District Not Recorded

A federal jury in the District of Columbia convicted the former Director of Operations of the U.S. Navy’s Military Sealift Command Office in Busan, South Korea, today for his role in a bribery conspiracy and for lying to federal investigators.

According to court documents and evidence presented at trial, Fernando Xavier Monroy, 64, of Brentwood, New York, engaged in a conspiracy to commit bribery with the owner of DK Marine, a South Korea-based company that provided services to the U.S. Navy, and a former civilian U.S. Navy cargo ship captain. Evidence at trial proved that Monroy conspired to unlawfully provide services for the Navy ship, captained by one of Monroy’s co-conspirators, during a December 2013 port visit in Chinhae, South Korea.

Evidence at trial also proved that Monroy provided a co-conspirator with confidential and other proprietary, internal U.S. Navy information. In exchange for the steering of business and the provision of such information, the co-conspirator paid bribes to Monroy, including cash, personal travel expenses, meals and alcoholic beverages, and the services of prostitutes. Monroy also repeatedly lied to special agents of the Defense Criminal Investigative Service (DCIS) and Naval Criminal Investigative Service (NCIS) during a voluntary interview in July 2019.

Monroy was convicted of conspiracy to commit bribery, bribery, and making false statements. He is scheduled to be sentenced on Nov. 18 and faces a maximum penalty of 25 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division made the announcement.

The DCIS and NCIS investigated the case.

Trial Attorneys Sara Hallmark and Amanda Lingwood of the Justice Department’s Fraud Section are prosecuting the case.

The Department of Justice today announced 56 awards totaling $35.7 million in funding from the Office on Violence Against Women (OVW) as part of the Department’s ongoing efforts to provide direct support and related assistance to victims of sexual assault. Announced in conjunction with the National Sexual Assault Conference, the Sexual Assault Services Formula Grant Program (SASP) awards include funding for each U.S. state, five U.S. territories, and the District of Columbia.

“For nearly two decades, the Justice Department’s Sexual Assault Services Program has demonstrated our commitment to providing comprehensive support to survivors of sexual assault,” said Attorney General Merrick B. Garland. “This grant funding will go directly toward strengthening the efforts of agencies and organizations across the country to provide critical services and care that survivors need and deserve.”

“Over the next year, this SASP grant funding will help tens of thousands of survivors of sexual violence access essential services,” said OVW Acting Director Allison Randall. “It is fitting to announce these awards today: SASP funding helps sexual assault survivors from every walk of life access medical care, crisis intervention, advocacy and counseling, among other services. I am so grateful to the direct service providers who ensure these services are available to survivors and provide trauma-informed care on a daily basis.”

SASP was first authorized by Congress in 2005 and is the nation’s first federal funding stream solely dedicated to providing direct intervention and related assistance to victims of sexual assault. OVW administers SASP funding according to a statutorily determined, population-based formula. States and territories, in turn, subaward the funds to rape crisis centers and other nonprofit, nongovernmental or Tribal agencies that provide direct intervention and related services to adult, youth and child victims of sexual assault.

OVW provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges. Learn more at www.justice.gov/ovw.

A New York woman was arrested today, following an indictment returned by the grand jury earlier this week charging her with filing false tax returns, obstructing the IRS, and willful failure to file tax returns.

According to the indictment, Ehrenfriede Kauapirura, of Brooklyn, filed a false 2015 amended tax return and a false 2016 tax return. On both returns, Kauapirura allegedly reported hundreds of thousands of dollars in fictitious tax withholdings, which purportedly entitled her to refunds of approximately $250,000 for each year. After allegedly determining that Kauapirura’s claims were fraudulent, the IRS began a collections proceeding to recoup the refunds paid out to Kauapirura. To thwart the IRS’s collection efforts, Kauapirura allegedly transferred money from her personal bank account to a bank account owned by a trust that she controlled. Kauapirura also allegedly submitted a bogus $1 million check drawn on a non-existent bank as payment of her tax obligations. In addition, Kauapirura allegedly did not timely file individual tax returns with the IRS for the years 2017 through 2020.

If convicted, Kauapirura faces up to three years in prison for each count of filing false tax returns, three years in prison for obstructing the IRS, and one year in prison for each of four counts of willful failure to file a tax return. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Breon Peace for the Eastern District of New York and Special Agent in Charge Tammy Tomlins Sarah of IRS-Criminal Investigation made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Michael C. Vasiliadis and Kenneth C. Vert of the Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Department of Justice and the Federal Trade Commission yesterday submitted to the Federal Energy Regulatory Commission (FERC) a joint comment urging it not to restore a right of first refusal that would enable incumbent electricity transmission owners to block competitors from bidding to design, construct, and own certain new interstate transmission facilities.

The FERC is considering reinstating the right of first refusal, or ROFR – which was eliminated in certain instances in 2011 – as long as incumbent transmission owners agree to a joint ownership structure with one or more unaffiliated, non-incumbent partners. FERC issued a Notice of Proposed Rulemaking on April 21, 2022. This could mean that the design and construction of certain transmission facilities is less competitive, resulting in higher prices or lower quality. 

“We commend FERC for undertaking this rulemaking, which is aimed at encouraging needed regional transmission planning and construction,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The rulemaking comes at a critical time, when the nation is undertaking major grid modernization efforts, and competition can make transmission design and construction less costly, more resilient, and more innovative for the American consumer. Thus, we urge FERC not to abandon competition, through the reinstatement of a federal right of first refusal, but to first evaluate the effects of its other proposals, which are consistent with competition, on achieving its goals.”

The joint comment addresses the benefits and importance of competition and new entry for the design and construction of interstate electric transmission facilities. These facilities are necessary to ensure robust wholesale electricity markets and interconnect renewable generation facilities. The comment notes that when FERC eliminated the ROFR under certain circumstances in 2011, it recognized the benefits to consumers of having competition for transmission design and construction. The comment urges FERC not to abandon competition, and it cites examples of where competition for transmission design and construction has resulted in lower costs and innovation.

The comment also supports proposals made in FERC’s Notice of Proposed Rulemaking to require that regional transmission planning be done on a sufficiently long-term basis, that planning involve state regulators to reduce disputes over cost allocation, that transmission planning for local projects be more transparent, and that neighboring utilities improve their interregional coordination. The comment also notes other procompetitive solutions offered by stakeholders in the ongoing proceeding, including creating an independent transmission monitor (or regional monitors) to limit the influence of incumbent utilities over the planning process.

FORT WAYNE – Sterling Bastin, 56 years old, of Wawaka, Indiana, was sentenced by United States District Court Judge Holly A. Brady on his plea of guilty to distribution of methamphetamine, announced United States Attorney Clifford D. Johnson.

Bastin was sentenced to a total of 168 months in prison followed by 5 years of supervised release.

According to documents in the case, in December 2020, and February 2021, Bastin sold over 140 grams of methamphetamine to another individual.  In May 2021, law enforcement initiated a traffic stop of the vehicle Bastin was driving.  However, he disregarded emergency lights and sirens, fled from law enforcement at speeds of 100 mph, lost control of his vehicle and spun out into a ditch, striking a stop sign.  Officers seized an additional 3.5 grams of methamphetamine as well as a digital scale from his vehicle.   

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration with the assistance of the Auburn Police Department, the Dekalb County Sheriff’s Department and the Butler Police Department.  The case was prosecuted by Assistant United States Attorney Brent A. Ecenbarger.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results

 

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A Missouri man was indicted yesterday for allegedly leaving a voicemail containing a threat on the personal cell phone of an election official in the Maricopa County Recorder’s Office in Maricopa County, Arizona.

Walter Lee Hoornstra, 50, of Tecumseh, is charged with one count of communicating an interstate threat and one count of making a threatening telephone call.

“These unlawful threats of violence endanger election officials, undermine our electoral process, and threaten our democracy,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “The department’s Election Threats Task Force, working with our partners across the country, remains committed to investigating and prosecuting such illegal threats to ensure that these public servants are able to do their jobs free from intimidation.”

According to the indictment, on or about May 19, 2021, Hoornstra allegedly left the following voicemail message on the personal cell phone of the election official: “So I see you’re for fair and competent elections, that’s what it says here on your homepage for your recorder position you’re trying to fly here. But you call things unhinged and insane lies when there’s a forensic audit going on. You need to check yourself. You need to do your [expletive] job right because other people from other states are watching your ass. You [expletive] renege on this deal or give them any more troubles, your ass will never make it to your next little board meeting.”

“The FBI is committed to vigorously investigating and holding accountable anyone who threatens election workers,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “These public servants protect our fundamental right to vote by administering fair and free elections. Any attempts to interfere with our elections by intimidating election officials, their staffs, and volunteers with threats of violence will not be tolerated.”

If convicted, Hoornstra faces up to five years in prison for making a threatening interstate communication and up to two years in prison for making a threatening telephone call. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

FBI Phoenix is investigating the case.

Trial Attorney Tanya Senanayake of the Criminal Division’s Public Integrity Section is prosecuting the case.

Substantial assistance was provided by the U.S. Attorney’s Office for the District of Arizona and the U.S. Attorney’s Office for the Western District of Missouri.

This case is part of the Justice Department’s Election Threats Task Force. Announced by Attorney General Merrick B. Garland and launched by Deputy Attorney General Lisa O. Monaco in June 2021, the Task Force has led the department’s efforts to address threats of violence against election workers, and to ensure that all election workers — whether elected, appointed, or volunteer — are able to do their jobs free from threats and intimidation. The Task Force engages with the election community and state and local law enforcement to assess allegations and reports of threats against election workers, and has investigated and prosecuted these matters where appropriate, in partnership with FBI field offices and U.S. Attorneys’ Offices throughout the country. A year after its formation, the Task Force is continuing this work and supporting the United States Attorneys’ Offices and FBI Field Offices nationwide as they carry on the critical work that the Task Force has begun. 

Under the leadership of Deputy Attorney General Monaco, the Task Force is led by the Criminal Division’s Public Integrity Section and includes several other entities within the Department of Justice, including the Computer Crime and Intellectual Property Section of the Criminal Division, the Civil Rights Division, the National Security Division, and the FBI, as well as key interagency partners, such as the Department of Homeland Security and the U.S. Postal Inspection Service. For more information regarding the Justice Department’s efforts to combat threats against election workers, read the Deputy Attorney General’s memo.

To report suspected threats or violent acts, contact your local FBI office and request to speak with the Election Crimes Coordinator. Contact information for every FBI field office may be found here: https://www.fbi.gov/contact-us/field-offices/. You may also contact the FBI at 1-800-CALL-FBI (225-5324) or file an online complaint at: tips.fbi.gov. Complaints submitted will be reviewed by the task force and referred for investigation or response accordingly. If someone is in imminent danger or risk of harm, contact 911 or your local police immediately.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law

An alleged cryptocurrency money launderer was extradited this week from the Netherlands to the United States to face charges in the District of Oregon.

