Western District of North Carolina
Press releases recorded for this federal judicial district.
Operator of Illegal Gambling Enterprise Pleads GuiltyRead the Press Release
CHARLOTTE, N.C. – A South Carolina man appeared before U.S. Magistrate Judge David C. Keesler today and admitted to operating an illegal gambling enterprise in Gaston County, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Lenny Steen, Jr. 65, of Spartanburg, S.C. pleaded guilty to one count of running an illegal gambling business and one count of money laundering.
In January 2015, Steen’s conspirator, Clarence Larry Calhoun, 71, of Gastonia, N.C. pleaded guilty to the same charges for his role in the illegal gambling scheme.
Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas joins Acting U.S. Attorney Rose in making todays’ announcement.
According to filed court documents and court proceedings, from about 2012 to October 2014, Calhoun and Steen owned and operated an illegal video poker gambling business in Gaston County. According to court records, Calhoun provided management advice and capital, while Steen was responsible for the day-to-day operations of the business. According to court records, the gambling business, known as “Mr. Lenny’s Place,” operated out of a large warehouse in Gaston County and was open 24 hours a day, 7 days a week. Court records show that, at its height, the gambling establishment housed approximately 63 video poker machines, employed more than eight employees and generated, on an average, more than $10,000 per day.
According to court records and court proceedings, the two men split the profits in half. Court records show that Steen collected the cash and concealed it in retail bags, and personally delivered half of the profits to Calhoun. Calhoun hid the gambling profits in PVC piping, while Steen transported his share to South Carolina and directed others to store the cash, court records show. Court records also indicate that law enforcement seized more than $4 million in cash over the course of the investigation.
At sentencing, the defendants face a maximum prison term of five years and a $250,000 fine for the charge stemming from running the gambling operation, and a maximum of 20 years in prison and a $500,000 fine or twice the amount of criminally derived proceeds for the money laundering charge.Both men have been released on bond and currently await sentencing.
HSI investigated the case.Assistant U.S. Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Message to Potential Tax Cheats from Federal Prosecutors: Tax Crimes Result in Criminal Prosecution, Prison Sentences and FinesRead the Press Release
CHARLOTTE, N.C. - With the deadline for filing income tax returns approaching next month, Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), jointly announce recent tax fraud prosecutions and deliver a powerful warning to potential tax cheats.
“As tax filing season reaches its peak, would-be tax fraudsters are warned that our office will prosecute those who try to cheat the tax system,” said Acting U.S. Attorney Rose. Rose noted the importance of deterring others from committing tax crimes and stated, “Our tax system is built on voluntary compliance and tax criminals who do not pay their fair share increase the tax burden on honest taxpayers.”
“Filing a truthful, accurate tax return is a responsibility that tax preparers should take very seriously, said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. “Let the message to unscrupulous tax return preparers be clear, that criminal activity and greed carry severe consequences. I encourage citizens to avoid being taken advantage of, by seeking out credentialed, reputable tax preparers during the current filing season, also to take the appropriate measures to safeguard their personal information, so as not to fall victim to identity theft.”
On Wednesday, March 18, 2015, Fitzroy Lawrence, a Charlotte tax return preparer, was indicted on federal charges for preparing false tax returns by making false claims for refund from the IRS. According to the indictment, for tax years 2008 through 2011, Lawrence aided and assisted in the preparation of hundreds of tax returns that were filed with the IRS, seeking fraudulent tax refunds totaling millions of dollars. Many of the fraudulent tax returns included false wages and false dependent information. Lawrence was charged with 15 counts of making false claims for refund and faces a maximum sentence of five years in prison and a $250,000 fine per count. The charges against Lawrence are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Prosecutions of Tax Evasion and Filing False Tax Returns
Over the last year, the U.S. Attorney’s Office has prosecuted and convicted a number of individuals for omitting income from their individual tax returns. For example, Mark Tuan Le (3:14-cr-00110), an internal medicine physician, pleaded guilty to tax evasion for hiding millions of dollars in personal income from the IRS by claiming fraudulent business expenses for funds that were used to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius. Plea documents indicate that Le omitted to report approximately $1.2 million of income per year for 2009 and 2010. Le, who also pleaded guilty to healthcare fraud charges, is awaiting sentencing.
During the past year, defendants have received substantial sentences for tax charges, ranging from home confinement to several years in prison. The following individuals were among the defendants sentenced for lying to the IRS about their taxable income:
- Denise Swanson (5:13-cr-00061), of Lenoir, N.C., owned and operated a tax preparation and bookkeeping business and failed to report more than $800,000 of income she received from embezzling client funds during years 2006 through 2011.
- Nghia Ly (3:13-cr-00235), of Waxhaw, N.C., and the fifty-percent owner of Kim Sen Jewelry, Inc., d.b.a. KS Nail Supply (KSJ) in Charlotte, concealed gross receipts and taxable income of over $800,000 from the IRS for 2007 through 2011.
- Kenneth Sumner (3:13-cr-00257), of Charlotte, and owner of Ken B. Sumner and Associates, a Charlotte-based sales company, failed to file timely tax returns for 2006 through 2008 with the IRS. Sumner subsequently filed a delinquent 2006 federal income tax return that omitted gross receipts from Sumner’s business totaling approx. $106,808. For tax years 2007 and 2008, Sumner failed to file timely income tax returns despite having income of approx. $318,433 and $337,090, respectively.
- Jonathan Davey (3:12-cr-00068), of Newark, Ohio, failed to report income that he received from a $21 million Ponzi scheme on his federal tax returns. Davey was also convicted of securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy.
Prosecutions of Fraudulent Tax Return Preparers
In 2014, the U.S. Attorney’s Office also prosecuted unscrupulous tax return preparers. The following defendants are among those prosecuted federally for tax return preparer fraud:
- Nkhenge Shropshire (3:13-cr-00248), of Charlotte, and owner of Tax Connections, was sentenced to 33 months in prison following her guilty plea to conspiracy to defraud the IRS and making a false statement on a loan application. For tax years 2009 through 2011, N. Shropshire aided and assisted in the preparation of more than 600 fraudulent tax returns filed with the IRS, resulting in tax losses of more than $580,000.
- Jessica Ordonez (3:14-cr-00071), a resident of Gaston County, N.C. and owner of Tax Pros, (a/k/a Ordonez Tax Services), located in Gastonia and Morganton, pleaded guilty to preparing fraudulent tax returns falsely claiming more than $200,000 in Additional Child Tax Credits. Ordonez also pleaded guilty to filing false tax returns in her own name. Ordonez is scheduled to be sentenced on March 25, 2015.
- Malik Shropshire (3:15-cr-00025), of Charlotte, was indicted in February 2015 on multiple charges, including conspiring with others to prepare hundreds of false tax returns with the IRS that included, among other things, false Schedule C businesses, false dependents, and false refundable education credits.
Prosecutions of Stolen Identity Refund Fraud
In addition to prosecuting tax evaders and fraudulent tax return preparers, the U.S. Attorney’s Office prosecuted individuals for stealing the identities of taxpayers and filing fraudulent tax returns. Jacquline Juarez (3:13-cr-00157), was sentenced to 18 months in prison and ordered to pay restitution of more than $1 million for her role in a fraudulent tax refund scheme involving the use of fraudulent IRS Individual Taxpayer Identification Numbers (ITIN) to obtain false tax refunds.
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
- Phone Scams
- Phishing
- Identity Theft
- Return Preparer Fraud
- Offshore Tax Avoidance
- Inflated Refund Claims
- Fake Charities
- Hiding Income with Fake Documents
- Abusive Tax Shelters
- Falsifying Income to Claim Credits
- Excessive Claims for Fuel Tax Credits
- Frivolous Tax Arguments
Education is the best way to avoid these common schemes.To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov. Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.
Federal Judge Sentences Last of Four Crystal Methamphetamine Traffickers to PrisonRead the Press Release
ASHEVILLE, N.C. – On Tuesday, March 10, 2015, U.S. District Judge Martin Reidinger sentenced Joshua Warner Kamp to 33 months in prison for his role in a crystal methamphetamine trafficking ring, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Kamp, 35, of Alexander, N.C. was also sentenced to four years of supervised release following his prison term. Kamp pleaded guilty in January 2015 to conspiracy to distribute and to possess with intent to distribute methamphetamine.
Kamp’s three codefendants were previously sentenced as follows: Mario Oliver Perez-Sanchez, 30, of Atlanta, Ga. was sentenced to 151 months in prison; Gerardo Moteil Diaz, 29, of Leicester, N.C. was sentenced to 87 months; and Debbie Ollis Webb, 58, of Leicester, N.C. was sentenced to 57 months in prison. They each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute methamphetamine and were also ordered to five years of supervised release following their release from prison.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Sheriff Van Duncan of the Buncombe County Sheriff’s Office (BCSO); and Lt. John Elkins of the Buncombe County Anti-Crime Task Force (BCAT) join Acting U.S. Attorney Rose in making today’s announcement.
According to court documents and court proceedings, from in or about April 2013 through October 2013, Perez acted as an Atlanta, Ga. based methamphetamine source of supply, moving large quantities of methamphetamine between Georgia, South Carolina and North Carolina. Court records show that Diaz assisted Perez in his North Carolina narcotics trafficking. According to court records, Kamp and Webb bought the methamphetamine from Perez and Diaz, and then sold it in Buncombe County and elsewhere. Over the course of the investigation, law enforcement seized approximately 21 ounces of methamphetamine, $10,876 in U.S. currency and one firearm.
Kamp 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.
ATF, BCSO and BCAT investigated the case. The prosecutions were handled by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.
Jill Westmoreland Rose to Serve as Acting United States Attorney for the Western District of North CarolinaRead the Press Release
CHARLOTTE, N.C. – Jill Westmoreland Rose will become the Acting United States Attorney for the Western District of North Carolina (WDNC), following the departure of U.S. Attorney Anne M. Tompkins on March 9, 2015. Ms. Rose served as the First Assistant U.S. Attorney to Ms. Tompkins.
Ms. Rose has been an Assistant United States Attorney (AUSA) in the Western District since 1999. During her 16-year tenure with the U.S. Attorney’s Office, Ms. Rose has served as lead attorney for WDNC’s Organized Crime Drug Enforcement Task Forces (OCDETF) Program, Deputy Criminal Chief, Chief of the Criminal Division and First Assistant United States Attorney. Over the course of her career as a federal prosecutor, Ms. Rose has handled a variety of cases, including domestic and international drug trafficking and money laundering, violent crime, financial fraud, domestic terrorism and national security cases. Notably, Ms. Rose prosecuted the nation’s first successful federal death penalty case against MS-13 gang member Alejandro Enrique Ramirez Umana (U.S. v. Ayala et al., 3:08-cr-134) and the nation’s first successful federal death penalty case involving the Violence Against Women Act (U.S. v. Barnette, 3:97-cr-23).
While serving as WDNC’s Chief of the Criminal Division, Ms. Rose was member of the Attorney General’s Criminal Chief’s Working Group, advising the Attorney General and the Deputy Attorney General on substantive legal and law enforcement issues.
Prior to becoming an AUSA, Ms. Rose was an Assistant District Attorney for the 29th Prosecutorial District of North Carolina (1990-1999).
Ms. Rose graduated from the University of North Carolina at Chapel Hill in 1987 and Campbell University School of Law in 1990. Ms. Rose is a member of the Harry C. Martin Chapter of the American Inns of Court.
Operator of Third Party Payroll Company Pleads Guilty to Federal Charges for Embezzling $11 Million from Client CompaniesRead the Press Release
CHARLOTTE, N.C. – James William Staz has pleaded guilty to federal charges for defrauding more than $11 million from clients of the third-party payroll company he jointly operated with his father, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. James Staz, 44, of Iron Station, N.C. appeared before U.S. Magistrate Judge David S. Keesler today and pleaded guilty to wire fraud, transactional money laundering and tax evasion. James Staz’s father, William James Staz, 72, of Huntersville, N.C., pleaded guilty in January 2015 to wire fraud and tax evasion charges.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
According to court documents and today’s plea hearing, William and James Staz operated the third-party payroll company, “Employee Services.Net, Inc.” (ESN) and provided various services to client companies, including processing payroll, collecting and paying employment taxes, and preparing and filing employment tax forms. At its height, ESN had approximately 500 client companies nationwide. Court records show that James Staz was ESN’s vice president and later the company’s president. William Staz was a company shareholder and, through 2008, managed ESN’s day-to-day operations. According to court documents, ESN had access to the clients companies’ bank accounts and directly drafted the funds needed to cover expenses associated with the services it provided.
According to court records, from 2008 to March 2014, the two men defrauded at least 113 ESN clients of approximately $11 million dollars intended for payroll and employment tax payments and used it to support their personal lifestyles. According to the charging documents, during that time period, James Staz stole at least $3.7 million in client funds and directed the money to his personal bank account. In order to conceal his embezzlement, James Staz made false entries into ESN’s accounting system to make it appear as though the funds were used for legitimate client expenses. According to court records, James Staz used the money to pay for alcohol, strip club entertainment, jewelry, a Mercedes Benz and a luxury home. Court records also show that over the course of the scheme, William Staz drew a salary from ESN as high as $200,000, even for the time period he was serving a nine-month federal prison sentence.
James Staz has been detained since his arrest in October 2014. William Staz has been released on bond pending sentencing. They each face a maximum of 20 years in prison and a $250,000 fine for the wire fraud charge and five years in prison and a $100,000 fine for the tax evasion charge. James Staz also faces a maximum of 20 years in prison and a $500,000 fine or twice the amount of the criminally derived proceeds, whichever is greater, for the money laundering charge. As part of the plea agreement, both defendants have agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendants has not been set yet.
The investigation for the case was handled by the FBI and IRS-CI. The prosecution of the case is being handled by Assistant U.S. Attorney Kelli H. Ferry of the U.S. Attorney’s Office, in Charlotte.
Charlotte Drug Cell Leader Sentenced to 20 Years in Prison for Heroin Trafficking ChargesRead the Press Release
CHARLOTTE, N.C. – On Monday, March 2, 2015, Chief U.S. District Judge Frank D. Whitney sentenced Hector Manuel Castaneda Gastelo, 31, of Mexico, to serve 240 months in prison on drug trafficking charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Gastelo pleaded guilty in May 2014 to conspiracy to distribute and to possess with intent to distribute heroin.
U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department, and Chief Rob Merchant of the Pineville Police Department.
According to filed court documents and today’s sentencing hearing, beginning in 2012 through September 2013, Gastelo was a Charlotte drug cell leader responsible for arranging bulk shipments of heroin from Mexico using a transportation network and couriers based out of Los Angeles. Court documents show that Gastelo also managed a group of lower-level conspirators who packaged and sold the heroin in Charlotte. According to court documents, Gastelo also facilitated the return of drug proceeds to Mexico. Filed documents indicate that Gastelo and his conspirators trafficked to the Charlotte area between 10 and 30 kilograms of heroin with a street value of more than $1 million dollars. Over the course of the investigation, law enforcement seized approximately $170,000 in cash, and almost 40 kilograms of heroin.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the indictment of 14 defendants on heroin trafficking and money laundering 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 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.
Other conspirators charged to date day in connection with this investigation are:
• Benjamin Villanueva Estrada – Pleaded guilty in 2014 to conspiracy to distribute and to possess with intent to distribute heroin and was sentenced in September 2014 to 78 months in prison and 2 years of supervised release.
• Carlos Lopez-Hernandez – Pleaded guilty to one count of misprision of a felony and re-entry by an illegal alien and was sentenced in January 2015 to 36 months in prison followed by one year of supervised release.
• Marcelino Rivera Vorquez – pleaded guilty in March 2014 to conspiracy to distribute and to possess with intent to distribute heroin and is pending sentencing.
• Fernando Hernandez – operated a heroin transportation group in Los Angeles and pleaded guilty in April 2014 to conspiracy to distribute and to possess with intent to distribute heroin and is pending sentencing.
• Yolanda Gonzalez – operated a heroin transportation group in Los Angeles and was convicted by jury in July 2014 of conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Lorenzo Gonzalez – Pleaded guilty in February 2015 to conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Steven Gonzalez - Pleaded guilty in January 2015 to conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Rigoberto Gonzalez– Pleaded guilty in February 2015 to conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Mahoud Barnabe Salame –Pleaded guilty in February 2015 to distribute and to possess with intent to distribute heroin and is pending sentencing.
• Jose Ivan Hernandez – Charged with conspiracy to distribute and to possess with intent to distribute at heroin and money laundering conspiracy and is currently awaiting trial.
• Jesus Viera – Has agreed to plead guilty to conspiracy to distribute and to possess with intent to distribute heroin.
• Gloria Isabell Ruiz-Pena Pleaded guilty to possession with intent to distribute heroin and is pending sentencing.
• Alberto Gasca - Arranged the transportation of heroin from Los Angeles and has pleaded guilty to conspiracy to distribute heroin. He is currently pending sentencing.
• Erik Estrada-Lopez- Has agreed to plead guilty to possession with intent to distribute heroin. A plea hearing date has not been set yet.Gastelo has been in federal custody since April 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was investigated by DEA in Charlotte, CMPD, and PPD. The prosecution is being handled by Assistant U.S. Attorney Elizabeth Greene of the U.S. Attorney’s Office in Charlotte.
U.S.Attorney Anne M. Tompkins Announces DepartureRead the Press Release
Law enforcement arrested 13 during early-morning round up; Law enforcement still looking for two defendants
CHARLOTTE, N.C. – Anne M. Tompkins, United States Attorney for the Western District of North Carolina (WDNC), announced today that she will stepping down as U.S. Attorney, effective midnight March 9, 2015. Upon Ms. Tompkins’ departure, Jill W. Rose will be Acting U.S. Attorney, until a permanent replacement is nominated and confirmed by the United States Senate.
