Western District of North Carolina
Press releases recorded for this federal judicial district.
Owner of Investment Firm Is Charged with Securities Fraud for Orchestrating A $4.7 Million Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – The owner of a North Carolina investment firm has been charged with securities fraud for orchestrating a Ponzi scheme that solicited victims to invest millions in the foreign currency market (“FOREX”), announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
North Carolina Secretary of State Elaine F. Marshall and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division join U.S. Attorney Tompkins in making today’s announcement.
On April 18, 2013, a federal criminal indictment charged James H. Mason, 66, of Graham, N.C., with one count of securities fraud in connection with a $4.7 million foreign currency Ponzi scheme. According to allegations contained in the indictment, beginning in 2010 and continuing through March 28, 2013, Mason executed the Ponzi scheme by inducing victims to invest with his investment companies, JHM Forex Only Pool and Forex Trading at Home Association, and other related entities, for the supposed purpose of investing in Over-the-Counter (“OTC”) foreign currency exchange.
The indictment alleges that Mason engaged in a scheme and artifice to defraud victims by making a series of false and fraudulent representations, omissions of material facts and deceptive half-truths. Specifically, Mason falsely claimed to victims that he had over 35 years of experience in commodity futures and options trading, when in fact, Mason had no such experience at all, according to the indictment. Also, Mason lulled his victims into a false sense of security by falsely projecting substantial returns of their investments. Mason solicited at least 500 victims to invest over $4.7 million. According to allegations in the indictment, rather than investing it as promised, Mason simply deposited victim money into various bank accounts he controlled and used a substantial amount of investor money to pay for personal and business expenses, real estate, cars and other expenses unrelated to any foreign exchange. In addition, the indictment alleges that Mason diverted most of the rest of his victims’ money to make “Ponzi” payments to other victims.
The criminal indictment also alleges that, throughout the course of this scheme, Mason put only a portion of investor money into foreign currency exchange. According to allegations contained in the indictment, Mason lost essentially all the money he did invest while conducting FOREX trading, thus losing even the minority of funds that he did trade. Mason failed to disclose his actual trading results to his victims, and instead made false oral representations and provided bogus statements to clients, fraudulently reporting profits. The indictment alleges that in order to induce individuals to further invest in his fraudulent foreign currency commodity pool, Mason established a website so that investors could access their accounts online. These online investor accounts depicted that investors were making money through successful FOREX trading and had, in many cases, significant amounts of money in their accounts. As alleged in the indictment, profits stated on individual investor accounts were false and, in many cases, there was no actual money in the victims’ accounts.
Mason has been in local federal custody since April 15, 2013. He has been charged with one count of securities fraud which carries a maximum prison term of 20 and a $5 million fine, plus restitution to investor victims of the scheme.
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.
The case was investigated by the North Carolina Secretary of State, Securities Division with assistance from the FBI, Charlotte Division. U.S. Attorney Tompkins also acknowledges the invaluable assistance of the Commodities Futures Trading Commission in this case.
The prosecution is being handled by Special Assistant United States Attorney Kevin M. Harrington and Assistant U.S. Attorney Kurt W. Meyers of the Western District of North Carolina.
Mr. Harrington is an Enforcement Attorney with the North Carolina Department of Secretary of State, Securities Division, and was appointed to serve as a Special Assistant United States Attorney (SAUSA) with the U.S. Attorney’s Office in Charlotte in September 2011. The SAUSA position is reflection of the partnership between the North Carolina Securities Division and the United States Attorney that helps ensure the effective and vigorous prosecution of white collar criminals, particularly in the area of securities fraud.
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.
Former N.C. Probation Officer Sentenced to 17 Months in Prison on Extortion and Drug TraffickingRead the Press Release
ASHEVILLE, N.C. – A former North Carolina probation officer was sentenced on Thursday, April 25, 2013, in U.S. District Court to serve 17 months in prison for extortion and drug trafficking offenses involving persons under his supervision, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. James David Franklin, 46, of Lenoir, was also sentenced to three years of supervised release following his prison term.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Director Gregory McLeod of the North Carolina State Bureau of Investigations (NC SBI).According to court documents and court proceedings, from April 2001 through July 2010, Franklin, was employed as a Surveillance Officer by the North Carolina Department of Correction’s Division of Community Corrections (DCC) and supervised probationers on intensive supervision in Burke and Caldwell Counties. According to filed documents, Franklin primarily conducted curfew checks and compliances searches and had arrest power over probationers and parolees. Court records indicate that from in or about July 2009 to in or about July 2010, Franklin used his position on multiple occasions to extort drugs from an individual who had been under Franklin’s supervision (“Probationer #2”). Specifically, court records show that Franklin, via text messages and other communications, repeatedly asked Probationer #2 to supply him with narcotics, including methamphetamine and hydrocodone.
Court records show that Franklin would arrange to retrieve the narcotics from Probationer #2’s driveway in exchange for cash. Law enforcement officers were alerted to Franklin’s conduct when Probationer #2 complained to his federal probation officer and to his primary North Carolina probation officer. Subsequently, Franklin was placed on desk duty. While on desk duty, Franklin sent a text message to Probationer #2 asking him to sell hydrocodone pills in exchange for a portion of the proceeds from the sale. Specifically, Franklin told Probationer #2 he would pay him “3 dollars a piece” for 125 hydrocodone pills. According to court records, Franklin was apprehended by law enforcement officers when he went to Probationer #2’s house to deliver the hydrocodone pills in exchange for $375 in cash.
In December 2011, Franklin pleaded guilty to one count of extortion under color of official right and one count of possession with intent to distribute hydrocodone.
vWhen announcing the sentence, U.S. District Judge Martin Reidinger noted that the sentence imposed was more than minimally required under the Federal Sentencing Guidelines because the defendant was “A person who by reason of his position had taken actions that undermine the integrity of the legal system.”Franklin has been in custody since April 2011. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and SBI. The case was prosecuted by Assistant United States Attorney Michael Savage of the U.S. Attorney’s Office in Charlotte.
Gary Michael Hilton Sentenced to Four Life SentencesRead the Press Release
ASHEVILLE, N.C. – Gary Michael Hilton was sentenced to four life sentences today in U.S. District Court for the kidnapping and murder of John D. Bryant and Irene W. Bryant and to 15 years in prison for a related robbery offense, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Hilton pleaded guilty to the murdering the couple in March 2012. He also pleaded guilty to robbery, kidnapping and firearms offenses.
In June 2011, a federal grand jury returned a five-count criminal indictment charging Hilton, 66, with the October 2007 kidnapping, robbery and murder of John and Irene Bryant on national forest lands. According to filed court documents and today’s sentencing hearing, Hilton admitted killing John Bryant within the Nantahala National Forest in Macon County, N.C. using a firearm. Hilton also admitted killing John Bryant’s spouse, Irene Bryant, within the Pisgah National Forest in Transylvania County, N.C.
“Our thoughts and prayers are with the family and friends of the victims and while today’s outcome cannot bring back John and Irene Bryant, it is our sincere hope that everyone impacted by Hilton’s heinous crime can finally have some closure,” said U.S. Attorney Tompkins. “I also want to thank the prosecutors and our law enforcement partners who worked on this case for their hard work, professionalism and integrity.”
In April 2011, Hilton was convicted and received a death sentence for the murder of Cheryl Dunlap in Leon County, Florida. Hilton is also serving a life sentence for his conviction related to the 2008 murder of Meredith Emerson in Northern Georgia. At today’s sentencing hearing, U.S. District Judge Martin Reidinger ordered that Hilton’s federal life sentences be served consecutively with the sentences he received for the state convictions in Florida and Georgia.
All federal sentences are served without the possibility of parole.
The prosecution was handled by Don Gast of the U.S. Attorney’s Office in Asheville. U.S. Attorney Tompkins thanked the FBI, SBI, the U.S. Forest Service, the Transylvania County Sheriff’s Office and the Macon County Sheriff’s Office for their assistance in this investigation.
Former Owner of Wilkesboro Clinical Laboratory Pleads Guilty to Criminal Health Care Fraud and Tax Charges and Agrees to Pay $300,000 to Settle Civil Fraud AllegationsRead the Press Release
CHARLOTTE, N.C. – The former owner of Wilkesboro Clinical Laboratory (“WCL”) pleaded guilty today in U.S. District Court for his involvement in a health care fraud scheme in which he and his company billed Medicare for services which were not rendered, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Louis Francis Curte, 49, also admitted he filed false tax returns from 2007 to 2010.
In a separate civil settlement with the U.S. Attorney’s Office, Curte also agreed to pay $300,000 to resolve civil fraud allegations that he and his company violated the Physician Self-Referral Act or “Stark Law.”
U.S. Attorney Tompkins is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
Curte appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to four counts of health care fraud and one count of filing a false tax return. According to court documents and today’s plea hearing, Curte was the owner and operator of Wilkesboro Clinical Laboratory (“WCL”), which was enrolled with the Medicare program and provided microbiology and other laboratory services. Court records show that from at least 2007 to in or about 2009, Curte defrauded Medicare by submitting false and fraudulent claims for microbiology services which were never rendered.
Court documents indicate that Curte and WCL used another company (“Company #1”) for certain types of microbiology testing that could not be performed by WCL in-house. Court records show that WCL generally submitted specimens to Company #1 to test for the presence of infection-causing bacteria. If an infection was present in a specimen, Company #1 then typically performed one or two additional tests to identify the type of pathogen present (“identification test”) and the type of antibiotic to which the pathogen was susceptible (“susceptibility test”).
Pursuant to the scheme to defraud, Curte routinely billed Medicare for identification and susceptibility tests, when, in fact, no such tests were performed and even when the initial testing indicated that no pathogen was actually present in the specimen. According to the plea agreement, the intended loss to Medicare by the defendant was between $10,000 and $30,000.
At today’s hearing, Curte also pleaded guilty to filing false tax returns for the years 2007 through 2010. According to filed documents and court proceedings, Curte filed false tax returns which substantially understated his gross income, and therefore, the tax owed to the United States. Court records indicate that Curte maintained false books in an attempt to mask a prohibited business relationship with a physician, identified in court documents as Dr. T.M. According to the plea agreement, the amount of tax loss was more than $30,000 but less than $50,000.
At sentencing, Curte faces a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges and a maximum term of three years in prison and a $250,000 fine for the tax fraud charge. In his plea agreement, Curte agreed to pay full restitution to Medicare and to IRS for any losses. The final restitution amount will be determined by the Court at Curte’s sentencing hearing, which has not been scheduled yet. Curte has been released on bond pending sentencing.
Curte’s prohibited relationship with Dr. T. M. forms the basis for Curte’s civil settlement agreement. According to the civil settlement agreement, from January l, 2006 through April 30, 2009 Curte and WCL violated the Stark Law by knowingly having a prohibited financial relationship with Dr. T.M.
Dr. T.M. owned and operated a billing company, now defunct, which submitted all of WCL’s reimbursement claims to Medicare. Dr. T.M.’s billing company was paid on a “per claim” basis for the reimbursement claims submitted to Medicare on behalf of WCL. As an owner of the billing company, Dr. T.M. benefitted directly from WCL’s payments to his billing company. Investigators also found that Dr. T.M. referred blood and tissue specimens to WCL for pathology testing.
The Stark Law forbids a medical provider from billing Medicare and Medicaid for certain services referred by physicians who have a financial relationship with the medical provider. A prohibited financial relationship includes an agreement between the medical provider and a physician to compensate the physician based on the volume of the physician’s referrals or the revenue realized through those referrals.
Under the terms of the settlement agreement, Curte is required to reimburse the government for the amount he wrongfully received from Medicare in violation of the Stark Law and to pay penalties back to the program, for a total of $300,000.
The investigation into Curte was handled by HHS-OIG and IRS, with the assistance of the FBI. The criminal prosecution was handled by Assistant U.S. Attorney Kelli Ferry. Assistant U.S. Attorney Don Caldwell handled the civil settlement.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Buncombe Co. Man Sentenced to 36 Years in Prison on Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – Lawrence Salvatore Hutson, 41, of Cantler, N.C. was sentenced on Wednesday, April 24, 2013, by U.S. District Judge Martin Reidinger to serve 432 months in federal prison for transporting child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Hutson was also placed on a lifetime of supervised release and was ordered to register as a sex offender.
Joining U.S. Attorney Tompkins in making today’s announcement are John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Sheriff Van Duncan, of the Buncombe County Sheriff’s Office.
In January 2012, Hutson pleaded guilty to one count of transportation of visual depictions of minors engaging in sexually explicit conduct. According to filed court documents and court proceedings, the conduct took place in August 2010. During the investigation, authorities seized a USB thumb drive, which belonged to Hutson, that contained over 4,000 images of child pornography, including many videos. Court records indicate that Hutson’s child pornography collection contained images of prepubescent children, including infants and toddlers. According to court records and yesterday’s sentencing hearing, Hutson also held two separate previous convictions in Pennsylvania for sexual contact offenses upon minors. Hutson’s sentence was enhanced because of the prior state convictions.
Hutson has been in local federal custody in the Western District of North Carolina since September 2011. Upon designation of a federal facility, he will be transferred into custody of the Federal Bureau of Prisons. All federal sentences are served without the possibility of parole.
The investigation was handled by the Buncombe County Sheriff’s Office assisted by the FBI and the Wheaton Police Department in Illinois. The case was prosecuted by Assistant United States Attorneys David Thorneloe and Don Gast of the U.S. Attorney’s Office in Asheville.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Nine More Members of Racketeering Enterprise Indicted on Investment Fraud, Mortgage Fraud and Related ChargesRead the Press Release
Two Others To Plead Guilty On Related Charges
A Total of 92 Defendants Have Been Charged To Date in Operation Wax HouseCHARLOTTE, N.C. – A federal superseding indictment unsealed today in U.S. District Court charged nine additional defendants in Charlotte and elsewhere with racketeering, investment fraud, mortgage fraud, bank bribery and money laundering, announced the U.S. Attorney’s Office for the Western District of North Carolina. This latest round of criminal charges resulting from Operation Wax House, a mortgage fraud investigation which began in the Western District of North Carolina in 2007, brings the total number of defendants charged to date to 92, of which 66 have pleaded guilty.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division, Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) and Elaine Marshall, North Carolina Secretary of State join the U.S. Attorney’s Office in making today’s announcement.
The superseding federal racketeering indictment was returned by a federal grand jury sitting in Charlotte on April 18, 2013 and remained sealed until today. The superseding indictment adds nine defendants to the existing charges, bringing to 26 the total number of individuals currently charged as part of a criminal organization (the “Enterprise”) that operated principally in the cities of Charlotte and Waxhaw, N.C., and stole more than $75 million from investors and mortgage lenders.
According to allegations contained in the unsealed indictment:
The Enterprise, which operated from about 2005 through 2012, engaged in an extensive pattern of racketeering activities, consisting of investment fraud, mortgage fraud, bank fraud, money laundering and distribution of illegal drugs. Members of the Enterprise also bribed bank officials. In the investment fraud portion of the racketeering activities, the co-conspirators targeted professional athletes and doctors as well as their personal and professional acquaintances and convinced them to invest in a series of sham corporations controlled by the Enterprise. For example, members of the Enterprise told potential investors that one of the sham corporations, PEI, was a commodities trading company that would broker deals for the supposed export-import of various commodities like rice-trading and gold and diamond mining in Africa. In truth and fact, instead of investing the victims’ money as promised, the Enterprise used the funds obtained through PEI to support its members’ lifestyles and to make Ponzi-style payments to other victims. The co-conspirators stole over $27 million from more than 50 investor victims, including monies that the investor victims were induced to obtain as loans from financial institutions.
The Enterprise’s mortgage fraud operations involved acquiring luxury homes in neighborhoods in Charlotte and Waxhaw. One member of the Enterprise would agree with a builder to purchase a property at the “true price.” The Enterprise would then arrange for a buyer to purchase the property at an inflated price. In most circumstances, the buyer would agree to purchase the property in his or her own name and sign whatever documents were necessary, in exchange for a hidden monetary kickback. The builder would sell the property at the inflated price, the lender would make a mortgage loan on the basis of that inflated price, and the difference between the inflated price and the true price would be extracted at closing by the Enterprise.
The vast majority of the houses purchased as part of the Enterprise’s mortgage fraud operations subsequently fell into foreclosure, resulting in losses of hundreds of thousands of dollars in most instances. Over the course of the conspiracy, members of the Enterprise purchased four condos in one building for inflated prices, resulting in an aggregate loss on those units of approximately $2 million.
Members of the Enterprise also engaged in bank bribery conspiracies, by bribing bank employees to cash checks received from fraudulent mortgage transactions carried out by the Enterprise, and to deposit checks in a manner designed to further conceal the true distribution of the proceeds, and to supply false letters of credit in the names of local banks in an attempt to obtain financing from other financial institutions. In one instance a bank employee was paid a $55,000 bribe for preparing and providing a false letter of credit.
The racketeering activities of the Enterprise also included distribution of illegal drugs. For example, members of the Enterprise transported truckloads of marijuana from Texas and elsewhere to North Carolina, using companies utilized in both the drug trafficking and mortgage fraud operations and trucks controlled by members of the Enterprise and others.
Defendants added in this superseding indictment are:
• William Brown, 34, of Matthews, N.C. is charged with racketeering conspiracy and mortgage fraud. Role: Promoter and buyer. Status: In custody, pending release on conditions, following arrest and initial appearance.
• Benjamin Clarke, 40, of Smyrna, Ga. is charged with mortgage fraud. Role: Buyer. Status: Released following arrest and initial appearance.
• Frank DeSimone, 40, of Charlotte is charged with racketeering conspiracy, securities fraud, wire fraud to defraud investors and money laundering. Role: Promoter. Status: To appear for an initial appearance pursuant to a summons.
• Lorie Dooley, 48, of Washington, D.C. is charged with racketeering conspiracy, mortgage fraud and bank bribery. Role: Promoter. Status: To appear for an initial appearance pursuant to a summons.
• James E. Fink, 43, of Waxhaw is charged with racketeering conspiracy and mortgage fraud. Role: Builder. Status: To appear for an initial appearance pursuant to a summons.
• Ralph Johnson, 35, of Charlotte is charged with racketeering conspiracy and mortgage fraud. Role: Promoter. Status: In custody.
• Denetria Myles, 41, of Charlotte is charged with racketeering conspiracy and mortgage fraud. Role: Promoter. Status: To appear for an initial appearance pursuant to a summons.
• Matthew Newland, 39, of Coralville, Iowa is charged with racketeering conspiracy and mortgage fraud. Role: Promoter and seller. Status: Released following arrest and initial appearance.
• Nazeere Saddig, 40, formerly of Charlotte is charged with racketeering conspiracy and mortgage fraud. Role: Promoter and buyer. Status: Fugitive.