Denis Mihaqlovic Dubnikov, 29, a Russian citizen, made his initial appearance in federal court today in Portland. A five-day jury trial is scheduled to begin on Oct. 4.

According to court documents, Dubnikov and his co-conspirators laundered the proceeds of ransomware attacks on individuals and organizations throughout the United States and abroad. Specifically, Dubnikov and his accomplices laundered ransom payments extracted from victims of Ryuk ransomware attacks.

After receiving ransom payments, Ryuk actors, Dubnikov and his co-conspirators, and others involved in the scheme, allegedly engaged in various financial transactions, including international financial transactions, to conceal the nature, source, location, ownership, and control of the ransom proceeds.

In July 2019, Dubnikov allegedly laundered more than $400,000 in Ryuk ransom proceeds. Those involved in the conspiracy laundered at least $70 million in ransom proceeds.

If convicted, Dubnikov faces a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

First identified in August 2018, Ryuk is a type of ransomware software that, when executed on a computer or network, encrypts files and attempts to delete any system backups. Of note, Ryuk can target storage drives contained within or physically connected to a computer, including those accessible remotely via a network connection. Ryuk has been used to target thousands of victims worldwide across a variety of sectors. In October 2020, law enforcement officials specifically identified Ryuk as an imminent and increasing cybercrime threat to hospitals and healthcare providers in the United States.

The FBI’s Portland Field Office is investigating the case.

The Justice Department’s Office of International Affairs handled Dubnikov’s extradition.

Justice Department components who worked on this seizure coordinated their efforts through the department’s Ransomware and Digital Extortion Task Force, which was created to combat the growing number of ransomware and digital extortion attacks.

The Task Force prioritizes the disruption, investigation, and prosecution of ransomware and digital extortion activity by tracking and dismantling the development and deployment of malware, identifying the cybercriminals responsible, and holding those individuals accountable for their crimes. The Task Force also strategically targets the ransomware criminal ecosystem as a whole and collaborates with domestic and foreign government agencies as well as private sector partners to combat this significant criminal threat.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Justice Department announced today that it will monitor the Aug. 16, 2022, federal primary election in certain jurisdictions in the State of Alaska to ensure compliance with the minority language accessibility requirements of the Voting Rights Act of 1965 and the disability accessibility requirements of the Americans with Disabilities Act of 1990. On election day, the Civil Rights Division will be monitoring in the following jurisdictions: Municipality of Anchorage, City and Borough of Juneau, Bethel Census Area, Dillingham Census Area and Kusilvak Census Area. During early/absentee voting, the Division has also monitored in the following jurisdictions:  Municipality of Anchorage, City and Borough of Juneau, Kenai Peninsula Borough, Matanuska-Susitna Borough, Denali Borough, Fairbanks North Star Borough and Yukon-Koyukuk Census Area.

The Division regularly deploys its staff to monitor for compliance with the federal civil rights laws in elections in communities all across the country. In addition, the Division also deploys monitors from the Office of Personnel Management, where authorized by federal court order. 

Individuals can file complaints related to possible violations of the federal voting rights laws by a complaint form on the department’s website https://civilrights.justice.gov/ or by telephone toll-free at 800-253-3931.

Individuals with questions or complaints related to the ADA may call the department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or submit a complaint through a link on the department’s ADA website, at https://www.ada.gov/.

Visit https://www.justice.gov/crt/voting-section for more information about the Voting Rights Act and other federal voting rights laws. Visit https://www.ada.gov/ for more information about the Americans with Disabilities Act.

A 28-count indictment was unsealed today in the Eastern District of California charging a former member of Congress with multiple fraud schemes and campaign contribution fraud.

Terrance John “TJ” Cox, 59, of Fresno, is charged with 15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud, and one count of campaign contribution fraud. 

According to allegations in the indictment, Cox perpetrated multiple fraud schemes targeting companies he was affiliated with and their clients and vendors. Cox created unauthorized off-the-books bank accounts and diverted client and company money into those accounts through false representations, pretenses and promises. From 2013 to 2018, across two different fraud schemes, Cox illicitly obtained over $1.7 million in diverted client payments and company loans and investments he solicited and then stole.

In addition, Cox allegedly received mortgage loan funds from a lender for a property purchase by submitting multiple false representations to the lender, including fabricated bank statements and false statements that Cox intended to live in the property as his primary residence. However, the indictment alleges Cox intended to and did buy the property to rent it to someone else.

According to allegations in the indictment, Cox also fraudulently obtained a $1.5 million construction loan to develop the recreation area in Fresno known as Granite Park. Cox and his business partner’s nonprofit could not qualify for the construction loan without a financially viable party guaranteeing the loan. Cox falsely represented that one of his affiliated companies would guarantee the loan, and submitted a fabricated board resolution which falsely stated that at a meeting on a given date all company owners agreed to guarantee the Granite Park loan. No meeting took place, and the other owners did not agree to back the loan. The loan later went into default causing a loss of more than $1.28 million.

According to allegations in the indictment, when Cox was a candidate for the U.S. House of Representatives in the 2018 election, he perpetrated a scheme to fund and reimburse family members and associates for donations to his campaign. Cox arranged for over $25,000 in illegal straw or conduit donations to his campaign in 2017.

If convicted, C ox faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for wire fraud and money laundering. He faces a maximum statutory penalty of 30 years in prison and a $1 million fine for wire fraud affecting a financial institution and financial institution fraud. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for campaign contribution fraud. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

U.S. Attorney Phillip A. Talbert of the Eastern District of California made the announcement.

The FBI and IRS Criminal Investigation are investigating the case.

Assistant U.S. Attorneys Henry Z. Carbajal III and Jeffrey A. Spivak are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Universal Helicopters Inc. (UHI), a private helicopter flight instructor training company, and Dodge City Community College (DC3), which operates campuses in Dodge City, Kansas, and Chandler, Arizona, have agreed to pay $7.5 million to resolve allegations that they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs (VA) in connection with the helicopter flight instructor training program jointly run by UHI and DC3.

The VA provided financial assistance as part of the Post-9/11 GI Bill to veterans taking classes at the UHI-DC3 helicopter flight instructor program. The United States alleged that from 2013 to 2018, UHI and DC3 made or caused to be made false statements to the VA regarding enrollment in the UHI-DC3 helicopter flight instructor program in order to obtain VA funding. UHI has agreed to pay $7 million and DC3 has agreed to pay $500,000 to settle these allegations. The settlement with DC3 is based on its ability to pay.

“The Post-9/11 GI Bill provides significant educational opportunities to our nation’s veterans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to help safeguard the integrity of VA programs intended for the advancement and benefit of veterans.”

“One of the ways the U.S. government demonstrates gratitude to our veterans is by creating programs intended to create easier paths to accessing higher education,” said U.S. Attorney Duston Slinkard for the District of Kansas. “It’s disheartening that any institution of higher learning would submit inaccurate information in order to improperly receive funds designed to benefit those who serve our nation.”

“This case demonstrates the VA Office of Inspector General’s (OIG) commitment to aggressively pursue schools who target veterans’ education benefits,” said Special Agent in Charge Rebeccalynn Staples of the VA OIG’s Western Field Office. “The VA OIG will continue to work with its law enforcement partners to protect the integrity of VA’s education benefits program and urges anyone with knowledge of possible fraud against VA to contact the OIG’s hotline at 1-800-488-8244.”

As part of the Post-9/11 GI Bill program, the VA provides tuition and fee payments directly to qualifying schools on behalf of eligible veterans. To qualify for the program, among other things, a school is required to certify to the VA that no more than 85 percent of the students for any particular course are receiving VA benefits. This requirement, commonly referred to as the “85/15 Rule,” is intended to prevent abuse of Post-9/11 GI Bill funding by ensuring that the VA is paying fair market value tuition rates since at least 15 percent of the enrolled students would be paying the same rate with non-VA funds. To determine whether it is in compliance with the 85/15 Rule, a school compares the full-time non-VA supported students enrolled in a particular course to the full-time veteran students enrolled in that same course. A separate ratio must be computed for each course of study.

The settlements resolve allegations that from 2013 to 2018, UHI and DC3 falsely certified compliance with the 85/15 Rule when the UHI-DC3 helicopter flight instructor program included certain expensive classes that were taken almost exclusively by veterans. In addition, in its settlement with DC3, the United States alleged that to reach the required 15 percent threshold, DC3 counted part-time students enrolled in only one online class per semester as full-time students, in violation of VA rules.

The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by William Rowe, a veteran and former student in the UHI-DC3 helicopter flight instructor program. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Rowe v. Dodge City Community College, et al., No. 18-cv-01113-TC-GEB (D. Kan.). Rowe will receive $1.125 million as his share of the settlements.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Kansas, with assistance from the VA OIG and the Veterans Benefits Administration, Education Service.

Trial Attorney Jonathan Thrope and Assistant U.S. Attorney Jon Fleenor for the District of Kansas prosecuted the matter.

The claims resolved by the settlements are allegations only and there has been no determination of liability.

A federal jury in the Southern District of Ohio convicted an Ohio physician on Friday for unlawfully distributing opioids from his Martin’s Ferry clinic.

According to court documents and evidence presented at trial, Thomas Romano, 72, of Wheeling, West Virginia, owned and operated a self-named pain management clinic where his clients traveled hundreds of miles to obtain prescriptions for opioids and other controlled substances. For his opioid and other controlled substance prescriptions, Romano only accepted cash—$750 for an initial prescription and $120 for subsequent monthly prescriptions. The evidence offered at trial demonstrated that the prescriptions Romano issued for opioids and other controlled substances greatly exceeded recommended dosages and were in dangerous, life-threatening combinations which served to fuel the addiction of his clients. According to evidence introduced at trial, between January 2015 and June 2019, Romano prescribed over 111,000 pills, including opioids, benzodiazepines, and muscle relaxants, to nine of his clients.

Romano was convicted of 24 counts of unlawful distribution of a controlled substance, outside the usual course of professional practice, and not for a legitimate medical purpose to these nine clients. He faces a maximum penalty of 20 years in prison for each charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. A sentencing date has not yet been set.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Ohio Kenneth L. Parker; Special Agent in Charge J. William Rivers of the FBI Cincinnati Field Office; Special Agent in Charge Orville O. Greene of the DEA’s Detroit Division; and Special Agent in Charge Mario M. Pinto of the Department of Health and Human Service Office of the Inspector General (HHS-OIG) made the announcement.

The DEA, FBI, and HHS-OIG, as well as the Ohio Bureau of Worker’s Compensation and Ohio Board of Pharmacy, investigated this case.

Acting Assistant Chief Andrew B. Barras and Trial Attorney Christopher Jason of the Criminal Division’s Fraud Section are prosecuting the case.

The FBI, working with its state and local partners during two weeks in August, identified and located 84 minor victims of child sex trafficking and child sexual exploitation offenses and located 37 actively missing children during a nationwide enforcement campaign, dubbed “Operation Cross Country.”

