Western District of North Carolina
Press releases recorded for this federal judicial district.
Columbia, S.C. Attorney Pleads Guilty to Making A False Statement to A Federal AgentRead the Press Release
COLUMBIA, S.C. – Joenathan Shelly Chaplin, an attorney in Columbia, S.C. appeared in federal court today before U.S. District Judge Margaret B. Seymour and pleaded guilty to making a false statement to a federal agent, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA) which overseas South Carolina, and Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) join U.S. Attorney Tompkins in making today’s announcement.
According to court documents and today’s plea hearing, Chaplin, 47, admitted to knowingly and willfully making a materially false, fictitious, and fraudulent statement and representation to the government. Specifically, court documents indicate, Chaplin told a special agent from the Department of Treasury that he was not aware of the reporting requirements of Form 8300. Form 8300 (“Report of Cash Payments Over $10,000 Received in a Trade or Business”) must be filed with the IRS if a person or business has received over $10,000 in one transaction or a series of related transactions while conducting their trade or business.
Chaplin has been released on bond. At sentencing, he faces a maximum prison term of five years, a $250,000 fine, or both. A sentencing date has not yet been set.
The case was investigated by IRS-CI, DEA and ATF. The prosecution is being handled for the government by Assistant U.S. Attorney Jill Westmoreland Rose of the U.S. Attorney’s Office for the Western District of North Carolina in Charlotte, upon recusal of the U.S. Attorney’s Office for the District of South Carolina.
Jackson Co. Woman Sentenced to 17.5 Years in Prison on Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – A Jackson County woman was sentenced on Tuesday, June 3, 2014, to serve 210 months in a federal prison for producing, receiving, 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 Kimberly Rachael Moore, 31, of Tuckasegee, N.C. to serve under court supervision the rest of her life upon release from prison and to register as a sex offender.
Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Jimmy Ashe of the Jackson County Sheriff’s Office join U.S. Attorney Tompkins in making today’s announcement.
In December 2012, a federal criminal indictment charged Moore with one count of production of child pornography, one count of possession of child pornography, one count of receipt of child pornography and four counts of distribution of child pornography. Moore pleaded guilty to the charges in May 2013. According to court filings and proceedings, during the investigation detectives discovered an extensive collection of child pornography, as well as a computer hard drive, an email account, and online photo sharing accounts.
Moore is in federal custody 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 Moore was handled by HSI and the Jackson 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 http://www.projectsafechildhood.gov.
Drug Trafficker Sentenced 17.5 Years in PrisonRead the Press Release
Trafficker’s Wife Receives A Two And A Half Year Sentence For Laundering Drug Proceeds
STATESVILLE, N.C. – Manuel Ocampo, Jr., 39, of Anaheim, Calif., was sentenced today to 210 months in prison for his role as a supplier of methamphetamine, cocaine, heroin, marijuana and other narcotics, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, U.S. District Judge Richard L. Voorhees ordered Ocampo to serve five years of supervised release. Judge Voorhees also sentenced today Manuel Ocampo’s wife, Yulisma Ocampo, 37, to 30 months in prison and three years of supervised release, for conspiring to launder the proceeds of drug trafficking.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas; Greg McLeod, Director of the State Bureau of Investigation (NC SBI); Chief Tom Adkins of the Hickory Police Department and Sheriff Coy Reid of the Catawba County Sheriff’s Office.
According to court documents and proceedings, the drug conspiracy lasted from 2011 to September 18, 2012. During that time, the Ocampos travelled from California to the Hickory, N.C. area to deliver a variety of narcotics, including methamphetamine, cocaine, heroin, and marijuana, among others. On May 4, 2012, law enforcement in Hickory N.C. seized over four pounds of 97% pure methamphetamine, more than one and half pounds of black tar heroin and over two pounds of powder heroin from a hidden compartment in the roof of the Ocampos’ minivan. During Manuel Ocampo’s arrest on that date, Yulisma Ocampo hid her husband’s cell phone and she subsequently picked-up drug proceeds from customers, until she was arrested in July 2012.
Two other conspirators involved in the drug scheme, Joey Carroll and Peter Anthony Sanders, were previously sentenced. Carroll was sentenced to 113 months in prison and five years of supervised release. Sanders was sentenced to 36 months in prison and four years of supervised release.
Both Manuel and Yulisma Ocampo will remain 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.
This investigation into the case was led by HSI and SBI, with the assistance of several other law enforcement agencies, to include the Hickory Police Department and the Catawba County Sheriff’s Office. The prosecution for the government is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Armed Drug Trafficker and Alleged Gang Member Sentenced to More Than 14 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Mauricio Mario Baltazar, 21, of Lake City, Ga. was sentenced today to 169 months in prison for his role as a supplier of more than three pounds of methamphetamine, 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 Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas.
According to court documents and court proceedings, from 2012 until the time of his arrest in April 2013, Baltazar established an extensive methamphetamine trafficking network that spanned from Georgia to North Carolina and beyond. According to court records, on the day of his arrest, Baltazar was traveling from Georgia transporting approximately 250 grams of methamphetamine (approx. 1,000 dosage units) and was on his way to conduct a drug transaction at a hotel in Boone, N.C. Law enforcement seized the drugs from Baltazar during a traffic stop and Baltazar was arrested. Court records indicate that when law enforcement executed a search warrant at Baltazar’s residence in Georgia, they found a 12-gauge shotgun, a rifle with scope, a ballistic vest, as well as other weapons. Court records indicate that law enforcement also found a cell phone which contained numerous photographs of Baltazar holding an assault rifle, handguns with high-capacity magazines and tactical lights, high-powered rifles and a pump action shotgun. Baltazar also had pictures of bulk currency fanned out with stacks of $100, $50, and $20 bills. According to court records, inside Baltazar’s residence, law enforcement also found “Sur13” gang graffiti consistent with gang-related tattoos on Baltazar’s body. Sur 13, also known as “Sureños” or “Southside,” are loosely affiliated gangs that pay tribute to the Mexican Mafia.
Baltazar will remain 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.
This investigation was led by HSI with the assistance of the North Carolina State Bureau of Investigation, the Boone Police Department, the Ashe County Sheriff’s Office and the Caldwell County Sheriff’s Office. The prosecution for the government is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Former Charlotte Mayor Pleads Guilty to Public CorruptionRead the Press Release
Patrick Cannon Admitted To Carrying Out A Bribery Scheme And Accepting At Least $50,000 In Exchange For Using His Official Position To Benefit His Payors
CHARLOTTE, N.C. – Former Charlotte Mayor Patrick D. Cannon pleaded guilty today to one count of honest services wire fraud, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
A federal criminal bill of information charging the former mayor and a filed plea agreement were unsealed on Monday, June 2, 2014. Cannon, 47, appeared in court today and formally pleaded guilty to the charge before U.S. Magistrate Judge David S. Cayer.
“Former Mayor Cannon used his elected official position to enrich himself at the expense of the City of Charlotte,” said U.S. Attorney Tompkins in making today’s announcement. “Through his actions, Cannon betrayed the trust of his constituents and his peers, compromised the integrity of our local government and damaged Charlotte’s good reputation as a city that does business the honest way. Cannon will now be held accountable for depriving the citizens of Charlotte of their right to his honest and faithful services and for putting personal gain over the greater good. As we move forward, let one message be clear: My office will continue to investigate allegations of public corruption and go after anyone who uses public office as a means of getting rich. Charlotte has no room for corrupt politicians.”
“This nearly four year investigation was complex and required a great deal of diligence and dedication from the FBI Special Agents and prosecutors involved. By its very nature, public corruption is conducted in a shroud of secrecy and can be difficult to detect. Fortunately, the FBI has the capability to use a number of lawful, sophisticated tools and techniques to capture key evidence. The criminal actions of Patrick Cannon brought undeserved shame and embarrassment upon the city of Charlotte. As the city begins to heal, citizens should be reassured, this investigation does not end with today’s guilty plea. FBI agents will continue to follow the trail of evidence in this case and look into related allegations as the investigation moves forward,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina.
According to the criminal bill of information to which Cannon pleaded guilty, other documents filed in this case and statements made in court:
I. Background
Beginning in on or about December 7, 2009, and continuing through March 26, 2014, Cannon devised a bribery scheme and used his official position to enrich himself. During the course of the scheme, Cannon was an elected official serving as a member of the City Council, and/or Mayor Pro Tem or Mayor of the City of Charlotte. During the relevant time period, Cannon solicited and accepted gifts, payments and other things of value in exchange for a pattern of official actions favorable to the persons who secretly paid him. Specifically, Cannon accepted a total of at least $50,000 from a Charlotte business owner and two undercover agents posing as investors interested in opening businesses in Charlotte. Cannon accepted the bribes in exchange for use of his official position on an “as needed” basis, including communicating with City and County officials and others to assist his payors’ projects and intervening with any zoning, permitting and transportation issues, among others. Cannon’s actions and fraudulent bribery scheme defrauded the citizens and the government of Charlotte and deprived them of their right to Cannon’s honest and faithful services.
II. The Scheme to Defraud
a. The Scheme to Solicit and Accept Things of Value from Businessman No. 1 (“BM1”)
The criminal bill of information identifies BM1 as the owner of a company that owns and operates a live adult entertainment club in the Charlotte area (the “Club”). During the relevant time period, Cannon secretly solicited, accepted and agreed to accept periodic payments and checks from or on behalf of BM1 in exchange for Cannon’s use of his elected offices to exert influence over City zoning, planning and transportation officials, as needed or required by BM1. Specifically, in and around January 2013, Cannon accepted approximately $2,000 in cash from BM1 in exchange for Cannon’s influence in relocating the Club away from the proposed LYNX Blue Line Extension (BLE), thereby enabling BM1 to keep his establishment open as an adult club.
b. The Scheme to Solicit and Accept Things of Value from Undercover Employee No. 1 (“UCE1”)
UCE1 was an FBI undercover agent who Cannon believed to be a business manager for a Chicago-based venture capital company interested in opening a nightclub/bar in Charlotte at a property identified as the “Firehouse.” The selected location had numerous zoning and parking issues. Beginning no later than December 12, 2012 through on or about March 26, 2014, Cannon secretly solicited, accepted and agreed to accept $12,500 in cash and the occasional use of an apartment in exchange for Cannon’s influence and intervention as needed to assist UCE1 in dealing with City and County officials and working out any zoning, licensing and permit issues associated with the selected property.
c. The Scheme to Solicit and Accept Things of Value from Undercover Employee No. 2 (“UCE2”)
UCE2 was an FBI undercover agent, who Cannon believed to be a Las Vegas real estate developer looking to secure foreign investors to finance commercial real estate developments in Charlotte. Beginning no later than May 21, 2013 through on or about March 26, 2014, Cannon secretly solicited, accepted and agreed to accept a total of $36,000 in cash, a trip to Las Vegas and the occasional use of an apartment in exchange for use of his elected position to create and make false representations on behalf of UCE2 to individuals Cannon believed to be foreign investors. Specifically, at the request of UCE2, Cannon traveled to Las Vegas, and in his official capacity as Charlotte’s Mayor Pro Tem delivered a presentation to purported investors during which Cannon falsely told them that he had successfully used his position in the past to assist with a similar project in Charlotte. Over the course of his dealings with UCE2, Cannon promised to use his new position as Mayor to make contacts and exert his official influence over City and County officials to secure federal financing for transportations projects that would benefit UCE2’s company; offered to use and used the Mayor’s office to persuade one of UCE2’s purported skeptical investors to invest in UCE2’s company; and promised to give UCE2’s company preferential treatment over other potential developers.
During the relevant time period, Cannon never disclosed to any City and County employees whom he contacted his relationship with BM1, UCE1 and UCE2 or that he was receiving cash, gifts and other things of value from them in exchange for use of his official position.
III. The Charged Offense and Penalties
Cannon has pleaded guilty to one count of honest services wire fraud. In pleading guilty, Cannon has admitted to defrauding and depriving the citizens of Charlotte and the Charlotte government of their right to Cannon’s honest and faithful services through bribery and the concealment of material information.
The charge carries a maximum prison term of 20 years, a $250,000 fine or both. According to the terms of the plea agreement, Cannon has also agreed to pay restitution. Cannon’s final sentence and restitution amount will be determined by a federal judge at sentencing. Cannon is currently released on bond and a date for his sentencing hearing has not been set.
The case is being prosecuted by Assistant United States Attorneys Michael E. Savage and Craig D. Randall of the U.S. Attorney’s Office in Charlotte. The ongoing investigation is being handled the FBI.
A copy of this press release and related documents can be found at:
http://www.justice.gov/usao/ncw/calendar.htmlCharlotte Man Sentenced to More Than 39 Years in Prison for Armed Robbery and Attempted Armed Robbery ChargesRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Tony Humphrey, 20, of Charlotte, to 471 months in prison, followed by five years of supervised release on charges stemming from an April 2012 armed robbery spree of several area businesses and a bank, 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 and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department.
According to court documents and today’s sentencing hearing, on two occasions, Humphreys committed armed robberies at two different branches of Regional Finance Corporation (Regional Finance). On April 3, 2012, Humphrey robbed the Regional Finance located on Tryon Street in Charlotte, stealing $2,000 in cash. Then, on April 16, 2012, Humphrey robbed a second Regional Finance branch located on E. Independence Boulevard, also in Charlotte. $3,400 was stolen from that location. On both occasions, Humphrey pointed a firearm at employees while he demanded money.
Also according to court documents and today’s sentencing hearing, Humphrey and his co-conspirator, Corey Miller, 25, attempted to commit two armed robberies. On April 6, 2012, Humphrey and Miller attempted to rob a Charlotte-area Sonic restaurant. Court records show that the two men placed an order at the drive through window and then Humphrey entered the restaurant armed with a handgun and demanded money. According to court records, when a restaurant employee stated that she could not give him money, Humphrey pointed the gun at the employee’s head and pulled the trigger. The gun did not fire. Miller waited outside in the getaway car and drove Humphrey away from the scene. On April 14, 2012, Humphrey and Miller attempted to rob the Crown Auto Sales and Finance office located in Charlotte. Both Humphrey and Miller possessed and brandished firearms during that attempted robbery.
On April 13, 2012, Humphrey and Adonte Young, 28, robbed a PNC Bank branch located on East Boulevard in Charlotte. According to filed court documents and related court hearings, Humphrey and Young entered the bank and demanded cash. At least one of the two men was armed with and brandished a handgun. As they were leaving the bank with over $9,000 in cash, one of robbers fired two shots. Young and Humphrey fled the bank in a stolen vehicle which they abandoned. Police recovered a handgun, as well as a disguise worn by Young, from the stolen getaway car.
In January of 2013, Humphrey pleaded guilty to two counts of Hobbs Act robbery, two counts of attempted Hobbs Act robbery, one count of armed bank robbery, and two counts of possessing and brandishing a firearm during and in relation to a crime of violence.
In January of 2013, Corey Miller pleaded guilty to the April 6, 2012 attempted Hobbs Act Robbery of the Sonic Restaurant and to the April 14, 2012 attempted Hobbs Act robbery of the Crown Auto Sales. He also pleaded guilty to possessing and brandishing a firearm during the attempted Hobbs Act robbery of the Crown Auto Sales. On February 3, 2014, Chief U.S. District Judge Frank D. Whitney sentenced Corey Miller to serve 11 years in prison, to be followed by 5 years of supervised release.
In January 2013, Adonte Young pleaded guilty to possessing and discharging a firearm and aiding and abetting the same, in relation to the April 13, 2012 robbery of the PNC Bank on East Boulevard. On March 31, 2014, Chief U.S. District Judge Frank D. Whitney sentenced Young to 10 years in prison, to be followed by 5 years of supervised release.
Humphrey remains in federal custody and will be turned to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI’s Safe Streets Task Force and CMPD. The prosecution for the government was handled by Assistant U.S. Attorney Elizabeth F. Greene of the U.S. Attorney’s Office in Charlotte.
Two Poachers Receive Jail Time for Illegally Harvesting 147 Ginseng RootsRead the Press Release
ASHEVILLE, N.C. - U.S. Attorney Anne M. Tompkins announced that two men have been convicted and sentenced in U.S. District Court for the illegal harvesting of ginseng. Joining U.S. Attorney Tompkins in making today’s announcement is Deborah Flowers, Acting Chief Ranger of the Blue Ridge Parkway.
Daniel Mizell, 26, of Green Mountain, N.C. was sentenced today to serve 30 days in jail for engaging in business operations on the Blue Ridge Parkway and entering a closed area on the Blue Ridge Parkway during the federal government shutdown in October 2013. His co-defendant, Derek Vann Whitson, 33, of Mars Hill, N.C. was sentenced on March 27, 2014, to 90 days in jail for conspiring to harvest ginseng.
According to court documents and statements made in court:
On October 13, 2013, Whitson and Mizell called 9-1-1 for assistance after they became lost in the Asheville Watershed which borders the Blue Ridge Parkway. During the course of a search and rescue mission, approximately 35 individuals from various local, state and federal agencies responded to assist in finding the two missing men. On October 14, 2013, Asheville Watershed employees located Whitson and Mizell, who were found to be in possession of three pounds of freshly dug ginseng (147 roots). Whitson admitted ownership of two pounds of ginseng roots and stated Mizell dug the other one pound. Mizell and Whitson also admitted to entering the Watershed from the Parkway. At sentencing, U. S. Magistrate Judge Dennis L. Howell took particular note of the amount of public resources used during the search to locate two individuals, who became lost while engaged in criminal activity for personal profit.
American ginseng is on the list of the Convention on International Trade of Endangered Species (CITES). The Division of Scientific Authority, U.S. Fish & Wildlife Service is the regulatory agency that evaluates the biological and management status of wild American ginseng throughout its native range. The Division issues an annual or biennial report detailing if any harvest conditions need to be modified to ensure the sustainable harvest of wild native ginseng.
National Park, U.S. Forest Service and Asheville Watershed lands have been severely impacted by ginseng poachers in Western North Carolina. Permits to collect ginseng root in National Forests are issued annually through the U.S. Forest Service from September 1 to September 15. Permits are not available in National Park lands such as the Blue Ridge Parkway and Great Smoky Mountains National Park where even the possession of American ginseng is prohibited. Permits to collect ginseng roots are also unavailable for the Asheville Watershed and that area is closed to entry by the public.
The investigation of the cases was handled by the rangers of the Blue Ridge Parkway and officers and employees of the City Of Asheville. The prosecution was handled by the U.S. Attorney’s Office in Asheville.
Armored Car Service Employee Sentenced to 15 Months in Prison for Stealing More Than $143,000 from Bank VaultRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Christian Zorrilla, 31, of Charlotte to 15 months in prison for stealing $143,680 from a bank vault, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Zorrilla was also ordered to serve two years under court supervision and to pay $143,680 as restitution. Zorrilla pleaded guilty in March 2013 to one count of bank theft.
Brock D. Nicholson, 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.
According to charging documents and statements made during the sentencing hearing, from 2005 through May 2012, Zorrilla was employed by an armored car service as a driver, messenger, and vault custodian. According to court records, between December 2011 and April 2012 and while working as vault custodian, Zorrilla stole a total of $143,680 from the armored car service. Court records indicate that Zorrilla’s responsibilities as vault custodian included coordinating cash storage at the bank’s vault and changing out security tapes. According to court documents, Zorrilla used the delay between the changing of security tapes to take cash out of sealed bags in the vault and to reseal the bags. Zorrilla stole funds in this manner on approximately six occasions, court records show. According to information contained in filed documents and statements made during the sentencing hearing, Zorrilla used the stolen money to pay for vehicles and to pay off a second mortgage on his home.
Zorrilla remains released on bond and upon designation of a federal facility he will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence. All federal sentences are served without the possibility of parole.
The investigation into Zorrilla was handled by HSI. The case was prosecuted by Assistant U.S. Attorney Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
Statesville Jury Finds Armed Bank Robbers GuiltyRead the Press Release
Defendant Used Vehicle He Carjacked That Morning To Commit Bank Robbery
STATESVILLE, N.C. – A federal jury sitting in Statesville returned a guilty verdict on Thursday, May 15, 2014, against Darius Donneal Freeman, 32, and Wincy Joseph, 29, both of Charlotte, for armed bank robbery and possession of a firearm in furtherance of a crime of violence charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The jury also found Freeman guilty of carjacking and a second possession of a firearm in furtherance of a crime of violence.
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, Chief Matthew A. Selves of the Troutman Police Department and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department.
According to filed court documents and trial proceedings:
In or about May 20, 2013, at approximately 5:15 a.m. Freeman carjacked a victim at gunpoint at a Circle K gas station located on South Boulevard in Charlotte. Later that morning, Freeman and Joseph used the carjacked vehicle to rob a Bank of America branch in Troutman, N.C. Soon after the bank opened, Freeman entered the bank wearing a black cap, sunglasses, gloves and brandishing a silver handgun. Freeman jumped on the tellers’ counter and demanded cash. Joseph entered the bank behind Freeman, dressed in a black sweatshirt with the hood pulled over his head, sunglasses and gloves, and demanded cash from another bank employee. The defendants then fled the scene with approximately $5,100 in cash, driving off in the car Freeman had jacked earlier that day. Law enforcement later found the car abandoned on Interstate-77 in Iredell County. The defendants were identified five days later, following a tip from a concerned citizen. Freeman was arrested on June 6, 2013. Joseph was arrested on June 13, 2013.The armed bank robbery charge carries a maximum prison term of 25 years and a $250,000 fine. The possession of a firearm in furtherance of a crime of violence offense carries a minimum of 7 consecutive years and a maximum of life in prison. Freeman also faces a maximum prison term of 15 years and a $250,000 for the carjacking charge. He also faces a minimum of 32 years and a maximum of life in prison for the possession of a firearm in furtherance of a crime of violence (carjacking). Both defendants remain in custody. Sentencing dates for the defendants have not yet been set.