“As United States Attorney for the Western District of North Carolina, Anne Tompkins has pursued the cause of justice with passion, with integrity, and with results,” said Attorney General Eric Holder. “In her outstanding work on matters involving health care and financial fraud, she helped safeguard the well-being of the American people and bring wrongdoers to justice. Through her service on the Attorney General’s Advisory Committee, she proved herself to be an indispensable advisor on a range of vital issues. And with her efforts to protect civil rights and combat human trafficking, she stood up for innumerable men, women, and children who are too frequently overlooked and too often underserved. Over the course of her extraordinary career, Anne has never lost sight of the most vulnerable in her own community, and has spearheaded trailblazing projects to engage young people in the work of building a more just society, from anti-bullying efforts to leadership development. Through her work at all levels, she has served as an inspiring example to public servants throughout the country – including me. And while I will miss her distinguished leadership and wise counsel, I look forward to all that she will achieve in the next stage of her already remarkable career.”
“It has been a great honor to serve the people of the Western District and I am grateful to President Obama for the opportunity,” said U.S. Attorney Tompkins. “For nearly five years, I’ve had the pleasure and the privilege of working with some of the brightest and most committed public servants. I have the utmost respect for their tireless dedication to the pursuit of justice. I am proud of our accomplishments and I am confident that the lawyers and staff of the Office will continue to work hard to protect the people of this district and deliver justice. ”
Ms. Tompkins was appointed by President Obama and confirmed by the U.S. Senate in April 2010. During her tenure, Ms. Tompkins’ office has prosecuted numerous financial fraud cases involving multi-million dollar investment schemes, securities fraud cases, and mortgage fraud conspiracies. Under Ms. Tompkins’ leadership, WDNC formed the District’s White Collar/Securities and Financial Fraud Group, which comprises federal and state law enforcement agencies and regulatory entities. This task force works in cooperation to identify potential fraud and move quickly to stop offenders and help victims of fraud.
U.S. Attorney Tompkins has also focused on combating health care fraud schemes and reducing the potential for health care fraud in the future. During her tenure, the Office created WDNC’s Health Care Fraud Task Force, a multi-agency team dedicated to identifying and prosecuting those who defraud public and private insurers, jeopardize the integrity of the health care system and waste taxpayer dollars. The Office has brought both criminal and civil fraud cases against individuals and corporations engaged in health care fraud against Medicare and Medicaid, and has recovered millions in restitution for the government-funded programs.
Ms. Tompkins has also focused on the protection of our vulnerable populations from exploitation and violence. In the past five years, the Office has prosecuted successfully numerous child predators and has secured restitution for known victims of child pornography. Also, under Ms. Tompkins’ leadership, the Office created the Charlotte Metropolitan Human Trafficking Task Force, which comprises law enforcement agencies, federal and state prosecutors and community organizations. The goal of the task force is two-fold: to identify cases for prosecution and to provide short and long-term support and assistance to victims of human trafficking. Working with the Task Force, WDNC has also organized annual training events aimed at raising awareness on the issue of human trafficking.
Protecting the integrity of government and public institutions from corruption has been another area of focus for Ms. Tompkins. Under Ms. Tompkins’ leadership, the Office has prosecuted a number of public corruption cases involving police officers and city employees, including the recent prosecution of Charlotte’s former mayor.
Under Ms. Tompkins’ leadership, WDNC was also selected to be a part of Attorney General Holder’s Residential Mortgage Backed Securities (RMBS) Working Group, tasked with investigating those responsible for misconduct contributing to the financial crisis through the pooling and sale of RMBS.
WDNC also continues to focus on community and local impact cases, conducting targeted enforcement actions in high-crime neighborhoods, particularly in response to violent gang activity, crime data, and community needs.
“During my tenure as U.S. Attorney, I have had the opportunity to work closely with our federal, state and local law enforcement partners on prosecutions and crime prevention and outreach initiatives. I extend my gratitude for each agency’s support, which will extend beyond my tenure, and I am thankful for the extraordinary service of the countless agents, officers and deputies who work hard to protect our communities and bring perpetrators to justice.”In addition to her supervision of the Office, in her role as U.S. Attorney, Ms. Tompkins has engaged in extensive community outreach efforts and crime prevention initiatives. A hallmark of Ms. Tompkins’ tenure has been her focus on youth engagement and crime prevention. Ms. Tompkins’ Office has partnered with Charlotte-Mecklenburg Schools (CMS), law enforcement and community groups to host a series of summits, titled “Engage,” that discuss various youth-related topics including anti-bullying, teen dating violence, leadership development, conflict resolution and race relations. Ms. Tompkins has also regularly participated in community-led events and has spoken on the issues of bullying, the importance of tolerance and positive conflict resolution.
“My position as U.S. Attorney has given me the opportunity to reach out to young people and empower them to effectuate change in their schools and their environments. Through the Engage Summits and our collaboration with CMS and a host of community organizations, we have delivered a powerful message, encouraging our youth to stand up, speak out and become catalysts for change by becoming leaders and positive role models to their peers. Our work would not be possible without the assistance of our community partners and the support of our citizen community. I am thankful for their ongoing collaboration and for partnering with the Office in support of our outreach efforts.”
During her tenure, Ms. Tompkins’ Office has organized events focusing on outreach, awareness, and training, in the areas human trafficking, gang prevention, focused deterrence, the Bank Secrecy Act, Project Safe Neighborhoods, domestic violence and prescription drugs. In addition, Ms. Tompkins has engaged in extensive outreach to the LGBT, Arab-Muslim and Sikh communities, and has met with leaders of numerous faith-based organizations.
In addition to serving as U.S. Attorney for WDNC, Ms. Tompkins served for over two years as an advisor to United States Attorney General Eric Holder by sitting on the Attorney General Advisory Committee (“AGAC”), advising the Attorney General on emerging policy management, and operational issues affecting the Department of Justice. “Serving on the AGAC has been a privilege and an opportunity to provide input on important issues to Department of Justice leadership, and to serve as a representative and an advocate for the U.S. Attorney community,” said Ms. Tompkins. Ms. Tompkins also served as co-chair of the AGAC’s Subcommittee on Civil Rights, and as a member of the Health Care Fraud, White Collar Crime, and Office Management and Budget Subcommittees.
Ms. Tompkins navigated the Office through significant challenges in her tenure, including hiring freezes, budgetary cuts and an unprecedented government shut-down. Despite the challenges, Ms. Tompkins’ Office has continued to handle high-volume cases while increasing the Office’s workforce with the addition of prosecutors and support staff.
The United States Attorney’s Office for the Western District of North Carolina includes 32 counties, half of the Great Smoky Mountains National Park and the Blue Ridge Parkway. The Pisgah and Nantahala National Forests cover over one million acres of our district. The largest Native American Community in the eastern half of the United States, the Eastern Band of Cherokee Indians, is in WDNC.
Federal Indictment Charges 15 with Drug Trafficking Conspiracy; Six More Face State Drug ChargesRead the Press Release
Law enforcement arrested 13 during early-morning round up; Law enforcement still looking for two defendants
CHARLOTTE, N.C. – A federal criminal indictment was unsealed today in U.S. District Court, charging 15 defendants with drug trafficking conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. FBI agents and officers with the Charlotte-Mecklenburg Police Department conducted an early morning round-up, arresting 13 of the 15 named in the federal indictment.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
The 15 defendants named in a federal indictment unsealed today are:
• Noel Rondell Alexander, a/k/a “Floyd,” 25 of Charlotte. (in custody)
• Akanni Butler, a/k/a “KB,” 29, of Charlotte. (in custody)
• Anthony Carter, a/k/a “Sanchez,” 26, of Charlotte. (in custody)
• Akeem Ford, a/k/a “Nike,” 21, of Charlotte. (in custody)
• Kenate Funderburk, a/k/a “Tay,” 35, of Charlotte. (in custody)
• Shemia Glenn, a/k/a “Pooh,” 22, of Charlotte. (not arrested yet)
• Isaac Hampton, a/k/a “Ike,” 26, of Charlotte. (in custody)
• William Kee, III, 20, of Charlotte. (in custody)
• Anthony C. Lindsay, a/k/a “Chez,” 26, of Charlotte. (in custody)
• Keith Rivera, 23, of Charlotte. (in custody)
• Rodney Smith, a/k/a “Man,” 22, of Charlotte. (in custody)
• Jonathan Stewart, a/k/a “J Rock,” 29, of Charlotte. (in custody)
• Antonio Sullivan, a/k/a “Pooh,” 36, of Charlotte. (not arrested yet) • Vincent Thompson, 32, of Charlotte. (in custody)
• Jamel Watson, a/k/a “Man,”18, of Charlotte. (in custody)(See chart below for a breakdown of federal charges and potential penalties for each defendant).
In addition to the 15 federal defendants charged today, six more defendants face state drug and related charges:
• Demontrez Mobley, 21, of Charlotte. (in custody)
• Kadarian Cortez Ford, 18, of Charlotte (in custody)
• Larry Yeargin, 36, of Charlotte. (in custody)
• Elijah Parker, 20, formerly of Charlotte (previously in state custody)
• Scott Mayfield, 26, of Charlotte. (not arrested yet)
• Ty’Darrien Cortez Ford, 20, of Charlotte. (not arrested yet)The federal defendants will have their initial appearances today in federal court.
Today’s arrests and indictments are the result of an eight month investigation conducted by federal and local law enforcement agencies dedicated to making our streets and communities safer. The agencies involved in the initiative include the U.S. Attorney’s Office for the Western District of North Carolina, the FBI, CMPD’s Gang Unit, Vice & Narcotics Unit, and Metro Division, and the Mecklenburg County District Attorney’s Office, with assistance from the North Carolina Division of Community Corrections. The goal of the investigation is to target and reduce violent crime in Mecklenburg County, with special emphasis placed on a street corner in Beatties Ford Road area, formerly controlled by the conspirators.
“Today’s arrests are the result of a coordinated effort of law enforcement partners, working together to target a hot spot for criminal activity. We will continue to work side-by-side side to identify and prosecute those who are responsible for spreading drugs in our streets and wreaking havoc in our neighborhoods,” said U.S. Attorney Tompkins. Tompkins also commended all the agents and officers who participated in this morning’s round up and thanked them for their commitment to serving and protecting our communities.
“The FBI working alongside our law enforcement partners is committed to keeping North Carolina families safe by targeting those offenders whose criminal activities threaten the safety and stability of our communities,” said FBI’s Special Agent in Charge Strong.
“The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be diligent in letting criminals know that these neighborhoods are not a safe haven for their illegal activity,” said Chief Monroe, CMPD. The charges contained in these indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation is being handled by the FBI’s Safe Streets Task Force, of which CMPD is a partner member. The prosecution is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.
Duke Energy Subsidiaries Charged with Clean Water Act ViolationsRead the Press Release
CHARLOTTE, N.C. – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act.
The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County). The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.
The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.
The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00.
Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act. See 18 U.S.C. § 3771. If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at [email protected] no later than March 6, 2015.
A criminal information is not a finding of guilt. A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.
The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.
U.S. v. Duke EnergyRegistered Sex Offender Sentenced to 40 Years in Prison for Producing Child PornographyRead the Press Release
Two Others Also Sentenced in Separate Cases
ASHEVILLE, N.C. – On Thursday, February 12, 2015, U.S. District Judge Martin Reidinger sentenced Kieron Mann, 45, of Hendersonville, N.C. to 40 years in prison on production of child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Mann was ordered to serve a lifetime of supervised release, to continue to register as a sex offender, and to pay $50,000 as restitution to his victims.
Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Charles McDonald of the Henderson County Sheriff’s Office join U.S. Attorney Tompkins in making today’s announcement.
“After receiving a lead from our Cyber Crimes Center about the suspected distribution of child pornography by this defendant, who is a registered sex offender, HSI special agents in Hendersonville were able to determine he was in fact producing child pornography with a very young child and was sexually abusing two other children,” said ICE/HIS Acting Special Agent in Charge Spradlin. “Thanks to the hard work of HSI and the Henderson County Sheriff’s Office, not to mention an aggressive prosecution by the U.S. Attorney’s Office, this monstrous child predator will never again have an opportunity to abuse another innocent victim.”
“The safety and security of the children in our communities is paramount. Through the efforts of agents from the Department of Homeland Security and deputies of the Henderson County Sheriff’s office, families affected by this vile predator can rest more comfortably knowing their children will never be harmed by Mr. Mann again,” said Sheriff McDonald.
In May 2014, Mann pleaded guilty to one count of production of child pornography. According to court documents and statements made in court, law enforcement executed search warrants at Mann’s residence, and seized his computers and cellular phones. A forensic examination of the seized items revealed that they contained images and videos of child pornography, which Mann had produced. Mann is a registered sex offender, which stems from his 1996 federal conviction for receiving child pornography. At today’s hearing, Mann’s sentence was enhanced because of his criminal history. Mann has been in federal custody March 2014. The case was prosecuted by HSI and Henderson County.
Judge Reidinger also sentenced today Tabatha Dianne Black, 35, of Bakersville N.C., to 210 months in prison and a lifetime of supervised release. According to court records, from May to June 2012, in Yancey County, Black did entice and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of it which she then distributed. Black pleaded guilty in June 2014 to one count of production of child pornography and has been in federal custody since April 2014. The case was prosecuted by HSI, the State Bureau of Investigation, and the Yancey County Sheriff’s Office.
Judge Reidinger sentenced a third defendant today on child pornography charges. Jonathan Michael Whisnant, 42 of Easley, S.C. was sentenced to 78 months in prison and to a lifetime of supervised release. According to court records, in January 2014 in Polk County, Whisnant received and possessed images depicting child pornography. Whisnant pleaded guilty in June 2014 to one count of possession of child pornography and one count of receipt of child pornography. He has been in federal custody since April 2014. The case was prosecuted by HSI.
U.S. Attorney Tompkins thanked all the law enforcement agencies that investigated these cases for their outstanding work and said, “My Office and our law enforcement partners will not allow child predators to victimize innocent children. We will find and prosecute those who prey upon the most vulnerable members of our communities.”
The defendants will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
This case 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
Former Wells Fargo Investment Banker and Three Conpsirators Sentenced for Insider Trading ConspiracyRead the Press Release
Investment Banker Received Kickbacks in Cash And Gold For Stolen Inside Information
CHARLOTTE, N.C. – A former Wells Fargo investment banker and three of his conspirators were sentenced today on insider trading conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Today’s sentencings stem from the Charlotte-based FBI investigation, “Operation Insider Out,” which began in early 2012 and identified targets involved in insider trading activities in the Charlotte area.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division joins U.S. Attorney Tompkins in making today’s announcement.
John W. Femenia, 33, of Greenwich, Conn., was sentenced to five years in prison and two years of supervised release. Shawn C. Hegedus, 34, of Centereach, N.Y. was sentenced to ten years in prison and two years of supervised release. Matthew J. Musante, 34, of Miami, Fla., was sentenced to 42 months in prison followed by two years of supervised release. They each pleaded guilty to insider trading and money laundering conspiracy charges. Danielle C. Laurenti, 34, of Massapequa Park, N.Y. was sentenced to 19 months (time served) in prison followed by two years of supervised release. Laurenti pleaded guilty to one count of insider trading conspiracy.
Four other codefendants who previously pleaded guilty to insider trading conspiracy have already been sentenced:
• Roger A. Williams, 53, of Georgetown, S.C., was sentenced to 24 months in prison and one year of supervised release.
• Kenneth M. Raby, 52, of Greer, S.C., was sentenced to 18 months in prison and one year of supervised release.
• Aaron M. Wens, 34, of Encinitas, Calif., was sentenced to six months in prison and one year of supervised release.
• Frank M. Burgess, Jr., 44, of Charlotte, was sentenced to six months in prison and one year of supervised release.
• James A. Hayes, 40, also of Charlotte, was sentenced to one year of probation.According to filed court documents and today’s sentencing hearings, from March 2010 through December 2012, the conspirators conducted illegal insider trading activities based on stolen material non-public information, including information on Wells Fargo and its clients’ upcoming corporate mergers and acquisitions. Stealing material non-public inside information allows a trader to cheat and earn substantial profits by trading before such news becomes public, thereby earning substantial profits by trading again once the news becomes public and impacts the price of a stock.
Femenia, an investment banker who lived in Charlotte and later in New York, stole from his employer, Wells Fargo, and its clients, material nonpublic information about upcoming mergers and acquisitions, and passed the inside information to his conspirators who then used it to conduct illegal trades. These conspirators then passed the confidential inside information to other conspirators who also then traded on that information, court records indicate. The criminal conspiracy netted over $11 million in proceeds as a result of the illegal insider trading activities, court records show.
According to court records, Femenia was paid kickbacks for the stolen information in several forms. Court records indicate that Hegedus, who was a stockbroker and Femenia’s high-school friend, used the proceeds of the insider trading to buy 55 gold bars. Femenia then sold four of the gold bars for $70,877. Femenia also received kickbacks in cash, including via ATM cash deposits made to account in the name of Femenia’s girlfriend. Court records indicate that Hegedus and his wife, Laurenti, laundered proceeds of the insider trading through a casino in Las Vegas. Court records also show that Femenia and Hegedus engaged in mortgage fraud through the fraudulent purchase of a luxury home in Waxhaw, N.C.