“The Justice Department is committed to doing everything in our power to combat the insidious crimes of human trafficking that devastate survivors and their families,” said Attorney General Merrick B. Garland. “I am grateful to the dedicated professionals of the FBI and our law enforcement partners across the country for their tireless work to rescue trafficking survivors, including exploited children, to investigate and prosecute the perpetrators of trafficking crimes, and to provide the services and support that survivors need and deserve.”

The FBI-led nationwide initiative focused on identifying and locating victims of sex trafficking and investigating and arresting individuals and criminal enterprises involved in both child sex and human trafficking.

"Human trafficking is among the most heinous crimes the FBI encounters,” said FBI Director Christopher Wray. “Unfortunately, such crimes—against both adults and children—are far more common than most people realize. As we did in this operation, the FBI and our partners will continue to find and arrest traffickers, identify and help victims, and raise awareness of the exploitation our most vulnerable populations.”

In addition to the identification and location of adolescent victims, the FBI and its partners located 141 adult victims of human trafficking. Agents and investigators also identified or arrested 85 suspects of child sexual exploitation and human trafficking offenses. Those suspects identified will be subject to additional investigation for potential chargers. The average age of victims located in similar operations is approximately 15.5 years old, while the youngest victim discovered during this operation was 11 years old.  

As part of Operation Cross Country XII, FBI special agents, intelligence analysts, victim specialists, and child adolescent forensic Interviewers working in conjunction with 200 state, local, and federal partners and the National Center for Missing and Exploited Children (NCMEC) conducted 391 operations over the two-week period. 

“The success of Operation Cross County reinforces what NCMEC sees every day. Children are being bought and sold for sex in communities across the country by traffickers, gangs and even family members,” said Michelle DeLaune, President and CEO National Center for Missing & Exploited Children “We’re proud to support the FBI’s efforts to prioritize the safety of children.  This national operation highlights the need for all child serving professionals to continue to focus on the wellbeing of children and youth to prevent them being targeted in the first place.” 

Victim specialists provide a “bridge” for victims who are wary of the system, help the victim establish positive relationships with law enforcement, and ensure the human trafficking victim population receives any appropriate resources available to them. Victim specialists also provide services based on the individual needs of human trafficking victims, to include crisis intervention, emergency food and clothing, transportation to receive emergency services, and locating shelter or housing. The task forces in the recent operation included federal, state, local and tribal partners, with efforts in every state and even a few U.S. territories.

Resources: 

• Victim Services Division
• Crimes Against Children
• Department of Justice Child Exploitation and Obscenity Section
• Operation Cross Country 2022

Three Nigerian citizens were extradited from the United Kingdom (UK) and arrived in the United States in relation to their alleged participation in multimillion-dollar cyber-enabled business email compromise (BEC) fraud schemes in the Western District of North Carolina, Southern District of Texas and Eastern District of Virginia. The scams allegedly perpetrated by the defendants and their co-conspirators targeted unsuspecting victims including universities in North Carolina, Texas and Virginia, and attempted to cause more than $5 million in losses.

BEC, also known as “cyber-enabled financial fraud,” is a sophisticated scam often targeting employees with access to company finances, businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. The same criminal organizations that perpetrate BEC also exploit individual victims, often real estate purchasers, the elderly, and others, by convincing them to make wire transfers to bank accounts controlled by the criminals. This is often accomplished by impersonating a key employee or business partner after obtaining access to that person’s email account or sometimes done through romance and lottery scams. BEC scams may involve fraudulent requests for checks rather than wire transfers; they may target sensitive information such as personally identifiable information (PII) or employee tax records instead of, or in addition to, money; and they may not involve an actual “compromise” of an email account or computer network. Foreign citizens perpetrate many BEC scams. Those individuals are often members of transnational criminal organizations, which originated in Nigeria but have spread throughout the world.

Western District of North Carolina

Oludayo Kolawole John Adeagbo aka John Edwards and John Dayo, 43, a Nigerian citizen and UK resident, and Donald Ikenna Echeazu aka Donald Smith and Donald Dodient, 40, a dual UK and Nigerian citizen, are charged with wire fraud conspiracy, money laundering conspiracy and aggravated identity theft for defrauding a North Carolina university (the University) of more than $1.9 million via a business email compromise scheme. The indictment was returned by a federal grand jury in the Western District of North Carolina on April 17, 2019, and was unsealed yesterday following Echeazu’s initial appearance in federal court in Charlotte.

According to allegations contained in the indictment, from Aug. 30, 2016, to Jan. 12, 2017, Adeagbo and Echeazu conspired with other individuals to obtain information about significant construction projects occurring throughout the United States, including an ongoing multi-million-dollar project at the victim University. To execute the scheme, the defendants allegedly registered a domain name similar to that of the legitimate construction company in charge of the University’s project and created an email address that closely resembled that of an employee of the construction company. Using the fake email address, the co-conspirators allegedly deceived and directed the University to wire a payment of more than $1.9 million to a bank account controlled by an individual working under the direction of defendants. Upon receiving the payment, the co-conspirators allegedly laundered the stolen proceeds through a series of financial transactions designed to conceal the fraud.

The wire fraud conspiracy charge and the money laundering conspiracy charge each carry a maximum statutory sentence of 20 years in prison. The aggravated identity theft charge carries a mandatory two-year prison sentence consecutive to any other term imposed.

The FBI Charlotte Field Office conducted the investigation. Assistant U.S. Attorney Graham Billings of the Western District of North Carolina is prosecuting the case.

Southern District of Texas

Oludayo Kolawole John Adeagbo aka John Edwards and John Dayo, 43, a Nigerian citizen and UK resident, is also charged in the Southern District of Texas with conspiracy to commit wire fraud and wire fraud. A federal grand jury returned the indictment March 30, 2022, which was unsealed on Aug. 3, 2022 before he was extradited to the United States. 

From November 2016 until July 2018, Adeagbo allegedly conspired with others to participate in cyber-enabled business email compromises in an attempt to steal more than $3 million from victims in Texas, including local government entities, construction companies and a Houston-area college. The indictment alleges Adeagbo and his co-conspirators registered domain names that looked similar to legitimate companies. They then sent emails from those domains pretending to be employees at those companies, according to the charges. The conspirators allegedly sent emails to clients or customers of the companies they impersonated and deceived those customers into sending wire payments to bank accounts they controlled.

Adeagbo faces up to 20 years in prison, if convicted on the charges.

The FBI Houston Cyber Task Force conducted the investigation with the assistance of the FBI Cyber and Criminal Investigative Divisions. The United Kingdom’s National Crime Agency, Metropolitan Police Service, City of London Police and Crown Prosecution Service also provided substantial assistance. Assistant U.S. Attorney Rodolfo Ramirez for the Southern District of Texas is prosecuting the case along with Trial Attorney Brian Mund of the Justice Department’s Criminal Division Computer Crime and Intellectual Property Section (CCIPS).

Eastern District of Virginia

Olabanji Egbinola, 42, is charged with wire fraud, conspiracy to commit wire fraud, money laundering, and conspiracy to commit money laundering.

According to a criminal complaint issued by the U.S. District Court for the Eastern District of Virginia, from Sept. 26, 2018, to Dec. 26, 2018, Egbinola is alleged to have conspired with others to defraud a Virginia-based university. Egbinola and co-conspirators created and used a fraudulent email account that incorporated the name of a construction company that had a large, ongoing contract with the university. Using this email account, Egbinola and co-conspirators deceived the university into transferring $469,819.49 to a bank account controlled by Egbinola and co-conspirators. That money was quickly laundered and transferred overseas through numerous transactions. Evidence obtained during the investigation showed that Egbinola repeatedly accessed the email account used to defraud the Virginia university.

The FBI Richmond Division conducted the investigation. Assistant U.S. Attorney Brian Hood of for the Eastern District of Virginia is prosecuting the case.

All three defendants were arrested April 23, 2020, by UK authorities at the request of the United States and ordered extradited on Sept. 3, 2021. All three defendants filed appeals, all of which were rejected by the UK High Court on July 12, 2022.

The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of all three defendants. The U.S. Marshals Service also assisted by transporting the defendants from the UK to the United States.

Victims are encouraged to file a complaint online with the IC3 at bec.ic3.gov. The IC3 staff reviews complaints, looking for patterns or other indicators of significant criminal activity, and refers investigative packages of complaints to the appropriate law enforcement authorities in a particular city or region. The FBI provides a variety of resources relating to BEC scams through the IC3, which can be reached at www.ic3.gov. For more information on BEC scams, visit: https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/business-email-compromise.

The charges contained in an indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal grand jury in the District of New Jersey returned an indictment today charging four New Jersey men with narcotics distribution and money laundering offenses.

According to court documents, William Panzera, 49, of North Heldon; Thomas Padovano, 48, of Newark; Bartholomew Padovano, 71, of Newark; and Sean Tighe, 46, of Kearny; are alleged members of a drug trafficking organization that sent money and digital currency to China to purchase fentanyl analogues, a schedule I controlled substance, and synthetic cathinones, a schedule I controlled substance, also known as “bath salts,” to distribute in the United States. In addition, Panzara set up a shell company to send funds to China to purchase fentanyl analogues. 

The defendants are alleged to have initially received approximately two to three kilograms of narcotics at a time, concealed in parcels sent through the mail, before they began importing larger quantities of narcotics. According to court documents, law enforcement intercepted and seized one of these shipments, which contained approximately 50 kilograms of 4-Fluoroisobutyrylfentanyl fentanyl or 4-FIBF, a controlled substance analogue of fentanyl. Law enforcement also seized an additional approximately 18 kilograms of 4-FIBF from a location in Newark, where the defendants had concealed the drugs received from a prior shipment from China.

As alleged in the indictment, the defendants pressed the fentanyl-related substances into pills that resembled commercial pharmaceutical products and sold them. The indictment also alleges that they made cash deposits into their bank accounts to conceal the earnings from their illegal drug trafficking activities. 

Defendant Panzara, Thomas Padovano, Bartholomew Padovano, and Tighe, were charged with drug trafficking conspiracy and international promotional money laundering conspiracy. Additionally, defendants Thomas Padovano and Bart Padovano were also charged with domestic concealment money laundering conspiracy. If convicted on the narcotics offenses in Count One, the defendants face a mandatory minimum sentence of 10 years and a maximum sentence of life imprisonment. If convicted on the money laundering offenses in Counts Two and Three, the defendants face a maximum sentence of 20 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and U.S. Attorney Philip R. Sellinger made the announcement.

Homeland Security Investigations (HSI), with assistance from the U.S. Postal Inspection Service and the Federal Bureau of Investigation, are investigating the case.

Trial Attorneys Stephen Sola and Michael Khoo of the Justice Department’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorney Sammi Malek of the District of New Jersey are prosecuting the case. 