The investigation was led by the FBI, the Troutman Police Department and CMPD. U.S. Attorney Tompkins also thanked the Mooresville Police Department, the Iredell County Sheriff’s Office and the Statesville Police Department for their assistance in the investigation.
The prosecution was handled by Assistant U.S. Attorney Elizabeth Greene and Special Assistant U.S. Attorney Rebecca McNerney. Ms. McNerney is a state prosecutor with the Iredell County District Attorney’s Office, and was assigned by District Attorney Sarah M. Kirkman to serve as a Special Assistant United States Attorney (SAUSA) with the U.S. Attorney’s Office in Charlotte.
The U.S. Attorney’s Office for the Western District of North Carolina Honors and Remembers Fallen Law Enforcement Officers, in Observance of 2014 "National Police Week"Read the Press Release
CHARLOTTE, N.C. – This week, communities across the United States will gather during National Police Week to remember law enforcement officers who made the ultimate sacrifice in the line of duty, to share their stories of courage and sacrifice and to honor their memory.
“Police week is a time of remembrance of fallen officers who gave their lives to protect ours,” said Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. “Together with our fallen heroes’ families, friends and comrades we come together to grieve for their tragic loss, to celebrate their lives and to carry on the legacy they left behind.”
This year, the names of 286 officers killed in the line of duty will be added to the National Law Enforcement Officers Memorial in Washington, D.C., including the names of 100 officers who made the ultimate sacrifice during 2013, and 186 officers who died earlier in history but whose sacrifice had not been previously documented. With the addition of the 286 names this year, a total of 20,267 officers’ names are engraved on the Memorial. The names represent fallen law enforcement officers from all 50 states, the District of Columbia, U.S. territories, federal law enforcement, and military police agencies. Among those added this year will be:
• Robert Austin Bingaman, of the Asheville Police Department. Officer Bingaman died in October 2013.
• Jerry L. Scantling, of the Onslow County Sheriff’s Office, who died in August 2008.
• Ronald Lee Yeazel, of the Hope Mills Police Department, who was killed in September 1994.
• John Cook, of the Mecklenburg County Sheriff’s Office, who was killed in October 1804.Since January 2014, two more officers in North Carolina have fallen in the line of duty. Alexander Thalmann, of the New Bern Police Department, died in March 2014 from a gunshot wound he sustained during a traffic stop. Forest Service law enforcement officer Jason Crisp and his K-9 partner, Maros, were shot and killed in March 2014 while pursuing a suspect, who hours earlier had killed his own father and step-mother. Officers Thalmann and Crisp will be honored in next year’s ceremony at the Memorial.
U.S. Attorney Tompkins noted that, “Police Week is an opportunity to honor and recognize all law enforcement officers in our communities, who bravely stand on the front lines of violence, each day. These officers are part of a long line of courageous men and women who have taken an oath to protect our neighborhoods, our homes and our loved ones from harm. I am thankful for their service, their courage and their willingness to answer the ultimate call of duty.” There are approximately 900,000 law enforcement officers currently serving in communities across the United States. Each year, nearly 60,000 assaults against law enforcement officers are reported, resulting in approximately 16,000 injuries.
The names of all 286 fallen officers nationwide will be formally dedicated on the National Law Enforcement Officers Memorial during the 26th Annual Candlelight Vigil, which will be held on the evening of May 13, 2014, in Washington, D.C. U.S. Attorney General Eric Holder will deliver the keynote address and lead the candle lighting and reading of the names of the fallen officers.
The ceremony will be webcast live beginning at 8:00 p.m. (EDT). To register for this free online event, please visit www.LawMemorial.org/webcast. http://www.LawMemorial.org/webcast
Burke Co. Man Sentenced to More Than Seven Years in Prison on Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – A Burke County man was sentenced on Thursday, April 24, 2014, to serve 90 months in a federal prison for possession, receipt, and distribution of child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Martin Reidinger also ordered the defendant to register as a sex offender and serve the rest of his life under court supervision after he is released from prison.
Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI) and Sheriff Steve E. Whisenant of the Burke County Sheriff’s Office join U.S. Attorney Tompkins in making today’s announcement.
In November 2012, a federal criminal indictment charged Eddie Wayne Lane, Jr, 27, of Connelly Springs, N.C. with one count of possession of visual depictions of minors engaging in sexually explicit conduct, one count of receiving such images, and one count of distributing them. Lane pleaded guilty to the charges in April 2013. According to court filings and proceedings, during the investigation, detectives discovered an extensive collection of child pornography including a computer hard drive and multiple email accounts. Lane’s investigation led to the prosecution of Michael John Jones who was sentenced to 25 years in prison for producing child pornography. The U.S. Attorney’s Office for the Northern District of West Virginia handled Jones’ prosecution. For information on that case is available at: http://www.justice.gov/usao/wvn/news/2012/august/jones.html and http://www.justice.gov/usao/wvn/news/2012/august/jones.html.
Lane is in local federal custody 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 Lane was handled by the SBI and the Burke County Sheriff’s Office. Both agencies are members of the North Carolina Internet Crimes Against Children Task Force (ICAC). Assistant U.S. Attorneys David A. Thorneloe and Cortney S. Randall of the U.S. Attorney’s Office for the Western District of North Carolina 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.
Mexican Drug Kingpin Pleads Guilty to Trafficking Black Tar HeroinRead the Press Release
CHARLOTTE, N.C. – Mexican drug kingpin, Carlos Ramon Castro-Rocha, appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to conspiracy to import and conspiracy to possess with intent to distribute heroin, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Castro-Rocha, a/k/a “Cuate,” 40, of Sinaloa, Mexico, was the head of a Mexican drug trafficking organization (DTO) responsible for producing and distributing into the United States vast quantities of heroin between 2005 and 2008.
Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office 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 court proceeds, as the DTO’s leader, Castro-Rocha ran an extensive drug trafficking network and oversaw all aspects of the drug operation, from production in Mexico to distribution in cities throughout the U.S. The Department of Justice designated Castro-Roca as a Consolidated Priority Organization Target, or “CPOT,” a designation reserved for command and control level drug traffickers, who run organizations that smuggle large quantities of narcotics into the United States.
Castro-Rocha was first charged by the U.S. government via a criminal complaint filed in the Western District of North Carolina in January 2009. He was formally indicted in this district on federal drug trafficking charges in June 2009. The indictment remained sealed until Castro-Rocha was arrested by Mexican authorities on May 30, 2010, pursuant to extradition proceedings initiated the U.S. Department of Justice. Following Castro-Rocha’s several unsuccessful appeals in the Mexican judicial system, his final extradition order to the United States was granted in October 2012, and Castro-Rocha arrived in the U.S. later that month. In addition to the charges against him in Western North Carolina, Castro-Rocha faces separate federal drug trafficking and related charges in the District of Arizona.
U.S. Attorney Tompkins stated, “Castro-Rocha’s guilty plea speaks of our determination to dismantle organized drug networks and take down their bosses, no matter how long it takes. Drug kingpins hiding in foreign countries think they are beyond our reach, either too powerful to go after or too well-hidden to find. But as this case shows, we will take the fight abroad and overcome all hurdles, until those responsible for flooding our streets with drugs face the American justice system.”
“DEA and its law enforcement partners delivered a major assault against a well-established Mexican DTO group which was led by Carlos Ramon Castro-Rocha. This Mexican-based DTO was a pipeline for black tar heroin and other dangerous drugs being shipped from Mexico to our country. Because of the dedication and hard work of all law enforcement agencies involved, Castro-Rocha and those he led will no longer distribute the destructive and deadly substances that wreak havoc in our neighborhoods,” stated Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division.
“The outcome of this case will have a significant impact on the distribution of illegal drugs across our nation and within the City of Charlotte,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “Dismantling a drug ring of this magnitude only could have been accomplished through the cooperation of all partner agencies involved. Our message is clear: illegal drug trafficking will not be tolerated or condoned in our community.”
Castro-Rocha’s guilty plea stems from “Operation Dirty Girl II,” which is the local portion of a national anti-drug initiative, “Project Deliverance,” aimed at stemming the flow of illegal narcotics into the U.S. Led by the DEA and other members of the Western District’s Organized Crime Drug Enforcement Task Force (OCDETF), Dirty Girl II focused on disrupting and dismantling the infrastructure of Castro-Rocha’s drug trafficking network, which was responsible for producing and smuggling in the U.S. vast quantities of heroin, including a highly dangerous form, black tar heroin. “Dirty Girl” is the street name for black tar heroin.
Filed court documents indicate that Castro-Rocha’s drug organization produced the heroin in Mexico, smuggled it across the border and distributed it throughout the United States, including the Charlotte area. According to court records, in September 2007, law enforcement in Charlotte seized more than two and a half kilograms (approx. six pounds) of black tar heroin that had been trafficked to Charlotte through Castro-Rocha’s drug distribution network. More than $110,000 in cash and a handgun were also seized. Court records indicate that in August 2008, law enforcement made two additional seizures of approximately one kilogram of black tar heroin. According to court records, between 2005 and 2008, Castro-Rocha’s network trafficked up to ten kilograms of black tar heroin in the Charlotte area alone, with an approximate street value of $1.2 million.
In addition to the organization’s leader, a total of 11 defendants associated with Castro-Rocha’s DTO have been prosecuted in Western North Carolina.
Castro-Rocha pleaded guilty to one count of conspiracy to import heroin and one count of conspiracy to possess with intent to distribute heroin in Charlotte and elsewhere. He faces a mandatory minimum prison sentence of 10 years and a maximum of life in prison, and a $10,000,000 fine. A sentencing date has not been set yet. Following Castro-Rocha’s sentencing in this district, he will be transferred to Arizona to face the federal drug charges pending against him there.
In making today’s announcement U.S. Attorney Tompkins praised the DEA agents and CMPD officers who worked tirelessly to build a successful case against Castro-Roca. She also thanked the FBI, the Gastonia Police Department and the Union County Sheriff’s Office for their invaluable assistance and commended Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte for his prosecution of the case.
Polk Co. Couple Sentenced for False Tax Refund ConspiracyRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced a Polk Co. couple to prison on Thursday, April 24, 2014, for filing over 1,000 false tax returns and collecting more than $3.5 million in fraudulent tax refunds, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and Keith Fixel, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service join U.S. Attorney Tompkins in making today’s announcement.
Senita Birt Dill, 46, and Ronald Jeremy Knowles, 42, both of Mill Spring, N.C. were sentenced to 324 and 70 months in prison, respectively. In addition to the prison terms, Judge Reidinger ordered the defendants to serve three years under court supervision and to pay $3,978,211 as restitution to IRS. Dill ato nd Knowles pleaded guilty in October 2012 false claims conspiracy and access device fraud. Dill also pleaded guilty to aggravated identity theft.
According to filed court documents and yesterday’s sentencing hearings, from 2009 to 2012, Dill and Knowles used fraudulently-obtained personal identification information (including names, dates of birth and social security numbers) to file false tax returns claiming tax refunds. Court documents indicate that the pair used tax preparation software programs to file and submit these fraudulent federal and state tax returns. According to court records, the tax returns contained fictitious information, such as the filer’s income and the amount of federal tax withheld. Court records show that the defendants were careful to use fictitious figures that maximized the amount of the claimed refund, while minimizing the risk of detection.
According to court records, the pairs’ elaborate tax scheme included renting a property on a lake which was surrounded by numerous vacation homes in the neighborhood. Court records show that Dill and Knowles used the neighboring addresses to fill out the fraudulent tax returns, and since the neighboring homes were not occupied daily, the couple was able to check the homes’ mailboxes frequently and retrieve the fraudulent refund checks upon delivery. According to court records, in addition to the addresses of lake homes, the defendants also used addresses in Greenville and Greer, S.C. on the fictitious tax returns, which is where Knowles’ business is located. Court records indicate that once they retrieved the refunds, the defendants deposited the refund checks directly into their bank accounts. On some occasions, the defendants received tax refunds in the form of pre-paid debit cards, court records show.
According to court records, Dill and Knowles filed over 1,000 false tax returns using the fraudulently obtained personal identification information. They also made fraudulent tax refund claims in excess of $5 million and actually received tax refunds totaling over $3.5 million.
The defendants have been in federal custody since October 2012. They 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 IRS and USPIS, with the assistance of the Polk County Sheriff’s Office. The prosecution of the case is handled by Assistant U.S. Attorney Don Gast of U.S. Attorney’s Office in Asheville.
Spruce Pine Attorney Sentenced to 27 Months for Filing False Tax ReturnsRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Graham Mullen sentenced a Spruce Pine man, who was an attorney, engineer and appraiser, to 27 months in prison for making false statements on his tax returns, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Randy Alan Carpenter, 56, was also ordered to serve one year under court supervision and to pay $507,995 as restitution to IRS.
Joining U.S. Attorney Tompkins in making today’s announcement are Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CI), John A Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI) and Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation, Office of the Inspector General (FDIC-OIG).
According to court records and today’s sentencing hearing, Carpenter received over $1.2 million in professional fees in 2005 and 2006 from his work at a failed real estate development near Spruce Pine, N.C., known as the “Villages of Penland.” Carpenter pleaded guilty to the tax charges in May 2013. As a condition of his plea agreement, Carpenter was also ordered to cooperate with the IRS in filing amended tax returns. When announcing his sentence, Judge Mullen noted that although Carpenter’s sentencing was not intentionally set for April 15th, the court agreed with the prosecution’s argument that Carpenter’s sentence should be a general deterrent to those might be tempted to intentionally file false tax returns.
Carpenter will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled jointly the FBI, IRS and FDIC-OIG. The case is being prosecuted by Assistant United States Attorneys Michael E. Savage and Courtney Bumpers of the U.S. Attorney’s Office in Charlotte and Trial Attorney Gregory Bailey of the U.S. Department of Justice’s Criminal Tax Division.
Former Chief Finance Officer Admits to Stealing Nearly $4 Million from His Employer and Pleads Guilty to Mail FraudRead the Press Release
CHARLOTTE, N.C. – The former Chief Finance Officer (CFO) of a Mint Hill-based company has admitted to stealing approximately $4 million from his former employer and has pleaded guilty to mail fraud, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Nathan Thomas Mroz, 39, of Charlotte, entered his formal guilty plea on Monday, April 14, 2014, before U.S. Magistrate Judge David S. Cayer.
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 filed court documents and court proceedings, from 2005 to 2013, Mroz was employed by an HVAC company as financial controller and later as CFO and had access to the company’s funds and books and records. Court documents show that over the course of his employment, Mroz exploited his position to create fake accounts payable invoices and to generate corresponding payments, which Mroz directed to himself or mailed to various credit cards he maintained. According to court documents, to cover up his scheme, Mroz fraudulently categorized the bogus company payments as legitimate business expenses in the company’s books and records. Court filings reflect that Mroz spent the stolen money on a wide array of personal expenditures, including vacations to Disneyland and Europe, luxury vehicles, private school tuition, jewelry and to purchase a $115,000 home for his nanny. In all, court documents indicate that Mroz stole approximately $4 million from his former employer.
Mroz pleaded guilty to one count of mail fraud and was released on bond. At sentencing, he faces a maximum prison term of 20 years and a $250,000 fine. As part of his plea agreement, Mroz 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 FBI. The prosecution for the government is being handled by Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte.
April is National Financial Literacy MonthIn 2004, April was officially designated National Financial Literacy Month, to raise public awareness on the importance of personal financial education and to promote access to tools and information so individuals can better protect themselves from financial fraud.
The U.S. Attorney’s Office for the Western District of North Carolina reminds the public that financial scams come in different forms: Ponzi schemes, mortgage fraud, corporate fraud, investor fraud, credit card fraud, identity theft, telemarketing scams and fraudulent charity solicitations are some of the most common schemes. Prosecuting financial fraud continues to be a priority for the U.S. Attorney’s Office however, becoming educated consumers and investors is the public’s first line of defense against predatory schemes and financial scams.
Additional information on common financial schemes and financial literacy resources are available at:
• U.S. Department of Justice – Financial Fraud Enforcement Task Force www.stopfraud.gov
• Federal Bureau of Investigation – Common Fraud Schemes www.fbi.gov/scams-safety/fraud
• U.S. Department of Treasury - Financial Literacy and Education Commission www.mymoney.gov
• U.S. Department of Justice – U.S. Trustee Program www.justice.gov
Seven Charlotte Men Sentenced for Conspiracy to Traffic in NarcoticsRead the Press Release
CHARLOTTE, N.C. – Seven Charlotte men were sentenced on Thursday, April 10, 2014, on federal drug conspiracy charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The sentencings stem from a joint six-month investigation conducted by the Drug Enforcement Administration and the Charlotte Mecklenburg Police Department, targeting drug trafficking and violent crime in Mecklenburg County, with special emphasis placed on Enderly Park neighborhood in northwest Charlotte.
Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD), join U.S. Attorney Tompkins in making today’s announcement.
According to the January 2013 criminal indictment, from 2006 through 2013, the 10 defendants engaged in a drug trafficking conspiracy. According to court documents and yesterday’s sentencing hearings, between July 2012 and January 2013, law enforcement made approximately 30 undercover drug buys from the defendants at or near a residence located on Karendale Avenue, in Enderly Park. In addition to charging the defendants, court documents show that the government has sought forfeiture of the residence that was used to facilitate the drug sales and that action is still pending.
Chief U.S. District Judge Frank D. Whitney sentenced the following seven of the 10 defendants:
• Maurice Crawford, 32, was sentenced to 49 months in prison and three years of supervised release. • Theodore Falls, 39, was sentenced to 40 months in prison and three years of supervised release. • Aaron Ligon, 49, was sentenced to 40 months in prison and three years of supervised release. • Mario Wilson, 24, was sentenced to 40 months in prison, followed by three years of supervised release. • Lavar Rodgers, 32, was sentenced to 30 months in prison, followed by three years of supervised release. • Curtis Smith, 37, was sentenced to 30 months in prison, followed by three years of supervised release. • Nathaniel Washington, 31, was sentenced to 24 months in prison and three years of supervised release.
The three remaining three defendants, Derrick Lowery, Derrick Owens and Cadaryl Drayton are awaiting sentencing.
In issuing the sentences, Judge Whitney noted the devastating effect that drug trafficking has had in communities. Judge Whitney called the repeated drug sales by these individuals a “poison” to the other residents of Enderly Park, who have a right to live in a safe and crime-free neighborhood.
The seven defendants have been in federal custody since January 2013. They 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 is being handled by the DEA and CMPD. The prosecution for the government is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.
Federal Judge Hands Down Prison Sentences to Two Women for Using Stolen Identities to Claim Millions of Dollars from Medicaid in Related Health Care Fraud SchemesRead the Press Release
CHARLOTTE, N.C. – Two women who defrauded Medicaid of millions of dollars using stolen therapists’ identities in related health care fraud schemes have been sentenced to prison by a federal judge in Charlotte, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
On Wednesday, April 9, 2014, Chief U.S. District Judge Frank D. Whitney sentenced Victoria Finney Brewton, 39, of Shelby, N.C. to 111 months in prison, to be followed by three years of supervised release for defrauding Medicaid of $8 million in false reimbursement claims for sham mental and behavioral health services. Judge Whitney also ordered Brewton to pay $7,070,426.52 as restitution to Medicaid and $573,392.80 to IRS.
On Tuesday, April 8, 2014, Judge Whitney sentenced one of Brewton’s conspirators, Rodnisha Sade Cannon, 27, of Charlotte to 102 months in prison for a similar scheme also involving sham mental and behavioral health services. Judge Whitney also ordered Cannon to serve three years under court supervision and to pay restitution in the amount of $2,541,306.36.
Cannon initially worked as a patient recruiter for Brewton, providing Brewton with the personal information of Medicaid recipients, which Brewton then used to file fraudulent reimbursement claims with Medicaid. Cannon later began running her own similar health care fraud scheme, that attempted to defraud Medicaid of $4.8 million in fraudulent reimbursement claims using the stolen identities of patients and therapists.
Victoria BrewtonAccording to court documents and court proceedings, from 2008 to 2012, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid beneficiaries through their families to sign up for these programs, promising the programs would be free for Medicaid recipients. Court records show that Brewton stole the Medicaid recipient numbers of some of the children and families who had signed up for the programs and fraudulently billed Medicaid for mental and behavioral health services which were never provided. Brewton was not licensed or qualified to provide mental and behavioral health services nor was she a Medicaid-approved provider, court documents show. According to court records, Brewton submitted the fraudulent reimbursement claims through other Medicaid-approved providers, some of whom did not know their information had been compromised.
Court records show that one such provider was a licensed therapist (“K.S.M.”) hired by Brewton to provide mental and behavioral health services for her company, Healing Hearts. Brewton submitted false and fraudulent claims to Medicaid using K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M, and continued to submit fraudulent claims even after K.S.M. was no longer employed by Brewton. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her company and submitted false claims to Medicaid through their numbers. Court records indicate that Brewton also failed to report to IRS the income derived from her fraudulent scheme. In January 2013, Brewton pleaded guilty to health care fraud and health care fraud conspiracy, aggravated identity theft and filing false tax returns.