In announcing today’s sentencings, U.S. District Judge Robert J. Conrad Jr. stated that the sentences imposed were intended to deter other insider traders and to recognize the seriousness of the offense.
Femenia and Musante have been released on bond and will be ordered to self-report to the Federal Bureau of Prisons (BOP) to begin serving their sentences. Hegedus, who previously fled to Cuba, has been detained since his return to the United States over the summer of 2013 and will be transferred to BOP’s custody upon designation of a federal facility.
U.S. Attorney Tompkins commended the FBI for their investigation of the case, and thanked the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and Wells Fargo for their invaluable assistance.
The prosecution for the government was handled by Assistant United States Attorneys Kurt W. Meyers and Kelli H. Ferry of the Charlotte office.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.stopfraud.gov.Drug Trafficker and Former Member of the Texas Mexican Mafia Sentenced to More Than 15 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Fred Carrasco, Jr., 37, of Mexico was sentenced today to 185 months in prison on drug trafficking and firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Carrasco to serve five years under court supervision upon completion of his prison term.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
According to court documents and court proceedings:
According to court documents and court proceedings, Carrasco is a former member of the Texas Mexican Mafia and an affiliate of the Sureños 13 and MS-13 gangs in Charlotte. Court records indicate that from 2005 to 2009, Carrasco was responsible for supplying more than 1,000 kilograms of marijuana and 500 grams of cocaine to Charlotte and elsewhere, which had been smuggled into the United States from Mexico. According to court records, Carrasco fled to Mexico in 2009 and returned in 2013 to face the federal drug trafficking charges filed in the Western District. He pleaded guilty in January 2014 to one count of conspiracy to distribute and to possess with intent to distribute marijuana and cocaine and one count of possession of a firearm in furtherance of a drug trafficking crime
Carrasco has been in federal custody since July 2013 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
This FBI and CMPD investigated the case. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Two Men Sentenced to Seven Years in Prison for Defrauding Investors in Separate Multi-Million Dollar Investment Fraud SchemesRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced two defendants to lengthy prison sentences for operating separate multi-million dollar investment fraud schemes. Stephen E. Maiden, 41, of Vienna, Va., was sentenced to 84 months in prison, followed by one year of supervised release for carrying out an $8.9 million Ponzi scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Maiden, who pleaded guilty to securities fraud in May 2013, was also ordered to pay $7,755,752 as restitution.
In a separate case, Judge Conrad sentenced James Alexander Shepherd, 59, of Vass, N.C to 84 months in prison and three years of supervised release for defrauding more than 100 investors of in excess of $6 million. Judge Conrad delayed issuing a final order of restitution to permit the parties to file additional court briefs. The United States is seeking a restitution order of approximately $8 million for victims of the scheme. Shepherd pleaded guilty to one count of securities fraud in June 2013.
United States v. Stephen Maiden
According to filed court documents and today’s sentencing hearing, Maiden, formerly of Charlotte, carried out the scheme through his Charlotte-based hedge fund, Maiden Capital Opportunity Fund (“Maiden Capital”), which he formed in 2006. According to court records, Maiden represented to his victims that the fund was doing well and was profitable. By at least February 2009, however, he had lost the majority of the fund’s assets in failed investments. Beginning in at least February 2009, Maiden began transmitting bogus account statements to his investor victims and to Maiden Capital’s fund administrator, falsely reporting favorable returns. To keep the scheme going, Maiden used money from new investors to satisfy withdrawal requests made by other fund investors, falsely characterizing the transactions as payments from Maiden Capital’s successful operations. As a result of his unlawful conduct, Maiden caused a total loss of at least $8.9 million to approximately 39 victims.
United States v. James Alexander Shepard
According to filed court documents and court proceedings, from 2006 to 2013, Shepherd defrauded investors in Union County and elsewhere of approximately $6 million. Court documents indicate that Shepherd carried out the fraud by promising his victims returns on their investments in funds Shepherd owned and controlled, including “The Shepherd Major Play Option Fund, L.P.” (the “Major Play Fund”) and the “Shepherd’s Model Hedge Fund” (the “Hedge Fund”). In addition, Shepherd had some individual investors that invested their money independent of any particular investment vehicle. In about 2006, and without his investors’ knowledge, Shepherd began misappropriating investor money from the Major Play Fund, and used it, among other things, to pay investors of his hedge fund, to trade in his personal accounts, and to fund the operations of his newsletter he distributed nationwide, court filings show. According to court records, Shepherd also used the money to fund his personal lifestyle, including to build a $2 million home and to make mortgage payments on that residence.
According to court records, to conceal his fraudulent conduct, Shepherd sent to investors certified financial statements for the Major Play fund, accompanied by an Independent Auditor’s Report. This assured investors that an independent audit on the fund had been conducted in compliance with the rules of the U.S. Commodities Futures Trading Commission (“CFTC”). The false financial statements also misrepresented to investor victims the financial condition of the fund. For example, in December 2012, Shepherd’s a fraudulent statement stated that the fund had a $6,041,850 cash balance, when in reality the fund had less than $100,000 at the time.
Shepherd used forged bank documents and names of fictitious bank employees, among other things, to trick an accountant into providing the Independent Auditor’s Report. According to court records, Shepherd’s scheme was uncovered when in March 2013 the accountant insisted on verifying the cash balance of fund’s bank account electronically, through the audit confirmation website www.confirmation.com, which is now the commonly used method of verification by accountants. Shepherd delayed and then refused to give the accountant authority to utilize the website to verify the cash balance of the Major Play Fund, court records show. In March 2013, the accountant notified the National Futures Association (NFA) that his audit opinion could no longer be relied upon.
In making today’s announcement, U.S. Attorney Anne Tompkins said “Prosecuting fraudsters who prey on innocent investors is a top priority of my Office. Each of these two defendants chose a path of deceit and lies to fulfill their greedy self-interest. As a result, both now have lengthy jail sentences to reflect on the inestimable damage they caused to their victims. My Office will continue to aggressively investigate and prosecute those who seek to victimize innocent investors.”
“These prison sentences are a stark reminder to con artists; no matter how elaborate or complex the scheme, you will be caught and held accountable. Unfortunately, victims lose billions of dollars annually to fraudsters. Investors should be cautious and question promises of large payoffs,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
Both Maiden and Shepherd have been released on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The FBI handled both investigations. U.S. Attorney Tompkins also thanked CFTC and NFA for their invaluable assistance in Shepherd’s case.
Assistant U.S. Attorneys Kurt Meyers and Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte prosecuted Shepherd, and AUSA Odulio prosecuted Maiden.
Charlotte Man Sentenced to More Than Five Years in Prison for Defrauding Investor in Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced John Reid Perkins, 45, of Charlotte, to serve 64 months in prison followed by three years of supervised release on securities fraud conspiracy charges and for violating the terms of his supervised release stemming from a previous federal conviction, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Perkins, who pleaded guilty in September 2013 to one count of securities fraud conspiracy, was also ordered to pay $805,150 as restitution.
Perkins’ conspirator, Terry Wayne Gandy, 51, or Myrtle Beach, S.C. was sentenced in December 2014 to 57 months in prison and three years of supervised release for his role in the conspiracy and was ordered to pay $3,076,411.34 in restitution to his victims.
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) and B.W. Colier, Acting Director of the North Carolina State Bureau of Investigation (SBI) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and court proceedings, from 2006 to 2008 Perkins conspired with Gandy and others and tricked victims into investing in a fraudulent real estate investment scheme. Court records show that Perkins owned and operated “Master Home Solutions” (“MHS”), a company that purportedly purchased, remodeled, renovated and resold foreclosed homes. Based on court records, Perkins induced victims by falsely representing their money would be invested in real estate projects through MHS, when, in fact, very little of that money was ever invested. Instead of investing the investors’ money as promised, Perkins, Gandy and others used the funds to pay themselves and to support their lifestyles, including to pay bills, buy cars, and make large cash withdrawals.
According to court documents and court proceedings, the conspirators also used some of the victim’s money to pay purported “profits” to other investors, falsely characterizing them as “gains on investments.” Perkins and his conspirators also used new victims’ money to make payments to old victim-investors, commonly known as “Ponzi” payments. Court records indicate that Perkins and his conspirators further lied to victims, falsely telling them their money was tied up in investments with specific “maturity periods.” In some instances, the defendants advised victims that additional investment funds were needed in order to secure the return of the victims’ original investment, court records indicate.
In handing down the 64 month sentence, Judge Cogburn stressed the significant damage caused to victims by Perkins’ greed and noted that the lengthy sentence was needed to protect the public from futures crimes of the defendant.
In 2007, Perkins was convicted on federal conspiracy, identification document fraud, wire fraud and aggravated identity theft charges and served 33 months in prison. Perkins began a five-year period of supervised release in November 2010. Judge Cogburn revoked Perkins’ supervised release because Perkins violated several of his conditions by, among other things, engaging in unauthorized travel and defrauding a victim of approximately $125,000 in a sham tugboat sale. Perkins was remanded into federal custody following the sentencing hearing. 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 FBI, IRS and SBI. Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Four Men Sentenced for Multi-Million Dollar Mortgage and Consumer Fraud SchemeRead the Press Release
STATESVILLE, N.C. – On Wednesday, February 4, 2015, U.S. District Judge Richard L. Voorhees sentenced four defendants involved in a consumer and mortgage fraud conspiracy which resulted in multi-million dollar losses for consumers and federal agencies, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Today’s sentences are the result of an investigation into a fraudulent mortgage and consumer fraud scheme committed by executives and employees of Phoenix Housing Group (“PHG”) and related lenders. The scheme caused multi-million dollar losses for consumers and federal agencies, including home buyers, the lenders that financed the home sales, and the U.S. Department of Housing and Urban Development (“HUD”) and U.S. Department of Agriculture (“USDA”), which guaranteed the loans.
Joseph (“Joey”) Klakulak, 36, of Charlotte, was sentenced to 30 months in prison, two years of supervised release and was ordered to pay $5,635,384.81 as restitution. Dennis Parris Wayne, 57, of Pinehurst, N.C. was sentenced to 24 months in prison, two years of supervised release and was ordered to pay $24,087,187.34 as restitution. Isaac “Ike” Vinson, IV, 47, of Murrells Inlet, S.C. was sentenced to 24 months in prison, two years of supervised release and was ordered to pay $6,625,841.24 as restitution. And, Andrew B. McKeown, 40, of Asheboro, N.C. was sentenced to a two year probationary term, with the first six months to be served in home confinement. McKeown was also ordered to pay $4,333,076.87 as restitution.
According to filed documents and statements made in court today, Parris was a former PHG Senior Vice President. Vinson was a former loan officer and manager for W.R. Starkey Mortgage (“WRSM”), McKeown was a former Sales Manager, and Klakulak was a Charlotte-based former loan officer for numerous lenders, including WRSM.
Court records indicate that from approximately 2004 to 2010, Parris, Vinson, McKeown, Klakulak, and related conspirators Roger Bailey, Marina McCuen and Fabian Sparrow originated hundreds of fraudulent HUD/FHA-insured and USDA-insured mortgage loans totaling more than $150 million and resulting in net losses of over $21 million to the United States and more than $3.3 million to consumers.
According to court records, the defendants convinced customers to purchase manufactured homes which they could not afford by misrepresenting the financing terms of the loans. Court records show that the conspirators secured loans for the unqualified consumers by providing lenders with documents that contained fraudulent customer information, such as false income, assets, and credit. According to court records, in some instances defendants also obtained inflated appraisals, misrepresented the source of down payment funds, and coerced consumers to sign closing documents. At times, the defendants also collected down payment money for which borrowers received no credit.
In handing down the defendants’ sentencings, Judge Voorhees noted the exceptional losses families “suffered as a result of unrealistic and ill-motivated procedures foisted on them.”
Klakulak pleaded guilty in August 2013 to conspiracy to make false statements to a federal agency and submit false statements to HUD. Parris and Vinson pleaded guilty in April 2014 and November 2014, respectively, to conspiracy to make false statements to a federal agency, submit false statements to HUD and destroy records in a federal investigation. McKeown pleaded guilty in January 2014 to concealing the conspiracy to defraud the government and consumers.
In August 2014, Marina McCuen, 51, of Asheville, N.C., and Roger Bailey, 42, of Hickory, were sentenced to 50 months and 30 months in prison, respectively. McCuen was a WRSM loan officer and Bailey was a sales manager of PHG’s sales center in Granite Falls. In addition to their prison terms, all defendants are barred from participating in mortgage lending.
The last conspirator charged in connection with this case, Fabian Sparrow, 36, of Burlington, N.C. has pleaded guilty to conspiracy to make false statements to a federal agency and submit false statements to HUD and is currently awaiting sentencing. Sparrow was a sales manager at PHG’s sales center in Burlington. In January 2011, PHG ceased business operations as part of a settlement with the Consumer Protection Division of the North Carolina Attorney General’s office.
Following the sentencing hearings, the defendants were ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Tompkins thanked the multiple agencies involved in the investigation:
Office of the Inspector General, Office of Investigation of the Department of Housing and Urban Development (HUD-OIG); Office of the Inspector General, Office of Investigation of the U.S. Department of Agriculture (USDA-OIG); Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS); North Carolina Attorney General’s Office; and North Carolina Commissioner of Banks (NCCOB). U.S. Attorney Tompkins also thanked the United States Marshals Service for their substantial assistance in financial analysis and the Department of State for their assistance in the apprehension of Sparrow when he fled the United States for Doha, Qatar.
The prosecution for the case was handled by Assistant United States Attorneys Michael Savage and Benjamin Bain-Creed, of the U.S. Attorney’s Office in Charlotte.
Federal Judge Sentences Three Methamphetamine TraffickersRead the Press Release
A total of 57 defendants have been prosecuted federally in connection with Operation “Dixie Crystal”
STATESVILLE, N.C. – On Monday February 2, 2015, U.S. District Judge Richard L. Voorhees handed down prison sentences to three men for their involvement in a methamphetamine trafficking ring, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Kenneth Herman Bennett, 53, of West Jefferson, N.C. was sentenced to 188 months in prison, followed by five years of supervised release. Bennett pleaded guilty in December 2013 to one count of conspiracy to distribute and to possess with intent to distribute methamphetamine. According to court documents and today’s sentencing hearing, Bennett was the one of the conspiracy’s leaders and a supplier of crystal methamphetamine smuggled in to the United States from Mexico.
Judge Voorhees also sentenced Troy William Yount, Jr., 49, of Hudson, N.C. to 51 months in prison, followed by five years of supervised release, and Isaac Andrew Waters, 38, of Charlotte, to 33 months in prison and two years of supervised release. Yount and Waters each pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine in November 2013 and April 2014, respectively.
The prosecutions stem from Operation “Dixie Crystal,” a joint drug task force operation which began in 2012, targeting significant methamphetamine traffickers in Ashe, Allegheny, Caldwell, Watauga, Wilkes Counties, and Johnson County in Tennessee. To date, at total of 57 defendants have been prosecuted federally in connection with this investigation.
According to filed court documents and court proceedings, beginning in 2003 and continuing through 2011, the drug trafficking conspiracy was responsible for the sale of more than 200 pounds of methamphetamine, with a street value of more than $4,000,000. Over the course of the investigation, law enforcement seized approximately 30 firearms, five vehicles, 20 pounds of methamphetamine, and $150,000 in U.S. currency.
The following 30 defendants each pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and were sentenced as follows:
1. Larry Mitchell Snyder of Trade, Tenn., was sentenced in July 2014 to 120 months in prison and five years of supervised release.
2. Earl Butler Potter of Todd, N.C., was sentenced in October 2014 to 37 months in prison and two years of supervised release.
3. Stephanie Lynn Shatley of Lansing, N.C., was sentenced in October 2014 to 60 months in prison and three years of supervised release.
4. Jared William Pardue of Zionville, N.C., was sentenced in October 2014 to 41 months in prison and three years of supervised release.
5. Tawana M. Sparks of Hudson, N.C., was sentenced in October 2014 to 24 months in prison and two years of supervised release.
6. Ricky Allen Latham of Creston, N.C., was sentenced in October 2014 to 46 months in prison and two years of supervised release.
7. Baxter Smith James of Boone, N.C., was sentenced in October 2014 to time served and eight years of supervised release.
8. Courtney Wayne Patterson of Todd, N.C., was sentenced in August 2014 to 110 months in prison followed by five years of supervised release.
9. Deborah Phillips Lewis of Todd, N.C., was sentenced in October 2014 to 33 months in prison followed by three years of supervised release.
10. James Foy Parsons of West Jefferson, N.C., was sentenced in August 2014 to 33 months in prison and two years of supervised release.
11. Tina Ann Wheeler (a/k/a Tina Ann Miller) of Crumpler, N.C., was sentenced in July 2014 to 108 months in prison, followed by five years of supervised release.
12. Mauricio “Mario” Baltazar of Lake City, Ga., was sentenced in June 2014 to 169 months in prison and five years of supervised release.
13. Jose Francisco Jimenez Pina of Mexico, was sentenced in April 2014 to 180 months in prison and five years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime and aiding and abetting.
14. Jason Michael Benfield of Laurel Springs, N.C., was sentenced in June 2014 to 121 months in prison and five years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to carrying of a firearm in furtherance of a drug trafficking crime.
15. Ernest Monroe Parlier, Jr. of Crumpler, N.C., was sentenced in April 2014 to 84 months in prison followed by five years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime.
16. Jeremy Keith Nunnenkamp, of North Wilkesboro, N.C., was sentenced in July 2014 to 120 months in prison followed by five years of supervised release.
17. Jeffrey Dale Watson of Fleetwood, N.C., was sentenced in June 2014 to 15 months in prison followed by five years of supervised release.