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal jury in the Northern District of Illinois convicted two former precious metals traders at JPMorgan Chase & Co. (JPMorgan) today of fraud, attempted price manipulation, and spoofing in a multi-year market manipulation scheme of precious metals futures contracts that spanned over eight years and involved thousands of unlawful trading sequences.

According to court documents and evidence presented at trial, Gregg Smith, 57, of Scarsdale, New York, was an executive director and trader on JPMorgan’s precious metals desk in New York. Michael Nowak, 47, of Montclair, New Jersey, was a managing director and ran JPMorgan’s global precious metals desk.

The evidence at trial showed that between approximately May 2008 and August 2016, the defendants, along with other traders on the JPMorgan precious metals desk, engaged in a widespread spoofing, market manipulation, and fraud scheme. The defendants placed orders that they intended to cancel before execution in order to drive prices on orders they intended to execute on the opposite side of the market. The defendants engaged in thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts traded through the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc. These deceptive orders were intended to inject false and misleading information about the genuine supply and demand for precious metals futures contracts into the markets.

“Today’s jury verdict demonstrates that those who seek to manipulate our public financial markets will be held accountable and brought to justice,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “With this verdict, the Department has secured convictions of ten former traders at Wall Street financial institutions, including JPMorgan, Bank of America/Merrill Lynch, Deutsche Bank, The Bank of Nova Scotia, and Morgan Stanley. These convictions underscore the Department’s commitment to prosecuting those who undermine the investing public’s trust in the integrity of our commodities markets.”

“For years the defendants allegedly placed thousands of false orders for precious metals, creating a ruse that lured others into making disadvantageous trades” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “Today’s conviction demonstrates that no matter how complex or long-running a scheme is, the FBI is committed to bringing those involved in crimes like this to justice.”

Following a three-week trial, Smith was convicted of one count of attempted price manipulation, one count of spoofing, one count of commodities fraud, and eight counts of wire fraud affecting a financial institution. Nowak was convicted of one count of attempted price manipulation, one count of spoofing, one count of commodities fraud, and 10 counts of wire fraud affecting a financial institution. Sentencing dates have not yet been set.

Two other former JPMorgan precious metals traders, John Edmonds and Christian Trunz, were previously convicted in related cases. In October 2018, Edmonds pleaded guilty in the District of Connecticut to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, price manipulation, and spoofing. In August 2019, Trunz pleaded guilty in the Eastern District of New York to one count of conspiracy to engage in spoofing and one count of spoofing. Edmonds and Trunz are awaiting sentencing.

In September 2020, JPMorgan admitted to committing wire fraud in connection with: (1) unlawful trading in the markets for precious metals futures contracts; and (2) unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds. JPMorgan entered into a three-year deferred prosecution agreement through which it paid more than $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with parallel resolutions by the Commodity Futures Trading Commission and the Securities Exchange Commission announced on the same day.

The FBI’s New York Field Office investigated the case. The Commodity Futures Trading Commission’s Division of Enforcement provided assistance in this matter.

Market Integrity & Major Frauds Unit Chief Avi Perry and Trial Attorneys Matthew Sullivan, Lucy Jennings, and Christopher Fenton of the Criminal Division’s Fraud Section are prosecuting the case. 

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-fraud/victim-witness-program for more information.

A federal jury in the Eastern District of Kentucky convicted a Louisiana man today for his attempted murder of a man at the direction of the violent prison gang, Aryan Circle.

Evidence presented at trial showed that Mitchell Farkas, aka Lifter, 52, of Baton Rouge, along with Johnathan Gober, stabbed another inmate, who the Aryan Circle believed had violated gang rules, while all were housed at federal prison U.S. Penitentiary (USP) Big Sandy in Martin County, Kentucky.

According to court documents and evidence presented at trial, the Aryan Circle is a violent, white-supremacist, prison gang with hundreds of members operating throughout the country, both inside and outside of prisons. The Aryan Circle enforces its rules and promotes discipline among its members, prospects, and associates through threats, intimidation, assaults, and murder.

The jury convicted Farkas of Violent Crimes in Aid of Racketeering (VICAR) attempted murder, VICAR assault with intent to do serious bodily harm, and attempted murder and assault with intent to do serious bodily harm. He is scheduled to be sentenced on Dec. 5 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Gober was sentenced on Dec. 21, 2021, to 10 years in prison.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated this case, with the assistance of the Federal Bureau of Prisons, the Texas Department of Public Safety, the Houston Police Department – Gang Division, and the Montgomery County (TX) Precinct One Constable’s Office.

Trial Attorney Rebecca Dunnan of the Justice Department’s Organized Crime and Gang Section and Assistant U.S. Attorney Gregory Rosenberg of the Eastern District of Kentucky are prosecuting the case.

New Trade Ship Management S.A. (New Trade), a vessel operating company, and vessel Chief Engineer Dennis Plasabas pleaded guilty today in San Diego, California, for maintaining false and incomplete records relating to the discharge of oily bilge water from the bulk carrier vessel Longshore.

New Trade and Plasabas admitted that oily bilge water was illegally dumped from the Longshore directly into the ocean without being properly processed through required pollution prevention equipment. Oily bilge water typically contains oil contamination from the operation and cleaning of machinery on the vessel. The defendants also admitted that these illegal discharges were not recorded in the vessel’s oil record book as required by law. Specifically, on two separate occasions between October and December 2021, Chief Engineer Plasabas, who was employed by New Trade, ordered lower-ranking crew members to use a portable pneumatic pump and hose to bypass pollution prevention equipment by transferring oily bilge water from the vessel’s bilge holding tank to the vessel’s sewage tank, from where it was discharged directly into the ocean. Plasabas then failed to record these improper transfers and overboard discharges in the vessel’s oil record book. Additionally, in order to create a false and misleading electronic record as if the pollution prevention equipment had been properly used, Plasabas directed lower-ranking crew members to pump clean sea water into the vessel’s bilge holding tank in the same quantity as the amount of oily bilge water that he had ordered transferred to the sewage tank. Plasabas then processed the clean sea water through the vessel’s pollution prevention equipment as if it was oily bilge water in order to make it appear that the pollution prevention equipment was being properly used when in fact it was not. The electronic records indicate that approximately 9,600 gallons of clean sea water were run through the pollution prevention equipment.  

“This case demonstrates our commitment to investigating and prosecuting environmental crimes occurring at sea, no matter how wrongdoers may try to cover them up,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The Department of Justice will continue to work with our partner agencies to ensure polluters are held fully accountable.”   

“We are committed to protecting our environment from people who cause immeasurable harm with short cuts,” said U.S. Attorney Randy Grossman for the Southern District of California. “This was a very calculated plan to violate the rules, and today the offenders are being held to account.” Grossman thanked the prosecution team and the U.S. Coast Guard for their excellent work on this case.

“This prosecution highlights the U.S Attorney’s Office and the U.S. Coast Guard’s dedication in safeguarding our oceans against those that seek to deliberately harm our natural resources,” said Captain James W. Spitler, Sector Commander of the Coast Guard Sector San Diego. “Illegal dumping of oil and falsification of oil record books are egregious violations. Today’s guilty plea should serve as a reminder that the Coast Guard and our partners at the Department of Justice will work tirelessly to hold accountable those that seek to deliberately discharge oil and falsify ship records.”

New Trade and Plasabas each pleaded guilty to a felony violation of the Act to Prevent Pollution from Ships for failing to accurately maintain the Longshore’s oil record book. Under the terms of the plea agreement and subject to court approval, New Trade will pay a total fine of $1,100,000 and serve a four-year term of probation, during which any vessels operated by the company and calling on U.S. ports will be required to implement a robust Environmental Compliance Plan. Sentencing for the defendants is currently set for Nov. 18.

This case was investigated by the U.S. Coast Guard Sector San Diego and the U.S. Coast Guard Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Melanie K. Pierson for the Southern District of California and Senior Trial Attorney Stephen Da Ponte of the Justice Department’s Environment and Natural Resources Division, Environmental Crimes Section.

Three people were arrested today on criminal charges in three separate indictments filed in the District of Idaho. These charges relate to the defendants’ alleged roles in fraudulently obtaining and misusing Paycheck Protection Program (PPP) loans.

According to court documents, Khadijah Chapman, 58, of Atlanta; Daniel Labrum, 41, of South Jordan, Utah; and Eric O’Neil, 57, of Bethel, Connecticut, are charged with fraudulently obtaining PPP loans for fictitious businesses in 2021. The defendants, along with others, allegedly falsified information and submitted fraudulent documents to collectively obtain over $2.4 million in relief funding guaranteed by the Small Business Administration (SBA) under the Coronavirus Relief, Aid, and Economic Security (CARES) Act for small businesses struggling with the economic impact of COVID-19. 

Chapman and O’Neil are each charged with one count of bank fraud, and Labrum is charged with five counts of bank fraud and one count of engaging in monetary transactions with criminally derived proceeds for their roles in the scheme. If convicted, Chapman, Labrum, and O’Neil each face a maximum penalty of 30 years in prison for each count of bank fraud. Labrum additionally faces a maximum of 10 years in prison for engaging in monetary transactions with criminally derived proceeds. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Joshua D. Hurwit for the District of Idaho; Assistant Director Luis Quesada of the FBI’s Criminal Investigation Division; Special Agent in Charge Stephen Belongia of the FBI’s Buffalo Field Office; Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI); and Inspector in Charge Ketty Larco-Ward of the United States Postal Inspection Service (USPIS) made the announcement. 

The FBI, IRS-CI, and USPIS are investigating the case.

Trial Attorneys Jennifer Bilinkas and Tamara Livshiz of the Justice Department’s Fraud Section and Assistant U.S. Attorney Sean Mazorol for the District of Idaho are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A California man pleaded guilty yesterday in the Western District of Texas to conspiracy to solicit millions of dollars in contributions to two political action committees based on false and misleading representations that the funds would be used to support presidential candidates during and after the 2016 election cycle.

According to court documents, from 2016 through at least April 2017, Robert Reyes, Jr., 40, of Hollister, along with others, operated two political action committees—Liberty Action Group PAC and Progressive Priorities PAC—which solicited contributions from the public via robocalls and television, radio, and internet advertisements. The two PACs represented that the contributions would be used to support dueling presidential nominees of the two major political parties, respectively. Instead, Reyes and his co-conspirators used the funds to enrich themselves and to fund additional fraudulent solicitations. Specifically, Reyes admitted that the two PACs raised approximately $3.5 million in contributions during the 2016 election cycle and subsequent months, of which Reyes received approximately $714,000. Of the approximately $3.5 million raised, the two PACs contributed approximately $19 to legitimate political causes.

Additionally, to conceal the origin and nature of the proceeds of the fraudulent scheme, Reyes and others instructed a third-party vendor to withdraw approximately $353,000 from the two PACs in excess of the payments for services rendered, then deposit the excess payments into accounts held by shell companies that they controlled. Reyes admitted to operating additional fraudulent PACs beyond the 2016 election cycle, Support American Leaders and Campaign to Support the President, from which he received approximately $95,000 generated from false and misleading solicitations to donors.