Rodnisha Sade CannonAccording to court documents and court proceedings, beginning in 2010 to 2012, Cannon created two companies, (“2nd Chances” and “A Chance for Change, Inc.”), and began operating after-school and summer childcare programs in Gastonia and Shelby. Although therapists initially performed some services at these programs, Cannon and others used the Medicaid provider numbers of other companies and individual therapists to submit fraudulent claims to Medicaid for therapy services supposedly provided at Cannon’s programs. Court records reflect that in many instances, the claimed mental and behavioral health services were never provided at all.
Court documents indicate that Cannon, who was not licensed or qualified to provide mental and behavioral health services and was not approved by Medicaid, stole the identities of Medicaid-approved providers who had some relationship with her programs. For example, court documents indicate that in May 2012, Cannon hired “M.B.,” who was a licensed clinical social worker, to work for her company. M.B. worked for Cannon’s company for a single day. Court records show that Cannon and her conspirators stole M.B.’s Medicaid provider information and used it to file more than $800,000 in fraudulent claims for services that M.B. never provided, including claims for dates of service before M.B. worked for Cannon.
According to court records, after opening her own companies, Cannon continued to provide and sell to Brewton Medicaid beneficiary identification numbers and information to be used in Brewton’s fraud scheme. In total, Cannon and her conspirators submitted approximately $4.8 million in false claims and received over $2.5 million as payment on those claims from Medicaid. Cannon pleaded guilty in April 2013 to health care fraud conspiracy, aggravated identity theft and money laundering conspiracy. Cannon also pleaded guilty to attempting to remove property subject to seizure, namely a 2010 Mercedes-Benz CLS550.
According to court records, Cannon purchased the Mercedes-Benz for $59,500 with the proceeds of her fraud scheme. When law enforcement obtained a warrant to seize the Mercedes-Benz, Cannon attempted to sell the vehicle to avoid its seizure. Cannon has been in local federal custody since her arrest on the attempted removal of property to prevent seizure charge in September 2012 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.
Brewton has been released on bond and will be ordered to self-report to the Federal Bureau of Prisons to begin serving her sentence. All federal sentences are served without the possibility of parole.
In making today’s announcement U.S. Attorney Tompkins thanked North Carolina’s Medicaid Investigations Division (MID) under the direction of Attorney General Roy Cooper, the Charlotte Division of the FBI, under the direction of Special Agent in Charge John A. Strong, the Internal Revenue Service, Criminal Investigation Division (IRS-CI) under the direction of Special Agent in Charge Jeannine A. Hammett, and the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region, under the direction of Special Agent in Charge Derrick Jackson, for their investigation leading to Brewton and Cannon’s prosecutions. She also thanked the North Carolina Division of Medical Assistance, Program Integrity Section for their invaluable assistance in Brewton’s case.
The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar 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 whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Prison Time and Stiff Penalties Await Tax Fraudsters, Prosecutors WarnRead the Press Release
Tax Preparer Fraud, Identity Theft Among The 12 Most Common Tax Scams
CHARLOTTE, NC - With the deadline for filing income tax returns less than a week away, Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division (IRS-CI), jointly announce recent tax fraud prosecutions and caution potential tax fraudsters to think twice before they commit tax crimes.
“Prosecuting those who cheat the tax system remains a priority for my Office,” said U.S. Attorney Tompkins in making today’s announcement. “Taxes help pay for important services our communities rely on and tax cheats increase the burden on honest taxpayers who each year file accurate and timely tax returns and pay their tax obligations.” Ms. Tompkins urged tax payers to be vigilant in safeguarding their personal identities and to avoid being victims of tax scams by selecting reliable tax preparers and reporting suspected tax fraud. U.S. Attorney Tompkins also said, “Our experienced tax prosecutors and IRS criminal investigators work hand-in-hand to uncover tax fraud and hold tax cheats accountable for their actions.”
“During tax filing season, return preparers and taxpayers should be aware of the serious consequences facing those who aid or assist in the filing of fraudulent tax returns,” said IRS-CI Special Agent in Charge Hammett. “Those who fly in the face of the tax laws face investigation, prosecution, and if convicted, significant prison sentences and substantial fines.”
Tax Preparer Pleads Guilty to Tax FraudReginald B. Landrum, a Charlotte-area tax return preparer, pleaded guilty today to one count of aiding in the preparation of false tax returns. Court records show that between 2006 and 2010 Landrum prepared and submitted to IRS 58 false tax returns using false information, resulting in larger tax refunds for his clients. Court records show that Landrum used false Schedule C income and expenses, false Schedule A deductions, false wages, false dependents and other false items to prepare the fraudulent tax returns. The total tax loss associated with the 58 fraudulent tax returns Landrum prepared and filed is $229,691. At sentencing, Landrum faces up to three years in prison and a $250,000 fine. A sentencing date has not been set yet. (3:14-cr-46).
Other 2013 Tax ProsecutionsIn the last year, the U.S. Attorney’s Office, with the assistance of IRS-CI, has prosecuted numerous individuals for criminal tax violations. Tax enforcement prosecutions include:
Isaac H. Birch - On August 15, 2013, Isaac Birch, of Franklin, N.C., pleaded guilty to filing false and fraudulent statements with the U.S. Treasury. According to court documents, Birch filed false tax returns in 2007, 2008 and 2009 using fictitious IRS 199OID forms, through which he fraudulently obtained a refund in excess of $480,000. Birch is awaiting sentencing and faces a maximum prison term of three years and a $100,000 fine. (2:13-cr-00020).
Tega Burns - On January 14, 2014, Tega Burns, a/k/a Tega Foy, of Charlotte, was sentenced to 24 months in prison and two years of supervised release and was ordered to pay $306,972.43 as restitution, for committing tax fraud and mortgage fraud. Court records show that from 2007 to 2011, Burns was the owner of Family Homecare Services, which provided in-home care services in the Charlotte area. Court documents show that Burns did not pay a large part of the employment taxes owed for the relevant tax years and used nominees, including her son and her step-father, to hide funds from the IRS. Burns pleaded guilty to failure to account for and pay over employment tax and to making a false statement on a loan application. (3:12-cr-00198).
Candida Figueroa and Cathy Cisneros – On November 7, 2013, Candida Figueroa and Cathy Cisneros, both of Charlotte, were sentenced to prison time for obtaining false and fraudulent income tax refunds. Figueroa was sentenced to 30 months in prison and two years of supervised release, and Cisneros was sentenced to 37 months in prison and three years of supervised release. Figueroa and Cisneros pleaded guilty false claims conspiracy and were ordered to pay $1,658,477.67 as restitution. Court documents indicate that from January to July 2012, the defendants used fraudulent Individual Taxpayer Identification Numbers (ITINs), Mexican birth certificates and other false documents to file at least 1,104 fraudulent tax returns seeking refunds. IRS issued refunds totaling approximately $1.6 million, of which $136,334 has been recovered. (3:12-cr-00260). A third co-conspirator, Ana Portillo, of Charlotte, pleaded guilty to false claims conspiracy in May 2013 for participating in the same tax fraud scheme and is awaiting sentencing. Portillo faces a maximum prison term of 10 years, a $250,000 fine, or both. (3:12-cr-00389).
Teodoro Felix Hernandez – On November 10, 2013, Teodoro Felix Hernandez pleaded to false claims conspiracy. According to filed court documents, from February 2012 to May 2013, Hernandez conspired with others and defrauded the U.S. Treasury by obtaining false tax refunds using fraudulently obtained ITINs. The conspirators prepared and filed false returns using the ITINs and false wage, income, and withholding tax information and claiming multiple dependents, causing the U.S. Treasury to issue tax return checks. The checks were mailed to rural addresses in North Carolina, South Carolina and Georgia, at which the purported taxpayer did not live. According to the documents, Hernandez cashed approx. 109 fraudulent tax return checks with various money service businesses, the value of which totaled $428,065 in false refunds. Hernandez is currently released on bond and awaiting sentencing. He faces a maximum of 10 years in prison and a $250,000 fine. (3:12-cr-158).
James Wesley Hills, II – On March 3, 2014, James Wesley Hills, II, of Asheville, pleaded guilty to making false claims against the United States and aggravated identity theft. According to court documents, Hills gained access to personal identifying information of customers of Primerica, a financial products company, and between 2010 and 2011, he used the stolen information to file fraudulent tax returns. Hills filed at least 38 false tax returns in this manner and collected over $50,000 of stolen U.S. Treasury funds. Hills is awaiting sentencing. He faces a maximum prison term of five years for making false claims and a mandatory term of two years in prison for the aggravated ID theft charge, and a $250,000 fine. (1:14-cr-05).
Jacqueline Pucheta Juarez – On January 7, 2014, Jacqueline Pucheta Juarez pleaded to false claims conspiracy. According to filed court documents, from January 2012 to May 2013, Juarez and others conspired to defraud the U.S. Treasury by participating in a scheme to obtain false tax refunds, using fraudulently obtained ITINs. Juarez and others used these ITINs to prepare fraudulent federal tax returns seeking refunds based on false wage, income, and withholding tax information and by claiming multiple dependents. Based on the fraudulent tax returns, the U.S. Treasury issued tax return checks and mailed them to addresses in rural addresses in North Carolina, South Carolina and Georgia, at which the purported taxpayer did not live. Juarez cashed approx. 350 fraudulent tax refund checks at various money service businesses, the value of which totaled $1,271,377 in false refunds. Juarez is currently in federal custody and awaiting sentencing. She faces a maximum prison term of 10 years, a $250,000 fine, or both. (United 3:12-cr-157).
Yolanda Tiess Kitson - On October 28, 2013, Yolanda Tiess Kitson, of Augusta, Ga., pleaded guilty to false claims conspiracy. Court records show that Kitson conspired with Senita Dill and Ronald Jeremy Knowles to file fraudulent tax returns using stolen personal identifying information. Through her job as a contractor at the Eisenhower Army Medical Center at Fort Gordon in Augusta, Ga., Kitson stole personal information from patient records and passed it her sister, Dill, who used it to file false tax returns. The conspirators filed more than 1,000 false tax returns and received over $3.5 million of stolen U.S. Treasury funds. Dill and Knowles also pleaded guilty to similar charges. All three defendants are awaiting sentencing and face up to 10 years in prison and $250,000 in fines. (1:13-cr-31).
Nghia Ly – On October 2, 2013, Nghia Ly, of Waxhaw, N.C., pleaded guilty to tax evasion for the 2011 calendar year. According to court records, Ly owned half of Kim Sen Jewelry, Inc., d.b.a. KS Nail Supply (KSJ) in Charlotte. From 2007 through 2011, Ly concealed from the IRS some of his personal earnings from KSJ. Court records show that Ly failed to provide bank records and hid a large part of the gross receipts of KSJ from his tax return preparer. For years 2007 through 2011, KSJ earned additional gross receipts totaling more than $4.8 million which Ly failed to report on KSJ corporate tax returns. As a result of the unreported gross receipts, Ly had additional taxable income of $820,396. A sentencing has not been set. Ly faces a maximum sentence of five years in prison and a maximum fine of $250,000. (3:13-cr-00235).
Jessica Ordonez – On March 31, 2014, Jessica Ordonez, of Morganton, N.C., was charged with tax evasion and aiding and abetting the preparation and presentation of a false tax return. Beginning in 2002, Ordonez was the owner of Tax Pros (a/k/a “Ordonez Tax Services”), which offered tax preparation services, among other things. Court documents show that between 2004 and 2012 Ordonez prepared at least 100 false tax returns for 23 taxpayers, using fraudulent ITINs which entitled her clients to large fraudulent tax refunds, with an associated tax loss of at least $202,217. Ordonez also failed to report her own income on her individual tax returns for tax years 2009 to 2011, with a corresponding tax loss between $81,000 and $122,000. Ordonez’s formal plea hearing is scheduled for April 11, 2014. At sentencing, she faces five years in prison and a $250,000 fine for the tax evasion charge and three years in prison and a $250,000 fine for aiding and abetting the preparation and presentation of a false tax return. (3:14-cr-00071).
Edward Rosner – On September 12, 2013, Edward Rosner, of Charlotte pleaded guilty to tax evasion. According to the court records, from 2005 through 2009, Rosner concealed his personal earnings from the IRS by directing funds obtained from his employer to himself through bank accounts in the name a nominee company, New Start LLC, and by directing the transfer of funds to accounts in the name of another individual. During this same time period, Rosner failed to file tax returns, despite obtaining income totaling approximately $2.9 million. Rosner awaits sentencing and faces a maximum prison sentence of five years and a $250,000 fine. (3:13-cr-00172).
Nkhenge Shropshire – On October 15, 2013, Nkhenge Shropshire, a/k/a Konjay Shropshire, of Charlotte, pleaded guilty to conspiracy to defraud the IRS and to making false statements on a loan application. Court records show that from 2009 through 2012, Shropshire owned Tax Connections, a Charlotte tax return preparation business. From 2009 to 2011, Shrophsire aided and assisted in the preparation of more than 600 tax returns for clients which were e-filed with the IRS. Many of the tax returns prepared by Shropshire falsely included Schedule C losses and refundable education credits, which decreased the clients’ tax liabilities, therefore 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. 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, Shropshire did not provide her clients with copies of their completed tax returns or gave them incomplete copies, so clients could know their returns contained false information. The defendant is awaiting sentencing, and faces a maximum sentence of five years in prison and a maximum fine of $250,000 for the conspiracy count and a maximum sentence of 30 years in prison and a $1 million fine for the false statement on a loan application charge. (3:13-cr-00248).
Kenneth Sumner – On January 16, 2014, Kenneth Sumner, of Charlotte, pleaded guilty to filing a false tax return. Court documents indicate that Sumner was the owner of a Charlotte sales company, Ken B. Sumner and Associates. From 2006 through 2010, Sumner failed to file timely tax returns with the IRS despite having the requisite income to file tax returns. In June 2010, Sumner filed his 2006 federal income tax return which omitted gross receipts from Sumner’s business totaling approximately $106,808. For tax years 2007 and 2008, Sumner failed to file timely income tax returns even though he earned approximately $318,433 and $337,090, respectively. A sentencing date has not been set. Sumner faces a maximum sentence of three years in prison and a $250,000 fine. (3:13-cr-00257).
Denise Swanson – On August 22, 2013, Denise Swanson, of Lenoir, N.C., pleaded guilty to tax evasion for tax year 2010. Court documents show that Swanson was the owner and operator of Bottomline Accounting, a tax preparation and bookkeeping business. From 2006 to 2012, Swanson performed tax preparation services for J.W. and K.W., and their business, C.B. (“the Clients”), and was responsible for making tax payments on their behalf. Swanson received money from the Clients to pay various tax obligations to the IRS and other state agencies. But instead of making the payments, Swanson embezzled the money and used it to pay for personal expenses. In total, Swanson embezzled approximately $839,830. Also, Swanson failed to report the embezzled income on her own individual tax returns for tax years 2006 through 2011. Swanson awaits sentencing and faces a maximum sentence of five years in prison and a $250,000 fine. (5:13-cr-61).
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 ID 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:
• Identity theft • Pervasive Telephone Scams • Phishing • False Promises of “Free Money” from Inflated Refunds • Return Preparer Fraud • Hiding Income Offshore • Impersonation of Charitable Organizations • False Income, Expenses or Exemptions • Frivolous Arguments • Falsely Claiming Zero Wages or Using False Form 1099 • Abusive Tax Structures • Misuse of Trusts
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.
Vehicle Emmissions Inspector Sentenced to Two Months in Prison for Emissions FraudRead the Press Release
To Date, 14 Defendants Have Been Sentenced For Conducing “Clean Scans”
CHARLOTTE, N.C. – A licensed vehicle emissions inspector was sentenced today to serve two months in prison for his role in providing fraudulent passing emissions scores for more than 200 vehicles, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, U.S. District Judge Max O. Cogburn, Jr. also sentenced Pedro Salmeron, 37, of Charlotte, to two years of supervised release, the first four months of which he must spend under home confinement. Salmeron was also ordered to perform 50 hours of community service and to a pay a $5,000 fine.
U.S. Attorney Tompkins is joined in making today’s announcement by Special Agent in Charge Maureen O’Mara of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office; Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI); and Steven M. Watkins, Director of the North Carolina Division of Motor Vehicles License and Theft Bureau (NC DMV L&T).
According to court records and today’s sentencing hearing, Salmeron was employed as a technician for “Carolina Inspections” – also known as “Carolinas Auto Inspection” – located in Charlotte, and was also a vehicle emissions inspector licensed by the state of North Carolina. As a state-licensed emissions inspector, Salmeron was responsible for ensuring the emissions of vehicles he tested met federally mandated emissions requirements. Court records show that from February 2010 through January 2011, Salmeron conducted 201 illegal vehicle emissions inspection and falsely passed vehicles that would have failed emissions inspection. Court records indicate that Salmeron performed these fraudulent tests by entering the information of the vehicle being tested into the state database at Carolinas Auto Inspection, but then connecting the testing equipment to “surrogate” vehicles at the repair shop. The illegal practice of utilizing substitute vehicles for emissions testing is referred to in the industry as “clean scanning.” Salmeron pleaded guilty in August 2012 to one count of conspiracy to violate the Clean Air Act by conducting false vehicle emissions inspections.
The Clean Air Act requires vehicle emission inspections in geographic regions that exceed national ambient air quality standards. According to the EPA, the Charlotte metropolitan area exceeds the 8-hour standard set for Ozone, a potent irritant that can cause lung damage and other types of respiratory problems.
Salmeron was 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.
Salmeron is the latest defendant to be sentenced resulting from an investigation of Charlotte-area vehicle emissions inspectors involved in conducing “clean scans.” The multi-agency investigation has netted 14 prosecutions, with defendants serving sentences ranging from 18 months in prison to probation, in addition to home confinement, community service and monetary fines:
1. Jassim Juburi: sentenced to 18 months in prison, three years of supervised release, and a $15,000 fine. (3:12-cr-84). 2. Jose Manuel Cabrera: sentenced to one year and one day in prison, three years of supervised release that includes 100 hours of community service and a $10,000 fine. (3:12-cr-240). 3. Jack Haney: sentenced to six months in prison, one year of supervised release that includes 6 months of home confinement, 50 hours community service, and a $10,000 fine. (3:11-cr-342). 4. Ronald Kinard: sentenced to six months in prison, one year of supervised release that includes 6 months of home detention, and a $10,000 fine. (3:11-cr-340). 5. Mohammed Hafeez Awan: sentenced to six months in prison, three years of supervised release that includes six months of home detention, 50 hours of community service, and a $1,000 fine. (3:12-cr-79). 6. Michel Jule Fernald: sentenced to five months in prison, two years of supervised release that includes five months of home confinement, and a $1,000 fine. (3:12-cr-90). 7. Chucky Cheung: sentenced to five months in prison and three years of supervised release that includes 5 months of home detention. (3:11-cr-160). 8. Tanveer Anwar: sentenced to four months in prison, two years of supervised release that includes four months of home confinement and 50 hours of community service. (3:11-cr-241). 9. Erick Chicas: sentenced to three months in prison, two years of supervised release that includes three months of home confinement, 50 hours of community service, and a $7,500 fine. (3:11-cr-240). 10. Alexander Edwards: sentenced to 60 days in prison, four months of home while serving two years of supervised release, and a $1,000 fine. (3:11-cr-102). 11. Thanh Long Quoc Nguyen: sentenced to two months of home confinement while serving two years of probation, 50 hours of community service, and a $2,000 fine. (3:11-cr-175). 12. Jin Sung Chang: sentenced to two years of probation to include six months of home detention, and a $400 special assessment. (3:11-cr-163). 13. Stephen Dickinson: sentenced to two years of probation and a $1,000 fine. (3:11-cr-101).
U.S. Attorney Tompkins thanked the EPA’s Criminal Investigation Division, NC SBI’s Diversion and Environmental Crimes Unit, and NC DMV License and Theft Bureau, with assistance from the North Carolina Division of Air Quality, Mobile Sources Compliance Branch, for their investigation leading to the 14 prosecutions.
Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte prosecuted the cases.
Maryland Man Charged with Insider Trading ConspiracyRead the Press Release
Defendant Netted over $650,000 in Illegal Profits from College Friend’s Insider “Tips”
CHARLOTTE, N.C. – A Maryland man who received insider “tips” of confidential trading information from his college friend, John Femenia, has been charged with insider trading conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
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.
The charges against Walter Donald Wagner, 33, of Rockville, Md. stem from “Operation Insider Out,” an FBI investigation into insider trading activities in the Charlotte area. The investigation, which began in early 2012, has resulted in the prosecution of nine other conspirators involved in the illegal trading ring, five of which have already been sentenced, and all of whom have pleaded guilty. John Femenia, who orchestrated the conspiracy, and three other conspirators are awaiting sentencing. According to filed court documents, Femenia was an investment banker with Wells Fargo, who lived in Charlotte and later in New York. Court documents indicate that from March 2010 through December 2012, Femenia stole material nonpublic information from Wells Fargo and its clients about potential and upcoming mergers and acquisitions. Femenia and Wagner were college friends, and around April 2012 Femenia recruited Wagner to participate in the insider trading conspiracy. Court records show that Femenia tipped off Wagner and other conspirators about upcoming mergers, who then traded on that information. Court records reflect that when one of the mergers went through and news of the merger became public, the company’s stock price increased by 64% and the conspirators collectively realized over $7.5 million in profits. Wagner specifically made over $650,000 in profit from the fraudulent insider tips he received from Femenia.