• Additionally, Steve Jones, 44, of Waxhaw, previously charged with securities fraud, wire fraud to defraud investors and money laundering conspiracy has now also been charged with racketeering conspiracy. Role: Promoter. Status: To appear pursuant to a summons.
Today, the U.S. Attorney’s Office also announced charges filed against two additional promoters in the mortgage and investment fraud scheme. They acknowledge taking part in the conspiracy and have agreed to plead guilty. They are:
• Waylon Long, 40, of Texas is charged with mortgage fraud conspiracy and money laundering conspiracy. Role: Promoter. Status: To appear for initial appearance upon a summons.
• Melvin Moye, 34, of Charlotte is charged with investment or securities and mortgage or bank fraud conspiracy. Role: Promoter. Status: Pleaded guilty and is awaiting sentencing.
Additionally, the U.S. Attorney’s Office announced that three of the original 17 defendants who were charged with racketeering conspiracy have pleaded guilty to those racketeering charges. They are:
• Travis Bumpers, 36, of Charlotte pleaded guilty to racketeering conspiracy to commit securities fraud, mortgage fraud, wire fraud and money laundering conspiracy. Role: Promoter. Status: In custody pending sentencing.
• Victoria Hunt, 36, of Rockville, Maryland, pleaded guilty to racketeering conspiracy, securities fraud, mortgage fraud, wire fraud to defraud investors, and money laundering. Role: Leader and promoter. Status: On house arrest pending sentencing.
• Purnell Wood, 41, of Holly Springs, N.C. pleaded guilty to racketeering conspiracy to commit mortgage fraud and money laundering. Role: Promoter. Status: Released pending sentencing.
The conspiracy to participate in the racketeering activities charge carries a maximum term of 20 years in prison and a $250,000 fine or twice the gross profits or other proceeds. The securities fraud charge carries a maximum term of 20 years in prison and a $250,000 fine. The bank fraud charge carries a maximum term of 30 years in prison and a $1 million fine. The wire fraud charge carries a maximum term of 20 years in prison and a $250,000 fine. The money laundering conspiracy charge carries a maximum term of 20 years in prison and a $500,000 fine or twice the amount of criminally derived proceeds. And, the bank bribery conspiracy charge carries a maximum term of five years in prison and a $250,000 fine.
An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. In addition, the guilty plea of any other person is not relevant to the guilt of any indicted person.
Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI, the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, and the Securities Division of the North Carolina Secretary of State. The prosecution for the government is being handled by Assistant United States Attorneys Kurt W. Meyers and Maria K. Vento and Special Assistant United States Attorney Kevin M. Harrington.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, 3:12cr239Charlotte Neurologist Will Pay $2 Million to Settle Civil Fraud AllegationsRead the Press Release
CHARLOTTE, N.C. – A Charlotte neurologist has agreed to pay $2 million plus interest to the United States to settle civil fraud allegations, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Hemanth P. Rao, MD, is the owner of and principal neurologist at The Neurological Institute in Charlotte, formerly known as Neurological Consultants of the Carolinas.
U.S. Attorney Tompkins is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
The settlement was reached following a multi-year investigation by HHS-OIG into Dr. Rao’s practices associated with the administration of intravenous immunoglobulin (IVIG) therapy. Government investigators found that from October 13, 2003 to May 26, 2006, Dr. Rao failed to meet the Medicare supervision regulations associated with IVIG therapy. IVIG is the delivery of healthy immunoglobulins directly into the bloodstream of patients suffering from immunodeficiency and autoimmune disorders. IVIG therapy involves the injection of a thick, viscous fluid into the veins of patients throughout a period of several hours. The Medicare program requires that the patient’s physician directly supervise the administration of this treatment in order to ensure the safety of the patient. Investigators found that Dr. Rao sought and obtained reimbursement for his IVIG therapy services from Medicare even though he was not present in the building with his patients when they were receiving IVIG treatment, as required by Medicare.
The Settlement Agreement also requires that Dr. Rao pay an additional $500,000 to Medicare upon the sale of his real estate holdings. Furthermore, Dr. Rao entered into a five-year Integrity Agreement with HHS-OIG to promote compliance with the statutes, regulations, program requirements, and written directives of Medicare, Medicaid, and all other federal health care programs.
In making today’s announcement U.S. Attorney Tompkins stated, “Dr. Rao’s actions not only compromised the integrity of the Medicare program, but exposed his patients to potential danger. I commend HHS-OIG for their thorough investigation and for their continued efforts to protect Medicare, an important health care program seniors rely upon to cover their health care needs.”
“Dr. Rao allowed his staff to practice a potentially hazardous procedure on Medicare patients, without his supervision, then blatantly charge taxpayers,” said Derrick Jackson of the HHS-OIG region including North Carolina. “Citizens of this State can continue to look toward U.S. Attorney Tompkins to vigorously pursue providers who shortcut Medicare regulations in exchange for profit.”
The investigation was conducted by HHS-OIG in Greensboro. Assistant United States Attorney Don Caldwell handled the case for the United States Attorney’s Office.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all 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.
Greer, S.C. Husband and Wife Sentenced for Filing False Tax ReturnsRead the Press Release
SPARTANBURG, S.C. – A husband and wife from Greer, S.C. were sentenced on Thursday, April 11, 2013 for filing false tax returns, 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); David A. Thomas, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Columbia Division in South Carolina; and James Ward, Special Agent in Charge, Department of Homeland Security, Office of the Inspector General in Atlanta join U.S. Attorney Tompkins in making today’s announcement.
U.S. District Court Judge Mary G. Lewis sentenced Julie Greene Tucker, 52, of Greer to 33 months in prison, to be followed by three years of supervised release. Tucker’s husband, James Dean Tucker, 54, also of Greer, was sentenced to eight months of house arrest and five years of probation. The Tuckers were ordered to pay $191,049 restitution to IRS, jointly and severally. Julie Tucker was ordered to pay an additional $590,128 as restitution to her former employer.
“For approximately 15 months the Tuckers used stolen money to fund a luxurious lifestyle way above their means. Today’s sentence sends a clear message that my office will work with our law enforcement partners to hold accountable those who break the law and to ensure the only rewards crooks get are stiff penalties and prison sentences,” said U.S. Attorney Tompkins.
“The IRS fosters confidence in the American tax system through the prosecution and conviction of individuals who intentionally conceal income and evade taxes. We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS,” stated Jeannine A. Hammett, Special Agent in Charge of the Charlotte Field Office.
“The Tuckers funded their lavish lifestyle of luxury cars and expensive vacations with embezzled money. The FBI and our law enforcement partners remain committed to holding those accountable who abuse their positions for their own personal profit,” said David A. Thomas, Special Agent in Charge of the Columbia Division of the FBI.
In November 2012, James and Julie Tucker pleaded guilty to a criminal bill of information charging them with two counts of filing false tax returns. In addition, Julie Tucker pleaded guilty to one count of wire fraud. According to filed court documents and yesterday’s sentencing hearing, from in or about 1996 through in or about July 2011, Julie Tucker was employed at Trendset, Inc. (“Trendset”), a freight audit business, located in Greenville, S.C. Her last position at Trendset was Director of Administration. Court records show that in that capacity, Julie Tucker had access to Trendset bank accounts and had the authority to write checks and initiate wire transfers from these accounts on behalf of Trendset. From April 1986 through July 2012, James Tucker was employed with the Department of Homeland Security and stationed in Greenville, S.C.
According to filed documents and court proceedings, beginning in or about 2010 and continuing until her resignation in July 2011, Julie Tucker embezzled money from Trendset bank accounts. Unbeknownst to Trendset, Julie Tucker used her access to the company’s bank accounts to wire money to her name and into accounts held jointly by her and her husband. Court records indicate that Julie Tucker also wired funds and wrote checks from these accounts to make direct payments on several automobile loans and a credit card in the couple’s name.
Based on filed court documents and statements made in court, Julie and James Tucker used the embezzled funds to perform major home renovations, purchase a second home, and buy three luxury vehicles for themselves and an additional vehicle for the daughter of a Trendset co-worker. Court records indicate that the couple joined a local country club where they hosted a lavish Christmas party for family and friends. The couple also used the embezzled funds to pay for several personal vacation trips. According to yesterday’s sentencing hearing, Julie Tucker also spent well over $100,000 in jewelry purchases. The couple failed to include taxable income derived from Julie Tucker’s embezzlement scheme in their joint tax 2010 and 2011 tax returns, court records show.
Court records indicate that James Tucker lied to co-workers when he was asked about the couple’s lifestyle improvements and spending. Court records indicate that James Tucker sometimes would say that the couple received the money from James Tucker’s father, after a profitable sale of Hormel stock. Other times, James Tucker would say his wife had received a big promotion at Trendset and that she was making a lot more money than he was, court records indicate.
Julie Tucker was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the IRS, FBI, and DHS-OIG. The prosecution was handled by Assistant U.S. Attorney Don Gast, of the U.S. Attorney’s Office in Asheville.
South Carolina Man Pleads Guilty to Kidnapping, Possession of A Firearm and Witness TamperingRead the Press Release
The Defendant Entered A Guilty Plea Following Nearly Two Days of Trial Testimony
CHARLOTTE, N.C. B On Wednesday, April 10, 2013, a South Carolina man on trial in U.S. District Court in Charlotte entered a guilty plea for kidnapping, possession of a firearm and witness tampering offenses after nearly two days of trial testimony, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, Chief Debra Duncan of the Monroe Police Department and Sheriff Kip Kiser of the Chesterfield County Sheriff’s Office in South Carolina.
On March 22, 2012, Lonnie Cecil Buchanan, Jr., 44, of Pageland, S.C., was indicted by a federal grand jury on one count of kidnapping, one count of possession of firearm by a convicted felon, and one count of possession of a firearm in furtherance of kidnapping. Court records indicate that following his arrest and while in federal custody, Buchanan began to call the kidnapping victim in an attempt to persuade the victim to recant the statements the victim made to law enforcement and the federal grand jury. As a result of that conduct, in December 2012, a federal grand jury added two charges of tampering with a witness, victim, or an informant in a superseding bill of indictment.
According to filed court documents and evidence presented at trial, on February 26, 2012 Buchanan, while holding a firearm, approached the victim in the Hilltop shopping center parking lot in Monroe, N.C. Witnesses at trial described the victim’s “blood curdling screams” as she ran to her vehicle in an attempt to get away from Buchanan. Buchanan chased the victim and jumped into her car. Witnesses also testified at trial that Buchanan and the victim violently struggled in the car until the victim was knocked unconscious. According to trial proceedings, Buchanan then went to the passenger side of the car and dragged the victim over to a van that he had parked nearby. Witnesses stated at trial that Buchanan stood over the victim with his hand on her throat and when he noticed other people around him, he started to tell the victim that he “was going to take her to the hospital.” Witnesses testified that Buchanan lifted the victim from the ground and placed her on the floor of the van. Witnesses also testified that Buchanan passed the hospital and drove the victim into Chesterfield County in South Carolina. According to court documents and trial proceedings, Buchanan repeatedly hit the victim and told her he would kill her. After 30 hours of being held captive, the Chesterfield County Sherriff’s Office located the van at a vacant house in the woods with both Buchanan and the victim inside. Buchanan was arrested and the victim was taken to the hospital for treatment, according to court records. Witnesses said that Buchanan left the .38 special revolver in the victim’s vehicle at the scene of the kidnapping, along with one of his shoes. During the investigation, law enforcement recovered a loaded .38 special revolver in the victim’s vehicle.
The defendant has been in local federal custody in the Western District of North Carolina since April 2012 and will remain in custody until his sentencing date, which has not been set yet. He faces a maximum of life in prison, a $250,000 fine or both.
The investigation was led by the Monroe Police Department, the Chesterfield County Sheriff’s Office, and ATF. The case was prosecuted by Assistant United States Attorneys Jennifer Lynn Dillon and Dana Owen Washington of the U.S. Attorney=s Office in Charlotte.
Robbinsville, N.C. Man Sentenced to Prison for Killing A Black Bear Cub in Nantahala National ForestRead the Press Release
ASHEVILLE, N.C. – U.S. Magistrate Judge Dennis L. Howell sentenced a Robbinsville, N.C. man to five months in prison on Wednesday, April 10, 2013 for killing an American Black Bear cub in Nantahala National Forest in October 2011, announced today Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Kristin Bail, Forest Supervisor for the National Forests of North Carolina joins U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and yesterday’s sentencing hearing, in October 2011 Tyler Micaiah Colvin, 20, of Robbinsville used a .50 caliber muzzleloader to kill a Black Bear cub in the Wayah Bear Sanctuary in the Nantahala National Forest, in Macon County. Court records indicate that Colvin had fired three shots, one of which fatally wounded the bear cub. Bear season was not open at the time Colvin killed the cub, it is illegal to kill a bear weighing less than 50 pounds at any time and killing bears within a bear sanctuary is prohibited even during bear hunting season. Court documents and court proceedings indicate that Colvin shot the bear cub, skinned it and removed the paws and some meat. Colvin left the remainder of the carcass and the entrails in the forest. Forest agents apprehended Colvin and retrieved the bear parts from his vehicle, all according to court records. Colvin pleaded guilty in December 2012 to one count of transporting wildlife that had been taken in violation of federal laws and regulations, which is a violation of the Lacey Act.
“The Lacey Act is an important arsenal in our fight against those who illegally kill endangered and threatened species,” said U.S. Attorney Tompkins. “It is important for all of us to follow the law when hunting protected species. Colvin’s conduct was outrageous, inhumane and illegal and anyone involved in the illegal killing of Black Bears will be vigorously prosecuted by this office.”
“This case is a positive example of how important partnerships between Forest Service and the North Carolina Wildlife Resources Commission can produce maximum results in the protection of our resources. Officers are faced with bad odds when dealing with poaching in such vast areas, so we urge the public to report all big game violations. These types of results definitely send a message to those who steal from the public,” said Steve Ruppert, Special Agent in Charge for the U.S. Forest Service, Southern Region.
“I commend the U.S. Forest Service agents and officers of their work on this case, and I believe the sentence sends a message that illegal hunting will not be tolerated in the national forests,” said Kristin Bail, forest supervisor of the U.S. Forest Service’s National Forests in North Carolina. “Working with a wide variety of local, state and federal partners, the Forest Service is committed to protecting wildlife to ensure these and other natural resources are available for the next generation of forest visitors.”
“The thin Green Line formed by the U.S. Forest Service, the U.S. Fish and Wildlife Service and the North Carolina Wildlife Resources Commission is all that stands between our state’s precious wildlife resources and those who take game illegally in our state. If it were not for the support of our Judges, the U.S. Attorney’s Office and the public for whom we serve, all efforts would be lost. This is a fine example of how things should work, from the execution and case development of the officers in the field to the handling of the case when it gets to court,” said Captain Greg Daniels, of the North Carolina Wildlife Resources Commission’s 9th District.
In addition to the prison sentence, Judge Howell ordered Colvin to one year of supervised release and to surrender his hunting license while he is under court supervision. Colvin is also prohibited from engaging in any hunting activities during that year. Colvin was also ordered to pay $2,232 as restitution to the North Carolina Wildlife Resources Commission for the killing of the Black Bear cub and was ordered to forfeit the muzzleloader rifle, a powder horn, and a deer call device.
The U.S. Attorney’s Office reminds the public that American Black Bears are a species of special concern warranting federal and state protection on the Blue Ridge Parkway and the Great Smoky Mountains National Park. Hunting is illegal at any time within the National Parks. Hunting on Forest Service land is only permitted during open season and in compliance with federal and state law.
To report Lacey Act violations, including the illegal hunting of American Black Bears, within National Parks and National Forests, please call the Law Enforcement Desk of the Great Smoky Mountains National Park at 1-865-436-1230, The North Carolina State Wildlife Hotline at 1-800-662-7137, U.S. Fish and Wildlife Service, 1-828-258-2084 or the National Forests at 1-828-231-0288.
The investigation was conducted by the United States Forest Service. The prosecution was handled by Assistant U.S. Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville.
Mortgage Fraud Promoters Operating in Union and Mecklenburg Counties Sentenced to PrisonRead the Press Release
CHARLOTTE, N.C. – Two defendants were sentenced to lengthy prison terms on Tuesday, April 9, 2013, for their role in a mortgage fraud conspiracy that primarily targeted neighborhoods in Union and Mecklenburg counties, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Joining U.S. Attorney Tompkins in making today’s announcement is Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
Kenneth Egri, 55, of Charlotte was sentenced to 78 months in prison and his co-defendant Dean Huffman, 57, formerly of Charlotte, was sentenced to 65 months in prison. U.S. District Court Judge Frank D. Whitney also ordered both defendants to serve two years of supervised release following their prison terms.
“Mortgage fraudsters like Egri and Huffman harm more than just the affected financial institutions; they wreak havoc on neighborhoods by virtue of the foreclosures resulting from their scheme” said U.S. Attorney Tompkins. “The defendants exploited the American Dream of home ownership in order to satisfy their own selfish greedy interests and they now have years of federal prison to contemplate their shameful conduct.”
“Individuals who commit mortgage fraud may be prosecuted on several charges including failure to file income tax returns. The law is crystal clear: people must pay their taxes. There is no gray area on this issue,” stated Jeannine A. Hammett, Special Agent in Charge of the Charlotte Field Office.
In July 2011, Egri and Huffman pleaded guilty to conspiracy to commit wire fraud in connection with their operation of a mortgage fraud cell that primarily targeted the neighborhood of Providence Downs. In addition, Egri pleaded guilty to two counts of failing to file income tax returns for the 2005 and 2006 tax years.
According to filed court documents and yesterday’s sentencing hearing, from in or about 2001 through in or about 2006, Egri and Huffman owned and operated Direct Home Services (DHS) in Charlotte. Egri and Huffman utilized DHS to generate over $37.4 million in fraudulent loans and to funnel over $5.4 million in fraudulent loan proceeds to themselves. To promote their scheme, Egri and Huffman would agree with a builder to purchase a property at the “true price.” Egri and Huffman would then arrange for a buyer to purchase the property at an inflated price—usually between $100,000 and $300,000 above the true price. In most circumstances, the buyer would agree to purchase the property in his or her own name and sign whatever documents were necessary, in exchange for a hidden kickback. The builder would sell the property at the inflated price, the lender would make a mortgage loan on the basis of that inflated price, and the difference between the inflated price and the true price would be extracted at closing by Egri and Huffman. To induce lenders to make mortgage loans, Egri and Huffman caused fraudulent loan packages to be submitted which included lies and misrepresentations about, among other things, buyers’ income and assets, place of employment, intent to occupy the homes as their primary residence, and true source of cash at closing.
In addition, according to the filed court documents and yesterday’s sentencing hearing, from 2003 through 2006, Egri failed to file income tax returns reporting $1,288,604 of income from the mortgage fraud scheme.