As part of his plea, Reyes agreed to forfeit $809,920.40 that he received for his participation in the scam-PACs during the scheme.

Reyes pleaded guilty to one count of conspiracy to commit wire fraud and to cause false statements to the Federal Election Commission and one count of money laundering. Sentencing will be scheduled at a later date. He faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Special Agent in Charge Oliver E. Rich of the FBI’s San Antonio Field Office made the announcement.

The investigation was conducted by the FBI’s San Antonio Division, Austin White Collar Crime Task Force.

Trial Attorneys Michael N. Lang and Celia Choy of the Criminal Division’s Public Integrity Section are prosecuting the case. Former PIN Trial Attorney Rebecca Schuman also contributed significantly to the investigation.

A federal jury convicted a North Carolina woman last Thursday for her role in a scheme to defraud several private health insurers by submitting over $34 million in false and fraudulent claims for physical therapy services that were never actually provided.   

According to court documents and evidence presented at trial, Jaroslava Ruiz, 50, of Chapel Hill, paid kickbacks and bribes to patient recruiters and patients with private insurance in exchange for allowing four Miami physical therapy clinics to bill for medical services that were never actually provided to those patients. Ruiz and her co-conspirators falsified medical records to give the impression that the physical therapy services were medically necessary, prescribed by a doctor, and actually rendered. In truth and fact, none or virtually none of the purported services had been provided. Ruiz and her co-conspirators submitted approximately $34.6 million in false and fraudulent claims to several private insurers for those nonexistent physical therapy services, of which the insurers paid approximately $7.7 million.

Ruiz was convicted of one count of conspiracy to commit health care fraud and wire fraud, and nine counts of health care fraud. She faces up to 20 years in prison on the conspiracy count, and up to 10 years in prison on each health care fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for Oct. 26, 2022.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.  

The FBI is investigating the case.

Trial Attorneys Emily Gurskis and Patrick Queenan of the Criminal Division’s Fraud Section are prosecuting the case.

The Justice Department today announced that two Virginia landlords have agreed to pay $225,000 to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against military tenants at the Hideaway at Greenbrier Luxury Apartment Homes in Chesapeake, Virginia, and the Chase Arbor Apartments in Virginia Beach, Virginia.

“Eviction judgments seriously jeopardize servicemembers’ ability to find and obtain affordable housing and negatively impact the financial readiness of our armed forces,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The department will vigorously pursue any landlord that obtains eviction judgments against servicemembers by misrepresenting their military status to the court.”

“A servicemember’s military career is adversely affected by a judgment, which affects the military’s readiness,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “The U.S. Attorney’s Office is committed to pursuing companies that obtain default judgments against servicemembers by misrepresenting a servicemember’s military status or by failing to file an affidavit of military service, as required by the SCRA.”

Under the SCRA, if a landlord files a civil lawsuit against a tenant and the tenant does not appear in court, the landlord must file an affidavit with the court stating whether the tenant is in the military before seeking a judgment. If the affidavit says that the tenant is in military service, the court cannot enter judgment until it appoints an attorney to represent the servicemember. The court must also postpone the case for at least 90 days. In a complaint filed in the U.S. District Court for the Eastern District of Virginia, the department alleges that the owners of the Hideaway at Greenbrier and Chase Arbor Apartments filed false affidavits and failed to file affidavits of military service, as required by the SCRA, prior to obtaining default judgments against numerous servicemembers. The properties are affiliated with one another and used the same law firm to file eviction claims in Virginia state courts.

The department alleges that the properties’ owners knew or should have known that the affidavits that they filed were inaccurate, because their files contained information that would have allowed them to easily verify their tenants’ military status. Landlords and lenders can also verify an individual’s military status by searching the Defense Manpower Data Center’s free publicly available website and by reviewing their files to see if there are applications, military leave and earnings statements or military orders indicating military status.

Under the proposed consent order, which still must be approved by the court, the owners of the two properties will pay $162,971 to affected servicemembers and a $62,029 civil penalty to the United States. The order also requires the owners to vacate the eviction judgments, repair the servicemembers’ credit, provide SCRA training to their employees and develop new policies and procedures consistent with the SCRA. The owners must also reimburse affected servicemembers for any amounts collected pursuant to an unlawful judgment.

This matter was handled jointly by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Eastern District of Virginia. Since 2011, the department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.

The civil claims settled are allegations only; there has been no determination by a court of liability.

A Massachusetts man was arrested on Saturday, after being charged by indictment with willfully failing to pay over employment taxes to the IRS, conspiring to defraud the IRS, and aiding in the preparation of a false tax return.

According to the superseding indictment, Mauricio Baiense, formerly of Quincy, owned and operated Contract Framing Builders, Inc. (CFB), a Medford construction business. Baiense allegedly was responsible for filing CFB’s quarterly employment tax returns and collecting and paying over to the IRS payroll taxes withheld from the wages of the company’s employees.

From approximately 2013 through 2017, Baiense allegedly took a series of steps to convert CFB’s corporate funds into cash. The indictment charges that he allegedly wrote checks drawn on CFB’s bank account to purported subcontractors, which were in fact nominee entities controlled by him. Baiense allegedly then cashed or directed others to cash approximately $11 million in such checks at a check cashing business during this period. Baiense, and at times another man, then allegedly used the cash to operate an “off-the-books” cash payroll for CFB’s employees. He allegedly did not report the cash wages to the IRS and did not pay employment taxes on wages paid to employees in cash. Baiense also allegedly assisted in the preparation of at least one fraudulent employment tax return that understated the actual wages paid to CFB’s employees.

In June, Baiense was indicted for making a false statement when questioned at a U.S. Department of Labor Occupational Safety and Health Administration hearing regarding a workplace accident.

If convicted, Baiense faces up to five years in prison for each of the seven counts of willful failure to collect or pay over employment taxes, five years in prison for conspiring to defraud the United States, and three years in prison for aiding and assisting in the preparation of a false tax return. He also faces up to five years in prison for the false statement charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rachael S. Rollins for the District of Massachusetts made the announcement.

IRS-Criminal Investigation, the Department of Labor’s Occupational Health and Safety Administration, and Homeland Security Investigations investigated the case.

Trial Attorney Thomas F. Koelbl of the Justice Department’s Tax Division and Assistant U.S. Attorney David Tobin of the U.S. Attorney’s Office are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal judge in the Southern District of Georgia today sentenced Travis McMichael, 36, to life plus 10 years in prison; and his father Gregory McMichael, 66, to life plus seven years in prison; and William “Roddie” Bryan, 52, to 35 years in prison, for committing federal hate crimes and other offenses in connection with the killing of Ahmaud Arbery, a young Black man, who was jogging on the public streets of a Brunswick neighborhood when he was chased down and shot to death in February 2020. 

All three defendants were convicted at trial in February 2022 on multiple counts, including one count of using violence to intimidate and interfere with Arbery because of his race and because he was using a public street. All three defendants were also found guilty of attempting to kidnap Arbery by chasing after him in their trucks in an attempt to capture and confine him. Finally, Travis McMichael was found guilty of using, carrying, brandishing, and discharging a Remington shotgun in the course of the hate crime, which added 10 years to his life sentence; and Gregory McMichael was found guilty of using, carrying and brandishing a .357 Magnum revolver, which added seven years to his life sentence. 

“The Justice Department’s prosecution of this case and the court’s sentences today make clear that hate crimes have no place in our country, and that the Department will be unrelenting in our efforts to hold accountable those who perpetrate them,” said Attorney General Merrick B. Garland. “Protecting civil rights and combatting white supremacist violence was a founding purpose of the Justice Department, and one that we will continue to pursue with the urgency it demands.”

“It was important that this murder was prosecuted for what it was—a brutal and abhorrent racially-motivated hate crime,” said Assistant Attorney General Kristen Clarke of the Justice Department's Civil Rights Division. “Ahmaud Arbery should be alive today. The tragic murder of Mr. Arbery reminds us that hate-fueled violence targeting Black people remains a modern-day threat in our country, and we must use every tool available to hold perpetrators accountable. We hope that this sentencing ends one painful chapter for the family of Ahmaud Arbery, the Brunswick community and the nation as a whole.”

“Those who commit hate crimes target what makes us who we are as Americans, striking at the very heart of our society,” said FBI Director Christopher Wray. “This is why combatting hate crimes and protecting civil rights are top priorities for the FBI. We will continue to fulfill our mission, working with our partners to investigate these acts of hatred and violence, and protecting the American people.”

“These substantial sentences should deliver a sense of finality and closure to an exceptionally tragic chapter in the Southern District of Georgia,” said U.S. Attorney David H. Estes for the Southern District of Georgia. “Even as the family and friends of Ahmaud Arbery continue to mourn his horrific and needless murder, we can find hope for our community’s future in the cooperative work of our law enforcement partners and prosecutors who brought these men to justice for their hateful crimes.” 

Evidence at trial revealed that on Feb. 23, 2020, defendants Travis and Gregory McMichael armed themselves with firearms and chased after Arbery as he ran past their driveway. The pursuit passed by the home of defendant Roddie Bryan, who got into his own truck and joined the chase, despite the fact that he did not know and had never before seen Arbery. For the next four to five minutes, the three defendants pursued Arbery through the neighborhood, trying to box him in with their trucks. For that entire time, Arbery ran from the defendants, unarmed and with his hands in plain view. He never spoke a word to the defendants, and never made any threatening sound or gesture; rather, he repeatedly tried to run away. Ultimately, after Arbery had already changed direction multiple times, trying to escape from the defendants, Travis McMichael got out of his truck and pointed a shotgun directly at Arbery. When Arbery tried to defend himself, Travis McMichael shot him in the chest. Arbery, wounded, grabbed for the gun. During a struggle over the gun, Travis McMichael fired two more shots into Arbery, who then stumbled a few steps and fell face-first onto the pavement, where he died in the street.

Evidence at trial revealed that the defendants had strongly held racist beliefs that led them to make assumptions and decisions about Arbery that they would not have made if Arbery were white.

Travis McMichael’s social media comments and text messages to friends, offered as exhibits at trial, showed that Travis harbored racial animus against Black people, whom he described at points as “sub-human savages” who “ruin everything”; the social media comments also revealed that Travis had for many years associated Black people with criminality and had expressed a desire to see Black people — particularly those he viewed as criminals — harmed or killed. 

Witnesses testified at trial about deeply racist comments Gregory McMichael had made to people he barely knew.  One witness testified about a brief encounter she had with Gregory in a professional capacity, during which she commented that it was “too bad” that Julian Bond, a Black Georgia civil rights leader, had recently passed away; Gregory angrily responded that he wished Bond had “been put in the ground years ago” and that Bond and “those Blacks” were “nothing but trouble.” According to the witness, Gregory then went on a five-minute rant about Black people.