A criminal bill of information filed today in U.S. District Court charges Wagner with one count of insider trading conspiracy. Wagner has agreed to plead guilty to the charge and will appear in U.S. District Court to formally accept the plea when the hearing is scheduled. At sentencing, Wagner faces a maximum prison term of five years and a $250,000 fine for the conspiracy to commit insider trading offense.
In December 2012, a separate criminal indictment charged John W. Femenia, Sawn C. Hegedus, Danielle C. Laurenti, Matthew J. Musante, Aaron W. Wens, Roger A. Williams, Kenneth M. Raby, Frank M. Burgess, Jr. and James A. Hayes for their involvement in the insider trading conspiracy. Femenia, Hegedus, Laurenti and Musante have pleaded guilty and are awaiting sentencing. The remaining five defendants have been already sentenced:
• Roger A. Williams, was sentenced in January 2014 to 24 months in prison and one year of supervised release. • Kenneth M. Raby, was sentenced in January 2014 to 18 months in prison and one year of supervised release. • Frank M. Burgess, Jr., was sentenced in January 2014 to six months in prison, six months of home detention, and one year of supervised release. • Aaron M. Wens,was sentenced in February 2014 to six months in prison, six months of home detention, and one year of supervised release. • James A. Hayes, Jr., was sentenced in January 2014 to one year of probation with a condition of eight months home detention.
In a related action today, the United States Securities & Exchange Commission filed civil charges against Wagner in federal court in Charlotte. U.S. Attorney Tompkins thanked the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance in this investigation.
Operation Insider Out in the Western District of North Carolina is being handled by the Charlotte Division of the FBI. The prosecution for the government was handled by Assistant United States Attorney Kurt W. Meyers.
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 is 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Charlotte Man Sentenced to 10 Years in Prison for Discharging A FirearmRead the Press Release
CHARLOTTE, N.C. – On Tuesday, April 1, 2014, Chief U.S. District Judge Frank D. Whitney sentenced Gerald Wayne Hairston to serve 120 months in prison for a federal firearms violation, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Hairston, 30, of Charlotte, was also sentenced to five 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 joins U.S. Attorney Tompkins in making today’s announcement.
According to court records and yesterday’s sentencing hearing, in April 2012, Hairston was a patron at a restaurant located on Pineville Mathews Road, in Pineville, N.C. Court records indicate that Hairston got into fight with at least one other patron at the restaurant. Following that fight, records show that Hairston retrieved a firearm from his car, pointed the gun at a group of patrons outside the restaurant and fired two to four shots. According to court records, Hairston then fled the scene and was later arrested by law enforcement. Officers found a Ruger, model P-5, 9 millimeter pistol with ammunition and drugs in Hairston’s car. Hairston pleaded guilty to one count of discharging a firearm in furtherance of a drug trafficking crime in May 2013.
Hairston has been in federal custody since January 2013. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by ATF. The prosecution for the government was handled by Assistant U.S. Attorney Ann Claire Phillips of the U.S. Attorney’s Office in Charlotte.
Atlanta, Ga. Man Sentenced to More Than 15 Years in Prison for Firearms ChargesRead the Press Release
CHARLOTTE, N.C. – Tommie Lee Williams, 43, of Atlanta, Ga. was sentenced on Monday, March 30, 2014 to serve 184 months in prison for federal 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 sentenced Williams to serve five years under court supervision following his prison term.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division joins U.S. Attorney Tompkins in making today’s announcement.
Williams pleaded guilty in January 2013 to one count of brandishing a firearm during and in relation to a drug trafficking crime and one count of felon in possession of a firearm. According to court documents and yesterday’s sentencing proceedings, in October 2011 Williams brandished a firearm during a drug transaction with an undercover officer. In November 2011, while conducting a traffic stop of the vehicle in which Williams was a passenger, law enforcement recovered an Uzi .45 caliber assault rifle and ammunition from a backpack that belonged to Williams. At the time of the offenses, Williams was a convicted felon and was prohibited from possessing a firearm.
Williams has been in federal custody since February 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 investigation was handled by ATF. The prosecution for the government was handled by Assistant U.S. Attorney Ann Claire Phillips of the U.S. Attorney’s Office in Charlotte.
Charlotte Mayor Arrested on Federal Public Corruption ChargesRead the Press Release
CHARLOTTE, N.C. – Charlotte Mayor, Patrick DeAngelo Cannon, was arrested today by FBI agents for alleged violations of federal public corruption laws, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The federal criminal complaint filed in U.S. District Court, charges Cannon, 47, of Charlotte, with theft and bribery concerning programs receiving federal funds, honest services wire fraud and extortion under color of official right.
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 allegations contained in the charging document and the affidavit filed in support of the criminal complaint, during the course of a separate criminal investigation, the FBI received reliable information that Cannon was potentially involved in illegal activities associated with his position as an elected official, and began an undercover investigation in or about August 2010. The complaint and affidavit allege that during the course of that investigation, Cannon allegedly solicited and accepted money bribes and things of value from undercover FBI agents, posing as commercial real estate developers and investors wishing to do business in Charlotte. As alleged in the filed documents, Cannon solicited and accepted such bribes and things of value in exchange for the use of his official position as Charlotte Mayor, Mayor Pro Tem and/or as a City Council Member.
The complaint and law enforcement affidavit allege that Cannon accepted the bribes from the undercover FBI agents on five separate occasions. On the last occasion, on February 21, 2014, Cannon allegedly accepted $20,000 in cash in the Mayor’s office. According to the complaint and the affidavit, between January 2013 and February 2014, Cannon allegedly accepted from the undercover agents over $48,000 in cash, airline tickets, a hotel room, and use of a luxury apartment in exchange for the use of his official position.
Cannon had his initial appearance today and has been released on bond, pending indictment. The charge of theft and bribery concerning programs receiving federal funds carries a statutory maximum sentence of 10 years in prison and a $250,000 fine; the charge of honest services wire fraud carries a statutory maximum sentence of not more than 20 years in prison and a $1,000,000 fine; and the charge of extortion under color of official right carries a statutory maximum sentence of not more than 20 years in prison and a $250,000 fine.
The charges contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The case is being prosecuted by Assistant United States Attorney Michael E. Savage of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the Federal Bureau of Investigation.
A copy of this press release and the filed complaint as well as case updates can be found on the website of the United States Attorney’s Office for the Western District of North Carolina at: Case Calendar.
cannon_complaint.pdf
Former City Employee Sentenced to 12 Months in Prison for Embezzling over $92,900 from the City of CherryvilleRead the Press Release
CHARLOTTE, N.C. – Former employee with the City of Cherryville, Jennifer Neal Hoyle, was sentenced to serve 12 months and a day in prison today for embezzling over $92,900 in city funds, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In January 2013, Hoyle, 36, of Cherryville, pleaded guilty to three felony charges of program fraud, stemming from a joint federal and state investigation into misappropriated city funds.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Greg McLeod, Director of the State Bureau of Investigation (NC SBI), and Chief James W. Buie of the Gaston County Police Department join U.S. Attorney Tompkins in making today’s announcement.
U.S. District Judge Robert J. Conrad, Jr. presided over the sentencing and ordered Hoyle to serve three years of supervised release upon completion of her sentence and to pay $92,922.55 as restitution to the city.
According to filed court documents and court proceedings, Hoyle was a Senior Customer Service Representative/Utility Supervisor for the City of Cherryville, responsible for collecting and posting utility payments made by customers. Court records indicate that beginning in January 2008 through May 2011, Hoyle embezzled approximately $92,922 from the City of Cherryville by stealing some cash payments made by utilities customers paying their bills. Court records show that Hoyle took the customers’ cash payments, issued paper receipts, credited the customers’ accounts with the payment and kept the cash. Then, using her supervisory override privileges, Hoyle deleted the transaction from the computer system. Court records also show that, in order to avoid any potential customer complaints, Hoyle created entries in the “extra charge” journal, in which she “wrote off” the cash amount the customers had paid, so that when bills were generated they would not include the embezzled amount. According to court records, Hoyle’s fraud was uncovered when a customer questioned the duplicate charges on her bill and brought in her paper receipt as proof of payment, after Hoyle had failed to convert the customer’s cash payment as a “write off” in the “extra charge” journal. Hoyle was terminated from her position in May 2012.
Hoyle was ordered to self-report to the Federal Bureau of Prisons to begin serving her sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation into Hoyle was handled by the FBI, SBI and the Gaston County Police Department. The prosecution is handled by Michael Savage, of the U.S. Attorney’s Office in Charlotte.
Charlotte Businessman Sentenced to Four Years in Prison for Worker Fraud Visa and Related OffensesRead the Press Release
CHARLOTTE, N.C. – U.S. District Court Judge Robert J. Conrad, Jr. sentenced a Charlotte businessman today to serve 48 months in prison for worker visa fraud and related offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Phani Raju Bhima Raju, 42, an Indian National residing in Charlotte, pleaded guilty in March 2013 to federal charges ranging from conspiracy to violate U.S. laws by filing fraudulent immigration documents to money laundering conspiracy, for his participation in a fraudulent scheme to obtain false H-1B immigration visas for foreign workers. The H-1B visa program allows U.S. employers to temporarily employ foreign workers in designated specialty occupations. In addition to the prison term, Raju will serve one year under court supervision and is subject to deportation from the United States.
Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas and Richard L. Walker, Special Agent in Charge for the Atlanta, Georgia Region of the U.S. Department of Labor’s Office of Inspector General (DOL-OIG), Office of Racketeering and Fraud Investigations join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and today’s sentencing hearing, from 2006 to November 2012, Raju conspired with Sarma G. M. Pingali, 64, and Bubala Elangovan, 33, both of Charlotte, to carry out a fraudulent scheme by submitting materially false documents to obtain H-1B immigration visas for foreign nationals seeking employment in the U.S. During the relevant time, Raju was the president of iFuturistics, a Delaware company headquartered in Pineville, N.C. Court records show that Raju and his conspirators falsely represented to the U.S. Department of Labor (“DOL”) and the Department of Homeland Security’s U.S. Citizenship and Immigration Services (“USCIS”) that iFuturistics was hiring H-1B visa holders to work directly for the company. Contrary to statements made on the submitted forms, court records show that once the applicants who were granted H-1B visas arrived in the U.S., they were assigned to work with various companies throughout the country. In fact, as court records show, iFuturistics had entered into lucrative contracts with staffing agencies prior to submitting the fraudulent visa applications. Court documents show that as a result of Raju’s illegal visa scheme iFuturistics received $13.2 million as payment from staffing companies in the U.S.
According to court documents and statements made in court, Raju admitted that in addition to submitting false applications, he and his conspirators engaged in an illegal scheme to recruit, solicit, entice and hire individuals outside the U.S. to apply for H-1B visas and to obtain work in the U.S. Court records show that Raju gave the H-1B visa applicants a “cheat sheet” of questions and answers to assist them during their interview process to obtain the H-1B visas.
Court records indicate that, once the H-1B visa workers were in the U.S., Raju at times failed to find them employment. On those occasions, court records indicate, these workers were “benched” in the U.S. while waiting for another job assignment, and during that time, and contrary to the salary claims made in the application forms, these workers received little or no pay from iFuturistics. On one occasion, court documents show, a foreign national H-1B visa holder had paid $2,500 to iFuturistics as a security deposit for processing her H-1B visa. According to the contract between iFuturistics and the employee, the employee was promised an annual salary of $60,000 and had agreed to the company’s request to market her services for employment throughout the U.S. In the end, iFuturistics never provided the worker with any work assignments and failed to pay her any wages, court records show.
Filed documents also indicate that during a scheduled inspection visit of the company’s Pineville offices in November 2009, Raju and his conspirators attempted to hide their fraudulent activities from law enforcement and immigration agents. In anticipation of the visit, court documents show that Raju and his conspirators had set up work stations, moved in furniture and recruited several persons to pretend to be iFuturistics workers for the duration of the inspection visit, when, in fact, the office space prior to the site visit had been empty and unoccupied. When law enforcement and immigration agents returned to the company’s offices a month after the site visit, the office space was dark and unoccupied, as it had been prior to the planned inspection.
Raju has been in federal custody since December 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.
Pingali and Elangovan each pleaded guilty to worker visa fraud and related offenses and face prison terms ranging from five to 10 years and fines of $250,000 per charged offense. The defendants are currently on bond and await sentencing.
The investigation is handled by ICE-HSI and DOL-OIG. The prosecution is handled by Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte.
California Man Sentenced to 22.5 Years in Prison for Role as Marijuana Supplier to Drug Trafficking NetworkRead the Press Release
CHARLOTTE, N.C. – Milton Earl Adams, 36, of Los Angeles, Calif., was sentenced today to serve 270 months in prison for his role as a supplier of marijuana to a drug trafficking network that operated from coast to coast for more than two years, 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 Brock D. Nicholson, Special Agent in Charge of ICE - Homeland Security Investigations (HSI) in Atlanta and the Carolinas and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department.
Adams, a/k/a “Turtle,” pleaded guilty in December 2012 to conspiracy to possess with intent to distribute 1,000 or more kilograms of marijuana and to money laundering conspiracy. Upon completion of his prison term, U.S. District Judge Robert J. Conrad, Jr. ordered Adams to be placed on five years of supervised release.
According to court documents and today’s sentencing proceedings, between 2009 and 2011, Adams was the California-based supplier of marijuana to a drug trafficking network that operated from coast to coast. Court documents indicate that Adams had ties to the “Mexican Mafia” and supplied several tons of marijuana from the Los Angeles area to the Charlotte area and other locations throughout the country. “Couriers” of the drug trafficking ring transported the marijuana using commercial flights, each time delivering $50,000 in cash to California, and returning to Charlotte with approximately 100 pounds of marijuana. An airport employee assisted the couriers in passing the packaged marijuana in baggage through airport security.
In January 2014, Judge Conrad sentenced the Charlotte leader of the drug trafficking ring, Parker Antron Coleman, to serve 60 years in prison for marijuana trafficking, money laundering and firearms offenses. To date, a total of 47 defendants have been sentenced in connection with the investigation, 11 are awaiting sentencing and five are currently fugitives. Also, the United States seized more than $1 million of drug proceeds, 600 pounds of marijuana and 13 firearms related to the case. (See list of defendants and sentences/status below).
This investigation, code-named “Operation Goldilocks,” was led by the Western District’s Organized Crime Drug Enforcement Task Force (OCDETF). In announcing the sentence, U.S. Attorney Tompkins commended the work of Homeland Security Investigations and CMPD, which are members of the task force. Ms. Tompkins also acknowledged the Gastonia Police Department, the Concord Police Department, the Mooresville Police Department, the Pineville Police Department, the Huntersville Police Department, the Kannapolis Police Department, the Cornelius Police Department, the Waxhaw Police Department, North Carolina Alcohol Law Enforcement, North Carolina State Bureau of Investigation, the Iredell County Sheriff’s Office, the Union County Sheriff’s Office, and the Culver City, Cal. Police Department for their assistance with the investigation.
Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte prosecuted the case.
The defendants stemming from this investigation are:
3:10-cr-238, U.S. v. Coleman et al:
1. Parker Coleman – 720 months in prison, followed by 10 years of supervised release (SR). 2. Stephanie Peppers – 54 months in prison and 4 years SR. 3. Shaunda Shenal McAdoo – 36 months in prison and 3 years SR. 4. Ryann Chancler Lewis – 87 months in prison and 5 years SR. 5. Samantha Jo Schmidlin – 27 months in prison and 3 years SR. 6. Nolan Robertson – 41 months in prison and 4 years SR. 7. Leah Patience Davis – 24 months of probation. 8. Leon Edgar Robertson – 84 months in prison and 4 years SR. 9. Mark Eric Dorsey, II – 96 months in prison and 5 years SR. 10. Wendell Jerrod Robinson – 72 months in prison and 4 years SR. 11. Davon Clifton Harris – 60 months in prison and 3 years SR. 12. Christopher Seaton McKneely – 37 months in prison and 4 years SR. 13. Gerren Ezekiel Darty – 188 months in prison and 5 years SR. 14. Glenn O’Neil Carrera – 87 months in prison and 3 years SR. 15. William Pierce – 36 months in prison and 3 years SR. 16. Rico Lamont Grier – 36 months in prison and 3 years SR. 17. Harold Manigault – 30 months in prison and 3 years SR. 18. Mark Rene Hunt – 46 months in prison and 4 years SR. 19. Jason Lee Banks – 78 months in prison and 3 years SR. 20. Megan Amelia Baehr – 41 months in prison and 4 years SR.
3:10-cr-245, U.S. v. Crockett et al:
1. Ahmed Daniel Crockett – 235 months in prison and 5 years SR. 2. Goldie Frances Crockett – 60 months in prison and 3 years SR. 3. Sharon Kelsey-Brown – 60 months in prison and 3 years SR. 4. Robert Jonathan Brown – 58 months in prison and 5 years SR. 5. Shondu Lamar Lynch – 96 months in prison and 4 years SR.
3:11-cr-18, U.S. v. Romero Lamont Massey – 60 months in prison and 4 years SR.
3:11-cr-46, U.S. v. Lasonya White – 24 months of probation.
3:11-cr-85, U.S. v. Thomas Diggs, III – 12 months and 1 day in prison and 2 years SR.
3:11-cr-209, U.S. v. Jerry Davis – 48 months in prison and 3 years SR.
3:11-cr-256, U.S. v. Saulsberry et al:
1. Kamia Arekai Saulsberry – 36 months of probation. 2. Kisha Dorsey – 44 months in prison and 4 years SR. 3. Robert Earl Dorsey, Jr. – 48 months in prison and 3 years SR. 4. Ashley Rae Williams – 6 months in prison and 3 years SR. 5. Tonisha Deshon Williams – 70 months in prison and 4 years SR. 6. Vincent Talbot – 72 months in prison and 4 years SR. 7. Kevin Lamont Stanfield, Jr. – 42 months in prison and 4 years SR. 8. Danny Hance – 37 months in prison and 3 years SR.
3:11-cr-287, U.S. v. Thomas Lavon Smith, Jr. – 168 months in prison and 5 years SR.
3:11-cr-337, U.S. v. Logie et al:
1. Tavarus Shamaco Logie – 210 months in prison and 5 years SR. 2. Crystal Alethea Easter – 36 months in prison and 4 years SR. 3. Don Levon Marsh – 48 months in prison and 4 years SR. 4. Anthony Silva Alegrete – 54 months in prison and 5 years of SR. 5. Ronald Clemenceau Hargette – 60 months in prison and 4 years SR. 6. Sandra Anita Landers – 27 months in prison and 3 years SR. 7. Natalia Christina Wade – 6 months in prison and 3 years SR. 8. Francine Vanessa Williams – convicted at trial/pending sentencing. 9. Evelyn Chantell LaChapelle – convicted at trial/pending sentencing. 10. Marvin Ray Wilburn – pleaded guilty/pending sentencing. 11. Corvain T. Cooper – convicted at trial/pending sentencing. 12. Leamon Keishan Moseley – pleaded guilty/pending sentencing. 13. Gregory Wall – pleaded guilty/pending sentencing. 14. Dana Lamont Adams – pleaded guilty/pending sentencing. 15. Lamar Andrew Harris – pleaded guilty/pending sentencing. 16. Clyde Monroe Wilburn – currently a fugitive.
3:13-cr-18, U.S. v. Lopez et al:
1. Enrique Leonardo Lemus – 70 months in prison and 3 years SR. 2. Octavio Lopez – pleded guilty/pending sentencing. 3. Gustavo Campos Garcia – currently a fugitive. 4. Roberto Mendoza – currently a fugitive. 5. Edgar Milian – currently a fugitive. 6. Cristian Deylah West – currently a fugitive.
3:13-cr-40, U.S. v. Andrew Scott Lowery – pleaded guilty/pending sentencing.
3:13-cr-132, U.S. v. Darrick Leon Johnson – pleaded guilty/pending sentencing.
Three Sentenced for Armed Bank RobberyRead the Press Release
CHARLOTTE, N.C. – On Thursday, March 13, 2014, U.S. District Judge Max O. Cogburn, Jr. presided over the sentencing of Kenneth Lamont Moore, Jr., 22, of Laurinburg, N.C., Antonio DeMarcus Clendening, 31, and Kamara Shanta McBrayer, 27, both of Charlotte, on armed bank robbery charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Clendening was sentenced to serve 272 months in prison, Moore was sentenced to 121 months in prison, and McBrayer was sentenced to 42 months in prison. All three defendants were also ordered to serve three years of supervised release following their prison terms.
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) are joining U.S. Attorney Tompkins in making today’s announcement.
According to court documents and yesterday’s sentencing hearings, on May 20, 2013, the three defendants robbed a Bank of America branch located on Albermarle Road in Charlotte. Court records indicate that Moore and Clendening entered the bank soon after it opened at 9:00 a.m., wearing gloves, women’s wigs and bandanas over their faces. The two men were also armed with handguns. According so court records, upon entering the bank, the defendants pointed their guns at the bank tellers and ordered them to put the money in a pillow case provided by Clendening. The robbers fled the bank with approximately $7,760 in cash and got into a vehicle driven by McBrayer. Court records show that CMPD officers responding to an emergency call attempted to stop the getaway vehicle, but McBrayer did not stop and a high speed chase ensued through a residential neighborhood. Law enforcement apprehended the three bank robbers after McBrayer crashed the vehicle she was driving.