In pronouncing the sentence, Judge Whitney noted that both defendants were “integral players in the mortgage fraud scheme” and emphasized the harm their unlawful conduct caused to the community. Judge Whitney ordered Egri and Huffman to pay restitution to Bank of America in the amount of $1,335,744 and ordered Egri to pay restitution to the IRS in the amount of $257,721.
Egri and Huffman were ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the IRS. The prosecution was handled by Assistant U.S. Attorney Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte.
Charlotte Woman Sentenced to Prison for Tax Refund Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – A Charlotte woman was sentenced in U.S. District Court today to 21 months in prison for her involvement in a tax refund fraud scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Joining U.S. Attorney Tompkins in making today’s announcement is Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
Leeora Anderson, also known as “Leeora Robinson” and “Lou Robinson,” 42, of Charlotte was sentenced to 21 months in prison and three years of supervised release by U.S. District Court Judge Frank D. Whitney.
U.S. Attorney Tompkins said, “Tax fraudsters like Anderson pocket money by defrauding the government and leave the rest of us to pick up the tab for their illegal tax schemes. Today we are sending a clear message: tax fraud will not be tolerated and we will make sure tax fraudsters pay the price for their actions, both financially and in prison time.”
“IRS-CI is determined to stop these false tax refund schemes. The message this case sends is that participation in refund fraud schemes does not pay and those who do will be prosecuted,” stated IRS Special Agent in Charge Jeannine A. Hammett, Charlotte Field Office Criminal Investigation.
In February 2012, Anderson pleaded guilty to one count of false claims conspiracy. According to filed court documents and today’s sentencing hearing, from in or about 2005 through in or about 2009, Anderson participated in a false tax refund conspiracy by obtaining, or helping others obtain, fraudulent tax refunds from IRS based upon false tax returns. Court records show that Anderson recruited individuals to file fraudulent federal income tax returns using their own names and social security numbers. To perpetrate the fraud, according to court documents and court proceedings, Anderson created fictitious W-2 forms for the recruited individuals, which contained fictitious names of employers and fabricated amounts of wages and withholdings. Anderson then caused legitimate tax preparers to prepare and file false tax returns based on the fraudulent information on behalf of the individuals recruited by the defendant.
Court records show that in some instances Anderson accompanied the recruited individuals to the tax preparers’ offices where the individuals had tax returns prepared and filed electronically. The recruited individuals would then file for refund anticipation loans (“RAL”) through the tax preparer, which allowed the recruited individuals to receive cash advances on their false tax refunds from the financial institutions within three to five days after the fraudulent returns were electronically filed. Anderson then accompanied the recruited individuals to pick up the RAL checks and to cash them at check cashing services, all according to court records. Anderson and others would then keep a portion of loan proceeds. Court records indicate that Anderson’s scheme resulted in the filing of 57 false tax returns, falsely claiming approximately $331,949 as refunds from the U.S. government.
In pronouncing the sentence, Judge Whitney emphasized the importance of general deterrence in tax cases since the tax code is based on honesty and noted that serious punishment was necessary because tax fraud victimizes honest taxpayers. Judge Whitney ordered Anderson to pay restitution to IRS in the amount of $202,577.
At the sentencing hearing, Anderson was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the IRS. The prosecution was handled by Assistant U.S. Attorney Jenny G. Sugar, of the U.S. Attorney’s Office in Charlotte.
Former Hickory, N.C. Resident Sentenced to More Than Five Years in Prison for Wire Fraud and Money Laundering OffensesRead the Press Release
STATESVILLE, N.C. – A former Hickory, N.C. resident was sentenced to 65 months in prison on Monday, April 8, 2013, for wire fraud and money laundering offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Court Judge Richard Voorhees also ordered Andrew Geiger, 48, of South Amboy, N.J., to serve two years of supervised release following his prison term.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI) joins U.S. Attorney Tompkins in making today’s announcement.
In March 2012, Geiger pleaded guilty to one count of wire fraud and one count of money laundering for carrying out an eight-year scheme to defraud his employer, Bernhardt Furniture Company, Inc. (“Bernhardt”) of over $563,000. The stolen money represented a 41% increase in the legitimate compensation he received from Bernhardt in the same time period.
According to filed court documents and yesterday’s sentencing hearing, from approximately June 1996 until January 2008, Geiger was employed by Bernhardt as the Director of Manufacturing, Casegoods-Bernhardt Contract Division. In that capacity, Geiger had the authority to negotiate and enter into contracts with third party manufacturers on behalf of Bernhardt. Court records show that in approximately December 1999, Geiger negotiated an agreement with a Canadian company for the manufacture of an office furniture line for Bernhardt and negotiated an agreement to pay the Canadian company a rate of 34% of the product’s list price.
Court documents indicate that shortly after thereafter, and unbeknownst to Bernhardt, Geiger created a company, Furniture Works International (“FWI”), and directed the Canadian manufacturer to ship the office furniture products to FWI. In reality, FWI was a sham entity that was owned and controlled by Geiger and utilized solely to advance his fraud scheme. Court records show that in fraudulent communications, Geiger told the Canadian manufacturer that the product would be sent to FWI so it could be “re-packaged.” According to filed documents, Geiger falsely advised the Canadian company that Bernhardt had authorized an increase in its payment from 34% to 39%, with the additional difference being paid to FWI and then later funneled to Geiger. To further his scheme, Geiger caused the Canadian company to receive bogus correspondence from FWI asserting, among other things, Bernhardt approved FWI’s involvement in the transaction and that Bernhardt approved the payment of FWI’s fee to be paid from the proceeds of the Bernhardt’s payment to the Canadian company. Moreover, beginning in approximately October 2006, Geiger directed all shipments directly to Bernhardt’s factory in Lenoir but he still collected the bogus fees through FWI. Geiger’s fraud scheme was discovered by Bernhardt when he left the company for another position in the furniture industry, court records show.
In pronouncing the sentence, Judge Voorhees noted the “very egregious nature of the offense” and ordered Geiger to pay restitution to Bernhardt in the amount of $563,164.
Geiger was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the FBI. The prosecution was handled by Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento, of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Sentenced to 42 Months in Prison for Identity Theft CrimesRead the Press Release
CHARLOTTE, N.C. – On Monday, April 8, 2013, U.S. District Court Judge Frank D. Whitney sentenced Jonquease Lydell Walker, 24, of Charlotte, to 42 months in prison on identity theft related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Walker was also ordered to serve five years under court supervision following his prison term and to pay restitution in the amount of $48,736.
U.S. Attorney Tompkins is joined in making today’s announcement by Keith Fixel, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS).
According to filed court documents and court proceedings, from 2008 through 2011 Walker engaged in an identity theft fraud scheme in which he used credit cards accounts of identity theft victims to fraudulently purchase goods and to obtain U.S. currency. Court documents show that Walker obtained personally identifiable information (“PII”) – including names, dates of birth and social security numbers – of six victims of identity theft, and used – or attempted to use – the PII to, among other things, gain access to the victims’ pre-existing credit card accounts, to receive replacement cards or to open new credit card accounts in the names of the ID theft victims.
Court records indicate that Walker contacted multiple credit card issuers and used the victims’ PII to convince the issuers he was the legitimate credit card account holder. Walker then caused the issuers to issue duplicate credit cards in the names of the ID victims, or to add Walker to the account as an authorized user and to issue credit cards in Walker’s name, or variations of Walker’s name. Walker then used the fraudulently acquired credit cards to purchase goods and obtained U.S. currency for a total value exceeding $50,000.
Walker pleaded guilty in September 2011 to one count of mail fraud and one count of aggravated identity theft. He has been in local federal custody since May 2011and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of Parole.
The investigation was handled by the USPIS, with assistance from the Charlotte-Mecklenburg Police Department. This prosecution was handled by Assistant U.S. Attorney Tom O’Malley of the U.S. Attorney’s Office in Charlotte.
If you believe that your personal information was compromised, there are numerous resources available online that can help you understand what steps to take to protect yourself against identify theft. This includes:
• A detailed list of resources from 11 different federal agencies, available at: http://idtheft.gov/takeaction.html • A guide from the Federal Trade Commission on what to do if your personal information has been compromised, but not yet misused: http://www.consumer.ftc.gov/features/feature-0014-identity-theft • Information on the different types of identity theft and additional resources available at: http://www.consumer.ftc.gov/features/feature-0014-identity-theftProsecutors Warn Potential Tax Evaders: Tax Crimes Result in Lengthy Prison Sentences and Steep FinesRead the Press Release
Taxpayers Also Cautioned About Tax Preparer Fraud and Other Illegal Tax Schemes
CHARLOTTE, NC - With the deadline for filing income tax returns rapidly approaching, 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-CID), jointly announce recent tax fraud prosecutions and sentencings, and deliver a powerful warning to those who are thinking about breaking the law by committing tax crimes.
“As April 15th approaches, honest taxpayers should rest assured: our office will work diligently to investigate and prosecute those individuals who try to cheat the tax system,” said U.S. Attorney Tompkins. “Whether dishonest taxpayers fail to report all of their income, attempt to obtain fraudulent refunds, or prepare bad tax returns for others,” Tompkins continued, “they face lengthy sentences and large fines.” Tompkins noted the importance of deterring others from committing tax crimes stating, “Our tax system is built on voluntary compliance, and tax criminals hurt all Americans by increasing the tax burden on honest taxpayers and refusing to pay their fair share.”
“The IRS fosters confidence in the American tax system through the investigation and prosecution of individuals and corporations who intentionally conceal income and evade taxes,” stated Charlotte Field Office Special Agent in Charge Jeannine A. Hammett, IRS Criminal Investigation. “Tax evasion is not a victimless crime. Honest, hardworking Americans pay the price when others choose to evade their tax obligations.”
In the last year, the U.S. Attorney’s Office, with the assistance of the IRS-CID, has prosecuted numerous individuals for criminal tax violations. Case highlights from the Western District of North Carolina’s tax enforcement prosecutions over the last year include:
Charles A. Davis - On September 10, 2012, Charles A. Davis, formerly of Mooresville, N.C., was sentenced to 10 years in prison for tax fraud. Davis, who was a pilot for U.S. Airways from 1983 through 2011, was convicted following trial of ten counts of filing false tax returns and one count of corruptly impeding the due administration of the IRS. Davis did not file timely income tax returns for 1996 through 2007 despite receipt of wages ranging from $129,950 to $190,510. Davis subsequently filed fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income, and he later filed five fraudulent individual income tax returns for 2004 through 2008, reporting false amounts of federal income tax withheld for each of those years and requesting fraudulent refunds from the IRS in amounts up to approximately $1.5 million. (Case No. 5:11-cr-32)
Candida Figueroa, et al. - On October 24 and November 5, 2012 respectively, Cathy Cisneros and Candida Figueroa, both of Charlotte, pleaded guilty to a false claims conspiracy for their roles in a scheme to defraud the government by obtaining false and fraudulent income tax refunds. According to the superseding indictment, the co-conspirators obtained false tax refunds using fraudulently obtained Individual Taxpayer Identification Numbers. The co-conspirators directed that fraudulent tax refunds be sent to addresses at various apartment complexes in Charlotte. The total attempted fraudulent tax refunds associated with the scheme was more than $3.8 million. No sentencing dates have been set. Figueroa and Cisneros each face a maximum sentence of 10 years in prison. (Case No. 3:12-cr-260)
Cynthia Garris - On May 15, 2012, Cynthia Garris, of Wadesboro, N.C., pleaded guilty to one count of filing a false tax return. Beginning in 2008, Garris was the owner of Wadesboro Home Care, Inc. in Charlotte. From 2008 through 2010, Garris concealed some of her personal earnings from the IRS by diverting funds from Wadesboro Home Care to pay for personal expenditures and failing to provide her return preparer with information about all of her earnings. For tax years 2008 through 2010, Garris had total unreported income of more than $400,000. No sentencing date has been set. Garris faces a maximum of three years in prison. (Case No. 3:12-cr-150)
Yolanda Tiess Kitson – On April 2, 2013, Yolanda Tiess Kitson of Augusta, Ga. was indicted on charges of false claims conspiracy and aggravated identity theft. According to the bill of indictment filed, Kitson, who is the sister of Senita Birt Dill (listed below), stole identifying information from patients at the Eisenhower Army Medical Center in Augusta and provided them to her sister Dill for use in her stolen identity tax refund scheme. Kitson is awaiting her initial appearance in federal court in Asheville. (Case No. 1:13-cr-31)
Ronald Jeremy Knowles and Senita Birt Dill – On October 29, 2012, Ronald Jeremy Knowles and Senita Birt Dill, both residents of Mill Spring in Polk County, N.C., pleaded guilty to charges of false claims conspiracy, access device fraud, and aggravated identity theft. According to the bill of information filed, Knowles and Dill used stolen identities to file over $5 million in fraudulent tax refund claims. Both are in custody awaiting sentencing, but no sentencing date has been set. Dill faces a maximum of 17 years in prison; Knowles is facing a maximum of 15 years in prison. (Case No. 1:12-cr-105)
Anthony Nguyen - On May 30, 2012, Anthony Nguyen, of Charlotte, pleaded guilty to tax evasion. Nguyen was the owner of Empress of China II, a Chinese restaurant in Charlotte. For tax years 2006 through 2008, Nguyen diverted cash receipts from his business to his personal bank accounts and failed to provide his tax return preparer full information about his earnings. For 2006 through 2008, Nguyen failed to report approximately $421,751 in income on his tax returns. No sentencing date has been set. Nguyen faces a maximum sentence of five years in prison. (Case No. 3-12-cr-155)
Nelson Rodriguez – On November 26, 2012, Nelson Rodriguez, of Morganton, N.C. pleaded guilty to tax evasion. Rodriguez, a dentist, failed to file income tax returns from 2005 through 2010 despite receipt of more than $1.7 million in income for those years. According to the superseding indictment, Rodriguez used nominee entities including Practice Promoters, LLC to receive his dental income. Additionally, Rodriguez purchased assets in nominee names and used bank accounts in nominee names. No sentencing date has been set. Rodriguez faces a maximum of five years in prison. (Case No. 1-12-cr-41)
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 maximum of 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 and to be vigilant in protecting themselves against a wide range of tax schemes. The IRS has issued its annual “Dirty Dozen” listing, which identifies common scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
• Identity theft
• Phising
• Return Preparer Fraud
• Hiding Income Offshore
• “Free Money” from IRS & Tax Scams Involving Social Security
• Impersonation of Charitable Organizations
• False/Inflated Income and Expenses
• False Form 1099 Refund Claims
• Frivolous Arguments
• Falsely Claiming Zero Wages
• Disguised Corporate Ownership
• Misuse of TrustsEducation 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.
Charlotte Woman Pleads Guilty to $4.8 Million Medicaid Scheme, Aggravated Identity Theft and Other ChargesRead the Press Release
Woman Steals Identity of Therapist to Submit False Claims to Medicaid and Attempts to Sell Mercedes-Benz to Prevent Law Enforcement Officers from Seizing Vehicle
CHARLOTTE, N.C. – A Charlotte woman pleaded guilty today in U.S. District Court for her involvement in a health care fraud scheme that attempted to defraud Medicaid of $4.8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Rodnisha Sade Cannon, 26, of Charlotte, also pleaded guilty to stealing a therapist’s identity to commit the fraud, money laundering conspiracy and attempting to sell her Mercedes-Benz in order to prevent law enforcement agents from seizing the vehicle.
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); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Cannon appeared this morning before U.S. Magistrate Judge David Cayer and pleaded guilty to one count of health care fraud conspiracy, one count of aggravated identity theft, and one count of money laundering conspiracy. Cannon also pleaded guilty to a single count of attempting to remove property subject to seizure, namely a 2010 Mercedes-Benz CLS550, in a related case. At today’s plea hearing, Cannon admitted that from 2010 to 2012, she and others submitted in excess of $4.8 million in false claims to Medicaid. According to filed court documents and statements made in court, Cannon and her co-conspirators operated after-school and summer childcare programs in Gastonia and Shelby, N.C. Although therapists initially performed some services at these programs, Cannon and others devised a scheme to defraud Medicaid by using the Medicaid provider numbers assigned to other companies and individual therapists for all therapy services supposedly provided at their programs regardless of whether those companies and individuals actually provided the claimed services. In many instances, the claimed mental and behavioral health services were never provided at all. Cannon and others accomplished this scheme by re-directing Medicaid payments away from the Medicaid providers’ bank accounts and to bank accounts controlled by Cannon and her co-conspirators.
According to the criminal bill of information and court documents, Cannon was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Cannon and others stole the identity of Medicaid-approved providers who had some relationship with the programs in order to accomplish the fraud. For example, court documents indicate that Cannon hired M.B. to work for her company in or about May 2012 and M.B. worked there for a single day. Cannon stole M.B.’s Medicaid provider information and redirected all Medicaid payments to M.B. be deposited into a bank account controlled by Cannon and others. Cannon and others then billed claims to Medicaid in excess of $800,000 for services that M.B. never provided, including claims for dates of service before M.B. worked for Cannon and her co-conspirators. In total, from 2010 to 2012, pursuant to the scheme to defraud, Cannon and her co-conspirators submitted approximately $4.8 million in false and fraudulent claims to Medicaid, resulting in payments of over $2.5 million to Cannon and her co-conspirators.
According to documents filed in court, Cannon also worked with Victoria Brewton, who pleaded guilty in January 2013 to carrying out a similar $8 million Medicaid fraud scheme in Shelby. Cannon assisted Brewton by providing and selling Medicaid beneficiary identification numbers and information to be used in Brewton’s fraud scheme. Brewton’s sentencing date has not been set yet.
As part of her plea, Cannon also admitted that she used the proceeds of her scheme to defraud Medicaid to purchase a 2010 Mercedes-Benz CLS550 for the purchase price of $59,500. In September 2012, law enforcement agents sought and obtained a warrant to seize this vehicle as the proceeds of Cannon’s health care fraud scheme. According to court documents, when Cannon learned that agents had a seizure warrant for the vehicle, she attempted to sell the Mercedes-Benz in order to avoid seizure of the vehicle. Cannon has agreed to forfeit the Mercedes-Benz as part of her plea today.
“Stealing money from Medicaid degrades the integrity of our health care system and victimizes those who rely on this important health care program for legitimate patient care,” said U.S. Attorney Tompkins. “The money that Cannon stole through her health care fraud scheme was intended to cover patient needs, not to purchase luxury items. Cannon will be held accountable for her actions,” Tompkins added.
Attorney General Roy Cooper stated, “Cheating Medicaid hurts needy patients, wastes taxpayer money, and drives up health care costs. Our Medicaid Investigations Division attorneys and investigators will continue to work closely with federal officials to root out fraud in North Carolina and make wrongdoers pay.”
“Money gained through illegal sources, such as healthcare fraud, is part of the untaxed, underground economy. This untaxed underground economy poses a threat to our voluntary tax compliance system and undermines the overall public confidence in our American system of taxation,” stated Charlotte Field Office Special Agent in Charge Jeannine A. Hammett, IRS Criminal Investigation.