The jury also saw racist text messages from Roddie Bryan.  When Bryan learned, just four days before the shooting, that his daughter was dating a Black man, Bryan referred to the boyfriend as a “ni----” and a “monkey.” In other messages on social media, Bryan also referred to other Black people using racial slurs. When the police spoke to Bryan about Arbery’s death, he admitted that he had never seen or heard anything about Arbery before; when he saw a Black man being chased, his “instinct” told him that the man must be a thief, or maybe had shot someone.

At trial, the jury found that the evidence proved beyond a reasonable doubt that race formed a but-for cause of the defendants’ actions on Feb. 23, 2020—meaning that, but-for Arbery being Black, the defendants would not have assumed he was a criminal, chased him down, and shot him.

All three defendants were previously convicted in a separate state trial on felony murder charges and other offenses. In state court, the McMichaels were both sentenced to life imprisonment without the possibility of parole, and Bryan was sentenced to life imprisonment with the possibility of parole.

This case was investigated by both the Georgia Bureau of Investigation and the FBI, and was prosecuted by Assistant U.S. Attorney Tara Lyons of the Southern District of Georgia, and Deputy Chief Bobbi Bernstein and Special Litigation Counsel Christopher J. Perras of the Civil Rights Division.

Attorney General Merrick B. Garland issued the following statement today commemorating the anniversary of the Voting Rights Act:

"Fifty-seven years ago tomorrow, one of our nation’s most consequential pieces of civil rights legislation -- the Voting Rights Act of 1965 -- was signed into law.

"The Voting Rights Act sought to make real the 15th  Amendment's guarantee that no American citizen be denied the right to vote on account of race.

"Central to the law was Section 5’s “preclearance” provision, which prevented jurisdictions with a history of discriminatory voting practices from adopting new voting rules until they could show the Justice Department or a federal court that the change would not have a racially discriminatory purpose or result.

"Yet in its 2013 decision in Shelby County v. Holder, the Supreme Court effectively eliminated the act’s preclearance protections. And in the years since, there has been a dramatic rise in legislative efforts that make it harder for millions of Americans to vote and to elect representatives of their own choice.

"Ahead of the 57th anniversary of the Voting Rights Act, the Justice Department remains committed to relentlessly protecting voting rights with the enforcement powers we have. And we continue to ask Congress to restore critical tools to help protect the fundamental right to vote."

The Attorney General, Deputy Attorney General, and Associate Attorney General today met with families of fallen officers to discuss the importance of the passage of the Public Safety Officer Support Act of 2022. The bipartisan bill expands coverage of the Public Safety Officers' Benefits Program, administered by the Justice Department’s Bureau of Justice Assistance, to include officers who are permanently and totally disabled due to particular mental health disorders and/or who die by suicide as a result of exposure to a traumatic event they encounter while on duty.

“Every day, public safety officers across the country put themselves in harm’s way to respond to some of the most difficult and traumatic moments that our communities face,” said Attorney General Merrick B. Garland. “The Justice Department welcomes the passage of the Public Safety Officer Support Act of 2022, which will enable us to provide support to the families of fallen officers who have died by suicide and to officers who have suffered debilitating trauma-related mental health injuries.”

“The Justice Department knows the toll that service in law enforcement can take, not only on those in uniform but also on those around them,” said Deputy Attorney General Lisa O. Monaco. “We commend Congress for passing the Public Safety Officer Support Act of 2022. It provides critical new support to families of the fallen. We will continue to do everything we can to ensure that public safety officers throughout the law enforcement community are cared for and protected, just as they care for and protect us all.”

“Supporting public safety officers and their families after a tragic loss or catastrophic disability is one of our solemn responsibilities at the Justice Department,” said Associate Attorney General Vanita Gupta. “Since 1976, the Public Safety Officers’ Benefits Program—administered by the Bureau of Justice Assistance—has provided nearly $2 billion in assistance to survivors of first responders. This bipartisan legislation is a welcome response to concerns expressed by the public safety community that this support be extended to recognize harms from an exposure to trauma while on duty. We commend members of Congress for their leadership on this issue and look forward to putting this bill to work on behalf of the brave professionals who serve and protect our communities.”

During the meeting, Department leadership heard directly from families about the unique grief of losing a loved one to suicide and discussed the impact this legislation will have on the healing process for families. Department officials recognized that public safety officers are routinely called to respond to stressful and potentially traumatic situations, often putting their lives in danger. 

Participating in the meeting were family members of officers Howard “Howie” Liebengood of the U.S. Capitol Police, Jeffrey Smith of the D.C. Metropolitan Police Department, and Shelane Gaydos of the Fairfax County Police Department.

A Maryland man made his initial appearance in federal court yesterday after being charged with 16 counts of willful failure to collect, account for and pay over employment taxes to the IRS.

According to the indictment, Brett Hill, of Parkton, owned and operated two telecommunications companies and was responsible for collecting and paying to the IRS income, Social Security, and Medicare taxes withheld from the wages of employees at both companies. Hill allegedly collected such taxes from the employees of the two companies but did not pay those taxes to the IRS or file quarterly employment tax returns. In total, Hill did not pay to the IRS approximately $900,000 in payroll taxes related to the two companies.

If convicted, Hill faces up to five years in prison for each of 16 counts of willful failure to collect or pay over employment taxes. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Erek L. Barron for the District of Maryland made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Shawn Noud and Catriona Coppler of the Justice Department’s Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A California man was sentenced today in the Eastern District of New York to four years in prison for defrauding American Express of approximately $4.7 million and for laundering the proceeds of his fraud.

According to court documents and evidence presented at trial, between November 2017 and December 2019, Jasminder Singh, 45, of Fremont, used four business entities that he created and controlled and 10 American Express credit cards in those entities’ names to purchase thousands of Apple iPhones. He then sold the iPhones to overseas purchasers for millions of dollars. As part of his scheme, Singh falsely told American Express that he was unable to repay approximately $4.7 million in charges incurred from the purchase of the iPhones, and created fake payment invoices in order to secure additional credit from American Express. Singh then used the proceeds of the scheme to pay for personal expenses and to buy luxury items, including a $1.3 million home and a luxury vehicle.

Singh was ordered to pay $4,651,845.08 in restitution and ordered to forfeit $3,018,602.22.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Assistant Director-in-Charge Michael J. Driscoll of the FBI’s New York Field Office made the announcement.

The FBI investigated the case.

Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael W. Gibaldi of the Eastern District of New York prosecuted the case.

A federal grand jury returned a 10-count indictment that was unsealed today charging a former Sanger Police Department officer with deprivation of constitutional rights under color of law for sexually assaulting four women with whom he interacted during the course of his duties.

According to the indictment, on multiple occasions from August 2017 to June 2021, J. DeShawn Torrence, 38, of Corcoran, California, engaged in various forms of nonconsensual sexual conduct, ranging from directing a victim to remove her clothing without a legitimate law enforcement purpose to forcing his victims to engage in sex acts, all while serving as a police officer. Torrence is no longer employed by the Sanger Police Department.  

Four of the charged counts alleged each carries a maximum statutory penalty of life in prison and a $250,000 fine. One count carries a maximum statutory penalty of 10 years. The remaining five counts each carry a maximum statutory penalty of one year in prison and a fine of up to $100,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Anyone with information is encouraged to contact the FBI at 916-746-7000.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Phillip A. Talbert for the Eastern District of California and Acting Special Agent in Charge Dennis Guertin of the FBI Sacramento Field Office made the announcement. 

This case is being investigated by the FBI Sacramento Field Office with assistance from the Fresno County Sheriff’s Office.

Special Litigation Counsel Fara Gold of the Criminal Section of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Karen Escobar are prosecuting the case.

The alleged operator of the illicit cryptocurrency exchange BTC-e was extradited yesterday from Greece to the United States to face charges in the Northern District of California.

“After more than five years of litigation, Russian national Alexander Vinnik was extradited to the United States yesterday to be held accountable for operating BTC-e, a criminal cryptocurrency exchange, which laundered more than $4 billion of criminal proceeds,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This extradition demonstrates the Department’s commitment to investigating and dismantling illicit cyber activity and would not have been possible without the relentless work of the Justice Department’s Office of International Affairs. The Justice Department thanks the Government of Greece, particularly the Ministry of Justice, for all their efforts in securing the defendant’s transfer to the United States.”

Alexander Vinnik, 42, a Russian citizen, was charged in a 21-count superseding indictment in January 2017. Vinnik was taken into custody in Greece in July 2017 at the request of the United States. He made his initial appearance earlier today in federal court in San Francisco before U.S. Magistrate Judge Sallie Kim.

According to the indictment, Vinnik and his co-conspirators allegedly owned, operated, and administrated BTC-e, a significant cybercrime and online money laundering entity that allowed its users to trade in bitcoin with high levels of anonymity and developed a customer base heavily reliant on criminal activity. 

The indictment alleges BTC-e facilitated transactions for cybercriminals worldwide and received criminal proceeds from numerous computer intrusions and hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution rings, and was used to facilitate crimes ranging from computer hacking, to fraud, identity theft, tax refund fraud schemes, public corruption, and drug trafficking. The investigation has revealed that BTC-e received more than $4 billion worth of bitcoin over the course of its operation.

Despite doing substantial business in the United States, the indictment alleges that BTC-e was not registered as a money services business with the U.S. Department of Treasury, had no anti-money laundering process, no system for appropriate “know your customer” or “KYC” verification, and no anti-money laundering program as required by federal law. 

In 2017, FinCEN assessed a civil money penalty against BTC-e for willfully violating U.S. anti-money laundering (AML) laws and against Vinnik for his role in the violations. A civil matter to enforce civil monetary penalties, in the amount of $88,596,314 as to BTC-e and $12 million as to Vinnik, is pending in the Northern District of California.

The indictment charges BTC-e and Vinnik with one count of operation of an unlicensed money service business, and one count of conspiracy to commit money laundering. In addition, the indictment charges Vinnik with 17 counts of money laundering and two counts of engaging in unlawful monetary transactions.

The FBI, IRS Criminal Investigation (Oakland Field Office and Cyber Crime Unit, Washington, D.C.), Homeland Security Investigations, and U.S. Secret Service Criminal Investigative Division are investigating the case.

Trial Attorney C. Alden Pelker of the Justice Department’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Claudia Quiroz of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.

The Justice Department’s National Cryptocurrency Enforcement Team provided substantial assistance. The extradition request was handled by the Justice Department’s Office of International Affairs.

The Justice Department thanks the Greek Ministry of Justice for its cooperation in securing the defendant’s transfer to the United States.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

WDC Acquisitions LLC d/b/a Wellman Dynamics located in Creston, Iowa, will pay $500,000 to resolve alleged violations of the False Claims Act for failing to conduct contractually required testing and falsifying test results for parts used in military aircraft, the Justice Department announced today. 