18. James Thomas Hawkins of Laurel Springs, N.C., was sentenced in August 2014 to 70 months in prison and five years of supervised release.
19. Chad Morgan Yates of Chattahoochee Hills, Ga., was sentenced in July 2014 to 97 months in prison followed by five years of supervised release.
20. Christy Lee Latham of Warrensville, N.C., was sentenced in June 2014 to 84 months in prison followed by five years of supervised release.
21. Melanie Virginia Osley of Chattahoochie Hills, Tenn., was sentenced in April 2014 to 108 months in prison and five years of supervised release.
22. Luis Enrique Garcia, of Mexico, was sentenced in December 2013 to 188 months in prison and five years of supervised release.
23. Jose Francisco Jimenez Pina, of Mexico, was sentenced in April 2014 to 180 months in prison and five year of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to unlawful use and carry of a firearm in furtherance of a drug trafficking crime.
24. Jose Humberto Jimenez Pina, of Mexico, was sentenced in April 2014 to 50 months in prison, followed by four years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to unlawful use and carry of a firearm in furtherance of a drug trafficking crime.
25. Bobby Giles Shore, of Lansing, N.C. was sentenced in April 2014 to 24 months in prison and five years of supervised release.
26. Danny Eller of West Jefferson, N.C., was sentenced in April 2014 to 21 months in prison followed by five years of supervised release.
27. Cristie Aldridge Dollar of Foscoe, N.C., was sentenced in December 2013 to 121 months in prison followed by five years of supervised release.
28. Pamela Ann Corum, of Zionville, N.C. was sentenced in March 2014 to 63 months in prison followed by five years of supervised release.
29. Tammy Wynette Woody, of West Jefferson, N.C., was sentenced in June 2014 to 30 months in prison followed by five years of supervised release.
30. Javier Sanchez Chavez of Mexico, was sentenced in March 2014 to 21 months in prison and one year of supervised release. He pleaded guilty to withholding information on a crime.Seventeen additional defendants have pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and are currently awaiting sentencing.
31. John Dale Darden, of Jefferson, N.C..
32. Larry Curtis Hooks of Lenoir, N.C.
33. William Clyde Townsend of Mountain, Tenn.
34. Victor Javier Hernandez (address unknown).
35. Terri Elaine Clark of Lenoir, N.C.
36. Michael Wayne Jenkins of Bloomer, N.C.
37. Bradley Eugene Goble of Lenoir, N.C.
38. Karl Albert Blanton of Lenoir, N.C.
39. Christopher Everett Triplett of Hudson, N.C.
40. Anthony Dwayne Byers of Jefferson, N.C.
41. Toni Leigh Wilson of Stanley, N.C.
42. Jesse Lawrence Burkett of Fleetwood, N.C.
43. John Paul Caudill of Laurel Springs, N.C.
44. Shannon Marie Williams Greene of Hickory, N.C.
45. Stephen Roger Dean (address unknown).
46. Lisa Dawn Wentworth of Lenoir, N.C.
47. Yee Thor of Newton, N.C.The following three defendants have agreed to plead guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and are expected to appear in federal court to formally accept their pleas once their hearings have been scheduled:
48. Anthony Lee Day of Crumpler, N.C.
49. Donald Ray Newton of Byron, Ga.
50. Marixa Dawn Hart of Jefferson, N.C.Three more defendants have been charged with conspiracy to distribute and to possess with intent to distribute methamphetamine:
51. Roger Dale Franklin of Lenoir, N.C. (via federal criminal indictment).
52. Brian Ledford of Newton, N.C. (via federal criminal complaint).
53. Heather Renee Miller of Hickory, N.C. (via federal criminal complaint).Another defendant, Martin Martinez Saldana, 43, of West Jefferson, N.C. was convicted by a jury in March 2014 of conspiracy to distribute and to possess with intent to distribute methamphetamine and of receipt and possession of a firearm that was not registered to him. He is currently awaiting sentencing.
In making today’s announcement, U.S. Attorney Tompkins recognized the following federal, state and local agencies which partnered in Operation Dixie Crystal, and thanked them for their continued cooperation and support:
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Drug Enforcement Administration (DEA); U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); North Carolina State Bureau of Investigation (NC SBI); Ashe County Sheriff’s Office; Allegheny County Sheriff’s Office; Boone Police Department; Caldwell County Sheriff’s Office; Watauga County Sheriff’s Office; Wilkes County Sheriff’s Office; Johnson County Sheriff’s Office in Tennessee; Lenoir Police Department; Hickory Police Department; and Catawba County Sheriff’s Office.
The prosecutions are being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
United States v. Jose Humberto Pina; Case Number 5:12-cr-48-RLV.
United States v. Saldana et al; Case Number 5:12-cr-49-RLV.
United States v. Shore; Case Number 5:12-cr-50-RLV.
United States v. Eller; Case Number 5:12-cr-51-RLV.
United States v. Corum; Case Number 5:12-cr-52-RLV.
United States v. Dollar; Case Number 5:12-cr-53-RLV.
United States v. Garcia et al; Case Number 5:12-cr-54-RLV.
United States v. Chavez; Case Number 5:13-cr-12-RLV.
United States v. Osley; Case Number 5:13-cr-15-RLV.
United States v. Parlier; Case Number 5:13-cr-18-RLV.
United States v. Latham; Case Number 5:13-cr-19-RLV.
United States v. Benfield; Case Number 5:13-cr-26-RLV; Complaint Number 3:13-mj-83.
United States v. Hawkins; Case Number 5:13-cr-27-RLV.
United States v. Yates; Case Number 5:13-cr-28-RLV.
United States v. Woody; Case Number 5:13-cr-36-RLV; Complaint Number 3:13-mj-132.
United States v. Nunnenkamp; Case Number 5:13-cr-39-RLV; Complaint Number 3:13-mj-132.
United States v. Watson; Case Number 5:13-cr-40-RLV; Complaint Number 3:13-mj-132.
United States v. Bennett; Case Number 5:13-cr-41-RLV; Complaint Number 3:13-mj-132.
United States v. Baltazar; Case Number 5:13-cr-42-RLV; Complaint Number 3:13-mj-137.
United States vs. Hartley; Case Number 5:13-cr-46-RLV.
United States vs. Lewis; Case Number 5:13-cr-47-RLV.
United States vs. Parsons; Case Number 5:13-cr-48-RLV.
United States vs. Yount; Case Number 5:13-cr-49-RLV.
United States vs. Snyder et al; Case Number 5:13-cr-50-RLV.
United States vs. Patterson; Case Number 5:13-cr-51-RLV.
United States vs. Wheeler; Case Number 5:13-cr-52-RLV.
United States vs. Darden, 5:14-cr-23-RLV.
United States vs. Hooks, 5:14-cr-30-RLV.
United States vs. Townsend, 5:14-cr-36-RLV.
United States vs. Hernandez, 5:14-cr-40-RLV.
United States vs. Clark, 5:14-cr-41-RLV.
United States vs. Jenkins, 5:14-cr-43-RLV.
United States vs. Goble, 5:14-44-RLV.
United States vs. Blanton, 5:14-cr-45-RLV.
United States vs. Triplett, 5:14-cr-50-RLV.
United States vs. Byers, 5:14-cr-51-RLV.
United States vs. Wilson, 5:14-cr-52-RLV.
United States vs. Burkett, 5:14-cr-63-RLV.
United States vs. Caudill, 5:14-cr-68-RLV.
United States vs. Greene, 5:14-cr-71-RLV.
United States vs. Dean, 5:14-cr-76-RLV.
United States vs. Wentworth, 5:14-cr-86-RLV.
United States vs. Thor, 5:15-cr-1-RLV.
United States vs. Day, 5:15-cr-5-RLV.
United States vs. Newton, 5:15-cr-10-RLV.
United States vs. Hart, 5:15-cr-7-RLV.
United States vs. Franklin, 3:14-cr-81-RLV; Complaint Number 3:14-mj-248.
United States vs. Ledford, 3:15-mj-30-DSC.
United States vs. Miller, 3:15-mj-30-DSC.Five Defendants Sentenced for Their Role in Federal Racketeering ConspiracyRead the Press Release
Defendants among 91 Charged in Operation Wax House
CHARLOTTE, N.C. – Matthew Newland, 41, of Iowa, was sentenced on Tuesday, January 27, 2015, by Senior U.S. District Judge Graham C. Mullen to serve 13 months in prison followed by one year of supervised release on federal racketeering charges, announced the U.S. Attorney’s Office for the Western District of North Carolina. Four other defendants were sentenced earlier this month.
The U.S. Attorney’s Office 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, eighty-nine defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives.
According to court records and Tuesday’s sentencing hearing, Newland operated as a promoter in the conspiracy and received more than $400,000 in kickbacks for his role. Newland also served as a seller in one transaction, letting approximately $240,000 in kickbacks be paid out of the loan proceeds to his co-conspirators. Newland pled guilty to RICO conspiracy to commit bank fraud in June 2013.
The other five defendants sentenced this month are:
• On January 27, 2015, Lorie Dooley, 50, of Charlotte, N.C., was sentenced to 46 months in prison, followed by three years of supervised release. Dooley was also a promoter in the enterprise’s mortgage fraud operations and received approximately $25,000 in kickbacks for her role. In addition to the mortgage fraud, Dooley engaged in a bank bribery scheme, in which she received $63,000 from a co-conspirator and paid a bank employee $55,000 to provide a bogus letter of credit. Also, when Dooley learned that the bank employee had pleaded guilty, Dooley obstructed justice, attempting to threaten and intimidate that employee. Dooley pleaded guilty to RICO conspiracy to commit bank fraud, wire fraud, and money laundering conspiracy in January 2014. She has been in custody since her arrest on these charges in May 2013.
• On January 20, 2015, Travis Bumpers, 38, of Charlotte, was sentenced to 66 months in prison and three years of supervised release. Bumpers was a promoter in both the enterprise’s mortgage fraud and investment fraud operations. Bumpers engaged in multiple mortgage fraud transactions, arranging for a straw buyer, providing down payment money, and receiving more than $800,000 in kickback money through a sham corporation. Bumpers also engaged in extensive investment fraud, defrauding approximately 70 victims out of more than $4.6 million. Bumpers pleaded guilty to RICO conspiracy to commit securities fraud, bank fraud, wire fraud and money laundering conspiracy in March 2013. He has been in custody since his arrest on these charges in November 2012.
• On January 8, 2015, Ralph Johnson, 37, of Charlotte, was sentenced to 27 months in prison and two years of supervised release. Johnson was a promoter in the enterprise’s mortgage fraud operations, helping arrange multiple fraudulent transactions and provide straw buyers in exchange for approximately $360,000 in kickbacks. Johnson pleaded guilty to RICO conspiracy to commit bank fraud, wire fraud, and money laundering conspiracy in June 2013. He has been in custody since his arrest on these charges in April 2013.
• Also on January 8, 2015, Benjamin Clarke, 41, of Atlanta, Ga. was sentenced to an eight month split sentence, followed by two years of supervised release. Clarke served the enterprise as a buyer for two properties purchased as part of its mortgage fraud operations and received approximately $200,000 in kickbacks. Clarke pleaded guilty to bank fraud in June 2013. Of the 26 six defendants charged in this indictment, 18 await sentencing, including three of the scheme’s leaders. The fourth leader, Ramin Amini, 46, last known address Tehran, Iran, is one of two international fugitives. 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.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.
Clay County Man Sentenced to 16 Years in Prison on Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – A Clay County man was sentenced on Thursday, January 22, 2015, to serve 192 months in a federal prison for producing, possessing and distributing child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, U.S. District Judge Martin Reidinger also ordered James Thomas Lifsey, 59, of Warne, N.C. to serve under court supervision the rest of his life upon release from prison and to register as a sex offender. Lifsey was also ordered to pay $ 46,057 as restitution to the victims.
Ryan L. Spradlin, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas joins U.S. Attorney Tompkins in making today’s announcement.
In July 2013, a federal criminal indictment charged Lifsey with one count of production, one count of distribution and one count of possession of child pornography. Lifsey pleaded guilty to the charges in December 2013. According to court filings and proceedings, during the investigation detectives discovered Lifsey had an extensive collection of child pornography, as well as a computer hard drive, an email account, and online photo sharing accounts. Lifsey admitted to distributing child pornography internationally that he produced himself.
Lifsey has been in federal custody since July 2013 and will be transferred into custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation into Lifsey was handled by HSI with assistance from the Clay County Sheriff’s Office and the Cherokee County Sheriff’s Office.
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
United States Supreme Court Affirms Bank Robber's ConvictionRead the Press Release
CHARLOTTE, N.C. – Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, announced that the United States Supreme Court affirmed yesterday the conviction of Larry Whitfield, a Charlotte man involved in the 2008 attempted robbery of a credit union in Gastonia, N.C. On November 23, 2009, following a six-day trial, a federal jury convicted Whitfield of attempted robbery of the credit union, conspiracy to possess, carry and use firearms during the attempted credit union robbery, possessing, carrying and using firearms during the attempted credit union robbery and forcing a victim to accompany him while avoiding and attempting to avoid arrest for these offenses, resulting in the death of the victim.
According to court records, Whitfield forced a victim, who died of a heart attack, to accompany him to another room inside her home while he was fleeing from police after the failed bank robbery. In a unanimous opinion, the U.S. Supreme Court found that Whitfield’s actions violated 18 U.S.C. Section 2113(e) (“forced accompaniment statute”), which provides for a sentence ranging from ten years up to life in prison for anyone who “forces any person to accompany him” in the course of committing or fleeing a bank robbery.
According to court records and evidence presented at Whitfield’s trial:
On September 26, 2008, Whitfield and his co-defendant, Quanterrious McCoy, armed with a loaded .357 revolver and an assault rifle, attempted to rob the Fort Financial Credit Union in Gastonia. Court records show that the two robbers fled the scene, switched get-away cars, and were heading toward Charlotte when spotted by law enforcement officers. Officers were in pursuit when the defendants’ vehicle hit another car and became disabled on the shoulder of an I-85 exit ramp.
After crashing, the robbers grabbed their firearms and fled toward a residential neighborhood in the Belmont area, where they got rid of their guns and split up. Whitfield entered the home of a victim and threatened her with a knife as she was coming into the house. The victim fled, and so did Whitfield. Whitfield then entered the house of a second victim, a 79-year-old woman who was home alone. Whitfield forced the victim to move to another room inside her home while Whitfield called a friend for help escaping police. The victim suffered and died from a heart attack during the forced accompaniment.
On November 20, 2012, Judge Conrad re-sentenced Whitfield, after correcting an error in the original sentence, to 264 months in prison for the forced accompaniment conviction, to run concurrently with 240 months in prison for the attempted robbery and conspiracy to carry firearms conviction, and to run consecutively with 60 months of consecutive imprisonment for the carrying firearms conviction, for a total sentence of 27 years in prison.
The United States Supreme Court accepted the case for certiorari review last year to decide whether the forced accompaniment offense required proof of more than minimum movement on the part of the victim. According to the Supreme Court’s website, “the Court receives approximately 10,000 petitions for a writ of certiorari each year. . . . [and] grants and hears oral argument in about 75-80 cases.”
In the Supreme Court’s 9-0 opinion written by Justice Antonin Scalia, the Court noted that the forced accompaniment language of the statue has remained unchanged since Congress passed the statute after a series of bank robberies committed by John Dillenger in the 1930s. The Court rejected Whitfield’s argument that the statute should be read to require a forced movement over more substantial distances than in Whitfield’s case, holding that “a bank robber ‘forces [a] person to accompany him, (for purposes of § 2113(e)), when he forces that person to go somewhere with him, even if the movement occurs entirely within a single building or over a short distance. Defined in this manner, Whitfield forced [the victim] to ‘accompany him.’”
Whitfield’s conspirator, Quanterrious McCoy, pleaded guilty in May 2009 to attempted bank robbery and use and carry of a firearm in relation to a crime of violence. He was sentenced in February 2010 to 84 months in prison.
The FBI investigated the case. The federal prosecution was handled by Assistant U.S. Attorney Thomas A. O’Malley and former Assistant U.S. Attorney Adam C. Morris handled the federal prosecution. Assistant U.S. Attorneys Amy Ray and William Miller handled the appellate portion of the case.
Law Enforcement Agencies and Community Organizations Gather to Recognize Human Trafficking Prevention Month and to Raise Community AwarenessRead the Press Release
The Charlotte Metropolitan Human Trafficking Task Force Highlights Its Ongoing Efforts To Fight Human Trafficking And Provide Victim Assistance
CHARLOTTE, N.C. – Federal, state and local law enforcement agencies and representatives of community organizations gathered today in recognition of “National Slavery and Human Trafficking Prevention Month.” During an early morning press conference, Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, emphasized the importance of raising public awareness on this issue and highlighted the continued efforts of the Charlotte Metropolitan Human Trafficking Task Force (CMHTTF) in fighting this modern-day form of slavery.
The Charlotte Metropolitan Human Trafficking Task Force comprises law enforcement agencies – including ICE-Homeland Security Investigations, the FBI, and the Charlotte-Mecklenburg Police Department – federal and state prosecutors and community organizations. In today’s remarks, U.S. Attorney Tompkins noted that a coalition of law enforcement agencies working side by side with community groups, equally committed to fighting this epidemic, is a powerful combination of resources in the fight against human trafficking. Ms. Tompkins praised the work of the task force’s community partners for their commitment to helping rescued victims and providing them with much-needed assistance, such as food, shelter, medical attention and mental health services.