At sentencing, Cannon faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charge, a maximum term of ten years in prison and a $250,000 for the money laundering conspiracy charge and maximum term of imprisonment of five years and a $250,000 fine for the attempted removal of property to prevent seizure. In her plea agreement, Cannon has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Cannon’s sentencing hearing, which has not been scheduled yet.
Cannon has been in local federal custody since her arrest on the attempted removal of property to prevent seizure charge on September 28, 2012.
The investigation into Cannon was handled by the FBI, MID, IRS, and HHS-OIG. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all 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.
Former Property Evidence Technician Pleads Guilty to Embezzling Drugs from the Asheville Police Department's Evidence RoomRead the Press Release
ASHEVILLE, N.C. – A criminal bill of information was filed on Tuesday, March 26, 2013, in U.S. District Court charging the former Property Evidence Technician with the Asheville Police Department (“APD”) with embezzling between $10,000 and $30,000 of controlled substances from the police department’s evidence room, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
William Ledessie Smith, III, 49, of Spartanburg, S.C., pleaded guilty today before U.S. Magistrate Judge Dennis Howell to a federal charge stemming from a joint federal and state investigation into the misappropriation of property from APD’s evidence room.
Roger A. Coe, Acting 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 criminal bill of information, the filed plea agreement, and statements made at today’s plea hearing, up until April 2011 Smith was a civilian employed for over twenty years by APD as the police department’s Property Evidence Technician. In that capacity, Smith oversaw APD’s evidence room and had access to items including cash, firearms and controlled substances, which were stored in the room as evidence. According to the charging document and today’s plea hearing, Smith surreptitiously opened envelopes containing controlled substances after their return from the SBI lab, where they had been analyzed. Smith then removed some or all of the controlled substances, then resealed the envelopes with a new layer of tape, carefully re-applied directly over the layer of tape that the SBI chemist had used to seal the envelope, with the chemist’s signature or initials. An analysis by the FBI lab revealed that in many instances, Smith’s fingerprints were found on the underside, or sticky side, of the new tape layer. Filed documents indicate that Smith embezzled between $10,000 and $30,000 of controlled substances from the police department’s evidence room.
“Mr. Smith betrayed the trust placed in him by the Asheville Police Department and the citizens of Buncombe County,” said U.S. Attorney Tompkins. “Instead of fulfilling his duties and safeguarding the evidence room, Mr. Smith pilfered controlled substances and, in the process, compromised the integrity and good name of the Asheville Police Department. My office will continue to work with our law enforcement partners to root out public corruption and prosecute those who abuse their positions of trust for their own benefit.”
“Not only did Mr. Smith treat items inside the Asheville Police Department’s evidence room as his own property, he put countless criminal cases in jeopardy. The success of this case was due in great part to our strong relationship with the SBI. We look forward to continuing our partnership with the SBI to see that corrupt public officials are brought to justice,” said Roger Coe, Acting Special Agent in Charge of the Charlotte Division of the FBI.
“I’m proud of our SBI agents’ excellent work in this case, which once again demonstrates our strong partnership with federal prosecutors in rooting out public corruption,” said SBI Director Greg McLeod.
Smith pleaded guilty to one count of federal program fraud. As the criminal information alleges, federal jurisdiction is based on the fact that the Asheville Police Department received over $10,000 in federal funds in the one year period that includes April 1, 2011. At sentencing, Smith faces a maximum term of 10 years in prison and a $250,000 fine. He has also agreed to pay restitution, the amount of which will be determined by the Court at sentencing. The defendant has been released on bond and a sentencing hearing has not been set yet.
The investigation into Smith was handled by the SBI and FBI. U.S. Attorney Tompkins also thanked the Asheville Police Department and the Buncombe County District Attorney’s Office for their invaluable assistance with the investigation.
Buncombe County District Attorney Ronald L. Moore stated, “I appreciate the hard work and diligence of the SBI, the FBI and the U.S. Attorney’s Office. I also want to thank Mike Wright, the owner of Blueline Systems and Services, who conducted a meticulous audit of APD’s evidence room.”
The prosecution is handled by Richard Edwards, of the U.S. Attorney’s Office in Asheville.
Indian National Pleads Guilty to Obtaining False Worker Visas and Related OffensesRead the Press Release
CHARLOTTE, N.C. – An Indian national pleaded guilty in U.S. District Court on Wednesday, March 20, 2013, for his role in a conspiracy to violate U.S. laws by filing fraudulent immigration documents and related offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
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.
Phani Raju Bhima Raju, 41, of Charlotte, pleaded guilty to five federal charges ranging from conspiracy to violate U.S. laws 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.
According to filed court documents and yesterday’s plea hearing, beginning in 2006 and through November 2012, Raju executed a fraudulent scheme to defraud the United States by submitting materially false documents to obtain H-1B immigration visas for foreign nationals seeking employment in the U.S. According to filed documents and statements made in court, Raju was the president of iFuturistics, a Delaware company with headquarters in Pineville, N.C. Court records show that Raju and others 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 the statements made on DOL and USCIS forms submitted by iFuturistics, when the applicants were granted H-1B visas they were placed in work locations with various companies throughout the U.S. In fact, as court records show, iFuturistics had entered into lucrative contracts with staffing agencies prior to submitting the fraudulent forms claiming the skilled IT workers would be employed at iFuturistics’ headquarters in Pineville. 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.
As part of his plea agreement, Raju has admitted that he submitted false documentation to DOL and USCIS and that he made materially false statements on the relevant forms in order to obtain approval of the H-1B immigration visas. In addition to filing fraudulent paperwork, Raju and others 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 Raju and his co-conspirators at times failed to find employment for the H-1B visa workers the company had recruited to work in the U.S. On those occasions, court records indicate, these workers were “benched” in the U.S. while waiting for another job assignment. While they were benched, 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 in November 2009, Raju and others attempted to hide their fraudulent activities from law enforcement and immigration agents during a scheduled inspection visit of the company’s Pineville offices. In anticipation of the visit, court documents show that Raju and others 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 was charged with and pleaded guilty to one count of conspiracy to violate United States laws, which carries a maximum prison term of five years and a $250,000 fine; one count of presenting fraudulent immigration documents, which carries a maximum prison term of 10 years and a $250,000 fine; one count of hiring at least 10 unauthorized aliens within a one year period, which carries a maximum prison term of five years and a $250,000 fine; one count of hiring recruiting, and referring for a fee for employment an unauthorized alien, which carries a maximum prison term of six months and a $100,000 fine; and one count of money laundering conspiracy, which carries a maximum term of 20 years in prison and a fine not to exceed the value of the funds involved. In addition, Raju has agreed to pay restitution to any victims harmed by his fraudulent conduct. The final restitution amount will be determined by the Court.
Raju has been in local federal custody since December 2012. A sentencing date has not been set.
The investigation was handled by ICE-HIS and DOL. The prosecution is being handled by Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte.
Hickory, N.C. Man Charged with Methamphetamine Trafficking Near an Elementary School and Gun Related OffensesRead the Press Release
CHARLOTTE, N.C. – A Hickory, N.C. man has been charged with methamphetamine trafficking near an elementary school and gun related offenses 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; Greg McLeod, Director of the North Carolina State Bureau of Investigation; and Sheriff Coy Reid, of the Catawba County Sheriff’s Office.
A federal grand jury sitting in Charlotte returned a seven-count criminal indictment against Gary Carroll, 57, of Hickory, on Tuesday, March 19, 2013. According to allegations contained in the indictment, beginning in 2010 and through March 2013, Carroll did knowingly conspire to distribute and to possess with intent to distribute methamphetamine. According to the indictment and filed court documents, Carroll was involved in a drug trafficking conspiracy that involved more than 500 grams of methamphetamine. According to a filed criminal complaint, upon execution of a search warrant at Carroll’s residence in January 2013, law enforcement recovered 67 grams of methamphetamine, other drug paraphernalia, cash, four firearms – including an assault rifle – and a large quantity of ammunition and ammunition magazines. The indictment, criminal complaint, and court proceedings allege that Carroll’s trafficking activities took place from, among other places, his home, which is within 1,000 feet of a public elementary school.
Carroll is charged with one count of conspiracy to distribute and to possess with intent to distribute at least 500 grams of methamphetamine, which carries a mandatory minimum of 10 years and a maximum of life in prison and a $10 million fine; one count of possession with intent to distribute methamphetamine which carries a maximum of 20 years in prison and a $1 million fine; one count of possession with intent to distribute methamphetamine within 1,000 feet of a public elementary school which carries a maximum of 40 years in prison and a $2 million fine; one count of possession with intent to distribute at least 50 grams of methamphetamine which carries a minimum of five years and a maximum of 40 years in prison and a $5 million fine; one count of possession with intent to distribute at least 50 grams of methamphetamine within 1,000 feet of a public elementary school which carries a minimum of five years and a maximum of 80 years in prison and a $10 million fine; one count of possession of firearms in furtherance of drug trafficking which carries a minimum of five years and a maximum of 80 years in prison and a $10 million fine; and, possession of firearms after conviction for domestic violence offense which carries a minimum of 10 years and a maximum of life in prison and a $250,000 fine.
Carroll was arrested in February 2013 and has been released on bond. The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The investigation was handled by ICE-HSI, SBI, and CCSO. The case was prosecuted by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Gaston County Man Sentenced to 17 Years in Prison for Possession and Transportation of Child PornographyRead the Press Release
CHARLOTTE, N.C. – A Gaston County man was sentenced to 204 months in prison today for possession and transportation of child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Bobby Clarence Byrd, Jr., 44, of Lowell, N.C. was also ordered to serve 15 years under court supervision following his prison sentence and to register as a sex offender.
Joining U.S. Attorney Tompkins in making today’s announcement are Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Stacy Conley, of the Gastonia Police Department.
In November 2011, a federal criminal indictment charged Byrd with one count of possession and one count of transportation of child pornography. According to filed court documents and today’s sentencing hearing, in or about January 2011, Byrd transported or possessed 59 videos and 342 images depicting the sexual abuse of children as young as two years old. Byrd pleaded guilty to the charges in April 2012. During the course of the investigation, law enforcement discovered that Byrd had sexually abused a young child in 2006. Byrd pleaded guilty to state charges and was sentenced to 16-20 months in state prison for his criminal conduct.
Byrd has been in local federal custody since December 2011. He will be transferred into 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 and Gastonia Police Department.
***In a separate case involving child pornography, on Monday, March 11, 2013, Judge Whitney sentenced Paul Durfee, 45, of Charlotte, to 70 months in prison, followed by five years of supervised release for possession of child pornography. Durfee was also ordered to register as a sex offender. According to filed documents and yesterday’s sentencing hearing, from February 2007 to December 2010, Durfee participated in a website that was being used to share child pornography internationally. Agents tracked Durfee to his home in Charlotte and executed a search warrant in December 2010. A forensic examination of a computer seized during the search located images of children being sexually abused and exploited.
Durfee has been in local federal custody since April 2012, and will be transferred into the custody of the Federal Bureau of Prisons upon designation of a federal facility where he will serve his sentence without the possibility of parole. Durfee’s investigation was handled by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
The prosecution for the government of Byrd and Durfee was handled by Assistant U.S. Attorney Cortney Escaravage of the U.S. Attorney’s Office in Charlotte.
Both cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Former North Carolina Resident Sentenced to Ten Years in Prison for Money Laundering ConspiracyRead the Press Release
Defendant ordered to pay more than $31 million in restitution for his role in the Queen Shoals Ponzi scheme
CHARLOTTE, N.C. – A former North Carolina resident was sentenced today in U.S. District Court for his involvement in the $32.5 million Queen Shoals Ponzi scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Robert J. Conrad, Jr. sentenced Gary D. Martin, 61, of St. Augustine, Fla. to 10 years in prison to be followed by two years of supervised release. Judge Conrad also ordered the defendant to pay $31,707,038 as restitution to the victims of the Ponzi scheme and ordered defendant liable to forfeit and repay the Government for the approximate $28,500,000 in proceeds of the scheme.
Joining U.S. Attorney Tompkins in making today’s announcement are Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and the North Carolina Secretary of State Elaine F. Marshall.
In February 2012, Martin pleaded guilty to one count of a money laundering conspiracy in connection with the Queen Shoals Ponzi scheme. According to court documents and court proceedings, on or about December 2007, Martin formed Queen Shoals Consultants, LLC (QSC) in North Carolina. Martin and others induced victims to invest over $28.5 million in the Queen Shoals Ponzi scheme operated by Sidney Hanson. Court records show that although Hanson never directly told Martin that Queen Shoals was a Ponzi scheme, Martin induced victims to invest in the Queen Shoals Ponzi scheme through a series of false and fraudulent representations. Specifically, Martin falsely claimed that QSC had over 20 years’ experience in financial services and international finance and that he had a vast background in financial services, including the silver, gold and foreign currency trading markets. In fact, Martin had no such experience, held no professional licenses related to finance or investments and had never engaged in any silver, gold or foreign currency trading.
According to court documents, Martin, through the QSC web site and other means, also made false claims about QSC’s financial expertise in “Self-Directed IRA Strategies and Fixed Rate Accounts.” Martin held QSC out as “leaders in Professional Private Placement Retirement Planning” and falsely claimed that QSC had a “proven method of diversification [that] spreads the risk nicely for a balanced portfolio,” when, in fact, QSC offered no such diversification and funneled victim funds solely into the Queen Shoals Ponzi scheme. Court records show that Martin routinely vouched for the success and reliability of Queen Shoals by claiming to have personally invested a significant amount of his own money into Queen Shoals when, in fact, Martin personally invested only $4,000.
According to filed documents and today’s sentencing hearing, Martin engaged in money laundering transactions by utilizing the referral fees he received from Hanson to pay commissions to himself and the so-called QSC consultants. From in or about 2007 to in or about 2009, Martin received over $1.9 million in referral fees from Hanson and paid the consultants over $1.5 million during the relevant time period in return for inducing victims to invest in the Queen Shoals Ponzi scheme. These payments caused QSC consultants to induce additional victims to invest in the Queen Shoals Ponzi scheme, thereby perpetuating the scheme.
In announcing today’s sentence, Judge Conrad described the impact of the Ponzi scheme on the victims. “This Ponzi scheme had devastating results,” Judge Conrad said. “People in their 60’s, 70’s, 80’s and even 90’s lost everything because Hanson and Martin defrauded them.” Judge Conrad also noted that Martin, “went into homes, got people to rely on him and told them things that weren’t true, and based on false representations, many lost their life savings…He is seriously culpable.”
Martin was released on bond and was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
Sidney Hanson, the mastermind of the Queen Shoals Ponzi scheme, was convicted of securities fraud and wire fraud and is currently serving a 22-year federal sentence. He was also ordered to pay over $31,000,000 in restitution. To date, over $9,000,000 has been paid to the Clerk of Court to pay victims of the Ponzi scheme. In addition, other assets, including federally forfeited precious metals and federally forfeited real estate, will be liquidated and the net sale proceeds will be paid to victims.
U.S. Attorney Tompkins thanked the Justice Department’s Asset Forfeiture and Money Laundering Section, the CFTC, and the North Carolina Secretary of State for their invaluable assistance in recovering assets, thereby ensuring that Hanson’s victims receive restitution money owed to them. U.S. Attorney Tompkins commended the quick asset seizures before the collapse of Queen Shoals, which will result in the return of nearly 30 percent of victims’ losses. The U.S. District Court has begun issuing restitution payments of the recovered funds to identified victims of the Ponzi scheme.
Martin’s case was investigated by the FBI with assistance from the Securities Division of the North Carolina Department of the Secretary of State. U.S. Attorney Tompkins also acknowledged the invaluable assistance provided by the Commodities Futures Trading Commission and the Florida Office of Financial Regulation, Bureau of Financial Investigations in this case. The prosecution is handled by Assistant United States Attorney Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte.
Elisa Baker Sentenced to 10 Years in Prison for Conspiracy to Distribute Prescription DrugsRead the Press Release
STATESVILLE, N.C. – U.S. District Court Judge Richard Voorhees sentenced today Elisa Annette Baker, 44, of Hickory, N.C., to serve 120 months in prison for conspiracy with intent to distribute prescription drugs, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Baker was also ordered to serve three years under court supervision once she serves her prison term.
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; Greg McLeod, Director of the North Carolina State Bureau of Investigation (SBI); and Chief Tom Adkins of the Hickory Police Department.
According to filed documents and court proceedings, from 2006 to October 2010, Baker conspired with others to distribute and possess with intent to distribute the controlled substances oxycodone, hydrocodone and alprazolam. Baker also maintained residences in Granite Falls, Hudson and Hickory, N.C. for the purpose of distributing the prescription drugs. According to plea documents and today’s sentencing hearing, Baker possessed approximately 12,000 dosage units of oxycodone, 10,000 dosage units of hydrocodone, and 29,000 dosage units of alprazolam. Filed documents indicate that Baker distributed prescription drugs to one of the co-conspirators, a relative, and several of his high school friends, when he was 16 years old. According to court documents, Baker obtained the prescription drugs through multiple prescriptions from physicians and from other unidentified sources in Catawba County. In January 2012, Baker pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute a controlled substance.
Baker is currently serving an 18-year state sentence for second degree murder in the death of Zahra Baker. At today’s sentencing hearing, Judge Voorhees ordered that Baker completes her state sentence before she begins serving her federal sentence. Federal sentences are served without the possibility of parole.
The investigation was handled by the DEA, NC SBI and the Hickory Policy Department. The prosecution was handled by Assistant United States Attorneys Dana O. Washington and Cortney S. Escaravage.
Wilson, N.C. Man Sentenced to Two Years in Prison for Distributing Counterfeit Viagra and Cialis in CharlotteRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Robert J. Conrad, Jr. sentenced today Awni Shauaib Zayyad, 56, of Wilson, N.C. to two years in prison for five federal offenses related to the possession and sale of counterfeit Viagra and Cialis pills, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Conrad also ordered Zayyad to serve two years under court supervision following his release from prison and to pay a $10,000 fine and $500 special assessment fee.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Atlanta and the Carolinas, Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD), and Dr. Duane Satzger, Acting Forensic Chemistry Center Director of the U.S. Food and Drug Administration, Cincinnati Office.
In February 2012, a federal jury convicted Zayyad of one count of conspiracy to traffic in counterfeit prescription medications containing counterfeit trademarks, two counts of trafficking in counterfeit prescription medications bearing counterfeit trademarks, and two counts of selling and holding for sale counterfeit prescription medications with intent to defraud and mislead. Viagra and Cialis, manufactured respectively by Pfizer and Eli Lilly, are prescription medications for the treatment of erectile dysfunction (ED) that lawfully may be distributed to the public only through licensed pharmacies based upon a doctor’s prescription. Trial evidence established that the counterfeit Viagra and Cialis pills Zayyad distributed contained active pharmaceutical ingredients (API) of the ED medications, although in unknown strength and with unknown non-API additives.