Wellman manufactures large metal castings that it supplies to prime defense contractors, including Bell Helicopter, Textron, Sikorsky Aircraft and the Boeing Company, for use in the UH-1Y, AH-1Z, AH-64 Apache, V22 Osprey and UH-60 Black Hawk programs.   

The United States alleged that, between 2014 and 2021, Wellman failed to conduct required metallurgic and other tests on the castings, including tensile strength testing, destructive testing, microstructure analysis, hot isostatic testing and salt fog testing, and falsely certified results of tests that had not been performed. The settlement was based on an analysis of the company’s ability to pay.

“Proper testing is critical for ensuring the proper performance of the equipment that is provided to our men and women in uniform” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable those who knowingly falsify or fail to conduct required tests and put our military at risk.” 

“It is imperative that our defense contractors and subcontractors provide the high-quality and properly tested products the military needs,” said Acting U.S. Attorney Timothy Duax for the Northern District of Iowa. “We are proud to work tirelessly with our partners to ensure that this is the case.”

The settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Wellman employee Bradley Keller. Under those provisions, a private party can file a lawsuit on behalf of the United States and receive a portion of any recovery. Keller will receive $90,000. The qui tam case is captioned United States ex rel. Bradley Keller v. WDC Acquisitions, LLC d/b/a Wellman Dynamics and Trive Capital Management LLC (S.D. Iowa No. 20-CV-100-LTS-MAR).

This matter was investigated by the Civil Division’s Commercial Litigation Branch (Fraud Section), the U.S. Attorney’s Office for the Northern District of Iowa and the Defense Criminal Investigative Service. The investigation was handled by Senior Trial Counsel Alicia J. Bentley of the Civil Division and Assistant U.S. Attorney Matthew Gillespie. 

The claims resolved by the settlement are allegations only and there has been no determination of liability.

BC Flynn Contracting Corp. (BC Flynn) and Axion Specialty Contracting LLC (Axion) pleaded guilty yesterday in federal court in Connecticut for their roles in a conspiracy to rig bids on insulation contracts in Connecticut in violation of the antitrust laws and, as to BC Flynn, to engage in criminal fraud related to those insulation contracts.

According to plea agreements filed yesterday in the U.S. District Court in Bridgeport, BC Flynn and Axion conspired among themselves and other companies and individuals to rig bids on contracts for installing insulation around pipes and ducts on construction projects at universities, hospitals, and other public and private entities in Connecticut. The conspiracy ran for nearly seven years, beginning as early as June 2011 and continuing until as late as March 2018.  Four individuals and one company previously pleaded guilty to charges related to their role in this scheme and await sentencing.

“Construction and infrastructure projects — many of them funded in whole or part by taxpayers — deserve to have contracting processes that are fair and competitive,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. “The division will work with our law enforcement partners to ensure that the individuals and corporations that defraud these projects are held fully responsible for their actions.”

“The plea agreements detail how the perpetrators submitted collusive bids and shared bid numbers with their competitors in an illegal effort to improve their companies’ bottom lines,” said U.S. Attorney Vanessa Roberts Avery for the District of Connecticut. “I commend the FBI and DCIS for investigating this scheme that victimized hospitals, universities and businesses throughout Connecticut.”

“Free and open markets are the foundation of a vibrant economy,” said Special Agent in Charge David Sundberg of the FBI New Haven Field Office. “The FBI is committed to investigating perpetrators of antitrust and fraud crimes that corruptly limit competition in the construction sector.”

“The Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense (DoD) Office of Inspector General, is fully committed to protecting the integrity of the DoD procurement system,” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office. “Anticompetitive and fraudulent practices undermine the legitimate procurement processes designed to ensure equity among parties that do business with the DoD. We will continue to partner with the Department of Justice and the FBI to ensure that the market for construction services provided to the U.S. military remains competitive.” 

The antitrust charges announced today carry a maximum penalty of a $100 million fine for each defendant corporation. The fraud conspiracy charge against BC Flynn carries a maximum penalty of a $500,000 fine. The fines for the antitrust and fraud conspiracy charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. In addition, pursuant to the plea agreements, which are subject to the court’s final approval, BC Flynn and Axion have agreed to pay restitution to the victims.

This investigation is being conducted by the Antitrust Division’s New York Office, the U.S. Attorney’s Office for the District of Connecticut, the FBI’s New Haven Division, and the DCIS’s New Haven Resident Agency. 

In November 2019, the Department of Justice created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government — federal, state and local. To contact the Procurement Collusion Strike Force, or to report information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to construction or infrastructure, go to https://www.justice.gov/procurement-collusion-strike-force.

The Justice Department today announced that Jose Gomez III, 21, of Midland, Texas, was sentenced to 25 years in prison on hate crime charges for attacking an Asian family he believed was Chinese and therefore responsible for the COVID-19 pandemic.  Gomez had previously pleaded guilty to three counts of committing a hate crime.

According to the facts admitted in the plea, on March 14, 2020, Gomez entered a Sam’s Club Warehouse in Midland, Texas, behind an Asian family with young children. Gomez had never seen them before and believed they were Chinese. Gomez followed them in the store for several minutes because he perceived them to be a “threat” as they were “from the country who started spreading that disease around.” Gomez then momentarily left the family to find a serrated steak knife in the store. Gomez bent the blade so that when he held the handle in his fist, the blade rested against his knuckles, sharp-edge facing outward. Gomez returned to the Asian family and punched the father, B.C., in the face, cutting him. Gomez then left to retrieve an eight-inch knife from the store. When Gomez returned to B.C., Gomez abruptly turned towards B.C.’s two young children – then aged six and two years old – who were seated in the front basket of the shopping cart. Gomez slashed open the face of R.C., the then-six-year-old child. The blade entered millimeters from R.C.’s right eye, split his right ear, and wrapped around to the back of his skull.  Gomez also stabbed a white Sam’s Club employee, Z.O., who intervened to stop Gomez from further assaulting the Asian family. While being held down on the ground, Gomez yelled at the Asian family, “Get out of America!”

Gomez admitted he believed the Asian family was Chinese and that he blamed them for the COVID-19 pandemic. Gomez further admitted he had attempted to kill the six-year-old child. Gomez also admitted he had attacked Z.O., the store employee, because Gomez wanted to kill the six-year-old child and Z.O. was preventing him from doing so. 

“Pandemic-driven and racially-motivated acts of violence are deplorable crimes, and the Justice Department stands ready to use our hate crimes laws to hold perpetrators accountable,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division.“Hate crimes targeting Asian Americans have spiked during the pandemic and must be confronted. All people deserve to feel safe and secure living in their communities, regardless of race, color or national origin.”

“Hate-motivated violence will simply not be tolerated in our society and every person deserves to feel safe from such vicious harm,” said U.S. Attorney Ashley C. Hoff for the Western District of Texas. “Today’s sentence sends the message loud and clear that our office will aggressively prosecute federal hate crimes while seeking justice for victims.”

"Mr. Gomez's cowardly and racially motivated actions do not represent our West Texas community,” said Special Agent in Charge Jeffery R. Downey of the FBI El Paso Field Office. “It is our hope today's sentence will help the victims with the healing process. Rest assured, the FBI and our law enforcement partners will aggressively pursue anyone who commits these violent acts to ensure the civil rights of all Americans are protected."

The case was investigated by the Midland Police Department and the FBI. The case is being prosecuted by Assistant U.S. Attorney Brandi Young for the Western District of Texas and Trial Attorney Angie Cha of the Civil Rights Division’s Criminal Section.

An Ohio corporation and its vice president pleaded guilty in federal court to the illegal sale of antimicrobial products. Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD), U.S. Attorney Kenneth L. Parker for the Southern District of Ohio and Special Agent in Charge Jennifer Lynn of the Environmental Protection Agency’s Criminal Investigation Division (EPA-CID) made the announcement.

Evan Morgan and DEM Technology LLC of Dayton, Ohio, pleaded guilty to selling an unregistered “fogger,” which they claimed, without proof, could sanitize an entire room. According to the plea, beginning in 1996, DEM produced the surface-sanitizing product, SaniGuard. It was only authorized for use as a surface spray. However, since SaniGuard’s initial EPA registration, DEM has sold the product not only as a “Dry Sanitizing Surface Spray” but also as a “Total Release Fogger.” According to its marketing materials, the fogger product allowed for the entire can’s contents to be released into a room, supposedly disinfecting all surfaces in the room. It also claimed the fogger could “sanitize a room within 10 to 15 minutes”; is “effective against H1N1, E-Coli, Staphylococcus, MRSA and Salmonella”; and has a “99.99% kill rate of fungus, bacteria…and viruses.” DEM has never established efficacy nor safety data associated with SaniGuard’s use as a fogger as required by the Federal Insecticide, Fungicide and Rodenticide Act.

From 2004 to 2015, DEM received and acknowledged repeated correspondence from the EPA, directing the removal of language relating to fogging from the SaniGuard label. Additionally, on July 21, 2015, the EPA entered a consent order, which ordered DEM to pay a civil penalty based upon DEM’s sale of the fogger product. Nonetheless, DEM continued to produce and sell Total Release Fogger in 2015, 2016, 2017 and 2018.

“The defendants in this case made claims about the efficacy of their product with no supporting data, putting their customers at risk,” said Assistant Attorney General Kim. “Despite this danger and repeated notices by EPA, the defendants continued their unlawful conduct for years. Yesterday’s guilty pleas shows that the Department of Justice will not tolerate such violations of federal law.”

“In order to safeguard the environment, it is essential that the Environmental Protection Agency’s pesticide programs receive accurate and honest information from pesticide registrants and their employees,” said Special Agent in Charge Lynn. “This guilty plea sends a clear message that EPA and its law enforcement partners will continue to hold individuals and companies fully accountable for illegal conduct that jeopardizes the environment.”

This case was investigated by Special Agent Christopher Wilson of EPA-CID and Jon Scale of the Ohio Attorney General’s Office Bureau of Criminal Investigation. It is being prosecuted by Trial Attorney Adam Cullman of ENRD’s Environmental Crimes Section and the U.S. Attorney’s Office for the Southern District of Ohio.

On Tuesday, extensive coordination and cooperation efforts between United States and Guatemalan law enforcement authorities culminated in the Guatemalan National Civil Police (PNC) conducting a significant enforcement operation to disrupt and dismantle a transnational human smuggling organization. This operation included the arrest of four alleged human smugglers who have been indicted in the United States.

On August 2, Guatemalan law enforcement executed 26 search warrants in Huehuetenango, El Quiché, Totonicapán, Alta and Baja Verapaz and arrested 19 individuals including the four U.S. fugitives. As a result of the search warrants, law enforcement recovered 10 high valued motor vehicles, firearms, and cash.