The three defendants pleaded guilty in July 2013. Clendening and Moore each pleaded guilty to conspiracy to commit armed bank robbery, armed bank robbery and use of a firearm in furtherance of a crime of violence. McBrayer pleaded guilty to conspiracy to commit armed bank robbery and armed bank robbery.
All defendants have been in federal custody in the Western District of North Carolina since they were arrested in May 2013. Upon designation of a federal facility they will be transferred into custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
The investigation was handled by the FBI’s Safe Streets Task Force and CMPD. The prosecution for the government was handled by Assistant U.S. Attorney J. George Guise of the U.S. Attorney’s Office in Charlotte.
Two Men Arrested in Buncombe Co. Face Drug Trafficking Charges Following 1,400 Lbs. Marijuana SeizureRead the Press Release
ASHEVILLE, N.C. – Jose Chavez and Ely Ramirez-Sanchez were arrested on Friday, March 7, 2014 in Buncombe County and face drug trafficking charges in connection with the seizure of approximately 1,400 pounds of marijuana, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
A criminal complaint filed today in U.S. District Court in Asheville charges Jose Chavez, 31, of Candler, N.C. and Ely Ramirez-Sanchez, 28, of Canton, N.C. with one count of possession with intent to distribute 100 kilograms or more of marijuana.
According to court records and allegations contained in filed court documents:
Law enforcement officers were alerted to the pair’s drug trafficking activities in connection with a drug trafficking investigation conducted by the U.S. Drug Enforcement Administration (DEA) and its task force members. On Friday, March 7, 2014, law enforcement conducted a traffic stop of Ramirez-Sanchez’s vehicle and seized approximately 40 pounds of marijuana contained in a cardboard box located on the back seat of the car. Later that day, while executing a search warrant at Chavez’s mobile home residence, law enforcement seized two large black trash bags filled with marijuana, three digital scales, plastic wrapping material, and a handgun with an obliterated serial number. Law enforcement also seized 15 cardboard boxes containing 23 blocks of marijuana from a pull-behind box trailer, and 27 cardboard boxes containing 111 blocks of marijuana stored in a small rental truck, both located on the property. The total weight of marijuana seized from Chavez’s residence was approximately 1,400 pounds, with an estimated street value between $840,000 and $1,820,000.
The defendants are currently in federal custody and will be arraigned on the federal charges on Wednesday, March 12, 2014, in Asheville before U.S. Magistrate Judge Dennis L. Howell. The possession with intent to distribute charge carries a mandatory minimum penalty of 5 years in prison, a maximum potential penalty of 40 years in prison, and a $10,000,000 fine.
The charges contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Tompkins credited the DEA under the direction of Special Agent in Charge Harry S. Sommers and the DEA task force members for their work leading to the arrests and drug seizures. The DEA task force is made up of local law enforcement agencies, including the Asheville Police Department, the McDowell County Sheriff’s Office, the Buncombe County Sheriff’s Office, the Henderson County Sheriff’s Office, the Transylvania County Sheriff’s Office, and the Bureau of Indian Affairs, all of which provided assistance in the investigation of this case.
U.S. Attorney Tompkins also thanked the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) under the direction of Special Agent in Charge Brock D. Nicholson, the North Carolina State Highway Patrol, under the direction of Colonel William J. Grey, and the North Carolina Alcohol Law Enforcement under the direction of Director B.W. Collier for their invaluable assistance in this investigation.
The government is represented by Assistant U.S. Attorney Thomas Kent, of the U.S. Attorney’s Office in Asheville.
Federal Jury Convicts Methamphetamine TraffickerRead the Press Release
Defendant Also Possessed An Illegal Short-Barreled Shotgun And Other Firearms
CHARLOTTE, N.C. B A Charlotte jury returned a guilty verdict against Martin Martinez Saldana, 44, of West Jefferson, N.C., following a four day trial that ended today, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Saldana was convicted of conspiracy to distribute and to possess with intent to distribute methamphetamine and possession of an illegal short-barreled shotgun.
U.S. Attorney Tompkins is joined in making today’s announcement by Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI); and Sheriff James Williams of the Ashe County Sheriff’s Office (ACSO).
According to court documents and evidence introduced at trial, from as early as 2011 through the end of 2012, Saldana and his co-conspirators distributed in Ashe County and elsewhere more than 20 pounds of near-pure crystal methamphetamine, also known as “ice.” According to trial evidence, the high level of purity of the methamphetamine indicates it originated from a Mexican “super lab” and had an estimated street-level value of more than $1 million. The evidence at trial also established that when law enforcement executed a search warrant at Saldana’s residence they seized four handguns, including a revolver hidden under his mattress, and an illegal short-barreled shotgun, as well as ammunition. Over the course of the investigation, law enforcement also seized five real properties in Ashe County worth over $500,000 combined, $50,000 in cash, one vehicle, one-quarter kilogram of methamphetamine “ice” and drug packaging materials. Among the seized items also were three images of Santa Muerte, who has been adopted by drug traffickers as folk “patron saint.”
Law enforcement arrested Saldana on December 12, 2012, as he was planning to leave for Mexico. He has been in federal custody since his arrest and will remain in custody until his sentencing date, which has not yet been set. The charges levied against Saldana carry a statutory mandatory minimum sentence of 10 years to life in prison, and a fine of up to $10,000,000.
U.S. Attorney Tompkins commended the DEA in Charlotte, ACSO, NC SBI, and ATF for the investigation leading to the successful prosecution of Martin Martinez Saldana. U.S. Attorney Tompkins also thanked the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Alleghany Sheriff’s Office and the Boon Police Department for the assistance in this case. Assistant U.S. Attorney Steven R. Kaufman is handling the prosecution for the case.
Cherryville's Former Finance Director Sentenced to Two Years for Embezzling More Than $435,000 from the CityRead the Press Release
CHARLOTTE, N.C. – Cherryville’s former Finance Director, Bonny Verley Alexander, was sentenced today in U.S. District Court for embezzling over $435,000 from the city, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Alexander, 59, pleaded guilty to five counts of program embezzlement for misappropriating city funds over a six year period. U.S. District Judge Robert J. Conrad, Jr. sentenced Alexander to 24 months in prison, followed by two years of supervised release. He also ordered Alexander to pay restitution in the amount of $435,294.17.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI) join U.S. Attorney Tompkins in making today’s announcement.
According to the filed documents and facts presented at today’s sentencing hearing, from about August 2005 through her retirement in December 2011, Alexander embezzled at least $435,294 of Cherryville’s funds and used the money to pay for personal expenses. As Cherryville’s Finance Director, Alexander oversaw multiple departments and had access to city funds. Among other things, Alexander was in charge of processing payroll payments to city employees, directing payments for city expenses and issuing checks on behalf of the city. Alexander also had access to Cherryville’s electronic accounting systems and was authorized to make adjustments as needed, court records indicate.
Court documents show that Alexander made weekly payroll payments to herself which were more than 300% of her actual salary, totaling approximately $309,594. Alexander also issued city checks to pay for personal expenses, including shopping and travel expenses, charged on her personal credit card. According to filed documents, after issuing the city checks payable to American Express, Alexander forged on the checks the signature of another Cherryville employee who was the authorized signatory on the account. To conceal the fraud, once the forged checks had cleared and were returned by the bank, Alexander removed them from the city’s records. Alexander issued and forged 26 checks totaling approximately $97,000, to pay off personal charges on her American Express card.
Alexander was ordered to self-report to the Federal Bureau of Prisons to begin serving her sentence upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation into Alexander was handled by the FBI and SBI. The prosecution is handled by Michael Savage, of the U.S. Attorney’s Office in Charlotte.
Former Cherryville Law Enforcement Officers Involved in Stolen Goods and Cash Conspiracy Sentenced to PrisonRead the Press Release
CHARLOTTE, N.C. – Two former law enforcement officers, Frankie Dellinger and Wesley Clayton Golden, and their civilian co-conspirator, Mark Ray Hoyle, were sentenced to prison today for their role in a conspiracy to transport stolen goods and cash in Gaston County, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Greg McLeod, Director of the State Bureau of Investigation (NC SBI) join U.S. Attorney Tompkins in making today’s announcement.
U.S. District Court Judge Robert J. Conrad, Jr. ordered Dellinger, 42, of Cherryville and a police officer who served 19 years in law enforcement with the Cherryville Police Department and the Gaston County Sheriff’s Office, to serve 36 months in prison, followed by two years of supervised release. Golden, 41, also of Cherryville and a Reserve Captain at the Gaston County Sheriff’s Office, was sentenced to 20 months in prison and to one year of supervised release. Their civilian accomplice, Mark Ray Hoyle, 40, of Cherryville, was ordered to serve 21 months in prison and two years under court supervision.
In January 2013, the defendants pleaded guilty to conspiracy to transport and/or receive stolen property and conspiracy to extort under color of official right. Hoyle and Dellinger also pleaded guilty to money laundering conspiracy.
According to filed court documents and today’s sentencing hearing, an undercover federal investigation revealed that beginning in August 2012 and on multiple occasions, Dellinger and Golden used their law enforcement credentials to provide “protection” to tractor trailers passing through Gaston County, containing what they defendants believed to be stolen merchandise and cash. Hoyle assisted in the conspiracy by representing himself to be a Deputy Sheriff at the Gaston County Sheriff’s Office. File documents and facts presented at today’s sentencing hearings showed that the former officers and their co-conspirator believed the trailers were transporting “stolen” merchandise with a purported retail value of more than $158,000, as well as cash proceeds from the sale of the stolen goods in excess of $400,000 and agreed to safeguard the trailers in exchange for cash payments.
In November 2013, two former Cherryville police officers involved in a similar conspiracy arising from the same investigation received prison sentences. Casey Justin Crawford and David Paul Mauney, III, were sentenced to 33 and 18 months in prison, respectively. A sixth defendant, John Ashley Hendricks, was sentenced to two years of probation.
In handing down today’s sentences, U.S. District Judge Robert J. Conrad, Jr. noted that “corruption of the highest is the worst type of corruption.”
The defendants have been in federal custody since October 2012. They 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 is handled by the FBI and SBI. The prosecution was handled by Michael Savage, of the U.S. Attorney’s Office in Charlotte.
Maker of Erectile Dysfunction Products Admits to Misbranding and Selling Drugs as "All-Natural" Herbal SupplementsRead the Press Release
“Mojo Risen” And Other Pills Contained Pharmaceutical Compounds Smuggled From China
CHARLOTTE, N.C. – An Ashe County man pleaded guilty in federal court today to defrauding consumers of nearly $5 million by misbranding erectile dysfunction drugs and selling them as “all natural” herbal supplements, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
David W. Bourne, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), Miami Field Office, and Keith Fixel, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS), join U.S. Attorney Tompkins in making today’s announcement.
Kamran Rezapour, 52, of Creston, N.C. pleaded guilty before U.S. Magistrate Judge David C. Keesler to one count of wire fraud and two counts of drug misbranding. At today’s plea hearing, Rezapour admitted that from 2009 through April 2013, he defrauded consumers of nearly $5 million, by fraudulently and falsely claiming that his erectile dysfunction products were “100 % safe and natural.” Rezapour admitted that his products, in fact, contained ingredients similar to prescription drugs such as Viagra, which require FDA approval to market and distribute. According to court documents, Rezapour was the owner and operator of Nutrition for Health, Inc. and Mojo Risen, LLC. Through these companies, Rezapour sold dietary supplements, male enhancement drugs and erectile dysfunction drugs, including Mojo Risen, Mojo Sensation and VajiVedic. Court documents indicate that Rezapour advertised Mojo Risen and the other erectile dysfunction pills as non-prescription, “all natural” herbal supplements. As part of his plea, Rezapour admitted that in order to induce consumers to purchase his Mojo Risen, Rezapour made multiple and repeated false claims that the sexual enhancement products were “100% safe and natural” and without “harsh and dangerous side effects.”
Rezapour admitted in court today that these claims were false. Court documents indicate that Mojo Risen, Mojo Sensation and VajiVedic contained pharmaceutical and prescription compounds, including sildenafil (the active ingredient in Viagra) and its chemical analogue noracetildinafil, which Rezapour smuggled into the United States from China. Rezapour did not list sildenafil, noracetildenafil or any another prescription ingredient in the packaging and advertising material for the supplements and did not provide any warnings about the possible adverse side effects of sildenafil and noracetildenafil. Court documents indicate that these products also did not bear the symbol “Rx only” on their labels, as is required for all prescription drugs.
According to court records, Rezapour and his Chinese supplier evaded detection of the pharmaceutical and prescription compounds by U.S. Customs authorities and the FDA by falsely labeling the packages as “paint products,” “care product[s]” and “gift[s].” Rezapour ultimately distributed his products nationwide, including to customers located in Charlotte, and received approximately $4,944,939 in payments for the fraud scheme.
During the course of the investigation, law enforcement agents seized approximately $1.5 million in funds, and gold and silver coins in connection with the fraud. Rezapour has agreed to forfeit all of these assets as part of his plea agreement in this case.
“Rezapour’s customers bought his mislabeled drugs as safe alternatives to prescription medications,” said U.S. Attorney Tompkins. “What’s particularly troubling is that Rezapour knew his products contained certain ingredients that could cause serious health consequences, yet he marketed and sold his supplements without appropriate warning labels. My office and our federal partners will prosecute those who profit from the reckless sale of misbranded drugs to unsuspecting consumers.”
“Protecting the American public from those utilizing the mail for illegal purposes is of primary concern to the Postal Inspection Service,” said Keith Fixel, Inspector in Charge of USPIS’s Charlotte Division. “Working with our law enforcement partners, we will vigorously pursue those who attempt to use the mail for unlawful gain and who prey upon unsuspecting consumers.”
At sentencing, Rezapour faces a maximum prison term of 20 years and a $250,000 fine for the wire fraud charge and a maximum prison term of three years and a $250,000 fine for each count of misbranding drugs. In his plea agreement, Rezapour has agreed to pay full restitution for any losses resulting from his criminal scheme. The final restitution amount will be determined by the Court at Rezapour’s sentencing hearing, which has not been scheduled yet. Rezapour has been detained since April 17, 2013.
The investigation into Rezapour was conducted by FDA-OCI and USPIS, with the assistance of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution is handled by Assistant U.S. Attorney Kelli Ferry and Special Assistant U.S. Attorney Erin Comerford of the U.S. Attorney’s Office in Charlotte.
In June 2013, the FDA issued a warning against Mojo Risen, advising consumers not to purchase or to discontinue using this product immediately. The FDA also advised consumers who have experienced any negative side effects as a result of using this product to consult a health care professional as soon as possible. For more information please visit:
https://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/medicationhealthfraud/ucm355904.htm.
Ginseng Root Poacher Sentenced to Jail TimeRead the Press Release
The Public Is Reminded Gathering Ginseng On The Nantahala National Forest Without A Permit Is Illegal
ASHEVILLE, N.C. – U.S. Magistrate Judge Dennis L. Howell sentenced Charles R. Nash, of Whittier, N.C. to serve 10 days in jail for the illegal possession or harvesting of American ginseng from the Nantahala National Forest, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and Kristin Bail, Forest Supervisor of the U.S. Forest Service National Forests in North Carolina.
According to the January 30, 2014 sentencing hearing and other documents, on October 12, 2013, Nash admitted to illegally possessing 24 American ginseng roots he had dug from the Mosses Creek and Wayehutta Off-Road Vehicle areas in Jackson County. He pleaded guilty to the poaching charge. Staff of the Forest Service replanted the recovered viable roots.
American ginseng is on the list of the Convention of International Trade of Endangered Species. The U.S. Attorney’s Office reminds the public that gathering ginseng on the Nantahala National Forest without a permit is illegal. U.S. Forest Service lands have been severely impacted by ginseng poachers in western North Carolina. American ginseng was formerly abundant throughout the eastern mountains, but due to repeated poaching, populations have been reduced to a point that they can barely reproduce. The roots poached in this park are usually young, between the ages of 5 and 10 years, and have not yet reached their full reproductive capacity. In time, the plant’s populations could recover if poaching ceased.
The Division of Scientific Authority, U.S. Fish & Wildlife Service is the regulatory agency that evaluates the biological and management status of wild American ginseng throughout its native range. The Division issues an annual or biennial report detailing if any harvest conditions need to be modified to ensure the sustainable harvest of wild native ginseng. Permits to collect ginseng root in National Forests are issued through the U.S. Forest Service in early September. Permits are not available in National Park lands such as the Blue Ridge Parkway and the Great Smoky Mountains National Park, where even the possession of American Ginseng is prohibited.
The investigation of the case was handled by the U.S. Forest Service. The U.S. Attorney’s Office in Asheville handled the prosecution.
To report illegal harvesting activities of American ginseng, please call 828-257-4200.
Zeekrewards’ Former Chief Operating Officer and Former Senior Technology Officer to Plead Guilty in $850 Million Internet Ponzi SchemeRead the Press Release
Defendants and their Co-Conspirators Promised High Returns to Attract Victim-Investors
CHARLOTTE, N.C. – ZeekRewards’ former Chief Operating Officer, Dawn Wright Olivares, 45, and the company’s former Senior Technology Officer, Daniel C. Olivares, 31, both of Clarksville, Ark., have agreed to plead guilty to federal charges for their roles in an $850 million Internet Ponzi scheme that promised victims a bogus return on investments, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The two Arkansas residents were associated with the Lexington, N.C. based Rex Venture Group, LLC (RVG), which owned and operated Zeekler and ZeekRewards.
“ZeekRewards used the enormous power of the Internet to rip off $850 million from hundreds of thousands of victims in less than two years. We will continue to work with our law enforcement partners to take down greedy scam artists who think nothing of stealing the savings of hard working people.”
“As today’s technology continues to evolve, cybercriminals use these advances and enhancements to perpetrate an expanding range of crimes,” said Secret Service Assistant Director of Investigations Paul Morrissey. “As we have seen with this case, even with the increasing complexity of online Ponzi schemes, it remains difficult for criminals to remain anonymous. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and other similar investigations is a result of our close work with our network of law enforcement partners.”
“This case shows that the appearance of success can be a mask for a tangled financial web of lies” said Richard Weber, Chief, IRS Criminal Investigation. “The underlying structure can fall apart at any time and leave many investors in financial ruin. Criminal Investigation is committed to investigating Ponzi schemes in an effort to protect the financial well-being of the American public.”
According to the criminal charges and plea documents filed today in U.S. District Court in Charlotte:
From January 2010 through August 2012, Dawn Wright Olivares, her step-son, Daniel Olivares, their unindicted co-conspirator and owner of RVG (identified in the charging document as “P.B”) and others engaged in a Ponzi scheme that raised more than $850 million through a sham internet-based penny auction company named “Zeekler” and its purported advertising division “ZeekRewards.” The defendants and their co-conspirators lured investors by falsely representing that ZeekRewards was generating massive profits from its penny auctions, and promised substantial returns on their investment, as much as 125%. Zeekler’s purported profits were bogus and ZeekRewards operated as a fraudulent Ponzi scheme whereby the co-conspirators used monies from victim-investors to pay fraudulent returns to earlier victim-investors and to personally enrich themselves. As a result, Dawn Wright Olivares, Daniel Olivares, “P.B.” and others induced victims worldwide, including over 1,500 victims in the Charlotte, N.C. area, to invest, thereby sustaining losses of at least $750 million.
Dawn Wright Olivares was closely involved in the strategic operations and ultimately served as the Chief Operations Officer of Zeekler and ZeekRewards (together “Zeek”). Dawn Wright Olivares also owned 95% of Wandering Phoenix, LLC, a company that she used, among other things, to receive payments from Zeek and RVG. During the course of the conspiracy, Dawn Wright Olivares and Wandering Phoenix received approximately $7.2 million in victim funds.
Daniel Olivares was RVG’s senior technology officer and was responsible for, among other things, database design, management and operations for Zeek. During the course of the conspiracy, Daniel Olivares personally enriched himself with victim funds totaling approximately $3.1 million. Other unnamed co-conspirators also personally enriched themselves with millions of dollars of victim funds.
In addition to the penny auction scheme, Dawn Wright Olivares, Daniel Olivares, and their co-conspirators represented that victim-investors in ZeekRewards could participate in what came to be known as the Retail Profit Pool (“RPP”), which supposedly allowed victims collectively to share 50% of Zeek’s “massive” net retail profits. However, the reported “daily net profit” was illusory and had no relationship at all to actual penny auction revenues or retail profits. The co-conspirators often re-used bogus daily profit figures from preceding days to report that new day’s purported profits and did not even keep books and records needed to calculate such a figure. Rather, the owner of RVG simply made up the “daily net profit” reported to victims. The true revenue from the scheme – approximately 98% of all incoming funds – came from victim-investors and not “massive” retail revenue and profits from the penny auctions as the co-conspirators claimed.
As the Ponzi scheme grew in size and scope, the co-conspirators took several steps to conceal the true nature of their scam by making a series of cosmetic changes to the ZeekRewards’ RPP. Ultimately, the Ponzi scheme began failing because the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control. By August 2012, the co-conspirators fraudulently represented to the collective victims that their investments were worth approximately $2.8 billion. Yet the co-conspirators had no accurate books and records to even determine how much cash on hand was available to pay such liability. In fact, by August 17, 2012, the co-conspirators had only $320 million or approximately 11% of $2.8 billion in value that they claimed investors had.