“Human Trafficking Prevention Month is a painful reminder that there are men, women and children within our communities trapped in a life of bonded labor, violence and forced prostitution for little or no pay. The Charlotte Metropolitan Human Trafficking Task Force is a strong coalition of law enforcement agencies and community organizations working together to fight this form of modern-day slavery, assist victims and prosecute the criminals who commit these acts,” said U.S. Attorney Tompkins.
“Homeland Security Investigations is committed to working with our partners both inside and outside of law enforcement to break the victims of human trafficking free from their bondage,” said Joe Gallion, Deputy Special Agent in Charge of ICE Homeland Security Investigations in Charlotte. “By working together across the enforcement and advocacy spectrum, we will ensure that the criminals are put behind bars and their victims have help in taking their first steps on the journey to healing.”
“Human trafficking victims are trapped in lives of misery—often beaten, starved, and forced to work as prostitutes or to take grueling jobs with little or no pay. The FBI devotes a significant amount of resources to hold those accountable who sacrifice another person’s civil rights and freedom for their own profit,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina.
“Moore & Van Allen launched its Human Trafficking Pro Bono Project in late 2013, to offer victims of human trafficking free legal representation in a variety of areas including victim-witness advocacy, criminal record expunction, and civil protective orders. The Project also focuses on facilitating community collaboration and awareness. The firm looks forward to the continued momentum of this important work,” said Sarah Byrne, Moore & Van Allen Conflicts Counsel and Charlotte Metropolitan Human Trafficking Task Force Member. “Gathering members of the bar and the bench, together with law enforcement and service providers like we have today is important because of the intersections between trafficking and domestic violence, trafficking and child abuse, trafficking and the juvenile justice system, and trafficking and runaway children. Only by recognizing these often hidden victims and connecting them to necessary services can we, as a community, offer justice and healing to survivors of this horrific crime,” Byrne added.
U.S. Attorney Tompkins thanked all the law enforcement agencies and community groups for their invaluable assistance and praised their work and ongoing collaboration. The press conference was followed by a half-day training workshop organized by the task force. The training was open to service providers, law enforcement, members of the judiciary and attorneys, and focused on the realities of human trafficking, victim identification and best practices support services.
If you believe you are the victim of a trafficking situation or may have information about a potential trafficking situation, call the National Human Trafficking Resource Center (NHTRC) at 1-888-373-7888. NHTRC is a national, toll-free hotline, with specialists available to answer calls from anywhere in the country, 24 hours a day, seven days a week, every day of the year related to potential trafficking victims, suspicious behaviors, and/or locations where trafficking is suspected to occur. You can also submit a tip to the NHTRC online.
You can also contact ICE-Homeland Security Investigations at 1-866-DHS-2-ICE (1-866-347-2423) or the Charlotte Office of the FBI at 704-672-6100.
Former Clinic Owner Sentenced to 2.5 Years in Prison for $3.4 Million Medicaid Fraud SchemeRead the Press Release
Defendant Spent Stolen Funds on Luxury Vehicles and Jewelry
CHARLOTTE, N.C. – Ronnie Lorenzo Robinson, 37, of Charlotte, was sentenced today to 30 months in prison for his role in a $3.4 million Medicaid fraud scheme involving sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also ordered Robinson to serve three years under court supervision and to pay $3,153,074 in restitution to Medicaid.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).
According to filed court documents and today’s sentencing hearing, from in 2007 to 2011, Robinson engaged in a scheme to defraud Medicaid of at least $3.4 million in fraudulent reimbursement claims submitted to Medicaid. Court records show that Robinson owned and operated Peaceful Alternative Resources, Inc. (PAR), a purported non-profit Medicaid-approved company providing mental health and mentoring services with offices in Charlotte, Mooresville and Greensboro, N.C. Robinson and PAR defrauded Medicaid by submitting false reimbursements to the government program for bogus mental health services. Contrary to the submitted claims, the claimed services were either provided by unlicensed, non-Medicaid approved individuals, or were never provided at all.
According to filed documents, Robinson submitted the fraudulent reimbursement claims using the Medicaid provider numbers of at least three licensed clinicians who had performed some work for PAR. Court records indicate that these clinicians never provided the claimed services and were not aware that Robinson was submitting the false claims using their provider numbers. Court documents also indicate that Robinson obtained Medicaid beneficiary information from other organizations and used that information to submit claims for the made-up services. According to court documents, that Robinson submitted claims to Medicaid totaling approximately $3.4 million and received approximately $3.1 million in payments. Robinson pleaded guilty in January 2014 to two counts of health care fraud.
Over the course of the investigation, law enforcement seized a 2004 Land Rover Range Rover HSE, a 2007 Chevrolet Suburban, a 2007 Mercedes S550 and a 1 5/8 carat oval ladies diamond ring, purchased with money fraudulently obtained from Medicaid. Agents also seized a classic 1972 Chevrolet Chevelle-Malibu, a 2006 Chrysler 300 and approximately $660,000 in funds in connection with the fraud.
Robinson will report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.
Two social workers, formerly employed by the Mecklenburg County Department of Social Services (DSS), who provided Robinson the Medicaid beneficiary information of DSS clients, have already pleaded guilty to health care fraud charges. Ieshia Hicks Watkins pleaded guilty in October 2014 to one count of health care fraud conspiracy and one count of receiving illegal kickbacks. Ryce Edward Hatchett pleaded guilty on Tuesday, January 6, 2015, to one count of receiving illegal kickbacks. Both defendants await sentencing.
The investigation into Robinson was handled by the FBI and MID. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
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.
Statesville Man Sentenced to 10-Year Prison Term on Child Pornography ChargesRead the Press Release
STATESVILLE, N.C. – On Monday, January 5, 2014, U.S. District Judge Richard L. Voorhees sentenced Forest Skidmore, Jr., 48, of Statesville, N.C. to 120 months in prison on child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Skidmore was ordered to register as a sex offender and to serve the rest of his life under court supervision after his release from prison.
U.S. Attorney Tompkins 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 Thomas A. Anderson of the Statesville Police Department.
Skidmore pleaded guilty in July 2014 to one count of possession of child pornography. According to filed documents and statements made in court, from on or about March 2012 to on or about May 2012, law enforcement became aware of Skidmore’s collection of child pornography, which he was downloading from and sharing over the Internet. Court records indicate that law enforcement executed a search warrant at Skidmore’s home and seized his computer. A forensic examination of Skidmore’s computer revealed that he possessed 166 images and 61 videos of children being sexually abused, including images of child pornography victims under the age of five. Court records show that the child pornography in Skidmore’s possession included at least 23 different children already identified by law enforcement as victims of child pornography.
Skidmore has been in custody since entering his guilty plea and will 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 FBI and the Statesville Police Department. Assistant U.S. Attorneys Cortney S. Randall and David A. Thorneloe prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
U.S. Attorney's Office Collects $22,164,212.92 in Fiscal Year 2014Read the Press Release
CHARLOTTE, N.C. - U.S. Attorney Anne M. Tompkins announced today that the Western District of North Carolina (WDNC) collected $22,164,212.92 in criminal and civil actions in Fiscal Year (FY) 2014. Of this amount, WDNC collected $9,677,978.82 in criminal actions and $12,486,234.10 in civil actions.*
Attorney General Eric Holder announced last month that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
“The men and women of the U.S. Attorney’s Office for the Western District of North Carolina are dedicated public servants tasked with an important mission: to enforce the laws of our nation and to ensure that criminals do not profit from their illegal activities. I am proud of their hard work and their commitment to recovering taxpayer dollars, securing restitution for victims of federal crimes and protecting the public from fraud, waste and abuse,” said U.S. Attorney Tompkins.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing criminal and civil actions and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. Criminal actions comprise criminal fines, special assessments and restitution. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. For example, in FY 2014, in US v. Martin, WDNC collected assets and cash from Gary D. Martin totaling $4,656,140.31, to be applied toward restitution for the victims of the scheme. WDNC prosecuted Martin for his involvement in the $32.5 million Queen Shoals Ponzi scheme. Martin was sentenced in March 2013 to 10 years in prison and was ordered to pay $31,707,038 as restitution. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
In FY 2014, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education. In WDNC, in US vs. Mark Le, the office collected $2.1 million of its $6.2 million civil settlement with Dr. Le, on civil fraud allegations arising from the submission of fraudulent reimbursement claims to Medicare and Medicaid for medically unnecessary diagnostic tests and procedures.
Additionally, the Western District of North Carolina worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $850,830,833.59 in cases pursued jointly with these offices. Of this amount, $850,786,750 was collected in civil actions and $44,083.59 was collected in criminal actions. In FY 2014, in US v. Bank of America Corp., et al. (Mortgage Services Global Settlement), WDNC shared in on $850 million collected from Bank of America as part of the multi-district settlement with the nation’s five largest mortgage servicers – Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, and Ally. As part of the 2012 settlement, the servicers agreed to pay a $25 billion to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures.
In addition to the criminal and civil actions, the U.S. Attorney’s office in Western District of North Carolina, working with partner agencies and divisions, collected $4,415,201 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
* In measuring collections recovered in FY 2014, the figures necessarily include some cases that were resolved in previous years but the proceeds were collected in FY 2014. Similarly, the FY 2014 figures do not include some cases resolved in the 2014 fiscal year, for which collections will begin in FY 2015.
Last of 18 Members of Methamphetamine Trafficking Ring Sentenced on Drug ChargesRead the Press Release
ASHEVILLE, N.C. – The last of 18 members of a methamphetamine trafficking organization was sentenced on Wednesday, December 17, 2014, to 46 months on drug charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Angela Leigh Wike, of Bryson City was also ordered to serve three years under court supervision.
U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division.
In May of 2013, 18 members of the drug ring were arrested as the result of a joint law enforcement investigation conducted by DEA, ATF, North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department.
According to filed court documents and court proceedings, from May 2012 to April 2013, the drug ring operated primarily in Jackson, Haywood, Macon, Swain and Buncombe counties in Western North Carolina. Wake was the last defendant to be sentenced in this case. Those already sentenced are:
• Cipriano Ramos Altamirano – 135 months in prison and five years of supervised release.
• Claude Gregory Coggins – 70 months in prison and three years of supervised release.
• Anne Harvey Cresswell – 60 months in prison and three years of supervised release.
• Joseph Daniel Denmark – 60 months in prison and four years of supervised release.
• Patricia Leigh Dreml – 57 months in prison and two years of supervised release.
• Daniel Furman Gibson - 151 months in prison and four years of supervised release.
• Gerardo Beltran Llanas – 97 months in prison and three years of supervised release.
• Forest Shane Lynn – 30 months in prison and three years of supervised release. Joshua Bryan Parker – 60 months in prison and four years of supervised release.
• Eddie Dwayne Potts – 27 months in prison and three years of supervised release.
• Gerardo Rodriquez-Aragon – 46 months in prison and two years of supervised release.
• Javier Serna-Trejo – 37 months in prison and two years of supervised release.
• Chad Keith Shuler – 100 months in prison and four years of supervised release.
• Paul Michael Swofford – 30 months in prison and three years of supervised release.
• Ronald Edward Swofford – 46 months in prison and three years of supervised release.
• James Homer Taylor – 30 months in prison and three years of supervised release.
• Heather Marie West – 54 months in prison and three years of supervised release.Wike 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 DEA and ATF, assisted by the North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department. The prosecution is being handled for the government by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.
Mecklenburg Co. Social Worker Charged with Receiving Illegal Kickbacks in Connection with Medicaid Fraud SchemeRead the Press Release
The Defendant Provided Medicaid Clients’ Identities to a Conspirator in Exchange for Cash
CHARLOTTE, N.C. – Ryce Edward Hatchett, Jr., 43, of Charlotte, and a Senior Social Worker with the Mecklenburg County Department of Social Services (DSS), was charged today by a criminal bill of information with one count of receiving illegal kickbacks, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A plea agreement has also been filed and Hatchett is expected to appear in federal court in the coming weeks to formally accept the guilty plea.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte.
According to filed court documents, from November 2009 to October 2010, and while working at DSS, Hatchett participated in an illegal kickback scheme with Ronnie Lorenzo Robinson, owner and operator of “Peaceful Alternative Resources, Inc.” (PAR), a non-profit mental health and mentoring services provider with offices in Charlotte and surrounding areas. Court records indicate that Hatchett solicited and received illegal kickbacks from Robinson and PAR, in exchange for the referrals of individuals enrolled with the Medicaid program, some of whom were DSS clients. Court records show that Robinson used the beneficiaries’ information to file fraudulent reimbursement claims with Medicaid for services that were either not approved by Medicaid or were never provided. According to court records, Hatchett received at least $12,000 in illegal kickbacks from Robinson, in exchange for providing the information of the Medicaid recipients.
Hatchett will be ordered by the U.S. District Court to appear on a summons for his initial appearance, which will be scheduled by the Court. At sentencing, he faces a maximum term of five years in prison and a $250,000 fine for receiving the illegal kickbacks. In his plea agreement, Hatchett has agreed to pay full restitution to Medicaid for any losses resulting from his criminal conduct. The final restitution amount will be determined by the court at Hatchett’s sentencing hearing, which has not been scheduled yet.
Robinson pleaded guilty in January 2014 to two counts of health care fraud in connection with a separate case and is currently awaiting sentencing.
The investigation into Hatchett was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
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
Yancey Co. Man Sentenced to More Than 21 Years in Prison Production of Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced Brian Wayne Moore to 262 months in prison on federal production of child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Moore was also ordered to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison. Judge Reidinger also ordered Moore to have no contact with victims of child pornography.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Gary Banks of the Yancey County Sheriff’s Office.
In August 2013, Moore, 28, of Burnsville, N.C., pleaded guilty to one count of production of child pornography and one count of possessing child pornography. According to filed documents and statements made in court, in May 2012, law enforcement became aware of Moore’s production of child pornography after it was reported by a family member. Law enforcement later searched a cellular phone and computer equipment pursuant to a search warrant. Court records indicate that after producing the child pornography, Moore distributed it to another person he met on the Internet who he believed to be a sixteen year old.
Moore has been in federal custody since February 2013. He 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 jointly by HSI and the Yancey County Sheriff’s Office.
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.
South Carolina Man Sentenced to More Than Four Years in Prison on Securities Fraud Conspiracy and Money Laundering ChargesRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Terry Wayne Gandy, 51, of Myrtle Beach, S.C. to serve 57 months in prison followed by three years of supervised release for stealing more than $2 million from investors, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Gandy to pay $3,076,411.34 as restitution to his victim investors.
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) and and B.W. Colier, Acting Director of the North Carolina State Bureau of Investigation (SBI) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s sentencing hearing, from 2000 to 2009 Gandy and his conspirators engaged in an investment fraud scheme that defrauded his victim investors of more than $2 million. According to court documents, Gandy was the owner and operator of TakeSix Trading Fund (TakeSix), which Gandy falsely held out to be a bona fide investment firm, when in fact TakeSix was never registered in North Carolina or elsewhere. Gandy used TakeSix to induce his victims to invest through the company, claiming, among other things, that their money would be invested in various project such as real estate and oil and gas wells. Contrary to Gandy’s claims, very little, if any, of the victim’s money was actually invested.
According to court documents and court proceedings, Gandy mainly targeted his former co-workers at Philipp Morris and solicited funds from them, promising rates of return anywhere between 20% to 30% annually. Instead of investing the victims’ money as promised, Gandy used it to fund his own personal lifestyle, including payment for luxury hotel accommodations on multiple trips to Las Vegas, cash withdrawals at Las Vegas casinos, purchase of luxury cars, and to pay purported “profits” to other investors who asked for their money, commonly known as “Ponzi” payments. Court records indicate that to further support his fraudulent scheme, Gandy provided his victim-investors false account statements depicting bogus and over-inflated account balances. In all, Gandy and his conspirators defrauded more than thirty victims of over $2 million. Co-conspirator John Reid Perkins earlier pleaded guilty to securities fraud conspiracy for his role in the scheme on September 6, 2013. Perkins is currently awaiting a sentencing date.
In handing down the 57 month sentence, Judge Cogburn emphasized that the “sentence is necessary to deter others who may be thinking of engaging in such unlawful conduct.”
Following the sentencing hearing, Gandy was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by FBI, IRS and SBI. Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Four Men Indicted on Federal Gun ChargesRead the Press Release
All Defendants Have Previous Convictions And Were Prohibited From Possessing Firearms
CHARLOTTE, N.C. – Four Charlotte men with previous criminal convictions have been indicted on federal gun charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A federal grand jury returned the criminal indictments on Tuesday, December 16, 2014, against Carlton Calvin Wilson, 28, Dominic Xavier McDonald, 28, Brendan Cornelius Penn, 25, and Tory Lorenzo Vaszquez, 25, all of Charlotte, charging them with multiple counts of possession of a firearm by a convicted felon.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department join U.S. Attorney Tompkins in making today’s announcement.
According to the four criminal indictments and other filed court documents, the defendants unlawfully possessed firearms despite having previous criminal convictions, which prohibit them from possessing weapons. Wilson’s six-count indictment alleges that, from September through November 2014, Wilson illegally possessed 11 firearms, including four pistols, five revolvers and two shotguns. Penn’s indictment alleges that in October 2014, Penn illegally possessed three firearms, and has been charged with three counts of possession of firearm by a convicted felon in connection with that conduct. A third indictment charges McDonald with four counts of possession of a firearm by a convicted felon. According to allegations contained in the indictment, in October 2014, McDonald possessed six firearms, including two pistols, one revolver and two rifles. A fourth indictment charges Vasquez with one count of possession of a firearm by a convicted felon for possessing two pistols in October 2014.