Evidence presented at Zayyad’s trial showed that Zayyad sold over 500 counterfeit Viagra pills on June 24, 2010, at a convenience store in Charlotte. According to trial records, on August 23, 2010, Zayyad was en route to Charlotte in a vehicle registered in his wife’s name to sell more counterfeit pills at the same Charlotte convenience store. Law enforcement agents stopped Zayyad’s vehicle in Mecklenburg County before Zayyad could arrive at his destination. Court evidence indicated that law enforcement found 500 counterfeit Viagra pills and over 200 counterfeit Cialis pills hidden in the vehicle.
Evidence from court proceedings established that Zayyad had possessed and/or distributed over 2,000 counterfeit Viagra pills and almost 400 counterfeit Cialis pills during the course of the investigation in 2010. The counterfeit Viagra and Cialis pills had a combined wholesale value exceeding $40,000. Evidence introduced also established that there is a risk of great bodily injury to consumers who purchase and use counterfeit prescription medications outside of a doctor’s care and outside of licensed pharmacies, especially where counterfeit prescription medications contain active pharmaceutical ingredients of unknown strengths, with unknown additives, manufactured in unknown and untraceable clandestine facilities.
The defendant was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was led by ICE-HSI, with assistance from CMPD and FDA. The case was prosecuted by Assistant United States Attorney Tom O’Malley of the U.S. Attorney’s Office in Charlotte.
Two Men Sentenced to Prison for Cocaine TraffickingRead the Press Release
CHARLOTTE, N.C. – Two men were sentenced on Wednesday, February 27, 2013, in U.S. District Court for their part in a cocaine trafficking conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr., sentenced Ildefonso Madrid Flores, 28, of Mexico, to 151 months in prison, to be followed by four years of supervised release. David Kennedy, 37, of Charlotte, was sentenced to 30 months in prison and will serve four years under court supervision following his prison term.
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; Greg McLeod, Director of the North Carolina State Bureau of Investigation (SBI); Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD); and Chief Tim W. Ledford of the Mint Hill Police Department (MHPD).
In May 2012, following a three day trial, a federal jury found Flores guilty of conspiracy to possess with intent to distribute cocaine. According to evidence presented at trial, law enforcement seized two kilograms of cocaine from a vehicle in which the drug transaction occurred. Flores expected to receive $70,000 as payment for the drugs. Also, according to trial evidence, Flores possessed two cell phones. One of the cell phones was subscribed in Flores’ name for his personal use. Flores used the second cell phone to coordinate drug trafficking with his co-conspirators. That phone was subscribed under the name “Tony Montana,” the infamous character from the movie “Scarface.” Trial evidence showed that the co-conspirators had distributed a total of approximately 26 kilograms of cocaine.
Kennedy pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine in April 2012. The third co-defendant, Robert Shanley, 34, of Charlotte, pleaded guilty to the same charge in December 2011. Shanley was sentenced in July 2012 to 57 months in prison, to be followed by four years of supervised release. In November 2011, a fourth co-conspirator, Joshua Poulin, 34, of Clover, S.C., pleaded guilty to two counts of conspiracy to possess with intent to distribute cocaine and was sentenced to 133 months in prison, to be followed by 10 years of supervised release.
Flores and Kennedy have been in local federal custody and will be transferred to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the DEA, SBI, CMPD, and MHPD. The case was prosecuted by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Sentenced to More Than 29 Years in Prison for Drug Trafficking and Related Firearms OffensesRead the Press Release
CHARLOTTE, N.C. – On Tuesday, February 19, 2013, U.S. District Judge Max O. Cogburn, Jr. sentenced Malcolm Springs, 22, of Charlotte, to 355 months in prison for drug trafficking and firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Springs was also ordered to serve five years under court supervision following his prison term and to pay $21,434 as restitution.
U.S. Attorney Tompkins is joined in making today’s announcement by Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney Monroe of the Charlotte Mecklenburg Police Department (CMPD).
According to filed court documents and statements made in court, on or about March 20, 2011, Springs met an individual identified as “S.C.” in the parking lot of a gas station in Charlotte for the purpose of purchasing a distribution amount of crack cocaine. Court records reflect that Springs stole the drugs and brandished a firearm. Court records indicate that a struggle over the gun ensued and S.C. was shot in the arm and in the abdomen. Following the shooting, Springs fled the scene in his car, according to court records.
According to filed documents, CMPD officers spotted Springs’ car and attempted to make a traffic stop. Springs did not stop and led police on a short chase, and then jumped and ran from his vehicle when he drove into a dead end. According to court records, a uniformed CMPD police officer spotted Springs, who was moving between two houses. Court records indicate that while fleeing, Springs pointed and then shot his gun at the officer. After being shot, the officer returned fire and struck Springs. Springs was then apprehended by the officers, court records indicate.
At the sentencing hearing, prosecutors described the shootings committed by Springs as “reckless and wanton” acts, and noted that “Springs could have killed two people.” Prosecutors also said that Springs’ shooting of a police officer reflected “complete lack of respect for the law.”
In making today’s announcement United States Attorney Anne Tompkins stated, “The Springs case demonstrates the U.S. Attorney’s Office’s commitment to vigorously prosecuting violent criminals and to enforcing existing federal firearms laws. Let it also be known,” U.S. Attorney Tompkins added, “that we will not tolerate any acts or attempted acts of violence against police officers.”
“Malcolm Springs’ ruthless actions put many lives at risk. The FBI and our law enforcement partners stand united in our commitment to hold violent offenders accountable for their negative impact on our communities,” said Roger Coe, Acting Special Agent in Charge of the Charlotte Division of the FBI.
“It is unfortunate that the incident escalated to where the suspect fired a gun and placed two lives in danger,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “Oftentimes those who are intent on breaking the law and who knowingly engage in criminal activities also lack a regard for human life.”
In December 2011, Springs pleaded guilty to one count of possession with intent to distribute crack cocaine, one count of possession of a firearm in furtherance of a drug trafficking offense and one count of possession of a firearm by convicted felon. Springs’ sentence was enhanced because of his four prior violent felony convictions, which make him an Armed Career Criminal under the United States Sentencing Guidelines.
Springs has been in local federal custody since June 2011. Upon designation of a federal facility, he will be transferred to the custody of the Federal Bureau of Prisons. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and CMPD, assisted by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution was handled by Assistant United States Attorney Robert Gleason of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Charged with Stealing More Than $829,000 from the University of North Carolina at CharlotteRead the Press Release
The Defendant Has Agreed to Plead Guilty to Conspiracy to Commit Theft of Program Receiving Federal Funds
CHARLOTTE, N.C. – A bill of information and a plea agreement were filed today in U.S. District Court charging a Charlotte man with one count of federal program theft conspiracy for stealing over $829,000 from the University of North Carolina at Charlotte (“UNCC”), announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Jeffrey A. Baker, of UNCC’s Police Department, join U.S. Attorney Tompkins in making today’s announcement.
According to the criminal bill of information, Sam Hanna, 62, of Charlotte, and two co-conspirators engaged in a scheme involving fraudulent contracts, bribes and kickbacks which defrauded UNCC of over $829,000. Court documents indicate that beginning in March 2005 Hanna was employed by UNCC as a Facilities Engineer Specialist and was responsible for soliciting bids and selecting outside contractors to work at UNCC. Hanna also had the authority to award contracts under $30,000 without a bid process. UNCC is an educational institution that receives federal assistance in the form of grants, loans and subsidies, among others.
According to the charging document and plea agreement filed today, Hanna used his position and authority to award no-bid contracts under $30,000 to two entities owned by Hanna’s co-conspirators. One of the companies owned by Hanna’s son-in-law, identified in the bill of information as “Individual A,” owned and operated “Air Handling Equipment Enterprises (“Air Handling”), based in Washington, D.C. A second co-conspirator, identified as “Individual B,” owned and operated “Air Motion Systems” (“Air Motion”) a company based in Greenville, S.C. Both companies maintained company bank accounts which were used to facilitate the scheme, filed documents indicate.
According to information contained in the charging document and the plea agreement, beginning from 2006 through 2011 Hanna awarded no-bid contracts to Air Handling and Air Motion and directed $829,807 as payments to the two companies in connection with such no-bid contracts. Air Handling and Air Motion did little or no work to justify the payments and Hanna issued fraudulent invoices from UNCC for Air Handling and Air Motion to cover up the fraudulent scheme. Court records show that the co-conspirators deposited the fraud proceeds in the companies’ bank accounts. Then, at Hanna’s direction, individuals A and B directed $413,170 in bribe payments to Hanna by depositing the money in a bank account of a company owned by Hanna, “Air Touch Systems” (“Air Touch”). Filed documents indicate that Hanna used the money he obtained through these kickbacks to pay for personal expenditures, including payments for multiple consumer lines of credit, mortgage payments for his home, and to make purchases from Dish Network, Anne Taylor and Verizon, among other things.
Hanna has been charged with, and agreed to plead guilty to, one count of federal program theft conspiracy. He faces a maximum prison term of five years and a $250,000 fine. The defendant has also agreed to pay full restitution, the amount of which will be determined by the Court at sentencing. Hanna’s initial appearance and plea hearing will be scheduled by the U.S. District Court.
The investigation is handled by FBI and the UNCC Police Department. 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.
Hedge Fund Manager and C.P.A. Administrator for $40 Million Ponzi Scheme Convicted by JuryRead the Press Release
Defendant Stole Victims’ Money to Build Personal Mansion through Belizean Shell Company
CHARLOTTE, N.C. – On Friday, February 8, 2013, a federal jury in Charlotte convicted certified public accountant Jonathan D. Davey, 48, of Newark, Ohio of four criminal charges relating to an investment fraud conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
The federal indictment, returned in February 2012, charged Davey with serving as the “Administrator” for numerous hedge funds for the Black Diamond Ponzi Scheme, with soliciting over $11 million from victims with his own hedge fund, “Divine Circulation Services,” and with tax evasion. The charges arise out of the Black Diamond investigation, which has brought criminal charges against eleven individuals and CommunityONE Bank, relating to conduct between October 2007 and April 2007 that deprived over 400 victims of more than $40 million.
U.S. Attorney Tompkins is joined in making today’s announcement by Roger A. Coe, Acting 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 Division (IRS-CI).
According to evidence presented at trial, Davey lied to collect over $11 million from victims mainly in North Carolina, Virginia, and Ohio for his hedge fund by claiming, among other things, that he had done due diligence on Black Diamond and was operating a legitimate hedge fund with significant safeguards, when, in reality, neither claim was true. Then, as Black Diamond began to collapse, Davey and other hedge fund managers started a derivative Ponzi scheme using a so-called “cash account” that Davey controlled. Davey and his co-conspirators collected over $5 million from new victim investors for the cash account, and used the new victim money to make Ponzi payments to old investors and themselves. The evidence at trial showed that, as Administrator for the scheme, Davey controlled most funds and wires for the scheme, and published a website for victims that reflected false returns. At trial, the Government showed that by the end of the scheme, the website reflected over $120 million in supposed value for victim-accounts when Davey and the hedge fund managers in reality had less than $1 million total in their accounts.
According to evidence presented at trial, Davey used an elaborate network of shell companies to evade taxes and commit money laundering with the proceeds of the Ponzi scheme. In particular, Davey used an offshore shell company in Belize to funnel money to build a mansion in Ohio, creating a sham “loan” by pretending that investors had “loaned” investment money to the Belizean shell company that was then used to build Davey’s personal mansion.
Other defendants convicted in this case are set forth below.
Keith Franklin Simmons, 47, formerly of West Jefferson, N.C., was convicted following a jury trial of securities fraud, wire fraud, and money laundering. Simmons was sentenced to 50 years in prison on May 23, 2012.
Bryan Keith Coats, 52, of Clayton, N.C., pleaded guilty on October 24, 2011, to conspiracy to commit securities fraud and money laundering conspiracy. Coats was sentenced to 15 years in prison on November 16, 2012.
Deanna Ray Salazar, 55, of Yucca Valley, Calif., pleaded guilty on December 7, 2010, to conspiracy to commit securities fraud and tax evasion. Salazar was sentenced to 54 months in prison on May 23, 2012.
Jeffrey M. Muyres, 37, of Matthews, N.C., pleaded guilty on May 17, 2011, to conspiracy to commit securities fraud and money laundering conspiracy. Muyres was sentenced to 23 months in prison on January 18, 2012.
Roy E. Scarboro, 48, of Archdale, N.C., pleaded guilty on December 3, 2010, to securities fraud, money laundering, and making false statements to the FBI. Scarboro was sentenced to 26 months in prison on May 4, 2011.
James D. Jordan, 49, of El Paso, Texas, pleaded guilty on September 14, 2010, to conspiracy to commit securities fraud. Jordan was sentenced to 18 months in prison on June 29, 2011.
Stephen D. Lacy, 53, of Pawleys Island, S.C., pled guilty on December 9, 2010, to conspiracy to commit securities fraud. Lacy was sentenced to six months in prison on May 4, 2011.
Chad A. Sloat, 34, of Kansas City, Missouri, pleaded guilty on October 17, 2012, to conspiracy to commit securities fraud and failure to file a tax return. Sloat is currently waiting to be sentenced.
Jeffrey M. Toft, 50, of Oviedo, Fla., pleaded guilty on November 26, 2012, to conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. Toft is currently waiting to be sentenced.
Michael J. Murphy, 52, of Deep Haven, Minnesota, pleaded guilty on January 22, 2013, to conspiracy to commit securities fraud. Murphy is currently waiting to be sentenced.
On April 27, 2011, a criminal bill of information and a Deferred Prosecution Agreement were filed against CommunityONE Bank, N.A., related to its failure to file a suspicious activity report (SAR) and maintain an effective anti-money laundering program. As court records show, Simmons was a customer of CommunityONE, and used various accounts with the Bank in furtherance of the Ponzi scheme. However, according to filed court documents, the Bank did not file any suspicious activity reports on Simmons, despite the hundreds of suspicious transactions that took place in his accounts. The Bank agreed to pay $400,000 toward restitution to victims of the Ponzi scheme that operated through accounts maintained at the bank.
Davey was convicted of all charges following a 45 minute jury deliberation. Davey faces a statutory maximum sentence of five years in prison for count one (securities fraud conspiracy) and a $250,000 fine, a maximum of 20 years in prison for count two (wire fraud conspiracy) and a $250,000 fine, a maximum of 20 years in prison for count three (money laundering conspiracy) and a $250,000 fine, and a maximum of five years in prison for count four (tax evasion) and a $250,000 fine. Davey has been released on bond and a sentencing date has not been set yet.
This matter is being prosecuted by Assistant United States Attorneys Kurt W. Meyers and Mark T. Odulio of the Western District of North Carolina, and the case against Jeffrey Muyres was prosecuted by Assistant United States Attorney Mark T. Odulio. The investigation is being handled by the FBI and the IRS.
Charlotte Jury Convicts Woman in $650,000 Medicaid Fraud SchemeRead the Press Release
Ninety Percent of the Defendant’s Claims for Mental and Behavioral Health Services Were Fraudulent
CHARLOTTE, N.C. – A federal jury sitting in Charlotte convicted a Charlotte woman late Friday, February 8, 2013 of defrauding Medicaid of at least $650,000, obstructing an official proceeding and making false statements in connection with a health care matter, 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 Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID), and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Charlotte Elizabeth Garnes, 37, of Charlotte was convicted following a weeklong trial before U.S. District Court Judge Frank D. Whitney. According to evidence presented at trial, Garnes was a Licensed Professional Counselor and was approved by Medicaid to provide mental and behavioral health services to qualified individuals. The Government’s evidence showed that Garnes claimed to have personally provided mental health services to Medicaid recipients when in fact she did not. Instead, as evidence established, the defendant conspired with others – who were not licensed and not approved by Medicaid – to permit those unqualified individuals to submit claims to Medicaid under the Defendant’s provider number for therapy services purportedly provided by those individuals. In reality, most of the services were never provided.
According to evidence presented at trial, Garnes agreed with Teresa Marible, Michele Jackson (a/k/a Sylvia Jackson) and others to falsely put Garnes’ name and Medicaid provider number on claims for therapy services supposedly provided by the co-conspirators. The Government established that after Medicaid paid Garnes for these false claims, Garnes kept 30% of the fraud proceeds and distributed the remainder to her co-conspirators. From March 2009 to April 2011, Medicaid paid the Defendant and her company, Charlotte’s Insight, Inc., approximately $740,349 and approximately 90% of that amount ($666,062) was based upon false claims for services that Garnes did not provide.
During trial, the Government established that many of the claimed services were never provided at all. Numerous Medicaid recipients or their parents testified at trial that they or their children never received the therapy services that Garnes claimed to have provided. For many of the claimed dates of services Garnes was not in North Carolina or in the country. In fact, the defendant billed Medicaid for therapy services she claimed to have provided while she was in Germany working on a government contract, all according to trial evidence. The evidence also established that Garnes routinely billed for more than 24 hours of therapy services in a single day, including allegedly providing 69 hours of individual therapy services in a single day in December 2009.
Trial evidence demonstrated that the Defendant purchased a Mercedes vehicle and plastic surgery with the fraud proceeds.
Garnes, who was convicted on all twelve counts charged in the indictment, has been released on bond. She faces a statutory maximum sentence of 10 years in prison and a $250,000 fine for count one. Count two carries a statutory maximum sentence of 20 years in prison and a $250,000 fine. Counts three through twelve carry a statutory maximum sentence of five years in prison and a $250,000 fine. A sentencing date for Garnes has not been set yet.
Teresa Marible was sentenced in June 2012 to serve 36 month in prison for her role in the scheme, and was ordered to pay $1,135,662 in restitution. Michele Jackson was sentenced in March 2012 to 15 months in prison and was ordered to pay $292,282 in restitution.
The investigation was handled by HHS-OIG and MID. The prosecution of the case is handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Charlotte Office.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Last of Three Defendants Sentenced to More Than 22 Years in Prison for Two Armed Robberies in MonroeRead the Press Release
CHARLOTTE, N.C. – On Wednesday, January 23, 3013, the last of three defendants involved in armed robberies of two Monroe businesses in October 2010 was sentenced to 268 months in prison, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
In addition to the prison term, U.S. District Court Judge Max O. Cogburn, Jr. ordered Reginald Lamont Chambers, 27, of Monroe, to serve three years of supervised release and to pay $3,100 as restitution.
Joining U.S. Attorney Tompkins in making today’s announcement are Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol Tobacco Firearms and Explosives (ATF), Charlotte Field Division and Chief Debra C. Duncan of the Monroe Police Department.
According to filed court documents and statements made in court, on October 18, 2010, Chambers robbed a Dollar General store on East Sunset Drive in Monroe. During the robbery, Chambers held the store clerk at gun point and forced the store clerk to open the safe. Court records show that Chambers then ripped the store’s telephones out of their jacks and took the phones with him. Chambers also attempted to lock the store clerk in the back office before leaving with the store’s money.