In the plea agreements also filed today with the Court, Dawn Wright Olivares has agreed to plead guilty to an investment fraud conspiracy charge and to tax fraud conspiracy. Daniel Olivares has agreed to plead guilty to an investment fraud conspiracy charge. Each charge carries a maximum prison term of five years in prison and a $250,000 fine. As part of their plea agreements, the defendants have also agreed to pay full restitution to their victims, the amount of which will be determined by the Court at sentencing.
Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: www.justice.gov/usao/ncw/ncwvwa.html.
In making today’s announcement, U.S. Attorney Tompkins praised the U.S. Secret Service for its investigation into ZeekRewards, which is still ongoing, and thanked IRS-CI for its assistance in the case.
In related action today, the United States Securities & Exchange Commission filed civil charges against Dawn Wright Olivares and Daniel Olivares in federal court in Charlotte. Tompkins thanked the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance in the ZeekRewards investigation.
The prosecution is handled by Assistant United States Attorneys Mark T. Odulio and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
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.
Zeekrewards’ Former Chief Operating Officer and Former Senior Technology Officer to Plead Guilty in $850 Million Internet Ponzi SchemeRead the Press Release
Defendants and their Co-Conspirators Promised High Returns to Attract Victim-Investors
CHARLOTTE, N.C. – ZeekRewards’ former Chief Operating Officer, Dawn Wright Olivares, 45, and the company’s former Senior Technology Officer, Daniel C. Olivares, 31, both of Clarksville, Ark., have agreed to plead guilty to federal charges for their roles in an $850 million Internet Ponzi scheme that promised victims a bogus return on investments, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The two Arkansas residents were associated with the Lexington, N.C. based Rex Venture Group, LLC (RVG), which owned and operated Zeekler and ZeekRewards.
“ZeekRewards used the enormous power of the Internet to rip off $850 million from hundreds of thousands of victims in less than two years. We will continue to work with our law enforcement partners to take down greedy scam artists who think nothing of stealing the savings of hard working people.”
“As today’s technology continues to evolve, cybercriminals use these advances and enhancements to perpetrate an expanding range of crimes,” said Secret Service Assistant Director of Investigations Paul Morrissey. “As we have seen with this case, even with the increasing complexity of online Ponzi schemes, it remains difficult for criminals to remain anonymous. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and other similar investigations is a result of our close work with our network of law enforcement partners.”
“This case shows that the appearance of success can be a mask for a tangled financial web of lies” said Richard Weber, Chief, IRS Criminal Investigation. “The underlying structure can fall apart at any time and leave many investors in financial ruin. Criminal Investigation is committed to investigating Ponzi schemes in an effort to protect the financial well-being of the American public.”
According to the criminal charges and plea documents filed today in U.S. District Court in Charlotte:
From January 2010 through August 2012, Dawn Wright Olivares, her step-son, Daniel Olivares, their unindicted co-conspirator and owner of RVG (identified in the charging document as “P.B”) and others engaged in a Ponzi scheme that raised more than $850 million through a sham internet-based penny auction company named “Zeekler” and its purported advertising division “ZeekRewards.” The defendants and their co-conspirators lured investors by falsely representing that ZeekRewards was generating massive profits from its penny auctions, and promised substantial returns on their investment, as much as 125%. Zeekler’s purported profits were bogus and ZeekRewards operated as a fraudulent Ponzi scheme whereby the co-conspirators used monies from victim-investors to pay fraudulent returns to earlier victim-investors and to personally enrich themselves. As a result, Dawn Wright Olivares, Daniel Olivares, “P.B.” and others induced victims worldwide, including over 1,500 victims in the Charlotte, N.C. area, to invest, thereby sustaining losses of at least $750 million.
Dawn Wright Olivares was closely involved in the strategic operations and ultimately served as the Chief Operations Officer of Zeekler and ZeekRewards (together “Zeek”). Dawn Wright Olivares also owned 95% of Wandering Phoenix, LLC, a company that she used, among other things, to receive payments from Zeek and RVG. During the course of the conspiracy, Dawn Wright Olivares and Wandering Phoenix received approximately $7.2 million in victim funds.
Daniel Olivares was RVG’s senior technology officer and was responsible for, among other things, database design, management and operations for Zeek. During the course of the conspiracy, Daniel Olivares personally enriched himself with victim funds totaling approximately $3.1 million. Other unnamed co-conspirators also personally enriched themselves with millions of dollars of victim funds.
In addition to the penny auction scheme, Dawn Wright Olivares, Daniel Olivares, and their co-conspirators represented that victim-investors in ZeekRewards could participate in what came to be known as the Retail Profit Pool (“RPP”), which supposedly allowed victims collectively to share 50% of Zeek’s “massive” net retail profits. However, the reported “daily net profit” was illusory and had no relationship at all to actual penny auction revenues or retail profits. The co-conspirators often re-used bogus daily profit figures from preceding days to report that new day’s purported profits and did not even keep books and records needed to calculate such a figure. Rather, the owner of RVG simply made up the “daily net profit” reported to victims. The true revenue from the scheme – approximately 98% of all incoming funds – came from victim-investors and not “massive” retail revenue and profits from the penny auctions as the co-conspirators claimed.
As the Ponzi scheme grew in size and scope, the co-conspirators took several steps to conceal the true nature of their scam by making a series of cosmetic changes to the ZeekRewards’ RPP. Ultimately, the Ponzi scheme began failing because the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control. By August 2012, the co-conspirators fraudulently represented to the collective victims that their investments were worth approximately $2.8 billion. Yet the co-conspirators had no accurate books and records to even determine how much cash on hand was available to pay such liability. In fact, by August 17, 2012, the co-conspirators had only $320 million or approximately 11% of $2.8 billion in value that they claimed investors had.
In the plea agreements also filed today with the Court, Dawn Wright Olivares has agreed to plead guilty to an investment fraud conspiracy charge and to tax fraud conspiracy. Daniel Olivares has agreed to plead guilty to an investment fraud conspiracy charge. Each charge carries a maximum prison term of five years in prison and a $250,000 fine. As part of their plea agreements, the defendants have also agreed to pay full restitution to their victims, the amount of which will be determined by the Court at sentencing.
Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: www.justice.gov/usao/ncw/ncwvwa.html.
In making today’s announcement, U.S. Attorney Tompkins praised the U.S. Secret Service for its investigation into ZeekRewards, which is still ongoing, and thanked IRS-CI for its assistance in the case.
In related action today, the United States Securities & Exchange Commission filed civil charges against Dawn Wright Olivares and Daniel Olivares in federal court in Charlotte. Tompkins thanked the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance in the ZeekRewards investigation.
The prosecution is handled by Assistant United States Attorneys Mark T. Odulio and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
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.
Operator of Multi-Million Dollar Ponzi Scheme Indicted on Federal ChargesRead the Press Release
Defendant Allegedly Defrauded Over 200 Investors
CHARLOTTE, N.C. – The operator of a $44 million Ponzi scheme that defrauded more than 200 investors has been indicted on federal charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A federal grand jury sitting in Charlotte returned the criminal indictment on Wednesday, December 18, 2013, charging Daniel H. Williford, 55, of Statesville, N.C. with one count of securities fraud, one count of wire fraud, and five counts of money laundering. The indictment also includes a forfeiture allegation seeking a money judgment in the amount of $44,000,000.
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).
“For those fraudsters who have not gotten the message yet, I am committed to prosecuting financial crimes and going after those who take money from victims with fake promises. Let me make it simple: you rip people off, you get indicted,” said U.S. Attorney Tompkins.
“For years, Daniel Williford swindled hundreds of people, including his own co-workers out of their hard-earned money. While most people struggle to afford college, he paid those expenses using cash from his investors. Now he will be held accountable for his actions because of the agents and prosecutors who worked so diligently to bring him to justice,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina.
According to allegations contained in the indictment, from January 2007 through July 2013, Williford induced over 200 investors in Charlotte and elsewhere to invest over $44 million, by promising his victims their money would be invested in wireless internet equipment, internet towers, and other facilities and companies. Instead of investing the money, the indictment alleges, Williford used it to run a Ponzi-style scheme and to fund his personal lifestyle. According to the indictment, during the course of the fraud, Williford invested only $7.7 million of the victims’ money as promised. The indictment alleges that Williford used approximately $32 million of the investor’s money to cover personal expenses and to pay some of his victims supposed “profits” on their investments. However, these payouts came from funds contributed by new investors, known as “Ponzi” payments.
Williford has been 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, Williford faces a maximum of 20 years in prison each for the securities fraud and wire fraud counts, and a maximum of 10 years imprison for each of the money laundering counts. The securities fraud count carries a maximum fine of $5,000,000, the wire fraud count a maximum fine of $250,000, and each of the money laundering counts carries a maximum fine of $250,000 or twice the amount of criminally derived proceeds.
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 Kurt Meyers of the Western District of North Carolina.
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.
Twelve Members of Methamphetamine Trafficking Ring Face Drug ChargesRead the Press Release
Seven Arrested During Round-up; Three Remain Fugitives
ASHEVILLE, N.C. – Twelve members of a methamphetamine trafficking ring have been charged with conspiracy to possess with intent to distribute methamphetamine. Seven of those charged were arrested on Tuesday, December 10, 2013, during an early morning round-up conducted by federal, state and local law enforcement, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Three of the named defendants remain fugitives (please see attached photos).
U.S. Attorney Tompkins is joined in making today’s announcement by Harry S. Sommers, 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).
The arrests are the result of a multi-agency investigation to target and reduce the trafficking of methamphetamine in Western North Carolina and was conducted by DEA, ATF, the North Carolina State Bureau of Investigation, the North Carolina State Highway Patrol, the Marion Police Department, the McDowell County Sheriff’s Office, the Yancey County Sheriff’s Office, the Rutherford County Sheriff’s Office, as well as the South Carolina Law Enforcement Division, the Cowpens Police Department and the Spartanburg County Sheriff’s Office in South Carolina.
According to allegations contained in the criminal indictment unsealed on Wednesday, December 11, 2013 in U.S. District Court, from about June 2011 to July 2013, the defendants did knowingly conspire to possess with intent to distribute more than 50 grams of actual methamphetamine or more than 500 grams of a mixture or substance containing a detectable amount of methamphetamine. The indictment alleges that the defendants carried out their drug conspiracy primarily in Buncombe, Cleveland and McDowell counties in Western North Carolina.
The following individuals were named and charged in the methamphetamine conspiracy indictment.
• George Wade Cook (a/k/a “Rooster”), 52 , of Caser, N.C. (in custody)
• Gergory Ray DeHart, 44, of Marion, N.C. (in custody)
• Ramona Jamison Lail, 48 ,of Marion. (in custody)
• Jimmy Dwayne Lawing (a/k/a “Dick”), 45 of Marion. (in custody)
• Carlos Alvarado Mendoza (a/k/a “Tequila”), 39 of Candler, N.C. (in custody)
• John Louis Pivonka, 42 of Marion. (in custody)
• Tommy Ray Sisk, 56 of Old Fort, N.C. (in custody)
• John Matthew Frady, (a/k/a “Ghost”), 39, of Cowpens, S.C. (in state custody)
• Jeffrey Kirkland, 41, of Gainesville, Ga. (in federal custody in Georgia)
• Miguel Santos-Maldonado (a/k/a “Mateo Segura”), 42, of Gainesville, Ga. (fugitive)
• Rigoberto Alvarado Mendoza (a/k/a “Big Boy”), 42 of Arden, N.C.(fugitive)
• Taide Alvarado Vergara, 27, of Candler. (fugitive)All twelve defendants in the methamphetamine trafficking ring have been charged with engaging in a narcotics conspiracy and they face a statutory minimum prison term of ten years and a maximum term of life imprisonment, and a $10 million fine. (See chart below for a breakdown of additional federal charges and maximum penalties for each defendant).
The seven defendants arrested in North Carolina had their arraignment and detention hearings on Monday, December 16, 2013, before U.S. District Court before U.S. Magistrate Judge Dennis L. Howell. All seven were detained pending trial.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The investigation is being handled by DEA, ATF, the North Carolina State Bureau of Investigation, the North Carolina State Highway Patrol, the Marion Police Department, the McDowell County Sheriff’s Office, the Yancey County Sheriff’s Office, the Rutherford County Sheriff’s Office, as well as the South Carolina Law Enforcement Division, the Cowpens Police Department and the Spartanburg County Sheriff’s Office in South Carolina.
The prosecution is being handled for the government by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.
Fletcher Dairy Company and Owner Plead Guilty to Clean Water Act Violation for Discharging Cow Feces into French Broad RiverRead the Press Release
ASHEVILLE, N.C. – Tap Root Dairy, LLC, one of North Carolina’s largest dairy farms located in Fletcher, N.C., and one of its owners pleaded guilty in federal court today to criminal violations of the Clean Water Act, 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 Special Agent in Charge Maureen O’Mara of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office, and Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI).
A criminal bill of information filed in U.S. District Court on November 11, 2013, charged Tap Root Dairy, LLC (Tap Root) and William “Billy” Franklin Johnston, 60, of Mills River, N.C., with one count of violation of the Clean Water Act, in connection with the discharging of cow feces into the French Broad River. According to filed documents and statements made in court, Tap Root maintains several hundred cows and manages hundreds of acres of crop fields in Fletcher. In the annual course of its operations, Tap Root disposes millions of pounds of solid and liquid animal waste, which are considered pollutants under the Clean Water Act.
Court documents indicate that beginning in 2009, Johnson let his certification lapse as Operator in Charge (OIC) of Tap Root’s animal waste management system. Despite receiving repeated warnings and notices, court records show that as of December 4, 2012, Tap Root still had not designated a valid OIC to oversee its waste management system. Furthermore, according to filed documents, from September 3, 2012 to December 4, 2012, for a total of 93 days, Tap Root failed to check and maintain the levels of cow waste in their on-site waste containment lagoons. This resulted in the spillover and discharge of 11,000 gallons of cow feces and other waste into the French Broad River on December 4, 2012.
In addition to pleading guilty to violating the Clean Water Act, Tap Root has also agreed: 1) to pay a fine of $80,000, which will be directed to entities that safeguard the French Broad River and other environmental concerns in the Southeast; 2) to abandon any appeal to a related $13,507.82 North Carolina State civil penalty; 3) to serve a probationary term of four years during which regulators and investigators can inspect their records and facilities without notice and without a warrant; and 4) to design and implement a compliance plan subject to approval by the EPA. At sentencing, Johnston faces a maximum prison term of one year and has agreed to pay an additional fine of $15,000. A sentencing date has not been set yet.
The Clean Water Act is a federal law enacted to prevent, reduce and eliminate pollution, and to restore and maintain the chemical, physical, and biological quality, of the Nation’s waters for the protection and propagation of fish and aquatic life and wildlife, for recreational purposes, and for the use of such waters for public drinking water, agricultural, and industrial purposes. The French Broad River supplies drinking water more than one million people and is frequently used for recreational water activities, such as swimming and kayaking. In 2012, North Carolina listed the French Broad River from Mud Creek to NC Highway 146 as impaired for fecal coliform bacteria. Tap Root is located on this impaired section of the French Broad River.
The investigation of this case was conducted by special agents of the EPA’s Criminal Investigation Division, and NC SBI’s Diversion and Environmental Crimes Unit. The prosecution is being handled by Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Charlotte Jury Finds Former Owner of Mental Health Clinic Guilty of Defrauding Medicaid Using Stolen Identities of Children and CliniciansRead the Press Release
Defendant Submitted Over $700,000 In Fraudulent Reimbursement Claims To Medicaid
CHARLOTTE, N.C. – A federal jury sitting in Charlotte returned a guilty verdict today for a Charlotte man accused of conspiring to defraud Medicaid of at least $700,000, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Calvin Cantrell Estrich, 32, of Charlotte, was convicted following a four-day trial before U.S. District Judge Max O. Cogburn, Jr. Estrich was also found guilty of committing health care fraud, making false statement in connection with a health care program, stealing the identities of children and clinicians to commit the fraud, money laundering and making false statements to investigators.
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).
“We will not allow the likes of Estrich to use Medicaid or any other taxpayer funded health care program as their personal ATMs,” said U.S. Attorney Tompkins in making today’s announcement of the guilty verdict. “Working together with our state partners we will find and prosecute those who pilfer precious health care resources from patients who need them and use scams to pocket taxpayer dollars.”
“Ripping off Medicaid harms needy patients, wastes tax dollars and contributes to rising health care costs,” North Carolina Attorney General Roy Cooper said. “This conviction sends a strong message that criminals who cheat Medicaid will pay, and it’s a great example of our ongoing partnership to stamp out health care fraud here in North Carolina.”
According to filed court documents and trial proceedings, from October 2009 to November 2010, Estrich and his co-conspirator, Joye Strong, participated in a scheme to defraud Medicaid for medically unnecessary services. Estrich’s company, Everyday’s Blessing, was approved by Medicaid to provide Intensive In-Home Community Intervention Services, which are mental and behavioral services designed to stabilize living arrangements for youth and children and prevent out-of-home therapeutic treatment. Trial evidence showed that Estrich and Strong stole and misused the identities of a nurse practitioner and two therapists in order to complete the necessary paperwork for Medicaid to approve services for Medicaid recipients to receive these services. According to evidence presented at trial, once Medicaid approved Everyday’s Blessing to provide services to these recipients based upon the fraudulent paperwork, Estrich and Strong sought and received payment from Medicaid for the fraudulent services. Evidence presented at trial established that in many instances, the Medicaid recipients did not receive any services at all. For example, evidence presented at trial established that Estrich, aided and abetted by others, used the Medicaid recipient identification number of a juvenile identified as “J.R.” and falsely and fraudulently billed Medicaid for services that J.R. never received. Estrich and Strong, through Everyday’s Blessing, received over $24,000 in payments from Medicaid for these false services.
Evidence presented at trial also showed that Estrich and Strong stole the identity of therapist “J.O.” in order to obtain approval from Medicaid for fraudulent and medically unnecessary services. Trial testimony revealed that J.O. provided her name and credentials to Strong when she sought employment at another company operated by Strong. Thereafter, Estrich and Strong stole and misused J.O.’s identity by forging J.O.’s signature to paperwork for diagnostic and therapeutic services which J.O. did not perform.
According to trial evidence, based on the fraudulent claims Medicaid reimbursed Estrich and Strong $462,178, from which Estrich received $192,000 for his role in the scheme. Trial evidence also showed that when investigators interviewed Estrich about the fraud scheme in December 2012, Estrich made materially false and fraudulent statements to investigators.
Estrich remains free on bond pending sentencing. At sentencing, Estrich faces a maximum term of ten years in prison for the health care fraud conspiracy count and for each of the four counts of health care fraud. Each of the four counts of making false statements in connection with health care matters carries a maximum term of five years in prison. Each of the eight aggravated identity theft counts carries a mandatory prison term of two years. Estrich also faces a maximum of 10 years in prison for the money laundering charge and a maximum of five years in prison for the one count of making false statements to investigators in a federal health care fraud investigation. Each count of conviction carries a maximum fine of $250,000. A sentencing date for Mr. Estrich has not yet been set.
Estrich’s co-conspirator, Joye Strong, pleaded guilty to eight counts of health care fraud and two counts of money laundering on October 4, 2011. Strong is awaiting sentencing on these charges.
The investigation into Estrich and Strong was handled by MID with assistance from the North Carolina Division of Medical Assistance.
The prosecution was handled by Special Assistant United States Attorneys Timothy Rodgers and Laura Lansford of the Western District of North Carolina. Mr. Rodgers is a Special Deputy Assistant Attorney General and Ms. Lansford is an Assistant Attorney General with the North Carolina Department of Justice Medicaid Investigations Division. The SAUSA position is reflection of the partnership between the Medicaid Investigations Division and the United States Attorney that helps ensure the effective and vigorous prosecution of Medicaid fraud.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil prosecutors, 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.
Aiport Operator Charged with Flying an Airplane Without A Proper Lincense and Lying to the Federal Aviation Administration About His QualificationsRead the Press Release
CHARLOTTE, N.C. – Paul Douglas Tharp, 53, of Greensboro, N.C., was arrested today on a federal criminal indictment charging him with lying to the Federal Aviation Administration (FAA) about his qualifications as mechanic and a pilot and for flying an airplane without the proper pilot’s license, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The five-count criminal indictment was unsealed today following the arrest of Tharp by law enforcement in Winston-Salem, N.C.
Kathryn A. Jones, U.S. Department of Transportation, Office of Inspector General (DOT-OIG) regional Special Agent-In-Charge, joins U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the criminal indictment:
From in or around 2011, Tharp was hired by Warriors and Warbirds, a group based in Monroe, N.C., to repair and refinish a multi-engine Curtiss Wright C-46F (C-46F) airplane that the group had purchased from an aviation museum in Midland, Texas. The Warriors and Warbirds group planned to feature the C-46F airplane at the museum located at the Charlotte-Monroe Executive Airport. Tharp currently operates an airport in Davidson County, N.C., and at the time he was certified to fly only single-engine aircrafts. Tharp did not have a multi-engine pilot license and did not hold an FAA Mechanic Certificate with an Airframe and Powerplant (A&P) rating. The Warriors and Warbirds hired Tharp to repair and fly their aircraft, after Tharp told a group representative that he was an A&P mechanic and could get the C-46F in good condition, and that he was licensed to operate a multi-engine plane like the C-46F.