All four defendants are currently in federal custody. They face a maximum of 10 years in prison and a $250,000 fine for each count.
The details contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation was handled by ATF and CMPD Violent Task Force. The case was prosecuted by Assistant United States Attorney Jennifer Dillon of the U.S. Attorney’s Office in Charlotte.
Former Charlotte Resident Indicted on Securities and Wire Fraud ChargesRead the Press Release
CHARLOTTE, N.C. – On Tuesday, December 16, 2014, a grand jury sitting in Charlotte returned a federal indictment against Michael Francis Egan, III, 32, formerly of Charlotte, charging him with securities fraud and wire fraud in connection with a fraudulent investment scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to allegations contained in the criminal indictment, from August 2007 to February 2012, Egan engaged in a fraudulent investment scheme by inducing his victims to enter into various fictitious business and investment contracts. The indictment alleges that Egan promised that he would invest the victims’ money in various projects, such as Halloween themed attractions, holiday themed attractions, land development and investment deals, and television shows, among others, when, in reality, Egan did not invest victims’ money as promised. According to allegations contained in the indictment, Egan further induced his victims to invest with him by lying about his financial background and personal assets. For example, the indictment alleges that Egan forged brokerage account statements to reflect fraudulent balances when, in reality, those accounts had no money or a fraction of the purported amount.
According to allegations contained in the indictment, Egan also lied to his investors about his professional connections and his investments. For example, as alleged in the indictment, Egan falsely told his victims he was a close associate and friend of the CEO of a major bank, a close associate or employee of a well-known investment mogul and that he owned a percentage of well-known hotels and casinos in Las Vegas. According to the indictment, instead of investing the victims’ money as promised, Egan used it to fund his lifestyle and to pay for personal expenses such as rent, his car lease, groceries, restaurants medical bills and pet care, among others.
Egan will be ordered by the U.S. District Court to appear on a summons for his initial appearance, which will be scheduled by the Court. If convicted, Egan faces a maximum of 20 years in prison and a $5 million fine for the securities fraud count and a 20 year prison term and a $250,000 fine for the wire fraud count.
The details contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI investigated the case. The prosecution is being handled by Assistant U.S. Attorney Kevin Zolot of the Western District of North Carolina.
Cocaine Trafficker Sentenced to More Than 33 Years in PrisonRead the Press Release
Conspiracy Involved Over 700 Kilograms of Cocaine Worth Over $21 Million
CHARLOTTE, NC B Pedro Oscar Dieguez, a/k/a “The Cuban,” was sentenced today by Chief U.S. District Judge Frank D. Whitney to serve 400 months in prison and five years of supervised release on cocaine trafficking and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Whitney also ordered the defendant to pay a $20,000 fine and the forfeiture of Dieguez’s Mercedes vehicle, three firearms and $1,890 in cash.
U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Sheriff Eddie Cathey of the Union County Sheriff’s Office (UCSO) and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD).
According to filed court documents, trial evidence presented, and today’s sentencing hearing:
In January 2014 following a four-day trial, Dieguez, 49, of Indian Trail, N.C. was convicted by a federal jury of conspiracy to distribute and to possess with intent to distribute cocaine and money laundering conspiracy. From about 2004 through 2013, Dieguez and his co-conspirators trafficked more than 700 kilograms of cocaine with an estimated street value of more than $21,000,000. Dieguez obtained his drug supplies from Mexican cartels and other sources of supply with connections to cartels and transported it to the Charlotte area using trucks. Dieguez and his conspirators ultimately redistributed the cocaine as crack cocaine. Dieguez engaged in a conspiracy to launder the drug proceeds through bank accounts and by purchasing expensive exotic horses. Dieguez kept the horses on his 16-acre ranch located in Indian Trail, which he also used to offload the drug shipments. While executing a search warrant at Dieguez’s ranch, law enforcement seized multiple firearms, including a .45 caliber High-Point handgun and a .22 Ruger handgun.
Dieguez, a Cuban national, has been in federal custody since April 24, 2013, after it was discovered that he had been planning to flee to Cuba. 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.
Two of Dieguez’s conspirators, Maximiliano Aguilar-Rodriguez and Juan Diego Aguilar-Preciado were previously sentenced to 70 months and 46 months in prison, respectively, and to three years of supervised release.
The case was investigated by the DEA in Charlotte, UCSO, and CMPD. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.
Cherokee, N.C. Man Sentenced TO More Than Nine Years in Prison in Connection with Oxycodone Distribution RingRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger today sentenced Jackie Lee Rattler, 55, of Cherokee, N.C. 108 months in prison on drug trafficking conspiracy charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Rattler was also ordered to serve three years under court supervision upon completion of his prison term.
U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the North Carolina; Charles Addington, Deputy Associate Director of the Bureau of Indian Affairs, Division of Drug Enforcement; Chief Ben Reed of the Cherokee Indian Police Department; Sheriff Curtis Cochran of the Swain County Sheriff’s Office; Sheriff Mickey Anderson of the Graham County Sheriff’s Office; and Sheriff Jimmy Ashe of the Jackson County Sheriff’s Office.
According to filed court documents and today’s proceedings, Rattler and his co-defendants were involved in the trafficking of narcotics, including Oxycodone, cocaine, marijuana and Alprazolam in Swain and Jackson Counties. At today’s sentencing hearing, Rattler was found to be accountable for trafficking 477.20 grams Oxycodone, 3.05 kilograms of marijuana and 56.2 grams of cocaine. During the investigation, law enforcement also seized 42 firearms, including two Ruger M77 II rifles and a Smith & Wesson 66 Revolver. In September 2013, Rattler pleaded guilty to six counts of possession with intent to distribute a controlled substance and one count of being a controlled substance user in possession of firearms.
Rattler’s co-defendants have already been sentenced: Mark Allen Winstead was sentenced to 38 months; Timothy Leroy Rattler was sentenced to 18 months; Jacob Hunter Rattler was sentenced to 15 months; Taryn Krista Elizabeth Toineeta Rattler was sentenced to 70 months in prison and Evan Thomas Norris, Jr. was sentenced to 19 months in prison.
Jackie Rattler has been in federal custody since June 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
U.S. Attorney Tompkins thanked all the law enforcement agencies involved in these investigations for their continued cooperation and assistance. The prosecution was handled by Assistant U.S. Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville.
Buncombe Co. Man Pleads Guilty to Armed Robbery and Gun ChargesRead the Press Release
ASHEVILLE, N.C. – Anthony Lamont Hill, 31, of Fletcher, NC, appeared before U.S. Magistrate Judge Dennis L. Howell on Tuesday, December 16, 2014 and pleaded guilty to armed robbery and gun charges in connection with a 2013 armed robbery of a Dollar General store in Woodfin, N.C., announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Brett Holloman of the Woodfin Police Department.
At today’s plea hearing, Hill admitted to committing the armed robbery of the Dollar General Store located at 458 Weaverville Road on August 2, 2013. Court records show that Hill by actual and threatened force took money from the store while it was occupied by only two employees. Hill pleaded guilty to one count of Hobbs Act robbery and one count of possessing and brandishing a firearm during and in relation to a crime of violence.
Hill remains in federal custody. He faces a maximum prison sentence of 20 years and a $250,000 fine for the armed robbery charge and a minimum of seven years and a maximum of life imprisonment for the gun charge. A sentencing date for Hill has not been set yet.
The investigation was handled by ATF and the Woodfin Police Department. The prosecution for the government was handled by Assistant U.S. Attorney John D. Pritchard of the U.S. Attorney’s Office in Asheville.
Former Online Mortgage Broker Employee and Mortgage Broker Conspirator Sentenced to Prison for Computer TheftRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced to prison a former online mortgage broker employee and his California-based mortgage broker conspirator, for their roles involving computer theft from a nation-wide online mortgage broker (the “victim company”), announced the U.S. Attorney’s Office for the Western District of North Carolina and John A. Strong, Special Agent in Charge for the Federal Bureau of Investigation, Charlotte Division.
Jarrod Beddingfield, 38, of Waxhaw, N.C., was sentenced to 15 months in prison, followed by two years of supervised release. Steve Rosene, 43, of Newport Beach, Calif. was sentenced to 27 months in prison and three years of supervised release. Judge Conrad also entered forfeiture money judgments of $1.9 million for Rosene and $60,000 for Beddingfield. Both defendants were ordered to pay restitution to the company, the amount of which will be determined by the court at a later date.
According to filed court documents, court proceedings and today’s sentencing hearing: Beddingfield, a former employee of the victim company, sold company-employee log-in credentials to California-based Rosene. Rosene then used the stolen log-in credentials to access the victim company’s database and downloaded approximately 41,435 mortgage leads for use by two mortgage companies associated with Rosene. Rosene also sold the stolen log-in credentials to two other California mortgage brokers, Brian Rich and Marcus Avritt, co-owners of Chapman Capital, Inc., a mortgage broker firm that also did business as “Home Loan Consultants.” Rich and Avritt used their unauthorized access to the victim company’s database to steal approximately 14,137 mortgage leads. The mortgage leads were stolen in 2007 prior to the victim company’s change of all employee log-in credentials in early January 2008.
The stolen mortgage leads consisted of data on consumers who had used the victim company’s online mortgage lending exchange network to apply for new and refinanced mortgage loans. Mortgage loan consumers used the internet to access the company’s network and to complete online mortgage application forms containing contact, non-public financial data and other information necessary to complete the application process. Court records indicate that the information submitted through this online process comprised the company’s mortgage referral information, known individually as “mortgage leads.” The mortgage referral information, which contained thousands of such individual mortgage leads, was valuable information because it consisted of mortgage loan consumers who were ready, willing and financially-able to close on mortgage loans, refinancing loans and home equity loans. By obtaining this information without paying the requisite fees and dues, Rosene avoided paying the victim company an estimated $1.9 million for the stolen mortgage leads. Rich and Avritt avoided paying the victim company an estimated $745,152 for the stolen mortgage leads.
Beddingfield and Rosene pleaded guilty in July 2013 to one count of conspiracy to illegally access and use the victim company’s customer database. Rosene also pleaded guilty to an additional count of illegally accessing and using the victim company’s database. The other two co-defendants, Avritt and Rich, were sentenced to 15 months and 24 months in prison respectively for conspiracy to illegally access and use the victim company’s customer database.
Beddingfield and Rosene have been released on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI. This prosecution is handled by Assistant United States Attorneys Tom O’Malley, Ben Bain-Creed and Tiffany Mallory of the U.S. Attorney’s Office in Charlotte.
Charlotte Woman Pleads Guilty to Conspiracy to Defraud Medicaid of More Than $4.3 MillionRead the Press Release
Today’s Plea is One of Four for Similar Schemes
CHARLOTTE, N.C. – A Charlotte woman appeared in federal court today and admitted to conspiring to defraud Medicaid of at least $4.3 million, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Aliya Boss, 35, of Charlotte, pleaded guilty before U.S. Magistrate Judge David C. Keesler to one count of health care fraud conspiracy.
In a separate case, Zaria Davis Humphries pleaded guilty on Tuesday, November 24, 2014, to one count of health care fraud conspiracy for attempting to steal over $850,000 from Medicaid. In a still further separate case, charging documents and plea agreements have been filed against two women also facing health care fraud conspiracy charges. Sakeenah David Davis and Kino Legette Williams are expected to enter formal guilty pleas on Thursday, December 4, 2014, for conspiring to defraud Medicaid of at least $1.6 million.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID), and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
Aliya Boss,,
According to filed documents and today’s plea hearing, from 2012 to June 2013, Boss participated in a scheme to defraud Medicaid of at least $4.3 million by submitting false reimbursement claims for mental and behavioral health services that she did not provide. Filed court documents indicate that Boss, a licensed social worker, is approved by Medicaid to bill for and receive reimbursement for therapy services provided to Medicaid recipients. According to court documents, 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, court documents indicate that, at the assistance of one conspirator, Boss submitted false claims to Medicaid for fraudulent counseling services through her own company, “Boss Counseling and Consulting, LLC.” According to court records, Boss billed Medicaid for fraudulent therapy services using the Medicaid numbers of beneficiaries collected by another member of the conspiracy working as a “patient recruiter.” Court records indicate that the patient recruiter collected the Medicaid numbers from the recipients in exchange for cash or indirectly by paying for food and taxi rides, among other things. According to court records, the conspirators then used the beneficiaries’ numbers to file the fraudulent reimbursements, claiming, in some instances, that Boss provided therapy services to more than 200 Medicaid recipients in a single day and billing for more than 64 hours of therapy over the course of a 24-hour period. In all, court records show that Boss and her conspirators caused Medicaid pay out over $1,135,302.27 as a result of the false claims, of which $306,965.56 was paid out directly to Boss.
Boss was released on bond following her guilty plea. The maximum prison term for the health care fraud conspiracy charge is 10 years and a $250,000 fine. Boss has also agreed to pay restitution, the amount of which will be determined by the Court at sentencing, which has not been set yet.
Zaria Davis Humphries
In a separate case, on Tuesday, November 24, 2014, Zaria Davis Humphries pleaded guilty to one count of health care fraud conspiracy. Humphries, 41, of Charlotte, admitted before Judge Keesler that she participated in a similar health care fraud scheme that attempted to defraud Medicaid of over $850,000 by submitting false claims for mental and behavioral health services that were never provided. Of the claims submitted, court records indicate that Medicaid paid out a total of $222,037 directly to Humphries. Court records in this case indicate that Humphries is a licensed social worker and the owner and operator of “Life Impact Solutions, LLC” (Life Impact), a company specializing in behavioral and counseling services. Court records show that from January to June 2013, Humphries and her conspirators submitted fraudulent claims to Medicaid for non-existent services, using Humphries’ Medicaid provider number. According to court records, at the assistance of one conspirator, Humphries filed the fraudulent claims using the Medicaid number of beneficiaries collected by a patient recruiter. As part of her plea agreement, Humphries admitted that, in some instances, she claimed she personally provided more than 39 hours of therapy in a 24-hour period and that she provided therapy to more than 100 Medicaid recipients in one day. Humphries was also released on bond and is awaiting sentencing. She faces a maximum prison term of 10 years and a $250,000 fine.
Sakeenah Davis & Kino Williams
Two more women face health care fraud conspiracy charges in connection with a scheme that attempted to defraud Medicaid of at least $1.6 million. Filed court documents indicate that that Sakeenah David Davis, 37, and Kino Legette Williams, 36, both of Charlotte, each have agreed to plead guilty to one count of heath care fraud conspiracy for filing fraudulent reimbursement claims with Medicaid for outpatient behavioral services that were never provided. Court documents show that the two women owned and operated “New Choices Youth and Family Services,” (New Choices), a Medicaid-approved company that purportedly provided outpatient mental and behavioral therapy services. According to court records, from October 2012 to July 2013, Davis and Williams 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 never provided by New Choices.
Court records show that all the claims submitted to Medicaid from New Choices listed “S.B.” as the attending clinician, even though S.B. did not provide the claimed services. In some instances, according to court records, 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. Court records also show that the conspirators used the Medicaid numbers of beneficiaries collected by a patient recruiter and fabricated patient notes to cover up the fraud. According to court records, the defendants were aware of the scheme but did not inquire about or attempt to stop the fraud. Instead, according to court records, they used some of the stolen funds to pay for personal expenses, including jewelry and to pay for Davis’s wedding. Davis and Williams admitted that fraudulent reimbursement claims totaling $1,696,225 were submitted to Medicaid over the course of the scheme, of which $506,124 was paid out to Williams and Davis.
The defendants are expected to appear in court on Thursday, December 4, 2014, before U.S. Magistrate Judge David S. Cayer to formally accept their guilty pleas. The health care fraud conspiracy charge carries a maximum prison term of 10 years and a $250,000 fine.
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].
Man Sentenced to 46 Months for Conspiracy to Traffic Counterfeit GoodsRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Ali Fayez Nasrallah, 46, of East Elmhurst, NY, to 46 months in prison for conspiracy to traffic in counterfeit goods and for making false statements on an income tax return, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Nasrallah to pay $623,826 as restitution.
Joining U.S. Attorney Tompkins in making today’s announcement are Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
According to filed court documents and today’s sentencing hearing, from 2007 to 2010, Nasrallah conspired with others in the Western District of North Carolina and throughout the country to traffic in counterfeit clothing and shoes bearing counterfeit trademarks of numerous manufacturers, including Nike, Gucci, Coach, Timberland, Ralph Lauren Polo, among others. According to court documents and court proceedings, Nasrallah had deposited approximately $8.2 million in various bank account connected with his trafficking in counterfeit goods. On December 2, 2010, agents seized 645 boxes of counterfeit goods worth over $1.5 million from two warehouses operated by Nasrallah in Astoria, NY. Court documents indicate that Nasrallah also falsely stated his business income and taxes owed on his 2008 income tax return.
Nasrallah has been released on bond. Upon designation of a federal facility he will be ordered to report to the custody of the Federal Bureau of Prisons. All federal sentences are served without the possibility of parole.
The investigation is being handled by HSI and IRS. The prosecution for the government was handled by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed of the U.S. Attorney’s Office in Charlotte.
Gastonia Man Sentenced to 7-Year Prison Term on Child Pornography ChargesRead the Press Release
CHARLOTTE, N.C. – On Thursday, November 13, 2014, U.S. District Judge Max O. Cogburn, Jr. sentenced Joseph Lee Schaffer, 44, of Gastonia, N.C. to 84 months in prison on child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Moore was ordered to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison.
U.S. Attorney Tompkins 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 Robert C. Helton of the Gastonia Police Department.
