a Costa Rican telemarketing scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina made the announcement.
Paul Ronald Toth Jr., 40, of Wintersville, Ohio, was convicted of one count of conspiracy to commit money laundering and six counts of international money-laundering concealment. Sentencing before U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina will be scheduled at a later date.
According to the evidence presented at trial, Toth was involved in a telemarketing scheme in which his co-conspirators contacted U.S. residents from call centers in Costa Rica, falsely informing them that they had won substantial cash prizes in “sweepstakes.” To claim the cash prizes, the victims – many of whom were elderly – were instructed to send a purported “refundable insurance fee.”
The trial evidence showed that, between approximately November 2009 and November 2010, Toth was a United States-based “smasher” who facilitated the laundering of funds received from the elderly victims. Specifically, according to the evidence presented at trial, Toth and others he recruited and supervised received over $300,000 from victims and, using various individuals as senders and recipients to conceal the fraudulent nature of the transactions, wired over $200,000 of those funds to co-conspirators in Costa Rica. The evidence further demonstrated that Toth kept the remainder as his profit.
This case is being investigated by the U.S. Postal Inspection Service, the FBI, the Internal Revenue Service, Federal Trade Commission and Department of Homeland Security. The case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorneys William Bowne and Anna Kaminska of the Criminal Division’s Fraud Section.
Charlotte Man Sentenced to 21 Months for Check Fraud ConspiracyRead the Press Release
CHARLOTTE, NC B A Charlotte man charged with defrauding financial institutions of more than $133,000 was sentenced today to 21 months in prison, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Dezon Montrice Gill, a/k/a “Bentley,” was also ordered by Chief U.S. District Judge Frank D. Whitney to serve three years under court supervision and to pay $133,940.83 as restitution.
Acting U.S. Attorney Rose is joined in making today’s announcement by Michael Rolin, Acting Special Agent in Charge of the United States Secret Service, Charlotte Field Division.
According to filed documents and today’s sentencing hearing, from about July 1, 2013 to August 21, 2013, Gill orchestrated a check fraud scheme that targeted financial institutions in the Charlotte area. Court records indicate that Gill executed the scheme by depositing worthless checks into back accounts of FDIC-insured institutions and then used debit cards linked to these bank accounts to purchase money orders and gift reload cards. According to court records, Gill opened a new account at a bank and used the new “starter” checks to write worthless checks he then deposited into other individuals’ bank accounts. According to court records, Gill paid the account holders between $1,000 to $2,000 in exchange for using their debit cards to purchase money orders, and Green Dot Moneypack Reload Cards. Court records show that Gill defrauded financial institutions of more than $133,000 in this manner. Gill pleaded guilty in January 2015 to one count of financial institution fraud conspiracy and one count of financial institution fraud.
Gill 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 U.S. Secret Service investigated the case.Assistant U.S. Attorney Kenneth Smith handled the prosecution.
Three Gaston County Men Arrested for Conspiracy to Violate Laws Governing Firearms, Explosive Devices and Related ChargesRead the Press Release
CHARLOTTE, N.C. – Walter Eugene Litteral, 50, Christopher James Barker, 41, of Gastonia, and Christopher Todd Campbell, 30, of Mt. Holly, N.C., were arrested on Saturday, August 1, 2015, for conspiring to violate federal laws governing firearms and explosive devices and related charges, announced Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Criminal complaints against the men were filed in late July 2015 and remained sealed until today.
Special Agent in Charge John A. Strong of the FBI’s Charlotte Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the affidavits filed with the criminal complaints:
Beginning on or about June 18, 2015, law enforcement received information that Litteral and Barker were attempting manufacture explosive or destructive devices. On or about July 22, 2015, law enforcement received information that Campbell was reconstructing live grenades from “dummy grenades” sold legally as military artifacts. Litteral, Campbell and others believed that the United States government intended to use the armed forces to impose martial law, which they planned to resist with violent force. Litterral had been purchasing numerous military equipment in preparation for the alleged attack, including ammunition for a .338 caliber rifle, handheld radios with throat microphones for communication, military issue Kevlar helmets, body armor vests and balaclavas (a form of cloth headgear designed to expose only parts of the face).
The FBI became aware that Litteral and Campbell wanted to manufacture destructive devices such as pipe bombs and grenades and possessed some of the needed components. According to the investigation, Barker provided Litteral with pipe fittings, which are needed to manufacture pipe bombs. Litteral also discussed testing the destructive devices in Shelby, N.C., with Barker present for the testing. Making reference to the explosion, court records indicate that Litteral said, “it is going to be great.”
In addition to purchasing the military supplies, Litteral also tried to purchase a firearm and ammunition for Barker. According to court records, Litteral filled out the required form with his own information, even though the gun was intended for Barker. Using his own debit card, Barker purchased ammunition and a large capacity magazine for the gun. Barker’s prior criminal felony convictions prohibit him from purchasing or possessing a firearm or ammunition.
The three men had their initial appearances today in court and will in remain in federal custody pending their detention hearings, which have been set for Thursday, August 6, 2015.
The charge of conspiracy to violate laws governing firearms and explosive devices carries a maximum potential penalty of five years in prison and a $250,000 fine. Campbell is also charged with receiving, possessing and making a firearm – which definition includes a destructive device – for which the maximum penalty is 10 years in prison and a $10,000 fine.
The charges contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and the Joint Terrorism Task Force (JTTF) of which the North Carolina Highway Patrol, the Federal Air Marshal Service, the Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Charlotte Mecklenburg Police Department are members. In making today’s announcement, Acting U.S. Attorney Rose thanked the Belmont Police Department, the Mount Holly Police Department, Gaston County Police Department, the Gastonia Police Department, and the Mecklenburg County Sheriff’s office for their assistance with the investigation.
The case is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Michael E. Savage of the Western District of North Carolina.