As part of his services to the group, Tharp regularly traveled to Midland, Texas, where he performed maintenance on the C-46F, knowing he was not certified to do so. In addition to providing mechanic services, on several occasions Tharp acted as second in command during flights, even though he lacked the proper authorization to fly this type of airplane. On or about June 4, 2011, Tharp, acting again as second in command pilot, and other persons traveled via the C-46F from Monroe to an air show in Reading, Penn. Because the airplane still needed additional mechanical work to improve its airworthiness, the FAA required a special ferry permit before the plane could be flown back to Monroe. On or about June 5, 2011, an FAA inspector asked Tharp if someone had inspected the airplane’s condition to determine if the C-46F was safe for the return flight from Pennsylvania to North Carolina, and Tharp falsely represented he was an A&P mechanic who could make that determination. When the FAA inspector asked Tharp about his A&P certificate, Tharp lied and told the inspector that he had forgotten his A&P certificate in a rush to prepare the C-46F for the flight to Pennsylvania. Tharp then gave the FAA inspector the A&P certificate number of another A&P certificate holder who Tharp knew. This person did not give permission to Tharp to use his certificate number, and he became upset when he learned about Tharp’s unauthorized use of his number.
Based upon Tharp’s false representation about his status as an A&P mechanic and his unauthorized use of another person’s certificate number, the FAA inspector issued a special ferry permit that allowed the C-46F and its passengers to fly from Pennsylvania back to Monroe. Tharp again acted as second in command of the multi-engine C-46F even though he should not have been flying this airplane.
After Tharp completed the return trip to North Carolina, the FAA inspector who issued the special ferry permit checked on the certificate number Tharp had provided and learned that Tharp had lied about having an A&P certificate. The FAA opened an investigation and when Tharp received a letter from the FAA inquiring whether he was an A&P mechanic and whether he had a pilot’s certificate that allowed him to fly a multi-engine airplane like the C-46F, Tharp sent a reply letter to the FAA falsely stating, “I have been putting a time line of when I received my multi engine rating,” despite knowing he had never had this rating.
“Tharp knowingly and repeatedly lied about his qualifications to his clients and the FAA and in the process put lives at risk. Tharp’s lack of proper certification as a pilot and a mechanic is a serious safety hazard and now Tharp must face the legal consequences of these dangerous lies,” said U.S. Attorney Tompkins.
“The arrest today is a clear signal that safety of the Nation’s air transportation system remains a high priority for both OIG and DOT,” said Kathryn A. Jones, DOT-OIG regional Special Agent-In-Charge. “Working with the FAA, and our law enforcement and prosecutorial colleagues, we will continue our vigorous efforts to prevent and detect unlawful use of, and false statements related to, pilot and mechanic certificates; and punish to the fullest extent of the law those who would seek to compromise the integrity of DOT’s safety programs.”
Tharp had his initial appearance today in U.S. District Court in Winston-Salem. At sentencing he faces a maximum of five years in prison and a $250,000 fine for each of the two criminal counts of making false statements to the FAA, and a maximum of three years in prison and a $250,000 fine for each of the three counts of flying without proper authorization.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until he is proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Tompkins credited the special agents of the U.S. Department of Transportation, Office of Inspector General for the investigation leading to Tharp’s indictment.
Assistant United States Attorney Kenneth M. Smith of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Two Charlotte Women Sentenced to Prison for Fraudulent Tax Refund SchemeRead the Press Release
Defendants Sought More Than $3 Million In Tax Refunds Using False Tax Identification Numbers
CHARLOTTE, N.C. – Two Charlotte women were sentenced to prison by U.S. District Court Judge Max O. Cogburn, Jr. on Thursday, November 7, 2013, for obtaining false and fraudulent income tax refunds, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Jeannine Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division and Keith Fixel, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service join U.S. Attorney Tompkins in making today’s announcement.
Candida Figueroa, 42, of Charlotte, was sentenced to serve 30 months in prison, to be followed by two years of supervised release. Figueroa pleaded guilty in November 2012 to one count of false claims conspiracy. Her co-defendant, Cathy Cisneros, 31, also of Charlotte, was sentenced to 37 months in prison and was ordered to serve three years under court supervision following her prison term. Cisneros also pleaded guilty to one count of false claims conspiracy in October 2012. Judge Cogburn ordered both defendants to pay restitution to IRS in the amount of $1,658,477.67.
“Figueroa and Cisneros thought they could get away with ripping off the government and honest taxpayers who file truthful and honest tax returns. But instead of a pot of gold, the pair found prison cells waiting at the end of their tax fraud rainbow,” said U.S. Attorney Tompkins.
Special Agent in Charge Jeannine A. Hammett, IRS Criminal Investigation said, “IRS CI is committed to stopping those who undermine the federal tax system. Preparers like these defendants seek to enrich themselves by essentially stealing from all of us who pay our taxes honestly.”
According to filed court documents and yesterday’s sentencing hearing, from January to July 2012, Figueroa and Cisneros conspired to defraud the U.S. Treasury Department by participating in a scheme to obtain false tax refunds, using fraudulently obtained Individual Taxpayer Identification Numbers (ITINs). Court records indicate that the two women obtained ITIN numbers for various individuals using Mexican birth certificates and other documents. Then, using these ITIN numbers, the defendants prepared fraudulent federal tax returns seeking refunds based on false wage, income, and withholding tax information and claiming multiple dependents.
According to filed court records, Figueroa and Cisneros rented apartments at complexes with clustered mailboxes and then used the multiple apartment addresses on the fraudulent tax returns they submitted to IRS seeking refunds, causing the Treasury Department to mail false tax refund checks to these addresses.
Court records reflect that at least 1,104 fraudulent tax returns claiming $5.1 million in refunds have been associated with the pair’s conspiracy. Of this amount, the IRS issued refunds totaling approximately $1.6 million. As part of the scheme, Figueroa and Cisneros arranged for the Treasury checks to be cashed, and then they deposited the cash into bank accounts or held it in safety deposit boxes before wiring it to Mexico. To date, law enforcement have recovered $136,334.
Figueroa and Cisneros 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.
A third co-conspirator, Ana Portillo, 42, of Charlotte, (also known as Ana Portillo-Flores, Ana Flores-Portillo, Peladita Portillo or Lety Portillo), pleaded guilty in May 2013, to one count of false claims conspiracy for participating in the tax fraud scheme. Portillo is currently released on bond and is awaiting sentencing. She faces a maximum prison term of 10 years, a $250,000 fine, or both.
The case was investigated by the IRS-Criminal Investigations Division with substantial assistance from the U.S. Postal Service. The prosecution is being handled for the government by Assistant U.S. Attorney Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
Registered Sex Offender Senenced to 10 Years in Prison for Processing Child PornographyRead the Press Release
CHARLOTTE, N.C. – On Thursday, November 7, 2013, U.S. District Court Judge Robert J. Conrad, Jr. ordered a Charlotte man to serve 10 years in prison for possessing child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Jerry Keith Kramer, 58, of Charlotte, was ordered to serve a lifetime of supervised release and to continue to register as a sex offender.
Brock D. Nicholson, 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 May 2012, a federal criminal indictment charged Kramer with one count of possession of child pornography. According to filed documents and statements made in court, the investigation began while Kramer was on state probation, after a North Carolina probation officer discovered questionable images involving children on Kramer’s computer during a routine home visit. Court records indicate that law enforcement executed a search warrant at Kramer’s Charlotte residence and seized his home computer. A forensic examination revealed that Kramer’s computer contained several images of child pornography. In December 2012, Kramer pleaded guilty to the charge in the indictment.
Kramer’s registered sex offender status stems from his prior convictions for sexually assaulting two minors, in 1992 and 1997, respectively. At yesterday’s hearing, Kramer’s sentence was enhanced because of his prior state convictions.
Kramer has been in federal custody since May 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 making today’s announcement U.S. Attorney Tompkins thanked the North Carolina Department of Corrections’ Community Supervision Section for their assistance in this case. Assistant U.S. Attorney Kimlani Ford of the U.S. Attorney’s Office in Charlotte prosecuted the case.
The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by ICE-HSI.
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.
Catawba County Round-up Nets 19 on Federal Drug and Gun ViolationsRead the Press Release
Nine Suspects Also Arrested On State Charges
CHARLOTTE, N.C. – Federal and local law enforcement agencies arrested 19 suspects today in Hickory, N.C. and the surrounding area charged with drug trafficking, illegal firearm possession and other federal offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Another nine individuals were arrested on state charges.
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, Chief Tom Adkins of the Hickory Police Department (HPD); and James C. Gaither, Jr., District Attorney for Burke, Caldwell and Catawba Counties.
The federal indictments were returned by a grand jury on October 15 and 16, 2013, but remained sealed until today’s arrests. The investigation began in October 2012, targeting individuals who participated in illegal drug transactions and gun trafficking in and around Hickory. The seven-month anti-violence initiative resulted in the seizure of more than 80 firearms, including 53 handguns, 19 rifles, 10 shotguns and one short barrel shotgun. Law enforcement also seized more than 1,425 grams of narcotics, including over 1,125 grams of cocaine and more than 230 grams of marijuana, with a total street value of over $55,000.
In making today’s announcement U.S. Attorney Tompkins stated, “This morning’s arrest of 19 offenders is part of my office’s ongoing effort to combat drug trafficking and gun violence throughout our district. The law enforcement partners who participated in this anti-violence initiative share a common goal: to fight and reduce violent drug crime by joining forces, so our citizens can reclaim their neighborhoods from drug dealers and put an end to the collateral violence that comes with drug and gun trafficking.”
“ATF will continue to work with our law enforcement partners to identify those individuals that contribute to the number of crime guns used in violent crime in the Hickory area. Violent gun crime is the scourge in our society and any contribution to illegal firearms trafficking cannot stand,” said ATF Special Agent in Charge Wayne L. Dixie. “Our mandate is to do everything we lawfully can to allow the citizens of Hickory to live in a safe and secure environment without the fear of having needless violent crime as a part of their lives. We accept that mandate and today’s law enforcement action should send that message loud and clear.”
“I am very proud of our local law-enforcement and agents and staff of the ATF who worked together to bring about this initiative. This is a major commitment of resources from the ATF for a city the size Hickory. These defendants will be prosecuted by both the U.S. Attorney’s office and the 25th prosecutorial district. We intend to follow up on this excellent collaborative effort with aggressive prosecution,” said James C. Gaither, Jr., District Attorney for the 25th Prosecutorial District, which encompasses Burke, Caldwell and Catawba counties.
“Hickory Police Department is committed to making our community safe,” said Chief of Police Tom Adkins. “HPD along with other area jurisdictions are members of the Catawba County Safe Communities Initiative, which directs law enforcement resources to reducing the violence and drugs in our communities. This focused investigation with ATF and our officers will have a lasting impact on reducing violence and taking drugs off the streets of Hickory and other communities in Catawba County.”
The round-up was conducted by the ATF, U.S. Marshals Service, Hickory Police Department, Newton Police Department, Catawba County Sheriff’s Office, Conover Police Department, and Longview Police Department. Those arrested include drug traffickers, members and associates of drug trafficking organizations, convicted felons, as well as several local gang members. The federal suspects arrested during the round-up were:
• Kadeem Jamal Albright, 21, address unknown.
• Marquice Tyrone Streeter, 25, of Hickory.
• Kianta Martese Davis, 21, of Conover, N.C.
• Keon Maurquie Gaither, 25, address unknown.
• Chaetez Sean Clayton, 23, of Hickory.
• Tyree Dorian Rhinehardt, 21, of Hickory.
• Isreal Lerock Linebarger, 22, of Conover.
• Larry Jermaine Linebarger, 26, address unknown.
• Larry Elwood Steptoe, 33, address unknown.
• Jeffrey Lashaw Maddox 27, address unknown.
• Anthony Roger Mull, 28, of Hickory.
• Kenneth Demond Norman, 35, of Hickory.
• Eric Jay Ramirez, 33, of Hickory.
• Cortez Lamar Rogers, 31, address unknown.
• Dorrian Debrell Shuford, 20, of Newton, N.C.
• Traquon Rashaad Davis, 20, of Conover.
• Brandon Jaqwan Sifford, 22, of Hickory.
• Anthony Lamar Mason, 24, of Hickory.
• Donnell Lavon Thomas, 39, of Hickory.
Click on the links below to view a chart of federal charges and penalties for each defendant:
PenaltiesNine additional defendants currently in state custody on state violations have been charged with federal offenses in connection with this investigation, bringing the total number of those charged federally to 28. They are:
• Damion Jordan Armstrong, 22, address unknown.
• Xavier Ahmad Cade, 22, of Hickory.
• Brandon Colbert, 26, of Hickory.
• Kerston Deshawn Edwards, 24, of Lincolnton, N.C.
• William Shalon Linebarger, 27, address unknown.
• Kenteze Rayvon Martin, 23, of Shelby, N.C.
• Christopher Durand Myers, 34, address unknown.
• Donald Lavar Ramseur, 24, of Hickory.
• Paris Michael Thompson, 24, address unknown.
Another nine defendants arrested this morning face state criminal charges.
The federal defendants arrested today are currently in federal custody. Their initial appearances were held in U.S. District Court before U.S. Magistrate Judge David C. Keesler.
The charges contained in the 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 conducted by the ATF and Hickory PD. U.S. Attorney Tompkins thanked all the law enforcement agencies involved in today’s round-up for their assistance in making today’s arrests.
Assistant U.S. Attorney Jennifer Dillon of the U.S. Attorney’s Office in Charlotte is leading the prosecution.
Lincoln County Businessman Indicted for His Role in A Multi-million Organized Retail Theft SchemeRead the Press Release
CHARLOTTE, N.C. – Steve Hale, 64, and owner of Double D Distributing, LLC, formerly based in Denver, N.C., has been indicted on conspiracy to transport stolen goods in interstate commerce, interstate transportation of stolen property and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The indictment remained under seal until today, following Hale’s arrest yesterday afternoon.
U.S. Attorney Tompkins is joined in making today’s announcement by Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Chief James W. Buie of Gaston County Police Department; and Chief Stacy Conley, of the Gastonia Police Department.
The federal charges against Hale are the result of “Operation Cash Back,” an investigation that began in September 2010 into the buying and selling of stolen over-the-counter (OTC) non-prescription drug and health and beauty aid (HBA) products. Six defendants have been sentenced to date in connection with Operation Cash Back. Bonnie Bridges, Kimberley Morris, Michael Morris, Darlene Schoener, William Schoener, and Darryl Brock were sentenced in January 2013 to prison terms ranging from 18 to 86 months. The amount of stolen property involved in the Bridges case from 2006 to 2011 exceeded $16 million.
The 30-count federal criminal indictment against Hale was returned by a grand jury sitting in Charlotte on October 17, 2013. According to allegations contained in the indictment, from 2006 to March 2011, Hale was a second-level “fence” for an organized retail theft scheme involving millions of dollars’ worth of stolen consumer goods transported in interstate commerce. The indictment alleges that professional shoplifters, known as “boosters,” committed large-scale retail theft of thousands of consumer products, including popular name brand over-the-counter non-prescription drug products and over-the-counter health and beauty aid products, and sold the stolen goods for cash to multi-level fencing operators, known as “fences.”
According to allegations contained in the indictment, Hale provided Bonnie Bridges with a “shopping list” of consumer products along with the prices that Hale would pay for those goods. The indictment alleges that Bonnie Bridges, Kimberly Morris, Michael Morris, Darlene Schoener, William Schoener, Darryl Brock and other first-level fences bought bulk quantities of stolen retail products from the boosters, and delivered the unsorted stolen merchandise to Hale at the Double D Distributing warehouse in plastic garbage bags, boxes and plastic containers, in exchange for cash payments. The indictment also alleges that Hale only accepted products with undamaged packaging and extended expiration dates, known as “shelf life,” that were marketable in retail stores. According to allegations contained in the indictment, Hale and his employees then removed the retail store security stickers contained on some of the stolen goods and organized the “cleaned” products for shipment to Hale’s customers. The indictment alleges that Hale shipped some of the stolen merchandise out-of-state, including to Florida. Hale sold the stolen consumer products, including name brand OTC-drug products and name brand OTC-HBA products, at discounted prices, up to fifty-two percent (52%) below wholesale prices in the legitimate marketplace, the indictment alleges.
According to allegations contained in the indictment, Hale made false statements in his 2006, 2007 and 2008 income tax returns by failing to include gross receipts substantially in excess of the amounts he claimed on his tax returns. Hale also was charged with failing to collect, truthfully account for and pay over to the IRS quarterly federal income taxes and Federal Insurance Contribution Act (FICA) taxes from the total wages of one of his employees for the tax years 2007 through 2010.
Hale has been charged with one count of conspiracy to transport stolen goods in interstate commerce, which carries a maximum prison term of five years; twelve counts of interstate transportation of stolen property, which carry a maximum prison term of 10 years per count; three counts of false statements on income tax returns, which carry a maximum prison term of three years per count; and fourteen counts of failing to collect, truthfully account for and pay quarterly federal income taxes and FICA taxes for a former employee, which carry a maximum prison term of five years per count. Each count also carries a $250,000 fine.
The indictment includes a notice of forfeiture, which gives notice that the defendant must forfeit to the United States all of the property, currency and monetary instruments involved in the offenses charged in the indictment. The government will pursue a forfeiture money judgment in the amount of at least $8,265,145, which the government contends constitutes the proceeds of the violations alleged in the indictment.
Hale had his initial appearance this morning in federal court in Charlotte. He was released on bond and was ordered to home detention with electronic monitoring. Hale is also prohibited from working in the wholesale goods business.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation was handled by USSS, IRS-CI, the Gaston County Police Department and the Gastonia Police Department. This prosecution is handled by Assistant United States Attorneys Tom O’Malley and Ben Bain-Creed of the Western District of North Carolina.
Seven Arrested on Federal Drug and Gun Charges During Early Morning Round-upRead the Press Release
Seven More Arrested This Morning Will Face Criminal State Charges
CHARLOTTE, N.C. – A total of 14 defendants were arrested earlier today and face federal and state criminal charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Seven of the defendants have been charged with federal drug and gun offenses, and seven face state criminal charges.
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; Andrew Murray, District Attorney for Mecklenburg County; and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).
The defendants were apprehended during an early morning round-up conducted by ATF, the U.S. Marshals and CMPD. Those arrested and charged by federal criminal complaints include, in alphabetical order:
• Donuell Johnson a/k/a “Rock,” 29, of Charlotte.
• Waycus Luckett, a/k/a “Lucky,” 31, of Charlotte.
• Erecai Lynch, 26, of Charlotte.
• David Ray McCullough, 37, of Charlotte.
• Christopher Roseboro, 33, of Charlotte.
• Brandon Tate, 26, of Charlotte.
• Terrence Tate, 21, of Charlotte.
Click on the links below to view a chart of federal charges and penalties for each defendant:
PenaltiesFederal arrest warrants have also been issued against Rodney Reid, 37, Jimareo Sherrill, 21, and Quandarius Shine, 23, all of Charlotte, who are still wanted by law enforcement.
Five additional defendants previously arrested on state charges have now been charged with federal offenses in connection with this investigation, bringing the total number of those charged federally to 15. They are: Jerry Lee Edwards, 27; Isiah Ezechukwu, a/k/a “Donte,” 26; Denis Joel Argueta Gonzalez, 20; Jamil Weaks, 19; and Darryl Whiteside, Jr., 26, all of Charlotte.
Seven more defendants arrested during this morning’s round-up face state criminal charges.
Over the course of the investigation law enforcement seized 10 firearms, including two loaded SKS rifles and stolen firearms brought into North Carolina from out of state.
Today’s arrests are the result of a four-month investigation targeting drug trafficking and violent crime in and around the Sugar Creek/Interstate 85 corridor. The agencies involved in this initiative are dedicated to working together to identify violent and repeat offenders for federal prosecution. This investigation, which began in early summer, is part of U.S. Attorney General Eric Holder’s Anti-Violence Initiative, which calls for federal, state and local agencies to target violent crime hot spots and collaborate on developing strategies to reduce crime and violence in those communities.
In making today’s announcement U.S. Attorney Tompkins stated, “This morning’s arrests are the result of a joint law enforcement investigation targeting an area of Charlotte that is afflicted by crime and drug-fueled violence. I want to thank our law enforcement partners who united to identify and remove violent felons from our streets and let this be a warning that we will not sit on the sidelines while our neighborhoods are polluted with drugs and violence.”
“Today’s law enforcement operation in the Interstate 85 corridor area in Charlotte should send the clearest message possible. As long as those individuals who insist on returning here again and committing violent crimes and violations of gun and drug laws, the ATF/CMPD Violent Crimes Task Force and our law enforcement partners will continue to identify you and put you behind bars where you belong,” said ATF Special Agent in Charge Wayne L. Dixie. “Our commitment to providing a safe and secure community for the citizens of Charlotte should not continue to be challenged, because we have demonstrated that we will utilize all of our joint resources and rise to that challenge if necessary.”
“We will continue to work to improve the quality of life for the citizens in this community by working with our committed partners in reducing crime,” said Charlotte-Mecklenburg Police Chief Rodney D. Monroe.
“We’re proud to stand beside our U.S. Attorney’s Office and law enforcement partners today and every day in our efforts to seek justice in our community,” said Mecklenburg County District Attorney Andrew Murray.
The seven federal defendants arrested today are currently in federal custody. Their initial appearances will be held in U.S. District Court before U.S. Magistrate Judge David Keesler.
The charges contained in these complaints 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 conducted by the ATF and CMPD. U.S. Attorney Tompkins also thanked the U.S. Marshals for their invaluable assistance in making today’s arrests.