Schaffer pleaded guilty in April 2013 to one count of transportation of child pornography and aiding and abetting the transportation of child pornography and one count of possession of child pornography. According to filed documents and statements made in court, in December 2011, law enforcement became aware of Schaffer’s extensive collection of child pornography which he was downloading from and sharing over the Internet. Court records indicate that law enforcement executed a search warrant at Schaffer’s home and seized his computers. A forensic examination of Schaffer’s computers revealed that he possessed over 6,000 images and hundreds of videos of children being sexually abused, including 1,540 images of child pornography victims under the age of five. Court records show that the child pornography in Schaffer’s possession included at least 87 different children already identified by law enforcement as victims of child pornography.
Schaffer has been ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and the Gastonia Police Department. Assistant U.S. Attorneys Cortney S. Randall and David A. Thorneloe prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
Two Charlotte Men Plead Guilty to Selling Misbranded DrugsRead the Press Release
The Defendants Falsely Claimed on Company Websites the Drugs Were Sold for “Research Purposes” Only
CHARLOTTE, N.C. – Joseph Marsala, 35, and Brent Bumgarner, 33, both of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to selling misbranded drugs, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A criminal bill of information charging the two men with one count of introducing and distributing misbranded drugs into interstate commerce and aiding and abetting was filed on October 28, 2014.
David W. Bourne, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), Miami Field Office and Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s plea hearing, from 2010 to January 2014, the defendants owned and operated two companies, first “Osta-Gain” and later “Spectrum Peptides,” through which they illegally distributed drugs, including “peptides,” and compounds containing the active ingredients of FDA-approved prescription drugs to customers, primarily bodybuilders, for human consumption. Court records indicate that there is an illegal market for peptides, prescription drugs, and compounds containing the active ingredients of FDA-approved prescription drugs among bodybuilders and weight lifters, since it is believed that these substances enhance muscle development. The FDA regulates these products as drugs when they are marketed for human use. According to court records, to avoid detection by the FDA, the defendants made numerous false representations on their companies’ websites, www.osta-gain.com and www.spectrumpeptide.com, claiming that, “ALL products and services offered are for RESEARCH purposes ONLY.” In reality, court records indicate, the products the defendants sold were intended for human consumption, by individuals seeking to build body mass and to counter the side effects of such muscle building drugs. In addition to the illegal drugs, Marsala and Bumgarner also sold the necessary “laboratory supplies” (e.g., pipettes) for bodybuilders to administer the products and distributed dosing information to consumers, court records show.
In connection with today’s guilty plea, the court was also advised that even though the defendants claimed the products sold on their websites were for research purposes only, Marsala and Bumgarner held promotional events such as Black Friday sales, Christmas sales, and free T-shirt promotions. The defendants also specifically targeted the bodybuilding community by advertising on websites catering to bodybuilders. According to filed court documents, in April 2013 Osta-Gain was named in a national newspaper article about the illegal marketing of research chemicals to bodybuilders. As a result of that article, the defendants shut down the Osta-Gain website, created Spectrum Peptides and began selling identical products through the new company’s website. During the relevant time period, Marsala and Bumgarner advertised and sold through the two websites approximately $800,000 of misbranded drugs to customers across the United States.
During the course of the investigation, law enforcement agents seized approximately $34,012.43 in funds. Marsala and Bumgarner have agreed to forfeit these assets as part of their plea agreement and to pay full restitution, the amount of which will be determined by the Court at sentencing.
The defendants have been released on bond. The penalty for introducing misbranded drugs into interstate commerce and aiding and abetting carries a maximum prison term of three years and a $10,000. A sentencing date has not been set yet.
The investigation was conducted by FDA-OCI and USPIS. The prosecution is handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
The FDA has made available a consumer-friendly form for reporting to the agency adverse events and other serious safety problems with FDA-regulated products, including products catering to bodybuilders for the increase of muscle mass. That form is available at http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm354560.htm.
Rutherford Co. Man Pleads Guilty to Securities FraudRead the Press Release
Defendant Stole more than $2 Million from over 30 Victim Investors
CHARLOTTE, N.C. – Chuckie Beaver, 51, of Ellenboro, N.C. appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to one count of securities fraud for defrauding more than 30 investors of over $2 million dollars, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division joins U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s plea hearing, from June 2012 to April 2014, Beaver induced over 30 victims to invest in his fraudulent scheme, falsely claiming that their money would be invested in “Best Services, Inc.,” a company owned by Beaver and specializing in the repair of industrial electronic equipment. Court records indicate that Beaver solicited friends, neighbors, and fellow church members to invest with his company, by 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, court records show that Beaver created and showed his investors bogus documents, including false repair orders indicating significant work activity, fake customer checks, and fake customer emails, giving a false impression he had strong relationships with major corporations.
According court records, Beaver provided his investor victims with promissory note investment contracts, stating that the investors would receive the principal invested plus interest - as high as 100% - within a specified period of time, typically 30 days. Court records indicate that, at the time of investment, Beaver would provide his investor victims a post-dated check for the full amount of the promised investment plus interest. As filed documents show, in most instances, when the investors deposited Beaver’s checks they would be returned for insufficient funds. According to court records, when investor victims questioned Beaver about the returned checks, Beaver made up a number of excuses, and in some instances he was able to lull investors into investing even more money with the promise of even greater returns. Court records indicate that contrary to his claims, Beaver used the investors’ money to pay for personal expenses and to make payments to previous investors, commonly referred to as Ponzi-payments. In total, over the course of the scheme, Beaver defrauded more than 30 individuals from Mecklenburg, Gaston and Cleveland counties of more than $2 million.
Beaver was released on bond following his plea hearing. He faces a maximum prison term of 20 years and a $250,000 fine, or both, and 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 Secret Service. Assistant United States Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte is handling the prosecution.
Florida Man Pleads Guilty to Securities Fraud ConspiracyRead the Press Release
Defendant Falsely Told Investor Victim He Was a Former FBI Agent
CHARLOTTE, N.C. – Mark Burgin, 44, of Tampa, Fla. appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to securities fraud conspiracy for soliciting investor victims to invest in a fraudulent bond scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Burgin’s conspirator, Charles Abrams, 52, of Huntersville, N.C., also faces wire fraud and securities fraud conspiracy, securities fraud and wire fraud charges in connection with the scheme.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s plea hearing, Burgin and Abrams engaged in a securities fraud scheme, by promoting a fraudulent investment known as the Mexican “Pink Lady” Bonds (bonds), which the two men claimed were gold-backed bearer bonds issued in 1899 by the “United States of Mexico” and had a value of 5% interest compounded daily. According to court records, the two men induced victims to invest in their scheme by falsely claiming that they had purchased the rare bond during a trip to Los Angeles in 2010. Court records show that, in February 2011, Burgin and Abrams met with one victim investor, identified as “Individual 1” and falsely represented that they were putting the bond on a trading platform named “Euroclear.” At that meeting, the conspirators promised Individual 1 a return of over $1.1 million based on the victim’s $225,000 past investment.
Court records indicate that in April 2011, Burgin and Abrams solicited another victim investor, “Individual 2,” to invest in the bond. During their meeting with Individual 2, court records indicate Burgin falsely held himself out to be a former police officer with Gastonia and Charlotte-Mecklenburg Police Departments and a former Special Agent with the FBI. According to court records, Burgin and Abrams falsely represented to Individual 2 that the bond was under contract with a company named “Americana” for $2 billion, and that they were to receive $1.9 billion from its sale. Court records indicate over the next few days, the conspirators induced Individual 2 to invest in the bond by falsely claiming that a purchase of the bond by the U.S. Treasury Department was imminent, causing Individual 2 to wire transfer $10,000 to a bank account maintained by Abrams. In addition to defrauding the investor victims, Burgin also provided false statements to law enforcement about his knowledge and participation in the scheme, court records show.
Burgin was released on bond following his plea hearing. He faces a maximum prison term of 20 years and a $250,000 fine, or both, and 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.
Abrams has also been released on bond and is scheduled appear to before U.S. Magistrate Judge David Keesler for his arraignment hearing on November 24, 2014 at 9:55 a.m.
The investigation was handled by the FBI. Assistant United States Attorney Kenneth M. Smith, of the U.S. Attorney’s Office in Charlotte is handling the prosecution.
Six Sentenced to Prison on Cocaine and Crack Cocaine Trafficking Conspiracy ChargesRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. handed down prison sentences ranging from 168 to 84 months to six defendants involved in a drug trafficking conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The six men each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine and crack cocaine.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Robert C. Helton of the Gastonia Police Department.
Judge Conrad sentenced Torbent Lamont Jackson, 34, of Charlotte to 168 months in prison; James Russell Coulter, 35, of Grover, N.C., to 132 months in prison; Mario Demond Floyd, 34, of Charlotte, to 120 months in prison; Larry Donnell Erby, Jr., 35, of Gastonia, N.C to 120 months in prison; Thomas Monteres Burris, 34, of Gastonia, to 87 months in prison; and Carroll Macarthur Williams, Jr., 35, of Winston-Salem, N.C. to 84 months in prison. Each defendant was also ordered to serve five years under court supervision upon release from prison.
According to filed court documents and court proceedings, from 2002 to September 2013, in Gaston and Mecklenburg Counties and elsewhere, the defendants conspired with each other and others to distribute and to possess with intent to distribute controlled substances, including dozens of kilograms of cocaine and dozens of ounces of crack cocaine with a street value in excess of $2 million. Coulter’s and Floyd’s sentences were enhanced because of their prior criminal histories and because they possessed a firearm in furtherance of the conspiracy.
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.
The 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. All federal sentences are served without the possibility of parole.
The case was investigated by the FBI and Gastonia PD. Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte handled the prosecution.
Man Sentenced to Prison for More Than 12 Years for CarjackingsRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. sentenced a Charlotte man today on charges stemming from two 2012 carjackings committed in Charlotte, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Antonio Cordiara McClary, 25, of Charlotte, was sentenced to 148 months in prison, followed by three years of supervised release.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Tompkins in making today’s announcement.
According to court documents and today’s sentencing hearing:
McClary carjacked a woman on January 5, 2012, and forced her to drive to her bank and withdraw $500 from an ATM. During the carjacking, McClary pointed what appeared to be a firearm at the victim’s head. Following the forced withdrawal of money from the ATM, McClary forced the victim into the trunk of her 2010 Honda Accord while he drove around for thirty minutes. McClary later abandoned the car with the victim locked in the trunk and told her not to get out. An hour later, the victim was able to escape the trunk and call police.
On January 20, 2012, McClary confronted a second woman who was getting out of her car in her apartment parking lot and forced her back into her car with what appeared to be a firearm and a knife. McClary took the victim’s car keys and drove the woman to the bank ATM, forcing her to withdraw $500. Later, while driving from the ATM, McClary threatened to “splatter the victim’s brains all over the windshield.” Following the carjacking, McClary abandoned the victim in her car and told her not to report the carjacking to the police because he knew where she lived and said he would come back and kill her. In both incidents, what appeared to be a firearm was later determined to have been an air rifle that fired pellets. In April 2013, McClary pleaded guilty to two counts of carjacking.
In announcing the sentence, Judge Conrad stated that the offenses were a “heinous couple of carjackings that caused unfathomable terror to the victims.” Judge Conrad noted that he imposed the 148 month sentence to protect the public from further crimes of the defendant.
The defendant has been 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.
The investigation was handled by ATF and CMPD. The prosecution for the government was handled by Assistant U.S. Attorney Robert Gleason of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Sentenced to More Than 16 Years in Prison for Operating A Ponzi Scheme That Defrauded Investors of More Than $1.5 MillionRead the Press Release
Defendant Spent The Stolen Funds On Personal Expenses
CHARLOTTE, N.C. – Sean F. Mescall, 35, of Charlotte, was sentenced today by U.S. District Judge Robert J. Conrad, Jr. to serve 195 months in prison for orchestrating a Ponzi scheme that solicited victims to invest more than $1.5 million dollars in the foreign currency market (FOREX), announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Conrad also ordered Mescall to serve three years under court supervision following his prison term and to pay $1,248,812.09 as restitution to his victims. In December 2012, a federal jury convicted Mescall of securities fraud, wire fraud and money laundering.
North Carolina Secretary of State Elaine F. Marshall and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division join U.S. Attorney Tompkins in making today’s announcement.
According to court documents and today’s sentencing hearing, from 2006 to 2010 Mescall executed a Ponzi scheme by inducing over 119 investors in Charlotte and elsewhere to invest more than $1.5 million in his investment company, “Capitalstreet Financial, LLC” (CSF), falsely representing that their money would be invested in the foreign currency market. Court documents show that Mescall lied to his victims about his professional background and credentials falsely claiming that he was a college graduate with over 20 years of experience trading in FOREX and that he was a former director at Merrill Lynch. Court records indicate that Mescall did not have a college degree, had no relevant trading experience and never worked for Merrill Lynch. Mescall also misled his investors about CSF, claiming that it was a national company with over 35 offices, and that CSF handled over $100 million in trade volume each month. In fact, court records indicate, CSF only operated a boiler room in Charlotte and later in Cornelius, and that it never handled $100 million in trade at any time during the scheme.
Court documents indicate that Mescall lulled his victims into a false sense of security by falsely promising 60% to 80% annual returns on their investments. Court records show that often Mescall’s victims were elderly and the funds they invested were most, if not all, of their life savings. Over the course of the scheme, Mescall only traded $285,908 of the victim’s money, and sustained $271,705 in losses. Mescall used approximately $295,000 to pay some victims supposed “payouts” from profits made on investments. However, court records show that these payments were not based on profits, but came from funds contributed by new investors, commonly referred to as “Ponzi” payments. Mescal simply deposited the rest of the investors’ money into various bank accounts he controlled in the United States and offshore, and used a substantial amount of investor money to pay for personal expenses unrelated to any foreign exchange. For example, court documents indicate that Mescall used investor money to buy, among other things, a BMW, a Ferrari and other cars, a Rolex watch, diamonds and other jewelry, and to make mortgage payments on his Lake Norman residence.
“The defendant seemed to have no sense of the traumas suffered by the victims,” Judge Conrad said in announcing Mescall’s sentence. “These losses were significant, life impacting events because of the defendant’s greed.”
Mescall has been detained since June 2012 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 Securities Division of the North Carolina Secretary of State and the FBI.
The prosecution was handled by Assistant U.S. Attorney Kenneth Smith of the Western District of North Carolina.
U.S. Department of Justice Nationwide Election Day ProgramRead the Press Release
U.S. Attorney’s Office for the Western District of North Carolina Leading Local Efforts
CHARLOTTE, N.C. – U. S. Attorney Anne M. Tompkins announced today that Michael E. “Mike” Savage and Richard Edwards, Assistant United States Attorneys (AUSAs) in the Charlotte and Asheville offices of the U.S. Attorney for the Western District of North Carolina will lead the efforts of this Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014, general elections. AUSAs Savage and Edwards have been appointed to serve as the District Election Officers (DEOs) for the Western District of North Carolina and in that capacity are responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Tompkins said, “Every citizen must be able to vote without interference or discrimination. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Tompkins stated that AUSA/DEO Savage will be on duty in the Charlotte Office and AUSA/DEO Edwards in the Asheville Office while the polls are open. They can be reached by the public at the following telephone numbers:
In Charlotte: 704-344-6222 and in Asheville: 828-271-4661.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 704-672-6100.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php. United States Attorney Tompkins said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”Tax Preparer Sentenced to 33 Months in Prison for Filing A False Tax Return and Lying on Loan ApplicationRead the Press Release
CHARLOTTE, N.C. – Nkhenge Shropshire, a/k/a Konjay Shropshire, 41, of Charlotte, was sentenced to 33 months in prison today for filing false tax returns and lying on a loan application, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney ordered Shropshire to serve five years under court supervision following her prison term and to pay $582,933 as restitution to IRS and $14,309.17 and $25,000 respectively to two credit unions she defrauded.
U.S. Attorney Tompkins is joined by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) in making today’s announcement.
According to filed court documents and today’s sentencing hearing, Shropshire was the owner of “Tax Connections” a Charlotte tax return preparation business. Court records indicate that from 2009 to 2011, Shropshire aided and assisted in the preparation of more than 600 tax returns for clients which were e-filed with the IRS. According to court records, many of the tax returns prepared by Shropshire falsely included Schedule C losses and refundable education credits, which decreased the clients’ tax liabilities, resulting in larger tax refunds and false Earned Income Tax Credits. The tax loss associated with the false education credits is more than $580,000. Court records show that Shropshire directed that many of the fraudulent tax refunds be deposited into a business bank account she controlled, and kept a portion of the refund as payment for her services. On some occasions, according to court records, Shropshire did not provide her clients with copies of their completed tax returns or gave them incomplete copies, so clients would not know their returns contained false information.
According to filed court documents, in October 2011 Shropshire applied for membership with a federal credit union using a different social security number and home address. On the same day, court records show, Shropshire also filled out an application for a car loan with the same credit union for the purchase of a 2008 Mercedes CLS 550 vehicle. On that car loan application, Shropshire listed a false employer, false annual salary and false job title. Court records also show that Shropshire was approved for a $40,075 car loan but only made two payments totaling $2,508.50. Shropshire pleaded guilty to conspiracy to defraud the IRS and to making false statements on a loan application in October 2013.
In handing down Shropshire’s sentence today, Judge Whitney noted that we have a “system based on truth” and “self-reporting,” and that we rely on individuals filing taxes to be honest and even more on return preparers. Judge Whitney also stated that the victims in this case are honest tax payers and that this crime victimizes every single honest taxpayer.