According to court documents and statements made in court, October 20, 2010, Chambers and his co-defendants, Anthony Polk and Trenton Raley, robbed La Chiquita store on Concord Avenue, in Monroe. Chambers and Raley held up at gun point two store clerks, and robbed money from the store and one of the clerk’s purses and its contents. Polk was the get-away driver in the robbery. Court records show that all three defendants were arrested in the early morning hours on October 21, 2010, in the get-away car and in possession of the firearms used by Chambers and Raley.
In December 2011, Chambers, who is a member of the United Blood Nation street gang, pleaded guilty to two counts of robbery of a business affecting interstate commerce, also known as “Hobbs Act” robberies, one count of carrying and brandishing a firearm in furtherance of robbery, and one count of possession of a firearm by a convicted felon. Under the United States Sentencing Guidelines, Chambers was sentenced as a an armed career criminal. v
On November 29, 2011, Raley, 20, of Peachland, N.C., pleaded guilty to one count of Hobbs Act robbery and one count of carrying and brandishing a firearm in furtherance of a crime. He was sentenced also sentenced on Wednesday, January 23, 2013, to serve 67 months in prison followed by three years of supervised release. On December 1, 2011, Polk, 30, of Monroe, pleaded guilty to one count of Hobbs Act robbery. He was sentenced on October 23, 2012, to 51 months in prison and three years of supervised release. Raley and Polk will be jointly and severally liable with Chambers for restitution to the victims of the La Chiquita robbery.
All three defendants are in local federal custody. Upon designation of a federal facility they will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
The investigation was handled by the ATF and the Monroe Police Department. The prosecution was handled by Assistant United States Attorney J. George Guise.
Unsealed Federal Indictment Charges 27 Members of Check Fraud ConspiracyRead the Press Release
The Co-conspirators Stole More Than $1 Million From Financial Institutions
CHARLOTTE, N.C. – A federal criminal indictment unsealed in U.S. District Court today charges 27 members of a check fraud scheme with bank fraud conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. (See chart below for a list of federal charges and maximum penalties for each defendant).
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department join U.S. Attorney Tompkins in making today’s announcement.
Of the 27 defendants charged in the indictment, 17 were arrested today, three are pending arrest (have agreed to turn themselves in), four are in state custody on state charges and three have not been arrested yet (photos of those not arrested are attached):
• Phillip Gregory Harris, Sr., aka “Cash P,” 30, of Charlotte. (arrested)
• Olwin Brown, aka “Juice” and “OJ,” 22, of Charlotte. (arrested)
• Kevin Smith, 33, of Charlotte. (arrested)
• Renardo Perry, aka “S-Dub,” 28, of Charlotte. (arrested)
• Jerry McDuffie, aka “J,” 31, of Whiteville, N.C. (arrested)
• Craig McInnis, 24, of Charlotte. (arrested)
• Yarral Wilson, 26, of Charlotte. (arrested)
• Kalif Wilson, aka “Scrap,” 28, of Charlotte. (arrested)
• Jarral Thompson, 28, of Clover, S.C. (arrested)
• Jakari Rutledge, 24, of Charlotte. (arrested)
• Martell Mackey, aka “Telly,” 26, of Charlotte. (arrested)
• Jade Brown, 24, of Charlotte. (arrested)
• Christopher Moat, 28, of Charlotte. (arrested)
• Rashad Johnson, 26, of Charlotte. (arrested)
• Quillie Smith, 29, of Charlotte. (arrested)
• Keosha Mack, aka “Kiki,” 28, of Charlotte. (arrested)
• Stanley Rutledge, Jr., 27, of Charlotte. (arrested)
• Jordan Forster, aka “2-3,” 26, of Charlotte. (pending)
• Pamela Kerns, 26, of Davidson, N.C. (pending)
• Tierra Love, 22, of Charlotte. (pending)
• Anthony Woods, aka “Gerod,” 30, of Charlotte. (in state custody)
• Tomonta Simmons, aka “Montay,” 21, of Charlotte. (in state custody)
• Christian Robertson, 20, of Charlotte. (in state custody)
• Walter Boyd, aka “Web,” 26, of Chester, S.C. (in state custody)
• Elijah Grant, aka “Box,” 28, of Charlotte. (not in custody)
• Travis Gabriel, aka “Gangster,” 27, of Charlotte. (not in custody)
• Demarcus Shankle, 25, of Charlotte. (not in custody)
According to allegations contained in the indictment:
From 2007 to 2014, the co-conspirators were involved in a check fraud scheme that operated in Mecklenburg, Gaston, Iredell and Cabarrus counties. The co-conspirators obtained checks linked to active bank accounts, either by purchasing or stealing them from the legitimate account holders. The co-conspirators then deposited these worthless checks made out for various amounts into bank accounts with very little or no available funds, thereby tricking the bank system into crediting the accounts with the funds. During the time it took the bank to process the bad checks, the co-conspirators used ATM cards and other methods to withdraw cash from those accounts. Over the course of the conspiracy, the defendants stole more than $1 million from numerous financial institutions.
“Combating financial fraud remains priority for my office. Fraud schemes like the one perpetrated by the defendants compromise the integrity of our financial system and leave the rest of us to pay for the incurred losses,” said U.S. Attorney Tompkins.
“Technology has forever changed the way we do business, making every day financial transactions a prime target for fraud,” said Charlotte Field Office Special Agent in Charge Russell F. Nelson. “The Secret Service, in conjunction with the Charlotte-Mecklenburg Police Department, and other task force agencies, continues to successfully combat these financial crimes by adapting our investigative methodologies. The U.S. Secret Service Electronic Crimes Task Force is a strategic alliance of law enforcement, academia and the corporate sector; dedicated to investigating, disrupting, and deterring cybercrime,” stated Nelson, “and this case serves as a great example of how these partnerships can strike a serious blow to organized crime groups that target our financial sector.”
“Financial frauds have been on the rise both on a national and on a local level,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “With this recent check fraud conspiracy, I am so proud that our respective agencies were able to work together. Only through our partnerships are we able to bring about large indictments as this.”
All 27 defendants involved in the scheme have been charged with one count of bank fraud conspiracy and they face up to 30 years in prison and a $1 million fine. All defendants except Tomonta Simmons have also been charged with one count of bank fraud. Kevin Smith is also charged with one count of possession of counterfeit securities, one count of possession of stolen mail and one count of possession of firearms by a convicted felon. Phillip Harris faces an additional charge of aggravated identity theft, and Tomonta Simmons is charged with two counts of theft of firearms.
The defendants arrested today will appear in U.S. District Court before U.S. Magistrate Judge David S. Keesler. Elijah Grant, Travis Gabriel and Demarcus Shankle are still wanted by law enforcement.
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 of this case was conducted by the U.S. Secret Service and CMPD. Assistant United States Attorney Kevin Zolot of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Law enforcement are still looking for (see photos): Travis Gabriel
Elijah Grant
Demarcus ShankleSix Sentenced in Multi-million Dollar Stolen Goods CaseRead the Press Release
CHARLOTTE, N.C. – U.S. District Court Judge Max O. Cogburn, Jr. sentenced six members of an organized retail crime ring that sold and distributed over $16 million in stolen over-the-counter (“OTC”) products, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Today’s sentencings of four co-defendants and the sentencings in October 2012 of two co-defendants are the result of “Operation Cash Back,” a multi-agency investigation that began in September 2010 into the buying and selling of stolen OTC and health and beauty aid (HBA) products. The prison sentences imposed on the six defendants range from 18 to 86 months’ imprisonment and include an order of restitution totaling $4,035,626. Judge Cogburn also ordered forfeiture of over $17,000 in cash, 20 motor vehicles, two real estate properties and a forfeiture money judgment of $7 million.
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.
In June 2011, a total of six defendants were charged with and pleaded guilty to one count of conspiracy to commit interstate transportation of stolen property. The defendants are, Bonnie Knight Bridges, 63, and Kimberley Bridges Morris, 37, both of Bessemer City, N.C.; Michael David Morris, 40, of Charlotte; Darlene Bridges Schoener, 39, and William Christopher Schoener, 33, both of Kings Mountain, N.C.; and Darryl Keith Brock, 45, of Cowpens, S.C. Bonnie Bridges, Kimberley and Michael Morris, and Darlene and William Schoener were also charged with and pleaded guilty to one count of tax evasion conspiracy. Bonnie Bridges is the mother of Kimberley Bridges Morris, who is married to Michael David Morris, and of Darlene Bridges Schoener, who is married to William Schoener.
Today, Judge Cogburn sentenced Kimberley Morris and Darlene Schoener to serve 18 months in prison, followed by three years of supervised release. Michael Morris was sentenced to 84 months in prison and two years of supervised release. William Schoener was sentenced to 86 months in prison and two years of supervised release. The defendants also were ordered to pay $4,035,636 in restitution.
Judge Cogburn sentenced Bonnie Bridges on October 19, 2012, to serve 70 months in prison followed by two years of supervised release, and ordered her to pay $4,035,636 in restitution. Judge Cogburn sentenced Darryl Keith Brock on October 30, 2012, to serve 20 months in prison followed by two years of supervised release, and ordered him to pay restitution in the amount of $2,128,059.
According to filed court documents and court proceedings, the defendants had participated in what is known as Organized Retail Crime (“ORC”) and Organized Retail Theft (“ORT”), an annual multi-billion crime affecting retail merchants. Court documents show that from 2006 to March 2011, the defendants engaged in a scheme whereby they bought and then sold stolen over-the-counter products, including medications and dietary supplements, and health and beauty aid products.
According to court records and court hearings, organized retail theft begins with individuals, known as “boosters,” who shoplift popular OTC and HBA products from the shelves of various pharmacy and retail stores. In this case, the “boosters” stole OTC and HBA products from stores in North Carolina, South Carolina West Virginia, Georgia, Pennsylvania and Connecticut. The “boosters” then sold the shoplifted goods far below retail and wholes prices to first-level “fences.” First-level fences in turn serve as middlemen between the “boosters” who steal the OTC and HBA products from retail merchant stores and second-level fences who further distribute the stolen goods to a higher-level fence or distributor, who then distribute the stolen products back into the retail marketplace.
According to court records and court hearings, the Bridges’ family members served as first-level fences who purchased stolen OTC and HBA products from “boosters.” The Bridges family members then sold the stolen OTC and HBA products to second-tier fences at prices far below the retail and wholesale prices of the stolen goods. Organized retail theft crime is a cash-only business, and the Bridges paid cash to “boosters” when purchasing the stolen OTC and HBA products, and were paid in cash by their second-tier fences for the stolen OTC and HBA products.
According to court records and court hearings, OTC and HBA goods stolen by “boosters” had to be “cleaned” of retail store security labels, tags, stickers, and pricing labels before they could be re-introduced through the various levels of fences into the retail marketplace. Cleaning stolen OTC and HBA products of genuine retail store security and pricing labels is a task performed by both first-level and second-level fences before reaching higher-level product distribution channels. The amount of stolen property involved in the Bridges case from 2006 to 2011 exceeded $16 million.
“The Congressional Research Service issued a report in December of 2012 that estimated the annual economic loss to businesses and consumers from Organized Retail Crime is between of $15 billion to $37 billion. The cooperative effort of the law enforcement agencies involved in this case was instrumental in breaking up this extensive conspiracy that plagued a wide range of retail businesses,” said U.S. Attorney Tompkins. “Retail theft means that consumers end up paying higher prices for goods sold by businesses impacted by those thefts. My office will continue to go after professional theft rings that engage in this form of organized retail crime.”
“The hard work and diligence of these investigators has paid off as they rooted out and followed the trail of this multi-million dollar theft scheme,” stated Special Agent in Charge Jeannine A. Hammett, IRS CI. “We should not expect the honest taxpayers to foot the bill for those who attempt to hide income from the IRS.
Bonnie Bridges has commenced serving her prison sentence. Michael Morris and William Schoener have been in custody since late 2011. Darryl Brock, Kimberly Bridges and Darlene Schoener will self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by 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 William Brafford of the Western District of North Carolina.
Ladybug Family Restaurant and Restaurant Employee Agree to Pay $62,000 to Resolve False Claims Act Allegations of Food Stamp FraudRead the Press Release
CHARLOTTE, N.C. – Ladybug Family Restaurant, Inc. and Retha Kendall Lindsey (“Defendants”) have agreed to pay $62,000 in damages and civil penalties to resolve allegations of food stamp fraud, announced Anne M. Tompkins, United States Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Karen Citizen-Wilcox, Special Agent in Charge, Office of the Inspector General, Office of Investigation of the U.S. Department of Agriculture (USDA-OIG).
On October 10, 2012, the United States filed a civil complaint against the Ladybug restaurant and Lindsey, who was employed by the restaurant, for violation of the United States False Claims Act. According to the filed complaint, the Defendants used other people’s Electronic Benefit Transaction (“EBT”) cards, formerly known as food stamps, to purchase food and other items for the Ladybug restaurants. The complaint alleged that from about August 2011 to about June 2012, the Defendants and others used EBT cards belonging to other people in at least 49 transactions to make bulk purchases of meat and other items for use at the Ladybug restaurants.
Today, the United States and Defendants submitted to the U.S. District Court a consent motion for a final order pursuant to which Defendants will pay $21,116.01 in damages and $40,883.99 in civil penalties under the False Claims Act. The proposed final judgment is subject to approval by a United States District Court Judge.
The Supplemental Nutrition Assistance Program (“SNAP”) provides assistance to low or no income individuals to allow them to purchase qualified food and nutrition items. Benefits are issued in the form of EBT cards similar to debit cards that can be swiped in a merchant’s credit card machine.
The civil action arose out of an investigation by the Inspector General’s Office of the U.S. Department of Agriculture, which administers the SNAP program. The False Claims Act allows the United States to recover triple the amount paid in fraudulent claims plus civil penalties of $5,000 to $11,000 per false claim. Each time an unauthorized party uses an EBT card constitutes a false claim to the United States subjecting the party to treble damages and civil penalties. The complaint in this case alleges that Defendants engaged in at least 49 fraudulent transactions. Each transaction is a false claim against the United States.
In making today’s announcement, U.S. Attorney Tompkins stated, “The SNAP program is in place to ensure that low income families and individuals are able to buy food staples to combat hunger and prevent malnutrition. Fraud on this program harms not only every American taxpayer but the vulnerable recipients who need it the most. My office will continue to use the False Claims Act to vigorously investigate and prosecute allegations of fraud on important government programs such as SNAP.”
Special Agent in Charge Citizen-Wilcox stated, “USDA-OIG aggressively investigates allegations of Supplemental Nutrition Assistance Program (SNAP) fraud with the goal of rooting out such activity to ensure that taxpayers’ funds are reserved for those who are truly in need. We would like to thank U.S. Attorney’s Office for their efforts in helping to combat SNAP fraud.”
The case was investigated by USDA-OIG. The prosecution was handled by Assistant United States Attorneys Paul B. Taylor and Jonathan H. Ferry of the U.S. Attorney’s Office for the Western District of North Carolina.
Charlotte Man Sentenced to 15 Years in Prison for Firearms OffenseRead the Press Release
CHARLOTTE, N.C. – A Charlotte man has been sentenced to 15 years in prison for a firearms related offense announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. On Wednesday, January 23, 2013, U.S. District Court Judge Max O. Cogburn, Jr. sentenced Ramsey Dean Lewis, 44, of Charlotte to serve 180 months in prison, followed by three years of supervised release.
U.S. Attorney Tompkins is joined in making today’s announcement by Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Rodney D. Monroe of the Charlotte Mecklenburg Police Department (CMPD).
In July 2011, a criminal bill of indictment charged Lewis with one count of possession of a firearm by a convicted felon. According to filed court documents and statements made in court, on December 8, 2010 Lewis possessed a loaded .22 caliber revolver in the car he was driving. Court records indicate that law enforcement recovered the firearm in the car after the defendant was involved in a car accident. Lewis pleaded guilty to the charge in December 2011.
Lewis’s prior convictions prohibit him from carrying a weapon and he was therefore sentenced as an armed career criminal by the Court.
Lewis has been in federal custody since July 2011. He will be transferred to the custody of the Federal Bureau of Prisons upon the designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the ATF and CMPD. The case was prosecuted by Assistant United States Attorney Robert J. Gleason of the U.S. Attorney’s Office in Charlotte.
Three Charged with Operating Online Counterfeit Credit Card Retailer Responsible for Estimated $34.5 in FraudRead the Press Release
Fakeplastic.net Taken Over By Federal Law Enforcement, Ongoing Investigation Has Led To 11 Additional Arrests
CHARLOTTE, N.C. – Three men who allegedly ran a one-stop online shop selling counterfeit credit cards and holographic overlays, to be used by criminals to make fake identifications, face federal charges in an ongoing investigation that has already resulted in 11 additional arrests, including a customer facing federal charges.
U.S. Attorney Anne M. Tompkins for the Western District of North Carolina and New Jersey U.S. Attorney Paul J. Fishman announced the charges today.
Sean Roberson, 39, of Palm Bay, Fla., who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Fla., and Hugo Rebaza, 31, of Palm Bay, Fla. with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, N.C., with one count of conspiracy to commit mail fraud, wire fraud and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.
U.S. Postal Inspection Service (USPIS) and the FBI assumed control of the website, fakeplastic.net, on Dec. 5, 2013, and made more than 30 controlled deliveries of ordered materials – not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state and local prosecutors across the United States.
U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”
“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”
Inspector in Charge Keith Fixel of USPIS in Charlotte stated, “Protecting the integrity of the nation’s mail system is a top priority for the Postal Inspection Service. Even though these defendants went to great lengths to avoid detection, their scheme was uncovered by Postal Inspectors committed to enforcing the laws that protect the mail from illegal use and bringing to justice those who attempt to compromise the public’s trust in the mail.
“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”
According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:
USPIS and the FBI, assisted by the U.S. Secret Service, have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”) as well as holographic overlays used to create fake driver’s licenses.
Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards – both embossed and unembossed – more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.
Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on Dec. 4, 2013, while he was in the storage space – seizing computers, printers, counterfeit cards, an embosser and other contraband.
Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.
Colbert was a members-only customer of the website, who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on Jan. 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.
Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.
The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.
More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.
The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.
By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features – such as holographic stickers.
At one time the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.
The charges and maximum potential penalties for each count are as follows:
Roberson: charged with conspiracy to commit wire fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense.
Gonzalez, Rebaza and Colbert: charged with conspiracy to commit mail fraud, wire fraud and bank fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense.
Roberson, Gonzalez and Rebaza: charged with conspiracy to traffic in counterfeit goods or services; penalty: 10 years and $2 million fine or twice the gain or loss from the offense.