Assistant U.S. Attorney Ann Claire Phillips of the U.S. Attorney’s Office in Charlotte is leading the prosecution.
Federal Jury Convicts Real Estate Agent and Loan Processor on Racketeering ChargesRead the Press Release
Defendants Were Among 91 Defendants Charged In Operation Wax House
CHARLOTTE, N.C. – Following a week and a half long trial, a federal jury today convicted a real estate agent and a loan processor on all charges relating to a $75 million racketeering conspiracy, announced the U.S. Attorney’s Office for the Western District of North Carolina. Today’s convictions are the latest in Operation Wax House, an investigation which began in 2007 and has netted 91 defendants to date, 80 of which have pleaded guilty or have been convicted following a trial.
Nathan Shane Wolf, 42, of Charlotte, a licensed real estate agent in North Carolina, was convicted of all three charges against him in the indictment: Racketeering Conspiracy, Bank Fraud, and Money Laundering Conspiracy.
Denetria Montresa Myles, 42, of Charlotte, a loan processor and licensed notary public in North Carolina, was also convicted of all charges against her in the indictment: Racketeering Conspiracy, and Bank Fraud.
The United States 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, and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI).
The federal criminal trial began on Tuesday, October 15, 2013, before Senior U.S. District Judge Graham Mullen. According to evidence introduced at trial, the enterprise operated from about 2005 until 2012, when indictment was unsealed. The enterprise engaged in an extensive pattern of racketeering activities, which included investment or securities fraud, mortgage fraud in the form of wire fraud and bank fraud, and money laundering.
According to trial evidence, defendants Wolf and Myles were participants in the enterprise’s mortgage fraud operations, accounting together for over $13 million in fraudulently-obtained loans. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loan from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. The evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000.
According to trial testimony, defendant Myles was a promoter for the enterprise, working with one of her co-conspirators also charged in the superseding indictment, Nazerre Saddig (currently a fugitive), to purchase a luxury home so that Myles could receive a $100,000 kickback disguised as a payment for “upgrade repairs” that were never done. According to trial evidence, Myles also purchased one such home in her own name for a kickback of nearly $80,000, paid to a company in the name of her husband. In other transactions, Myles facilitated the identity theft of a victim whose name and credit information was used to buy two homes and obtain in excess of $1 million in loans by Myles falsely notarizing that the victim had signed the loan documents, when, in fact, the victim’s identity had been stolen and the victim never signed the documents nor appeared in front of Myles.
Following the jury’s convictions, both defendants consented to forfeiture in an amount to be determined, and were released on bond pending the scheduling of their sentencing hearings. At sentencing, Wolf faces a maximum prison term of 70 years, and Myles faces a maximum prison term of 50 years. In determining their actual sentence, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges. Sentencing dates for the defendants have not been set yet.
Twenty-six defendants were charged in the case. Eleven defendants remain for trial, including two who are international fugitives. Each remaining defendant and his or her status are listed below.
• Ramin Amini, 45, of Tehran, Iran, is charged with racketeering conspiracy, mortgage fraud and money laundering conspiracy. Role: Leader and promoter in the scheme. Status: International fugitive.
• Frank DeSimone, 41, of Charlotte is charged with racketeering conspiracy, securities fraud, wire fraud to defraud investors, and money laundering conspiracy. Role: Promoter. Status: On bond; Scheduled for trial in January 2014.
• Lori Dooley, 49, of Washington, D.C. is charged with racketeering conspiracy, mortgage fraud, and bank bribery. Role: Promoter. Status: Detained; Scheduled for trial after January 2014.
• Toby Hunter, 38, of Fort Mill, S.C. is charged with racketeering conspiracy, securities fraud, wire fraud to defraud investors and money laundering. Role: Promoter. Status: On bond; Scheduled for trial January 2014.
• Steven Jones, 45, of Waxhaw, is charged with securities fraud, wire fraud to defraud investors, money laundering conspiracy and racketeering conspiracy. Role: Promoter. Status: On bond; Scheduled for trial January 2014.
• Kurosh Mehr, 52, of Charlotte is charged with racketeering conspiracy, mortgage fraud and money laundering. Role: Promoter and buyer. Status: On bond; Scheduled for trial after January 2014.
• Ann Tyson Mitchell, 62, of Charlotte, is charged with racketeering conspiracy, mortgage fraud and money laundering. Role: Facilitator. Status: On bond; Scheduled for trial after January 2014.
• John Wayne Perry, Jr., 32, of Charlotte, is charged with racketeering conspiracy and money laundering conspiracy. Role: Promoter. Status: On bond; Scheduled for trial after January 2014.
• Nazeere Saddig, 41, formerly of Charlotte, is charged with racketeering conspiracy and mortgage fraud. Role: Promoter and buyer. Status: International Fugitive.
• Carrie Tyson, 59, of Winterville, N.C., is charged with racketeering conspiracy, securities fraud, mortgage fraud, wire fraud to defraud investors and money laundering. Role: Leader and promoter. Status: Detained (bond review pending); Scheduled for trial January 2014.
• James Tyson, Jr., 32, of Dakar, Senegal, is charged with racketeering conspiracy, securities fraud, mortgage fraud, wire fraud to defraud investors, bank bribery and money laundering. Role: Leader and promoter. Status: Detained; Scheduled for trial January 2014.
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. The United States Attorney’s Office also relied heavily on the expertise and assistance of the North Carolina Real Estate Commission. The Wolf and Myles prosecution for the government was handled by Assistant United States Attorneys Kurt W. Meyers and Maria K. Vento.
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.
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.
Attorneys and Paralegals
Crawford/Mallard, Michelle 3:11cr374
Gates, Christine 3:09cr100
Norwood, Kelli, 3:09cr162
Rainer, Demetrius 3:08cr239/241
Smith, Troy, 3:08cr264Bank Insiders
Brown, Jamilia, 3:10cr124
Eason, Danyelle, 3:10cr116
Henson, Vic. F., 3:10cr124
Jackson, Mitzi, 3:11cr374
Ramey, Bonnie Sue, 3:10cr124Builders and Sellers
Fink, James, 3:11cr374; 3:12cr239
Jackson, Jennifer, 3:09cr241
Smith, Kelvis, 3:12cr238
Viegas, Jeffrey, 3:12cr298
Wittig, Mark, 3:12cr335
Wood, Gary, 3:09cr208Facilitators and Financiers
Hickey, Denis, 3:09cr103
McClain, Landrick, 3:10cr124
Mitchell, Ann Tyson, 3:12cr239
Panayoton, Sherrill, 3:11cr176
Taylor, Alicia Renee, 3:10cr124
Wilson, Willard, 3:09cr161Buyers
Banks, Arketa, 3:12cr297
Hillian, Kirk, 3:12cr83
Mathis, Charles, 3:10cr1
Mobley, Sarena, 3:10cr124
Moore, George, 3:12cr337
Richards, Dan, 3:10cr119
Smith, Kevin, 3:12cr341
Tyler, Glenna, 3:11cr200
Vaughn, Mary, 3:12cr329
Wallace, Jamaine, 3:12cr330
Wellington, William, 3:12cr333Notary Public
Willis, Anthony, 3:09cr218Appraiser
Darden, Clinton 3:10cr108Mortgage Brokers
Bradley, Bonnette, 3:12cr299
Clarke, Linda, 3:10cr120
Flood, Ericka, 3:10cr124
Goodson-Hudson, Crystal, 3:12cr339
Mahaney, Robert, 3:12cr34-0
Scagliarini, Coley, 3:11cr374
Staton, Walter, 3:10cr113
Vaughn, Danielle, 3:12cr329
Williams, Marcia, 3:12cr334
Williams, Sean, 3:12cr336
Woods, Joseph, 3:09cr178Real Estate Agents
Belin, Chris, 3:11cr374
Clark, Christina, 3:09cr44
Lee, Shannon, 3:12cr338
Pasut, Holly Hardy, 3:12cr331
Wolf, Nathan Shane, 3:12cr239
Wood, Gary, 3:09cr208Promoters
Amini, Ramin, 3:12cr239
Barnes, Vonetta Tyson, 3:12cr239
Brown, William, 3:12cr239
Bumpers, Travis, 3:12cr239
Carr, Stephen, 3:10cr124
Clarke, Benjamin, 3:12cr239
Clarke, Reuben, 3:10cr120
Coleman, Gregory, 3:10cr118
DeSimone, Frank, 3:12cr239
Dooley, Lorie, 3:12cr239
Hitchcock, Jimmy, 3:11cr374
Hubbard, Glynn, 3:12cr239
Hunt, Victoria, 3:12cr239
Hunter, Toby, 3:12cr239
Johnson, Ralph, 3:12cr239
Jones, Steven, 3:12cr239
Jones, Tyree, 3:10cr230
Long Waylon, 3:12cr239
Marshall, Michael, 3:07cr283
McDowell, John, 3:12cr239
McPhaul, Elizabeth, 3:10cr114
Mehr, Kurosh, 3:12cr239
Mitchell, Ann Tyson, 3:12cr239
Moye, Melvin, 3:12cr239
Myles, Denetria, 3:12cr239
Newland, Matthew, 3:12cr239
Perry, John Wayne, Jr., 3:12cr239
Perry, Kim, 3:10cr25
Phillips, Rick, 3:10cr115
Saddig, Nazeere, 3:12cr239
Sharreff-El, Drew, 3:10cr124
Sherald, Kiki, 3:10cr117
Simmons, Aaron, 3:09cr240
Snead, Todd, 3:10cr124
Staton, Lisa, 3:10cr113
Thorogood, Donte, 3:12cr239
Tyson, Carrie, 3:12cr239
Tyson, James, Jr. 3:12cr239
Tyson, James, Sr., 3:12cr239
Wellington, Phillip, 3:12cr332
Wood, Purnell, 3:12cr239Federal Jury Finds Three Guilty of Charges Related to Shipping More Than 35 Tons of Marijuana to CharlotteRead the Press Release
CHARLOTTE, N.C. – A Charlotte federal jury delivered guilty verdicts today against three defendants charged with marijuana trafficking conspiracy and related offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Evelyn LaChapelle, 28, Natalia Wade, 30, and Corvain Cooper, 33, all from California, were convicted following a four-day trial before U.S. District Court Judge Robert J. Conrad, Jr, which ended today.
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 Atlanta and the Carolinas and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department.
According to court records, LaChapelle, Wade, and Cooper were initially charged on January 15, 2013 with marijuana trafficking conspiracy and money laundering conspiracy in a multiple-defendant criminal bill of indictment. The indictment was later superseded to include a third charge of structuring financial transactions through banking institutions to avoid reporting requirements. According to evidence presented at trial, the marijuana was shipped to the Charlotte area in commercial crate shipments and overnight packages. Trial evidence revealed that the conspiracy involved more than 35 tons of marijuana being shipped to Charlotte and millions of dollars of laundered proceeds funneled back to the sources of supply in California.
The defendants were convicted of all three charges. At sentencing, LaChapelle and Wade face a mandatory minimum of five and a maximum of 40 years in prison and a $4 million fine for the marijuana trafficking conspiracy charge. Because of his prior conviction and the drug weight for which he has been held liable, Cooper faces a mandatory minimum of 20 years and a maximum of life in prison and a $20 million fine for the same charge. All three defendants face a maximum of 20 years in prison for the money laundering conspiracy charge and the greater of $500,000 or twice the value of the property laundered as a monetary fine. For the structuring of financial transactions offense in a pattern exceeding $100,000 in a 12-month period, all three defendants face a maximum of 10 years in prison and a $250,000 fine. The defendants will remain in federal custody until their sentencing hearing which will be scheduled by the court at a later date.
This prosecution is part of an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation that has resulted in the conviction of more than 50 defendants for marijuana trafficking, money laundering, and firearms violations over the past four years.
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 investigation was led by HSI and CMPD, with the assistance of several other law enforcement agencies, to include the Gastonia Police Department, the Concord Police Department, the Mooresville Police Department, the Pineville Police Department, the Huntersville Police Department, the Kannapolis Police Department, the Cornelius Police Department, the Waxhaw Police Department, North Carolina Alcohol Law Enforcement, North Carolina State Bureau of Investigation, the Iredell County Sheriff’s Office, the Union County Sheriff’s Office, and the Beverly Hills and Culver City, California Police Departments. The prosecution for the government was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Federal Jury Finds Three Guilty of Charges Related to Shipping More Than 35 Tons of Marijuana to CharlotteRead the Press Release
CHARLOTTE, N.C. – A Charlotte federal jury delivered guilty verdicts today against three defendants charged with marijuana trafficking conspiracy and related offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Evelyn LaChapelle, 28, Natalia Wade, 30, and Corvain Cooper, 33, all from California, were convicted following a four-day trial before U.S. District Court Judge Robert J. Conrad, Jr, which ended today.
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 Atlanta and the Carolinas and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department.
According to court records, LaChapelle, Wade, and Cooper were initially charged on January 15, 2013 with marijuana trafficking conspiracy and money laundering conspiracy in a multiple-defendant criminal bill of indictment. The indictment was later superseded to include a third charge of structuring financial transactions through banking institutions to avoid reporting requirements. According to evidence presented at trial, the marijuana was shipped to the Charlotte area in commercial crate shipments and overnight packages. Trial evidence revealed that the conspiracy involved more than 35 tons of marijuana being shipped to Charlotte and millions of dollars of laundered proceeds funneled back to the sources of supply in California.
The defendants were convicted of all three charges. At sentencing, LaChapelle and Wade face a mandatory minimum of five and a maximum of 40 years in prison and a $4 million fine for the marijuana trafficking conspiracy charge. Because of his prior conviction and the drug weight for which he has been held liable, Cooper faces a mandatory minimum of 20 years and a maximum of life in prison and a $20 million fine for the same charge. All three defendants face a maximum of 20 years in prison for the money laundering conspiracy charge and the greater of $500,000 or twice the value of the property laundered as a monetary fine. For the structuring of financial transactions offense in a pattern exceeding $100,000 in a 12-month period, all three defendants face a maximum of 10 years in prison and a $250,000 fine. The defendants will remain in federal custody until their sentencing hearing which will be scheduled by the court at a later date.
This prosecution is part of an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation that has resulted in the conviction of more than 50 defendants for marijuana trafficking, money laundering, and firearms violations over the past four years.
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 investigation was led by HSI and CMPD, with the assistance of several other law enforcement agencies, to include the Gastonia Police Department, the Concord Police Department, the Mooresville Police Department, the Pineville Police Department, the Huntersville Police Department, the Kannapolis Police Department, the Cornelius Police Department, the Waxhaw Police Department, North Carolina Alcohol Law Enforcement, North Carolina State Bureau of Investigation, the Iredell County Sheriff’s Office, the Union County Sheriff’s Office, and the Beverly Hills and Culver City, California Police Departments. The prosecution for the government was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Six Individuals, Including Three Licensed Mortgage Brokers and A Real Estate Agent, Have Agreed to Pay Civil Penalties to the United States to Settle Civil Fraud ClaimsRead the Press Release
The Defendants Obtained Mortgage Loans Based On Falsified Mortgage Applications To Purchase Investment Properties In Charlotte’s Dilworth Neighborhood
CHARLOTTE, N.C. – Six individuals, including three licensed mortgage brokers and a real estate agent, have agreed to pay civil penalties ranging from $5,000 to $85,000 to the United States to resolve civil fraud allegations stemming from false statements they made in mortgage loan applications, announced Anne M. Tompkins, United States Attorney for the Western District of North Carolina.
In addition to the civil penalties, Kyle Frey, Adam Goulet, Roger Sterling Moore, William S. Nunemaker, Tyler P. Nunemaker and Daniel Brewton (Defendants) have also agreed to pay to the United States any profits from the sale of the real estate properties they purchased with those loans.
The civil complaints filed against the defendants pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act, (“FIRREA”), allege that beginning in or about 2005 to in or about 2008, the defendants obtained mortgage loans from various financial institutions and purchased real estate properties as speculative investments in Charlotte’s Dilworth neighborhood. A federal investigation revealed that the loan applications the defendants submitted contained false statements. The civil complaints filed in U.S. District Court allege that the defendants falsified information on the mortgage applications, including the borrower’s income, assets, liabilities, and/or net worth.
According to court records, the defendants also falsely represented on the mortgage applications that they were buying the houses as their primary residences when, in fact, they had no intention of living in them. According to allegations contained in filed documents, the defendants purchased the properties with the intention of building new houses and then selling them quickly for a profit. By representing to the financial institutions that the mortgage loans were for primary residences, the defendants were able to obtain favorable “no recourse” loans, which typically means that if they defaulted on the mortgages, the lender’s only recourse would be against that one property bought and built with the loan and the defendants’ other assets would not be at risk. Under such circumstances, a borrower is attempting to use the bank’s money, risk free, to speculate in real estate development. The United States contends that through the false statements alleged in these actions, the defendants avoided having to obtain commercial loans which typically would have required larger down payments, personal guarantees, or the pledging of other assets, and further avoided the risk associated with being personally liable for the success of their real estate speculation.
The defendants were on notice of the requirement to provide truthful statements in mortgage applications as they were either licensed mortgage originators, licensed real estate agents, experienced real estate investors, or closely related to such persons. In addition, all of the misrepresentations were made on the mortgage applications, despite the fact that each loan application contained a warning against making false statements or misrepresentations on the form. The mortgage loans obtained based on the false applications were generally in the range of $775,000 to $890,000.
In the FIRREA civil actions filed by the U.S. Attorney’s Office, without admitting liability, the defendants have agreed to settle the cases by paying civil penalties ranging from $5,000 to $85,000 and to sell properties which the United States alleges were purchased with mortgages obtained by false statements. Also, pursuant to these settlements, the profits – if any – from the sale of these properties will be surrendered to the United States.
Congress enacted FIRREA in 1989 as part of a comprehensive legislative plan to reform and strengthen the banking system and the federal deposit insurance system that protects the public from bank failures. FIRREA also authorizes the Department of Justice to file civil actions to recover monetary penalties of up to $1 million per false statement made in transactions affecting financial institutions.
In making today’s announcement, U.S. Attorney Tompkins thanked the Charlotte Division of the FBI and the Enforcement Division of the North Carolina Office of the Commissioner of Banks for their assistance in investigating this case. The case is being handled by Special Assistant United States Attorney Allison Carroll, and Assistant United States Attorneys Paul Taylor and Mike Savage of the U.S. Attorney’s Office for the Western District of North Carolina. The investigation is ongoing.
Charlotte Man Sentenced to 12 Months in Prison for Vehicle Emissions FraudRead the Press Release
Defendant Was A Licensed Emissions Inspector At Carolina Tire & Auto In Pineville
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. sentenced a Charlotte man today to 12 months in prison for conducting false vehicle emission inspections, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Jose Manuel Cabrera, 28, of Charlotte, was also ordered to serve three years under court supervision following the prison term with the condition that he will not obtain a license to or actually conduct any vehicle emissions testing. Cabrera was also ordered to pay a $10,000 fine and to complete 100 hours of community service.
U.S. Attorney Tompkins is joined in making today’s announcement by Special Agent in Charge Maureen O’Mara of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office; Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI); and Steven M. Watkins, Director of the North Carolina Division of Motor Vehicles License & Theft Bureau (NC DMV L&T).
According to court records and today’s sentencing hearing, Cabrera worked at Carolina Tire & Auto service center (Carolina Tire) in Pineville, as a mechanic and a vehicle emissions inspector licensed by the state of North Carolina. As a state-licensed emissions inspector, Cabrera tested vehicles to ensure they met federally-mandated emissions requirements. Court records show that from February 2011 to May 2012, and while employed at Carolina Tire, Cabrera conducted 164 illegal vehicle emissions inspections using surrogate vehicles to falsely pass vehicles that would have failed emissions inspection. According to court records, Cabrera performed these fraudulent emissions tests at Carolina Tire by entering into the state database the information of the vehicle that needed to be tested but then connected the testing equipment to a vehicle that was either being worked on at Carolina Tire or had already been repaired and had not been picked by the owner. The illegal practice of utilizing substitute vehicles for emissions testing is referred to in the industry as “clean scanning.” Court records indicate that Cabrera charged $60 to clean scan a vehicle. Carolina Tire’s Pineville service center was suspended from conducting emissions testing for ten years by the NC DMV L&T.
Cabrera’s sentence was enhanced because of Cabrera’s criminal history, including membership in the MS-13 gang. Cabrera was taken into custody following the sentencing hearing. He will be transferred into the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The Clean Air Act is a federal law that authorizes the EPA to establish air quality standards to protect public health and welfare and to regulate emissions of hazardous air pollutants. As required by the Act, the State of North Carolina has established a vehicle emissions testing program that requires cars in 48 out of North Carolina’s 100 counties be inspected to ensure that their emissions do not exceed limits for hydrocarbons, nitrogen oxides, and other compounds. According to the EPA, the Charlotte metropolitan area exceeds the 8-hour standard set for ozone, a potent irritant that can cause lung damage and other types of respiratory problems. The Clean Air Act prohibits making false statements in records, including emissions certificates and database records that are required to be maintained by the Act.
The investigation of this case was conducted by the EPA’s Criminal Investigation Division, NC SBI’s Diversion and Environmental Crimes Unit and the NC DMV License & Theft Bureau, with assistance from the North Carolina Division of Air Quality, Mobile Sources Compliance Branch. The prosecution was handled by Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.