Shropshire will be ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by IRS-CI. Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Mexian National Sentenced to 35 Years in Prison for Cocaine and Heroin Trafficking and Related ChargesRead the Press Release
CHARLOTTE, N.C. – On Tuesday, October 28, 2014, Chief U.S. District Judge Frank D. Whitney sentenced Molina-Sanchez, 35, of Mexico, to serve 420 months in prison on drug trafficking and firearms charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A federal jury convicted Molina-Sanchez in May 2013 of conspiracy to distribute and to possess with intent to distribute at least five kilograms of cocaine and at least one kilogram of heroin, conspiracy to launder proceeds of drug trafficking, possession with intent to distribute cocaine and possession of a firearm in furtherance of drug trafficking.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Kevin L. Auten of Rowan County Sheriff’s Office (RCSO).
According to filed court documents, trial evidence and today’s sentencing hearing, from 2004 to 2011, Molina-Sanchez and his conspirators obtained more than 350 kilograms of cocaine with a street value of more than $30 million from a supplier in California. Molina-Sanchez and his conspirators transported and distributed the cocaine to traffickers in North Carolina who then sold it throughout the state. Court records show that to transport the drugs without being detected, Molina-Sanchez and his conspirators hid the drugs and drug proceeds in secret car compartments. During the investigation, law enforcement found hundreds of thousands of dollars, three kilograms of cocaine, and a kilogram of heroin, all hidden in various locations within vehicles. When officers arrested Molina-Sanchez in October 2012, he was in possession of almost three ounces of cocaine, two handguns, and more than 100 rounds of ammunition, according to court records. Finally, based on evidence elicited at Molina-Sanchez’s May 2013 trial, law enforcement, post-trial, conducted a search of one of his vehicles and found a hidden compartment containing almost $50,000 in cash and three handguns.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of 14 defendants on cocaine trafficking, money laundering, 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 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.
Molina-Sanchez has been in federal custody since October 2012. 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 HSI in Charlotte and RCSO, assisted by the Charlotte-Mecklenburg Police Department and its crime laboratory, the Iredell County Sheriff’s Office and its crime laboratory, and the North Carolina State Bureau of Investigation. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.
Last of 28 "United Blood Nation" Gang Members Sentenced to More Than 6 Years in Prison on Gun ChargesRead the Press Release
CHARLOTTE, N.C. – Eric Eugene Brice, a/k/a “Bug,” 42, was sentenced today to 77 months in prison and to three years of supervised release for possession of an illegal firearm, a Maverick 99 pistol-grip shotgun, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Brice pleaded guilty to the charge in March 2014.
Brice is also the final defendant to be sentenced in connection with the 28 “United Blood Nation” (UBN) gang members indicted in 2012 on racketeering and related charges.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins U.S. Attorney Tompkins in making today’s announcement.
According to filed documents and statements made in court, the defendants conspired to participate in a racketeering enterprise, that is, the United Blood Nation (“UBN” or “Bloods”) and several factions of the UBN. Court records indicate that from 2007 to May 2012, in the Western District of North Carolina and elsewhere, the defendants conspired to operate as a gang, a criminal enterprise, and in doing so, they engaged in criminal activities, including racketeering conspiracy, murder conspiracy, narcotics trafficking, armed robbery and firearms related crimes.
The remaining defendants have been sentenced as follows:
• James Anderson, a/k/a “Stank, 31, was sentenced to 84 months in prison and 5 years of supervised release. • Alan Boyd Donta Barnett, a/k/a “Big Al”, 39, was sentenced to 360 months in prison and 5 years of supervised release. • Travis Lamar Brice, a/k/a “Trap”, 30, was sentenced to 63 months in prison and 4 years of supervised release. • Quinton Lavar Brown, a/k/a “QP” or “QB”, 22, was sentenced to 70 months in prison and 4 years of supervised release. • Rafas Gene Camp, a/k/a “Tick”, 35, was sentenced to 130 months in prison and 4 years of supervised release. • Joston Jamal Clemmer, a/k/a “Ace”, 23, was sentenced to 97 months in prison and 2 years of supervised release. • Kemmey Nicole Cooke, a/k/a “ Gangsta Wu”, 32, was sentenced to 27 months in prison and 2 years of supervised release. • Jaimel Kenzie Davison, a/k/a “I-Shine”, 31, was sentenced to 150 months in prison and 2 years of supervised release. • Wesley Tyler Floyd, a/k/a “West Coast”, 28, was sentenced to 110 months in prison and 4 years of supervised release. • Davon Yakeen Futrell, a/k/a “Smooth”, 26, was sentenced to 63 months in prison and 2 years of supervised release. • Tristan Daquane Goode, a/k/a “Buck”, 22, was sentenced to 70 months in prison and 4 years of supervised release. • Nathaniel Graham, a/k/a “Nasty”, 25, was sentenced to 240 months in prison and 3 years of supervised release. • Joseph Dranell Gray, a/k/a “Killa”, 40, was sentenced to 180 months in prison and 2 years of supervised release. • Dominque O’Neill Jackson, a/k/a “DJ”, 26, was sentenced to 84 months in prison and 4 years of supervised release. • Jimmy Lionell, Jones, a/k/a “Buddhist” or “Buddha”, 39, was sentenced to 180 months in prison and 3 years of supervised release. • William Amir Knox, a/k/a “Poo Nuk”, 30, was sentenced to 108 months in prison and 5 years of supervised release. • Kentrell Tyrone McIntyre, a/k/a “Mustafa”, 35, was sentenced to 192 months in prison and 3 years of supervised release. • William Lewis Dontars Meeks, a/k/a “Willie” or “Rock”, 36, was sentenced to 130 months in prison and 8 years of supervised release. • Kevin Jerome Morris, a/k/a “Kato”, 37, was sentenced to 84 months in prison and 3 years of supervised release. • Franklin Robbs, a/k/a “Frankie Boo”, 43, was sentenced to 132 months in prison and 3 years of supervised release. • Maurice Terrell Robinson, a/k/a “Hell Rell”, 25, was sentenced to 70 months in prison and 2 years of supervised release. • Andrew Eugene Stowe, a/k/a “Coco”, 38, was sentenced to 60 months in prison and 4 years of supervised release. • Marquise Deshawn Watson, a/k/a “ Rambo”, 22, was sentenced to 97 months in prison and 2 years of supervised release. • Melinda Charmane Watson, 38, was sentenced to 46 months in prison and 4 years of supervised release. • Daryl Wilkinson, a/k/a “OG Powerful”, 50, was sentenced to 51 months in prison and 3 years of supervised release. • Samatha Williams, a/k/a “Samantha Wilkinson” or “Lady Sam”, 45, was sentenced to 72 months in prison and 2 years of supervised release. • Perry Gorontent Williams, a/k/a “P-Flame” or “Flame”, 29, was sentenced to 360 months in prison and 3 years of supervised release.
Court documents indicate that, as part of the conspiracy, the defendants engaged in drug trafficking, and used the proceeds of their drug crimes to help finance the gang’s criminal activities. According to court records, the defendants also committed armed robberies and armed home invasions in order to generate proceeds to support the enterprise. Court document show that, as part of the conspiracy, the defendants committed acts of violence against rival gang members. According to court records, the defendants concealed their criminal activities and obstructed justice, including threatening potential witnesses. The defendants also maintained and circulated a collection of firearms for the use in criminal activity by UBN members, court records show.
According to court records, the defendants and other UBN gang members in North Carolina and elsewhere identified gang members belonging to other UBN or Bloods factions by their gang names and phone numbers, including telephone area codes. For example, according to court records, area code “704” represented gang factions within Mecklenburg and Gaston Counties. Court records indicate that gang members identified other gang members who were incarcerated by their street gang names and by their inmate identification numbers, in lieu of their telephone numbers, while incarcerated gang members were referred to as “behind the G wall.”
According to court documents and court proceedings, as gang members of the UBN enterprise, the defendants met regularly with other UBN members. During those meetings, gang members talked about past acts of violence and other crimes against rival gang members, about UBN gang members who had been arrested or incarcerated, about police interactions with gang members and discussed internal disciplinary action of other UBN members, court records show. According to court records, also during these meetings, gang members shared identities of individuals whom they suspected to be cooperating with law enforcement and discussed the types of action that ought to be taken against those individuals. Court documents indicate that during these meetings, UBN members also planned and agreed on carry out future crimes, including murder, robbery, and drug trafficking.
The case was investigated by the FBI in cooperation with the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the North Carolina State Bureau of Investigation, the Charlotte-Mecklenburg Police Department, the Gastonia Police Department, the Gaston County Police Department, the Gaston County Sheriff’s Office, the Shelby Police Department, and North Carolina Department of Probation and Parole. All federal sentences are served without the possibility of parole.
The prosecution is handled by Assistant U.S. Attorney Jill Westmoreland Rose, Daniel Ryan, and Kevin Zolot of the U.S. Attorney’s Office.
Federal Judge Sentences Charlotte Man to More Than 18 Years in Prison for Sex Trafficking of A MinorRead the Press Release
CHARLOTTE, N.C. – Late on Tuesday, October 28, 2014, U.S. District Judge Robert J. Conrad, Jr. sentenced Juan Brandon Gray-Sommerville, 25, of Charlotte, to 225 months in prison followed by three years of supervised release for sex trafficking of a minor, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A federal jury convicted the defendant of one count of sex trafficking of a minor in August 2013.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and testimony presented during the two-day trial, the minor female met Gray-Sommerville through social media in early March 2012. Shortly thereafter, the defendant began exchanging text messages with the minor, encouraging her to meet him. According to court records, on March 13, 2012, Gray-Sommerville and his girlfriend travelled to a town outside of Charlotte to pick up the minor in front of her school. There, he enticed to come to Charlotte with him by showing her a large sum of money and marijuana. According to trial testimony, the three of them drove back to Charlotte and checked into a motel. Trial testimony established that the defendant created an online advertisement on Backpage.com to recruit clients to engage in sex acts with the minor. Court records indicate that the defendant drove the minor to have sex for money with two clients. According to court documents and witness testimony, law enforcement located the minor when they responded her 9-1-1 call, after Gray-Sommerville abandoned her fearing police detection. Court records indicate that during the investigation, an FBI computer forensic examiner found on Gray-Sommerville’s computer the picture of the minor the defendant posted on Backpage.com. Investigators also recovered text messages the defendant had exchanged with the minor using his cell phone.
At sentencing, Judge Conrad considered an incident that occurred several months before the defendant picked up the minor victim at her school. Testimony regarding this incident was presented at trial. During that incident, law enforcement officers and agents encountered the defendant at a local hotel when he dropped off another minor so that she could prostitute there.
In announcing his sentence, Judge Conrad said that Gray-Sommerville was a pimp whose actions were callous. The judge also found that the Gray-Sommerville knowingly testified falsely at trial and that credible evidence presented at trial showed that the defendant knew early on in his involvement with the victim that she was a minor.
Gray-Sommerville has been in local federal custody since April 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation of the case was handled by the FBI and was assisted by CMPD and Homeland Security Investigations (“HSI”). Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte, prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
Charlotte Man Sentenced to More Than 12 Years for Robbing PharmacyRead the Press Release
CHARLOTTE, N.C. – Antonio Donte Smith, 30, of Charlotte, was sentenced to 147 months in prison today in connection with the 2012 robbery of a pharmacy and related firearms violations, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also ordered Smith to serve five years under court supervision.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Rob Merchant of the Pineville Police Department (PPD) join U.S. Attorney Tompkins in making today’s announcement.
In July 2013, a federal jury convicted Smith of Hobbs Act robbery, possession of a firearm in furtherance of a crime of violence, and possession of a firearm by a convicted felon in connection with the September 2012 armed robbery of a pharmacy located in Pineville, N.C. According to filed documents, evidence presented at trial, and today’s sentencing hearing, Smith entered the pharmacy wearing a white hooded sweatshirt and a cut-off black tee-shirt sleeve across his face, and was carrying a Ruger .45 caliber pistol. Court records show that Smith pointed the firearm at the store clerk and demanded money from the cash register, to which the cashier complied. Court records indicate that while Smith was taking the money from the register Smith noticed a customer, pointed his firearm at the customer, ordered the customer to get on his knees and robbed the customer of his wallet. According to court records, Smith then forced the store manager to give him all the money kept in the store’s safe. At trial, witnesses testified that Smith pointed his gun at the store manager and began to count down from ten while the store manager tried to open the safe.
Court records indicate that Smith fled the store, entered a vehicle and proceeded to lead law enforcement officers on a high speed chase. Eventually Smith abandoned the car and fled on foot into a wooded area where he dropped the firearm and some of his clothing. According to court records, police officers, assisted by a K-9 unit, found and arrested Smith who was hiding in a nearby apartment complex. In the area where Smith was apprehended, officers located money and a receipt that belonged to the pharmacy customer Smith had robbed earlier. At trial, Smith claimed that it was his brother who had robbed the pharmacy.
In handing down today’s sentence, Judge Whitney stated that “Smith is a very serious recidivist with regard to violent armed crimes.” He also noted that Smith committed five armed robberies and planned out violent crimes and that he terrified the employees of the pharmacy he robbed.
In 2002, Smith was convicted in state court of four counts of robbery with a dangerous weapon. According to police reports and court documents from those cases, Smith robbed three Charlotte-area pharmacies and a fast-food restaurant and even shot a cashier working at one of the drug stores during one of the robberies.
Smith has been in local federal custody since he was arrested in February 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was investigated by ATF and PPD. The prosecution is being handled by Assistant U.S. Attorney Jennifer Dillon.
Woman Sentenced to More Than 7 Years in Prison for Wire Fraud Conspiracy Involving Stolen Identities and Consumer Credit ReportsRead the Press Release
STATESVILLE, N.C. – On Monday, October 27, 2014, U.S. District Judge Richard L. Voorhees sentenced Nakia Monica Brown, 36, formerly of Charlotte, to 87 months in prison and to two years of supervised release for her role in a scheme involving stolen personal identities and fraudulently-obtained consumer credit reports, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Voorhees also ordered a money judgment forfeiture against Brown in the amount of $396,194.18, and victim restitution in the amount of $447,101.
U.S. Attorney Tompkins is joined in making today’s announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS).
According to filed court documents and court proceedings, from 2009 to 2010, Brown and her conspirators obtained a list of more than 1,400 identity theft victims, which contained stolen personally identifiable information (PII), such as the victims’ names, social security numbers, and dates of birth. Court records show that the conspirators used the victim’s PII to obtain free consumer credit reports from credit reporting agencies and then used the credit report information to manufacture fake identification documents and to purchase over $400,000 in merchandise from 11 national retail chains.
According to filed documents and court proceedings, Brown gained access to the victims’ consumer credit reports, including the victims’ credit scores, their existing credit card accounts, their available lines of credit and other biographical information, such as their residential addresses. In this manner, Brown fraudulently acquired a combined total of 370 credit reports from three major credit reporting agencies, according to court documents. Court documents indicate that Brown then used the identity theft victims’ information to manufacture counterfeit New York driver’s licenses that contained the names, dates of birth and addresses of the identity theft victims, along with photographs and physical descriptions of Brown and her conspirators. Using the counterfeit driver’s licenses, Brown and her conspirators fraudulently purchased merchandise at national retail stores based on the identity theft victims’ available credit or based on same-day, instant credit offered by the retail stores to new customers. Court records indicate that the fraudulently-purchased merchandise was then sold to pawnbrokers, “fences” and other end users. According to court records, Brown and her conspirators purchased over $400,000 in merchandise. Brown pleaded guilty to one count of wire fraud conspiracy and one count of aggravated identity theft in May 2013.
Following the sentencing hearing, Brown was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
Brown’s conspirators, Tiffany Sherise Young, 22, of Charlotte and Trina Monique Young, 41, of Bronx, N.Y. were each sentenced earlier this year to 10 months in prison and to two years of supervised release on wire fraud conspiracy charges.
The investigation was handled by USPIS, with assistance from the Charlotte- Mecklenburg Police Department. The prosecution was handled by Assistant U.S. Attorneys Tom O’Malley and Benjamin Bain-Creed of the U.S. Attorney’s Office in Charlotte.
Owner of Accounting Business Sentenced to Two Years in Prison for Tax FraudRead the Press Release
STATESVILLE, N.C. – On Monday, October 27, 2014, U.S. District Judge Richard L. Voorhees sentenced Denise Swanson of Lenoir, N.C. to 24 months in prison for tax evasion, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Swanson was also ordered to serve three years under court supervision following her release from prison and to pay restitution in the amount of $839,830.99 to client victims and $249,912 to IRS.
U.S. Attorney Tompkins is joined by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) in making today’s announcement.
According to court documents and yesterday’s sentencing hearing, Swanson was the owner and operator of “Bottom-line Accounting,” a tax preparation and bookkeeping business. Filed court documents show that from 2006 to 2012, Swanson performed tax preparation services for her clients, J.W. and K.W., and their business, C.B. (“the clients”), which included making related tax payments on their behalf. According to court records, Swanson received funds from her clients that were supposed to be used to pay their various tax obligations to IRS and other state agencies. But instead of making the payments, court records show, Swanson embezzled the money and used it to pay for personal expenses including her daughter’s college tuition, renovations to her house and gambling. In total, Swanson embezzled approximately $839,830 from her clients. According to court records, Swanson failed to report the embezzled income on her own individual tax returns for tax years 2006 through 2011. Swanson pleaded guilty to tax evasion for tax year 2010 in August 2013.
Following the sentencing hearing, Swanson was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by IRS-CI. Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte prosecuted the case.