Roberson: charged with conspiracy to commit fraud and related activity in connection with authentication features; penalty: 20 years and $250,000 fine or twice the gain or loss from the offense
U.S. Attorneys Tompkins and Fishman credited inspectors of USPIS, under the direction of Inspector in Charge Keith Fixel in Charlotte and Maria L. Kelokates in Newark; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents of the Charlotte Division of the U.S. Secret Service under the direction of Special Agent in Charge Russell F. Nelson for the ongoing investigation. The Computer Crimes and Intellectual Property Section of the Justice Department’s Criminal Division is a partner in the prosecution.
U.S. Attorney Tompkins also thanked Chief Kevin Lovelace and the Rutherfordton, N.C. Police Department for the department’s vital role in this case. Chief Lovelace stated, “I would like to commend the efforts of all of our officers involved with this case in ensuring that the information they obtained was shared with the appropriate agencies. Communication between law enforcement agencies plays a vital role in resolving many cases.”
The government is represented in the Western District of North Carolina by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed and in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; and in Washington by CCIPs Trial Attorney Evan Williams.
The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.
The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.
Gonzalez et al Superseding Indictment
The Colbert Complaint
The Roberson Complaint
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Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
Exhibit O
Gastonia Man Handed 6-Month Prison Sentence for Vehicle Emissions FraudRead the Press Release
Defendant Delivered Fraudulent Emissions Certificate to Undercover Agents in Exchange for Cash
CHARLOTTE, N.C. – A Gastonia man was sentenced late Wednesday, January 22, 2014, to serve six months in prison for producing a fraudulent vehicle emissions certificate to undercover agents, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also sentenced Mohammed Hafeez Awan, 52, of Gastonia, to three years of supervised release, six months of which Awan will spend in home confinement. Awan was also ordered to perform 50 hours of community service and to a pay a $1,000 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 License & Theft Bureau).
According to court records and yesterday’s sentencing hearing, Awan is the former owner of Prestige Car Care (Prestige), an automobile repair shop and state licensed vehicle emissions station in Charlotte. In 2005, as a result of a state investigation into illegal emissions inspections, it was determined that Awan and his employees conducted the fraudulent inspections, commonly referred to as “clean scanning,” by connecting Prestige’s emission testing equipment into a designated surrogate vehicle that would pass the state’s emission testing requirements. As a result of that investigation, the NC DMV License & Theft Bureau suspended Prestige’s safety/emissions inspection license for a period of 11 years.
According to yesterday’s sentencing hearing, in September 2011, while Awan’s shop was no longer able to conduct emissions inspections, Awan conspired with Jassim Juburi, a former employee of Central Auto Inspection & Repair in Charlotte to continue this practice. According to court documents, law enforcement agents working undercover paid Awan $150.00 in exchange for a fraudulent vehicle emissions certificate and without ever producing a vehicle to be inspected. The fraudulent emissions test and certificate were generated by Awan’s co-conspirator, Jassim Juburi, a former employee of Central Auto Inspection & Repair in Charlotte. Juburi was previously sentenced to an 18-month prison term for conducting more than 530 illegal “clean scan” 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.
In March 2012, Awan pleaded guilty to one count of conspiracy to violate the Clean Air Act by conducting false vehicle emissions inspections. Awan 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.
The investigation of this case was conducted by the EPA’s criminal investigation division, NC SBI’s Diversion and Environmental Crimes Unit, and 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.
Five Sentenced in Connection with Cigarette Smuggling Ring Operating in North and South CarolinaRead the Press Release
The Defendants Were Caught In ATF And IRS-CI Undercover Investigation Involving More Than 486,000 Cartons Of Purportedly Stolen Cigarettes Worth Over $20 Million
CHARLOTTE, N.C. – Five of twelve conspirators charged with running a cigarette smuggling ring in North and South Carolina were sentenced in U.S. District Court on Wednesday, January 22, 2014 on cigarette trafficking and money laundering charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The smuggling ring was uncovered over the course of “Operation Burn Notice,” a multi-agency investigation into the interstate transport and sales of stolen property and money laundering in Charlotte and Greensboro, N.C. and Columbia, S.C.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department join U.S. Attorney Tompkins in making today’s announcement.
Chief U.S. District Judge Frank D. Whitney handed down the federal sentences ranging from 14 months to 18 years in prison:
• Kamal Zaki Qazah, 35, of Columbia, S.C., was sentenced to 18 years in prison followed by two years of supervised release and ordered to forfeit property associated with his offenses.
• Tha’er Ismail Ayyad, 48, of Kernersville, N.C., was sentenced to 41 months in prison followed by two years of supervised release. Ayyad, a Jordanian national, was also convicted of one count of visa fraud and will be deported upon completion of his sentence.
• Ahmed Ibrahim, age 48, of Columbia, S.C., was sentenced to 30 months in prison followed by two years of supervised release.
• Ziad Hashem Najjar, 47, of Greensboro, N.C., was sentenced to 24 months in prison followed by two years of supervised release.
• Ahmed Samy Hosney Kareem, 35, of Matthews, N.C., was sentenced to 14 months in prison followed by two years of supervised release.
The final defendant in the conspiracy, Nasser Kamal Alquza, 48, of Mt. Pleasant, N.C., will appear before Judge Whitney on January 30, 2014, for his final sentencing and pending forfeiture of property associated with his offenses.
According to the sentencing hearings, trial evidence and other court records:
From about August 2009 to November 2011, the co-conspirators engaged in a cigarette smuggling conspiracy that trafficked more than 486,000 cartons of cigarettes across North and South Carolina with an estimated retail value of $20 million. The co-conspirators paid more than $9.3 million in cash for cigarettes they believed to be stolen from Virginia and Tennessee, and profited by selling them to a network of retail businesses and associates willing to purchase the illegally obtained cigarettes at prices far below market value. The co-conspirators laundered their criminal proceeds through businesses owned by Kamal Qazah and Nasser Alquza in Columbia, S.C.
Kamal Zaki Qazah and Nasser Kamal Alquza were convicted of multiple counts of conspiracy on February 4, 2013, after a seven-day jury trial in federal district court in Charlotte.
The other six defendants involved in the conspiracy were previously sentenced as follows:
• Khaled Fadel Ibrahim, 50, of Charlotte, was sentenced to 60 months in prison and two years of supervised release.
• Wael Mahmoud Salem, 38, of Oakland Gardens, N.Y. was sentenced to 27 months in prison and one year of supervised release.
• Jose Calderon-Silver, 38, of New York, N.Y., was sentenced to one month in prison, six months of home confinement and one year of supervised release.
• Zafer Ramadan Kafozi, 48, of Charlotte, was sentenced to 18 months in prison and two years of supervised release.
• Hesham Rahman, 46, of Charlotte, was sentenced to 21 months in prison and two years of supervised release.
• Murad Ayyad, 33, of Charlotte, was sentenced to one year of probation.
Defendants Qazah, Alquza and Tha’er Ayyad are currently in federal custody. The remaining defendants will be ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
U.S. Attorney Tompkins thanked ATF, IRS-CI and CMPD for their investigation of the case. The prosecution was handled by Assistant United States Attorneys Mike Savage and Jennifer Dillon of the U.S. Attorney’s Office in Charlotte.
Charlotte Woman Sentenced to More Than Three Years in Prison for $730,000 Mail Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – A Charlotte woman was sentenced on Tuesday, January 22, 2013, by U.S. District Court Judge Frank Whitney to 41 months in prison to be followed by three years of supervised release for carrying out a six-year mail fraud scheme against her employer, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The defendant was also ordered to pay restitution in the amount of $737,733.
U.S. Attorney Tompkins is joined in making today’s announcement by Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to filed court documents and court proceedings, Maureen Barbara Mallon, 67, of Charlotte, pleaded guilty in July 2011 to one count of mail fraud. Court documents show that Mallon was employed by an insurance company in Charlotte, as the company’s accounts payable/receivable manager and later as its office manager. From 2004 to 2010, Mallon engaged in a scheme to defraud her employer, court records indicate. According to court documents, Mallon’s position at the insurance company gave her full access to the company’s operating account and made her responsible for various administrative and financial tasks, including processing invoices and remitting payments of insurance premiums to insurance companies underwriting client policies for Mallon’s employer.
Court records indicate that beginning in March 2004 Mallon began issuing duplicate insurance premium payments from her employer’s operating accounts. According to court documents, Mallon would mail one check to the underwriting insurance company and deposit a duplicate check into her personal bank account. Filed court documents show that the duplicate company check was usually made payable to “Amwins Brokerage of the Carolinas,” which was an underwriting insurance company that did business with Mallon’s employer. To facilitate the deposit of the fraudulent checks, Mallon changed the name on the personal bank account to “Maureen B Mallon DBA Amwins Brokerage,” court records show.
According to court records and proceedings, over the course of six years, Mallon deposited approximately $730,000 into her personal bank account, and used the money for personal expenditures, including vehicle expenses and residential rental payments. Mallon was ordered to self-report to the Federal Bureau of Prisons to begin her sentence upon the designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI. The case was prosecuted by Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Sentenced to 60 Years in Prison for Marijuana Trafficking, Money Laundering and Gun OffensesRead the Press Release
CHARLOTTE, N.C. – U.S. District Court Judge Robert J. Conrad, Jr. sentenced today Parker Antron Coleman, 28, of Charlotte to 30 years in prison for marijuana trafficking and money laundering, plus a consecutive 30 years for firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Coleman was also ordered to serve 10 years of supervised release.
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 evidence presented at his trial and other court records, Coleman was the head of a drug trafficking conspiracy that transported and distributed more than four tons of marijuana in the Charlotte area. Court records indicate that Coleman’s suppliers were linked to California-based members of the “Mexican Mafia” drug trafficking organization. According to trial evidence and filed court documents, the drug organization had “couriers” who used commercial flights to travel between the two states, each time transporting approximately $50,000 in cash to California, and returning to Charlotte with approximately 100 pounds of marijuana in checked baggage. An accomplice working at the airport in California assisted the couriers with passing their luggage containing the drugs through airport security. Coleman convinced friends and family members, among others, to act as couriers for him, as well as his own probation officer who became a “lieutenant” in his drug organization. Trial evidence demonstrated that couriers for the organization made well in excess of 100 such round trips.
Court records indicate that on November 2, 2010, law enforcement recovered $117,595 at the airport from two of Coleman’s couriers and approximately 30 pounds of marijuana from the South Park residence of one of Coleman’s co-conspirators. Upon executing a search warrant on the same day, law enforcement also recovered $92,577 in cash, a semi-automatic handgun, large quantities of drug trafficking paraphernalia and money laundering evidence from Coleman’s residence. Coleman initially denied owning the residence however, law enforcement recovered information that tied the property to the defendant, including business records, photographs, and exotic fish and aquarium equipment worth over $15,000.
On November 16, 2010, law enforcement arrested Coleman and seized two handguns hidden in a secret compartment in Coleman’s luxury SUV. Coleman is a convicted felon and is therefore prohibited from carrying and/or owning a firearm.
Coleman’s prosecution stems from operation “Goldilocks,” an Organized Crime Drug Enforcement Task Force (OCDETF) investigation that began in January 2009 and has resulted in the federal prosecution of approximately 70 individuals involved in the drug conspiracy.
“Coleman trafficked tons of marijuana into Charlotte and profited from spreading drugs in the city he grew up in. Today’s sentence is the capstone to a multi-year international drug trafficking investigation that has dismantled a major drug organization and has landed over 60 defendants in federal prison,” said U.S. Attorney Tompkins.
“As the head of a significant drug trafficking organization in Charlotte, the defendant controlled the smuggling and distribution of large amounts of marijuana," said Brock D. Nicholson, special agent in charge of HSI Atlanta, who oversees agency investigations in Georgia and the Carolinas. “Working with great partners and teamwork under the Organized Crime Drug Enforcement Task Force model, HSI special agents and Charlotte-Mecklenburg officers have disrupted and dismantled this cell and crippled their operations in North Carolina and California.”
“I commend our agency partners for all their hard work and diligence in helping to dismantle and disrupt drug trafficking activities between here and California,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “With the turn of events, there is now one less drug trafficking organization plaguing our community.”
Coleman’s sentence was enhanced due to prior felony convictions. He has been in local federal custody since his November 2010 arrest and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a facility. Federal sentences are served without parole.
U.S. Attorney Tompkins credited special agents of ICE HSI and CMPD officers for the investigation leading to today’s sentence. The prosecution was handled by Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Two Charlotte Men Sentenced to Prison for Operating Separate Ponzi SchemesRead the Press Release
The Defendants Falsely Promised Victims Huge Profits From Trading In The Commodities Futures Market
CHARLOTTE, N.C. – Two Charlotte men were sentenced late Thursday, January 17, 2013, for carrying out two separate Ponzi schemes involving trading in the commodities futures market, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Joining U.S. Attorney Tompkins in making today’s announcement are Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and North Carolina Secretary of State Elaine F. Marshall.
Mitchell Huffman
Mitchell Brian Huffman, 52, of Charlotte, was sentenced by Chief U.S. District Court Judge Robert J. Conrad, Jr. to serve 60 months in prison, followed by three years of supervised release. Huffman was also ordered to pay restitution to his victims, the final amount of which will be determined by the Court within 60 days. During the sentencing hearing, Judge Conrad also ordered the defendant to forfeit approximately $2.5 million the Court deemed as proceeds of Huffman’s criminal conduct.
In September 2011, Huffman pleaded guilty to engaging in a $2.5 million Ponzi scheme. According to filed court documents and court proceedings, from 2006 through in or about March 2011, Huffman raised approximately $3.2 million dollars from his victims by falsely claiming that he was generating annual rates of return between 100% to 150% using his proprietary trading program to trade in the commodities futures market.
Based on information in court documents and court proceedings, Huffman directed his victims to transfer their funds to his personal bank account. Court records show that of the $3.2 million Huffman fraudulently obtained from his victims, he only utilized a little over 50% of the funds (approximately $1.7 million) to engage in trading activities. To conceal the fraudulent scheme, Huffman generated bogus monthly statements to his victims which falsely reflected fictitious profits from trading activities, when in fact Huffman sustained massive losses. During this time, Huffman made also Ponzi payments of approximately $834,160 to victim investors, falsely representing that these payments were profits from trading activity.
Huffman also used the victims’ funds, without their knowledge or consent, for personal expenses, including to purchase multiple vehicles, take luxurious vacations, and to make charitable contributions.
At the sentencing hearing, Judge Conrad said that Huffman took away “retirements, college educations funds and houses” from his victims and caused them to go through “financial hardships and depression.”
Robert Moss
Robert S. Moss, 49, also of Charlotte, was sentenced to 57 months in prison followed by three years of supervised release, and was ordered to pay $1,460,121 as restitution. Moss pleaded guilty in September 2011 to one count of commodities fraud, for engaging in a $1.5 million Ponzi scheme. From at least in or about 2001 through in or about February 2009, Moss solicited investments totaling approximately $3.1 million from victims nationwide. Court records show that Moss lured his victims by falsely claiming that he was generating substantial profits through options trading in the commodities futures market. Filed documents indicate that Moss told his victims that he had not had a losing year trading since 1993, that he generated annual returns of between 22% and 41% annually, and that none of his investors had ever lost any capital. In fact, between 2003 and 2009, Moss suffered losses of $342,264 in the commodities futures market. Moss also advised the victims that his liquid assets were more than three times the size of his trading account when in fact they were not.
According to filed documents and statements made during court proceedings, in exchange for their investment Moss provided his victims with promissory notes either guaranteeing annual rates of return of 16 to 18%, or a variable rate tied to the level of Moss’ trading profits. To conceal his scheme, Moss made Ponzi payments to his victims totaling $1.6 million and falsely represented that these payments were the result of successful trading profits. In addition, Moss unlawfully used money invested by the victims for personal expenditures such as mortgage payments, groceries, and other household expenses.
Both Huffman and Moss have been ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation of Huffman was handled by the FBI. The investigation of Moss was handled by the FBI and the Securities Division of the N.C. Secretary of State’s office. U.S. Attorney Tompkins also acknowledges the invaluable assistance of the Commodities Futures Trading Commission in both cases.
Both cases are related to the work of Charlotte’s Securities and Financial Crimes Task Force, a group made up of the FBI, the securities division of the N.C. Secretary of State’s office, the N.C. Attorney General's Office, the IRS criminal division, the U.S. Postal Inspection Service, the Mecklenburg County District Attorney's Office, the Securities and Exchange Commission, and the U.S. Attorney’s Office. The multi-agency Task Force promotes collaboration between the agencies in the fight against corporate fraud, insider trading, accounting fraud, market manipulation schemes, and other finance-related crimes.
The prosecutions were handled by Assistant United States Attorney Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte.
Nine Charlotte Men Have Been Arrested and Charged with Drug ConspiracyRead the Press Release
A Charlotte Woman Was Charged With Maintaining Drug-Involved Premises
CHARLOTTE, N.C. – Nine Charlotte men were arrested today on federal drug charges during an early morning roundup conducted by the Drug Enforcement Administration and the Charlotte Mecklenburg Police Department, 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 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).
Today’s arrests and indictment are the result of “Operation Enderly Park,” a six-month investigation conducted jointly by the DEA and CMPD to target and reduce violent crime in Mecklenburg County, with special emphasis placed on Enderly Park neighborhood in northwest Charlotte.
The defendants were apprehended early morning on Friday and were charged with multiple counts of conspiracy to possess with intent to distribute crack cocaine, marijuana and cocaine. The federal indictment was filed on Wednesday, January 16, 2013, and was unsealed today in U.S. District Court in Charlotte following the arrests.
Those arrested and charged today are Theodore Falls, 38, Maurice Crawford, 32, Derrick Lowery, 31, Derrick Owens, 35, Aaron Ligon, 48, Mario Wilson, 23, Cadaryl Drayton, 25, Curtis Smith, 36, and Lavar Rodgers, 31, all of Charlotte. Mary Falls, 70, also of Charlotte, was arrested and charged today with one count of maintaining drug-involved premises. Another defendant named in the indictment, Nathaniel Washington, 30, of Charlotte, has not been arrested yet.
In making today’s announcement U.S. Attorney Tompkins thanked the DEA and CMPD for today’s successful operation. U.S. Attorney Tompkins noted, “Today’s arrests are the result of a coordinated effort of law enforcement partners to focus our resources on a hot spot for drug trafficking. I want to assure the public that we remain steadfast in our commitment to making our streets safer and to prosecuting those who spread drugs in our communities.”
“Those involved in drug trafficking are simply delivering deadly doses of poison to the community. The perpetrators who distribute these dangerous and deadly chemicals deserve to be prosecuted to the fullest extent of the law and that is what happened with this case today. I would like to thank our law enforcement partners who helped make this investigation a success,” said Special Agent in Charge Sommers, of DEA’s Atlanta Field Division.
“The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be diligent in letting criminals know that these neighborhoods are not a safe haven for their illegal activities,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “We are committed to utilizing all our resources to impact crime in the community.”
All defendants, except Ligon and Smith, had their initial appearances today in U.S. District Court before U.S. Magistrate Judge David S. Cayer and were detained pending their detention hearings. The defendants charged with drug conspiracy face a statutory minimum prison term of five years and a maximum of 40 years, and a $5 million fine. Mary Falls faces a maximum prison term of 20 years and a $500,000.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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.
Former Minister Pleads Guilty in North Carolina to Engaging in Illict Sexual Conduct in HaitiRead the Press Release
CHARLOTTE, N.C. – A former minister pleaded guilty today in North Carolina to engaging in illicit sexual conduct in Haiti, announced Assistant Attorney General Lanny A. Breuer, U.S. Attorney for the Western District of North Carolina Anne M. Tompkins and 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.
Larry Michael Bollinger, 67, of Gastonia, N.C., pleaded guilty before U.S. District Judge David S. Cayer in the Western District of North Carolina to two counts of engaging in illicit sexual conduct in a foreign place. Bollinger was charged in an indictment filed on May 15, 2012.
According to filed court documents and court proceedings, Bollinger was a former Lutheran minister who performed missionary work in Haiti. Court records show that Bollinger regularly travelled to Haiti and served as the Haiti director for a Lutheran charity. Bollinger admitted that from about August 2009 to October 2009, he sexually molested four Haitian females, between the ages of 11 and 16. According to court records, one of the victims said that Bollinger offered to give her food and money in exchange for sexual acts.
Bollinger has been in federal custody since he was charged in May 2012. Each count of engaging in illicit sexual conduct in a foreign place carries a maximum penalty of 30 years in prison and a $250,000 fine. A sentencing date for Bollinger has not been set yet.
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.
Former Finance Directory Agrees to Plead Guilty to Embezzling More Than $435,000 from the City of CherryvilleRead the Press Release
Another Former City Employee Pleads Guilty to Embezzling Over $92,900
CHARLOTTE, N.C. – A criminal bill of information was filed today in U.S. District Court charging Cherryville’s former Finance Director, Bonny Verley Alexander, with embezzling over $435,000 from the City of Cherryville, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Another former Cherryville employee, Jennifer Neal Hoyle, has also been charged with embezzling over $92,900 from the city.
Alexander, 58, and Hoyle, 34, both of Cherryville, have agreed to plead guilty to the charges stemming from a joint federal and state investigation into misappropriated city funds.
Roger A. Coe, Acting 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.
According to the bill of information and the filed plea agreement, up until her retirement in December 2011, Alexander was employed by the City of Cherryville as its Finance Director and supervised the city’s Finance Department. In that capacity, Alexander oversaw the city’s accounting, financial reporting and treasury divisions, as well as the city’s revenue collections and customer service departments. As the Finance Director, Alexander also had access to and was able to process payroll payments to Cherryville employees, direct payments for city expenses, issue checks on behalf of the city, remove cancelled checks from the city’s records and make adjustments to Cherryville’s electronic accounting systems, court records indicate.
From about August 2005 through December 2011, Alexander embezzled at least $435,294 of Cherryville’s funds and used the money to pay personal expenses. Court documents show that Alexander made weekly payroll payments to herself which were more than 300% of her authorized net pay from the city. In total, Alexander embezzled approximately $309,594 from the City of Cherryville in this manner.
Court records also show that Alexander used city funds to pay for personal expenses, including shopping and travel expenses, she charged on her personal American Express credit card by issuing checks from the City of Cherryville made out to American Express. According to filed documents, Alexander issued the city checks and forged on those checks the signature of another Cherryville employee who was the authorized signatory on the account. Then, to avoid detection, after the forged checks had cleared and were returned by the bank, Alexander would remove them from the city’s records, court documents show. Alexander issued and forged a total of 26 checks from the City of Cherryville totaling approximately $97,000 to pay off personal charges on her American Express card.
Hoyle, a former Senior Customer Service Representative/Utility Supervisor for the City of Cherryville, has been charged with and has agreed to plead guilty to three counts of federal program fraud for embezzling approximately $92,922 from the City of Cherryville. According to the federal charging document and the filed plea agreement, Hoyle was responsible for the collection and posting of utility payments made by Cherryville utilities customers. Hoyle, who reported to Alexander, was terminated in May 2012.
According to filed court documents, beginning in January 2008 through May 2011 Hoyle embezzled approximately $92,922 from the City of Cherryville by taking cash payments made by customers paying their utilities bills for her own use. Court records show that Hoyle would accept the cash payments from the customers and issue paper receipts. Hoyle would credit the customers’ accounts with the payment, keep the cash, and then, using her supervisory override privileges, would go in the computer system and delete the transaction, court records show. Court records also show that, in order to avoid any potential customer complaints, Hoyle would create entries in the “extra charge” journal in which she would “write off” the cash amount the customers paid so that bills containing the embezzled amount would not be issued, records show. According to the bill of information, 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.
Alexander is charged five counts of program embezzlement. She has agreed to plead guilty to the charges and faces a maximum term of 10 years in prison and a $250,000 fine per count. Hoyle has agreed to plead guilty to three counts of program fraud. She faces a maximum prison term of 10 years and a $250,000 fine per count. The defendants’ initial appearances and plea hearings will be scheduled by the U.S. District Court.
The investigation into Alexander was handled by the FBI and SBI. 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 Woman Sentenced to 24 Months in Prison for Tax and Mortgage FraudRead the Press Release
CHARLOTTE, N.C. – On Tuesday, January 14, 2014, Chief U.S. District Judge Frank D. Whitney sentenced a Charlotte woman to 24 months in prison for committing tax fraud and mortgage fraud, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Tega Burns, 41, of Charlotte, was also ordered to serve two years under court supervision following her prison term and to pay $201,039.43 in restitution to IRS, $57,450.00 in restitution to Bank of America, and $48,483.00 in restitution to CIT Group Consumer Finance.
U.S. Attorney Tompkins is joined in making today’s announcement by Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CID).
Burns, a/k/a Tega Foy, was the owner of Family Homecare Services, a Charlotte-based company that provided in-home care services in the area from 2007 through 2011. According to filed court documents and yesterday’s sentencing hearing, Burns failed to pay a large part of the employment taxes her company owed for the relevant tax years. Specifically, court records show that during the relevant time period, Burns had an outstanding liability of more than $200,000 relative to the employment taxes. According to statements made during sentencing, Burns utilized nominees, including her son and her step-father, to hide funds from the IRS and to evade payment of the outstanding taxes.
Court records also show that in May 2007, Burns obtained mortgage loans using false information – including fake employment documentation from her company – to purchase two homes in the name of another individual. Both of these homes were eventually foreclosed on, with losses to the banks.
In July 2012, Burns pleaded guilty to one count of failure to account for and pay over employment tax and one count of making a false statement on a loan application.
Burns will be ordered to begin her prison sentence and be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was conducted by IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
Anderson, S.C. Attorney Pleads Guilty to ObstructionRead the Press Release
Defendant Made False Statements To Federal Authorities During Investigation Of Client Indicted on Drug Conspiracy Charges
GREENVILLE, S.C. – Charles Anderson, an attorney in Anderson, S.C., pleaded guilty to obstruction charges in federal court today before U.S. District Judge Michelle Childs in Greenville, S.C., announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Greenville District Office, and 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 join U.S. Attorney Tompkins in making today’s announcement.
According to court documents and today’s plea hearing, Anderson, 44, pleaded guilty to one count of making materially false statements to a department or agency of the United States. Court records show that Anderson represented Lonnie Maddox, who is currently facing federal drug charges in South Carolina, stemming from a large-scale cocaine conspiracy. Court records indicate that on five occasions from February 21 to March 15, 2013, Anderson lied to federal agents concerning his knowledge of the whereabouts of two vehicles Maddox had purchased with the illegal proceeds of his drug dealings.
According to the charging documents and information presented in court, Anderson knew where Maddox’s Yukon Denali sport utility vehicle was located, but repeatedly denied this fact to DEA and HSI agents. Anderson further lied to law enforcement about his participation in moving the Denali, which was ultimately recovered at the residence of Anderson’s law partner. Court records also show that Anderson initially lied to federal agents about possessing another one of Maddox’s vehicles, a classic Chevrolet Chevelle. Anderson later admitted to law enforcement that he had in fact possessed the Chevelle but then lied about the location from where he had obtained the vehicle.
“Lawyers are officers of the court, sworn to protect the law and adhere to a professional code of ethics. Anderson’s actions were illegal, unethical but most importantly compromised the integrity of our legal system. Any attorney who puts personal gain above professional responsibility has no business practicing law,” said U.S. Attorney Tompkins.
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division commented, “Drug trafficking often leads to morally debased actions of those involved, which was the case during this investigation. This attorney was licensed to practice law, but this does not mean that he was above the law. Now, the full measure of the justice system will appropriately deal with his criminal actions. This investigation would have not been possible without the collaborative efforts of our local, state and federal law enforcement counterparts.”
“Mr. Anderson overstepped his role as a zealous advocate for his client, which led him afoul of the law,” said Brock D. Nicholson, Special Agent in Charge of ICE Homeland Security Investigations in Georgia and the Carolinas. “By lying to federal investigators, Mr. Anderson betrayed his responsibilities as an officer of the court and will pay a heavy price for his malfeasance.”
Anderson 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 jointly by the DEA and HSI. The prosecution is being handled for the government by Assistant U.S. Attorney J. George Guise 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.
Kings Mountain Man Charged with Armed Robbery of Fast Food Chain Restaurant in CharlotteRead the Press Release
CHARLOTTE, N.C. – James William Lewis, Jr., 31, of Kings Mountain, N.C. faces federal charges in connection with the December 12, 2013 armed robbery of a Charlotte area Jack in the Box restaurant, 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.
A federal criminal complaint filed today in U.S. District Court charges Lewis with one count of Hobbs Act robbery. According to the criminal complaint, on December 12, 2013, Lewis entered the restaurant and asked the manager for money while brandishing a weapon. The manager handed Lewis cash and Lewis fled the scene.
Lewis is currently in federal custody. His initial appearance is set for today at 2:00 p.m. before U.S. Magistrate Judge David S. Cayer. The statutory maximum sentence for Hobbs Act robbery is 20 years imprisonment and a $250,000 fine.
The charges contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation is handled by the FBI and CMPD. The prosecution is being handled for the government by Assistant U.S. Attorney George Guise of the U.S. Attorney’s Office in Charlotte.
Federal Jury Returns Guilty Verdict for Cocaine TraffickerRead the Press Release
Conspiracy With Cartel Connections Involved Over 700 Kilograms Of Cocaine
CHARLOTTE, NC B A Charlotte federal jury convicted today Pedro Oscar Dieguez, also known as “The Cuban,” 48, of Indian Trail, N.C., on cocaine trafficking and related charges, 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 Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Sheriff Eddie Cathey of the Union County Sheriff’s Office (UCSO), and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD).
According to filed court documents and evidence presented at trial:
From about 2004 through 2013, Dieguez – a Cuban national – and his co-conspirators obtained more than 700 kilograms of cocaine from Mexican cartels (or other sources of supply with connections to cartels), transported it using trucks to the Charlotte area, and redistributed it for ultimate sale as crack cocaine. The current street value of that amount of cocaine is in excess of $21,000,000. Dieguez conspired to launder the drug proceeds through bank accounts and the purchase of expensive exotic horses, which he kept on his 16-acre ranch residence in Indian Trail. The defendant also used his ranch to offload shipments of drugs. Following a four-day trial, the Charlotte jury convicted Dieguez of conspiracy to distribute and to possess with intent to distribute cocaine and conspiracy to launder proceeds of drug trafficking.
Dieguez has been in the federal custody since April 24, 2013. Dieguez faces a statutory mandatory minimum sentence of 10 years to life in prison, and a fine of up to $10,000,000. A sentencing date has not been set yet.
The case was investigated by the DEA in Charlotte, UCSO, and CMPD. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.
Former Clinic Owner Pleads Guilty to $3.4 Million Medicaid Fraud SchemeRead the Press Release
Fraudster Bought Luxury Vehicles and Jewelry with Stolen Funds
CHARLOTTE, N.C. – A Charlotte man pleaded guilty today for his involvement in a health care fraud scheme that attempted to defraud Medicaid of at least $3.4 million for sham mental and behavioral health services, 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 Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).
Ronnie Lorenzo Robinson, 36, of Charlotte, pleaded guilty today before U.S. Magistrate Judge David S. Cayer to two counts of health care fraud. At today’s plea hearing, Robinson admitted that from in or about 2007 to in or about 2011, he engaged in a scheme to defraud Medicaid of at least $3.4 million in fraudulent reimbursement payments from false claims submitted to Medicaid. According to filed court documents and statements made in court, Robinson owned and operated Peaceful Alternative Resources, Inc. (PAR), which held itself out as a non-profit provider of mental health and mentoring services and maintained offices in Charlotte, Mooresville and Greensboro, N.C. Robinson and his company defrauded Medicaid by submitting false claims to Medicaid stating that licensed clinicians allegedly employed by PAR had performed services when those clinicians had not. The claimed services, if provided at all, were provided by unlicensed individuals who were not approved by Medicaid to provide such services and, in many instances, the claimed services were not provided at all.
According to filed documents, Robinson and his company misappropriated the Medicaid provider numbers of at least three licensed clinicians who performed some work for PAR. Robinson then used these Medicaid provider numbers to seek reimbursement for services that the licensed clinicians did not perform. Court documents indicate that Robinson obtained Medicaid beneficiary information from other organizations. Although employees associated with PAR sometimes provided services to the Medicaid recipients, these services typically were not provided by licensed professionals and were little more than mentoring services, which Medicaid does not reimburse. Court documents indicate that Robinson attempted to defraud Medicaid of approximately $3.4 million and received approximately $3.1 million in payments.
During the course of the investigation, law enforcement agents seized a 2004 Land Rover Range Rover HSE, a 2007 Chevrolet Suburban, a 2007 Mercedes S550 and a 1 5/8 carat oval ladies diamond ring, purchased with money fraudulently obtained from Medicaid. Agents also seized a classic 1972 Chevrolet Chevelle-Malibu, a 2006 Chrysler 300 and approximately $660,000 in funds in connection with the fraud. Robinson has agreed to forfeit all of these assets as part of his plea.
“This type of blatant abuse of a federally-funded system simply will not be tolerated,” said U.S. Attorney Tompkins. “The money Robinson stole from Medicaid was intended to cover the medical expenses of needy North Carolinians, including children, not to fund the defendant’s penchant for cars and jewelry. My office will continue to hold accountable those who engage in schemes that rip off government health care programs supported by taxpayer dollars.”
“Health care fraud increases costs for everyone and degrades the integrity of our health care system. The FBI is committed to rooting out this type of fraud and holding those accountable who attempt to illegally manipulate the system that so many Americans count on,” said John A. Strong, Special Agent in Charge of the Charlotte Division of the FBI.
“Fraud like this hurts patients who really need care, wastes tax dollars, and drives up health care costs for everyone. Our investigators and attorneys will continue to work with their federal partners to go after health care fraud,” said Attorney General Roy Cooper, who oversees North Carolina’s MID.
At sentencing, Robinson faces a maximum term of 10 years in prison and a $250,000 fine for each count of conviction. In his plea agreement, Robinson has agreed to pay full restitution to Medicaid for any losses resulting from his criminal scheme. The final restitution amount will be determined by the Court at Robinson’s sentencing hearing, which has not been scheduled yet. Robinson remains on bond pending sentencing.
The investigation into Robinson was handled by the FBI and MID. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Shelby Woman Pleads Guilty to Defrauding Medicaid of $8 Million, Aggravated Identity Theft and Tax FraudRead the Press Release
Woman Steals Identity of Therapist to Submit False Claims to Medicaid
CHARLOTTE, N.C. – A Shelby woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, of Shelby, N.C., also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.
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); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services which were never provided.
According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker, and in other instances, stole the identity of Medicaid-approved providers, in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.
Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.
As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 which intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.
Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges, and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Brewton’s sentencing hearing, which has not been scheduled yet.
Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012 and is awaiting sentencing.
The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the Task Force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. 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.
Shelby Woman Pleads Guilty to Defrauding Medicaid of $8 Million, Aggravated Identity Theft and Tax FraudRead the Press Release
Woman Steals Identity of Therapist to Submit False Claims to Medicaid
CHARLOTTE, N.C. – A Shelby woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, of Shelby, N.C., also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.
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); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services which were never provided.
According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker, and in other instances, stole the identity of Medicaid-approved providers, in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.
Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.
As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 which intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.
Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges, and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Brewton’s sentencing hearing, which has not been scheduled yet.
Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012 and is awaiting sentencing.
The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the Task Force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. 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.
Federal Judge Sentences Former Minister to 25 Years in Prison for Engaging in Illicit Sexual Contact in A Foreign PlaceRead the Press Release
The Gaston County Man Abused Minors While On Mission Trips In Haiti
CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. sentenced a former minister to 25 years in prison today for engaging in illicit sexual conduct while on mission trips in Haiti, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and 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.
Larry Michael Bollinger, 68, of Gastonia, N.C., was also ordered to serve a lifetime under court supervision following his prison term and to register as a sex offender. Bollinger pleaded guilty in January 2013 to two counts of engaging in illicit sexual conduct in a foreign place.
According to filed court documents and today’s sentencing hearing, Bollinger was a former minister who performed missionary work in Haiti. Court records show that Bollinger travelled regularly to Haiti because of his involvement with the Lazarus Project, a charity that supports two charitable organizations in the country, the Hope House and The Village of Hope School. According to court records and court proceedings, from in or about August 2009 to October 2009, Bollinger sexually molested four Haitian females, between the ages of 11 and 16. Court records indicate that one of the victims said that Bollinger offered to pay her food and money in exchange for sexual acts.
“Bollinger is a sexual predator who used his missionary work as a cover to hide the heinous sexual abuse he perpetrated on the innocent children of an impoverished country. Prosecutors and law enforcement worked tirelessly to bring this monster to justice, and even though today’s sentence cannot undo the harm Bollinger inflicted upon his young victims, it is a clear message that our justice system will protect children beyond our borders,” said U.S. Attorney Tompkins.
“The defendant betrayed the trust placed in him by his congregation, his charity and, most importantly, by the children he was supposedly helping in Haiti,” said Brock D. Nicholson, Special Agent in Charge of HSI Atlanta, who oversees Georgia and the Carolinas. “For the damage he has caused in these young lives, the defendant has earned every minute of this sentence. HSI special agents will continue to stand strong against child predators who prey upon the innocent, no matter where those children might be found.”
Judge Conrad called Bollinger’s crimes “heinous” before handing down the 25 year prison term following a daylong sentencing hearing. The final restitution amount to Bollinger’s victims will be determined by the Court within the next 90 days.
Bollinger has been in federal custody since he was charged in May 2012. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was conducted by ICE-HSI. 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).
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.