Felipe Diego Alonzo, aka “Siete”, 38; Nesly Norberto Martinez Gomez, aka “Canche”, 37; Lopez Mateo Mateo, aka “Bud Light”, 42; and Juan Gutierrez Castro, aka “Andres”, 45; were arrested in Guatemala at the request of the United States pursuant to charges previously filed in the Western District of Texas (WDTX) and unsealed yesterday. The defendants allegedly conspired with other smugglers to facilitate the travel of large numbers of migrants from Guatemala through Mexico, and ultimately, to the United States, charging the migrants and their families approximately $10,000 to 12,000 USD for the perilous journey. In addition to prolific smuggling of migrants to the United States, the human smugglers targeted in this operation are alleged to be responsible for the death of a young indigenous Guatemalan woman who died in Texas in April 2021. Guatemalan authorities arrested Diego Alonzo, Martinez Gomez, Mateo Mateo, and Gutierrez Castro pursuant to requests for their extradition by the United States.

The victim’s family paid the defendants approximately $10,000 for the journey to the United States. According to the indictment, the defendants and their co-conspirators guided her for several days through the desert to Odessa, Texas where she ultimately perished. Upon learning of her death, the defendants and their co-conspirators quickly worked to get rid of the body and discarded it on the side of a country road in Crane County, Texas. The defendants and their co-conspirators then arranged for payment to the victim’s family.

“Joint Task Force Alpha was created to investigate and prosecute the international networks responsible for dangerous and prolific human smuggling activities that exploit and victimize migrants,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “These indictments demonstrate the Department of Justice’s commitment to holding accountable criminal organizations that prey upon vulnerable people for profit. JTF Alpha’s dedicated personnel, along with our international law enforcement partners, are working tirelessly to disrupt and dismantle these harmful smuggling and trafficking networks.”

“These recent arrests are the culmination of over a year’s efforts of international coordination and investigation into this extensive human smuggling operation,” said U.S. Attorney Ashley C. Hoff. “This specific criminal organization has smuggled a large number of migrants from Guatemala, which included a young woman who died while being smuggled, and whose body was later callously dumped by the smugglers in Crane County, Texas. Along with our partners, the U.S. Attorney’s Office for the Western District of Texas is committed to delivering justice for her and to holding all the offenders accountable for their crimes, including those members of the criminal organization who remain in Guatemala.”

“HSI is deeply immersed in the global fight against human smuggling, and that absolutely includes our International Operations within Central and South America,” said Steve Francis, acting executive associate director of Homeland Security Investigations. “Combating this horrific, transnational crime is one of our top priorities – our special agents are actively engaged with law enforcement partners and task forces around the globe working to dismantle criminal networks that treat human life like a commodity. We will continue to root out those engaged in this crime and bring alleged perpetrators, such as these four, to justice.”

“Transnational criminal organizations continue to recklessly endanger the lives of individuals they smuggle for their own financial gain with no regard for human life,” said CBP Deputy Commissioner Troy Miller. “CBP supports Joint Task Force Alpha through information sharing and analysis from its frontline personnel and CBP’s National Targeting Center. That coordination is essential in identifying transnational criminal organizations and bringing human smugglers to justice.”

The indictments against Diego Alonzo, Martinez Gomez, Mateo Mateo and Gutierrez Castro and assistance provided by U.S. authorities to Guatemala law enforcement were coordinated under Joint Task Force Alpha (JTFA). JTFA was created by the Attorney General in June 2021 in partnership with the Department of Homeland Security (DHS), to strengthen the Department’s overall efforts to combat these crimes based on the rise in prolific and dangerous smuggling emanating from Central America and impacting our border communities. JTFA’s goal is to disrupt and dismantle those human smuggling and trafficking networks operating in El Salvador, Guatemala, Honduras, and Mexico, with a focus on networks that endanger, abuse or exploit migrants, present national security risks, or engage in other types of transnational organized crime.

Since its creation, JTFA has successfully increased coordination and collaboration between the Justice Department, DHS, and other interagency law enforcement participants, and with foreign law enforcement partners, including El Salvador, Guatemala, Honduras, and Mexico; targeted those organizations who have the most impact on the United States, and coordinated significant smuggling indictments and extradition efforts in U.S. Attorney’s Offices across the country. To date, JTFA’s work with its partners has resulted in criminal charges and over a hundred domestic and international arrests, including against leaders, organizers and significant facilitators of human smuggling activities; several dozen convictions; significant jail sentences imposed; and substantial asset forfeiture. JTFA is comprised of detailees from southwest border U.S. Attorney’s Offices, including the Southern District of Texas, the Western District of Texas, the District of Arizona, and the Southern District of California, and dedicated support for the program is also provided by numerous components of the Criminal Division that are part of JTFA – led by the Human Rights and Special Prosecutions Section (HRSP), and supported by the Office of Prosecutorial Development, Assistance, and Training (OPDAT), the Narcotic and Dangerous Drug Section (NDDS), the Money Laundering and Asset Recovery Section (MLARS), the Office of Enforcement Operations (OEO), the Justice Department’s Office of International Affairs (OIA), and the Organized Crime and Gang Section (OCGS). JTFA is made possible by substantial law enforcement investment from DHS, FBI, Drug Enforcement Administration (DEA), and other partners.

HSI Midland led U.S. investigative efforts, working in concert with HSI Guatemala, and the HSI Human Smuggling Unit in Washington, D.C. HSI received substantial assistance from U.S. Immigration and Customs (ICE)’s Enforcement and Removal Operations, U.S. Customs and Border Protection’s National Targeting Center/Operation Sentinel; U.S. Border Patrol, the U.S. Marshals Service, the Odessa and Midland Police Departments; the Texas Department of Public Safety; and the Ector County, Midland County, and Crane County Sherriff’s Offices.  HRSP, OIA, and OPDAT provided significant assistance in this matter. The Department of Justice thanks Guatemalan law enforcement, who were instrumental in furthering this investigation.

The case is being handled by JTFA Deputy Director James Hepburn of HRSP, Assistant U.S. Attorneys Adrian Gallegos and Jose Luis Acosta of the WDTX and JTFA, and Assistant U.S. Attorney John Fedock of WDTX, with assistance from HRSP Historian/Latin America Specialist Joanna Crandall.

The charges contained in an indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal indictment was unsealed yesterday in Tulsa, Oklahoma, charging a former private prisoner officer with sexually assaulting a male pretrial detainee during a prisoner transport and later lying to the FBI.

According to the indictment, at the time of the alleged crime, Dewayne Dudley, 55, of Claremore, Oklahoma, worked as a private prisoner transport officer for Blue Raven Services, a company that was hired by local jails and prisons throughout the country to transport people who had been arrested pursuant to out-of-state warrants and needed to be transported back to the states that had issued the warrants.

Count One of the indictment charges Dudley, while acting under color of law, with willfully depriving a male pretrial detainee whom he was transporting from Indiana to New Mexico, of his constitutional right to bodily integrity. The indictment alleges that Dudley’s conduct resulted in bodily injury to the victim and kidnapping. Count Two charges Dudley with knowingly and willfully making false statements to a Special Agent with the FBI regarding his transport of the victim.

If convicted, Dudley faces a maximum sentence of life in prison.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division and U.S. Attorney Clinton Johnson for the Northern District of Oklahoma made the announcement.

The case is being investigated by the FBI Oklahoma City Field Office. Assistant U.S. Attorney Clay Compton for the Northern District of Oklahoma and Trial Attorney Laura Gilson of the Civil Rights Division are prosecuting the case.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A former governor of Puerto Rico was arrested today on bribery charges related to the financing of her 2020 campaign.

Relatedly, a political consultant for the former governor and the president of the international bank have also pleaded guilty to participating in the bribery scheme.

“The alleged bribery scheme rose to the highest levels of the Puerto Rican government, threatening public trust in our electoral processes and institutions of governance,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.  “The Department of Justice is committed to holding accountable those who wrongly believe there is one rule of law for the powerful and another for the powerless.  No one is above the rule of law.”

According to the indictment, from December 2019 through June 2020, then-Governor of Puerto Rico Wanda Vazquez Garced, 62, of San Juan, allegedly engaged in a bribery scheme with various individuals, including Julio Martin Herrera Velutini, Frances Diaz, Mark Rossini, and John Blakeman to finance Vazquez Garced’s 2020 gubernatorial election campaign.

“The criminal actions of the defendants in this case strike a blow to the heart of our democracy and further erode the confidence of our citizens in their institutions of governance,” said U.S. Attorney W. Stephen Muldrow for the District of Puerto Rico. “Our resolve to bring to justice those entrusted by the public to serve with integrity and who violate that trust remains steadfast. Equally steadfast is our resolve to prosecute those who seek to use their wealth and power to enrich themselves at the expense of honest government. I commend the dedication and hard work of the law enforcement personnel and prosecutors in this case, as well as those individuals willing to come forward and cooperate.”

Herrera Velutini, 50, a dual Venezuelan-Italian citizen residing in London, United Kingdom, owned an international bank operating in San Juan. Diaz, 50, of Puerto Rico was the CEO and President of the international bank owned by Herrera Velutini. Rossini, 60, of Madrid, Spain was a former FBI Special Agent who provided consulting services to Herrera Velutini. Blakeman, 53, of Puerto Rico, is a political consultant who worked on Vazquez Garced’s 2020 campaign.

“Public corruption manifests in many different ways,” said Special Agent in Charge Joseph González of the FBI San Juan Field Office. “Those who engage in this illegal conduct often believe they are above the law or fool themselves into believing this is a victimless crime and thus are not doing anything wrong. Our message is and has been clear. Public corruption erodes the people’s trust in our institutions and fuels civil unrest. As a top priority for the FBI, wherever allegations of public corruption arise, we will investigate. No one is above the law and the victim of this crime, the People, deserve better.”

According to the indictment, beginning in 2019, Herrera Velutini’s bank was the subject of an examination by Puerto Rico’s Office of the Commissioner of Financial Institutions (OCIF), a regulatory agency that oversees financial institutions operating in Puerto Rico. Through intermediaries, Herrera Velutini and Rossini allegedly promised to provide funding to support Vazquez Garced’s 2020 gubernatorial election campaign in exchange for Vazquez Garced terminating the Commissioner of OCIF and appointing a new Commissioner of Herrera Velutini’s choosing. The indictment alleges that Vazquez Garced accepted the offer of a bribe and, in February 2020, took official action to demand the resignation of OCIF Commissioner A and, in May 2020, to appoint OCIF Commissioner B – a former consultant for the international bank owned by Herrera Velutini – who had been personally selected by Herrera Velutini. In return, Herrera Velutini and Rossini allegedly paid more than $300,000 to political consultants in support of Vazquez Garced’s campaign.

The indictment further alleges that following Vazquez Garced’s primary election loss in August 2020, Herrera Velutini sought to bribe her successor, Public Official A, by offering funding in support of Public Official A’s campaign in exchange for Public Official A ending OCIF’s audit of Herrera Velutini’s bank on terms favorable to Herrera Velutini. According to the indictment, between April 2021 and August 2021, Herrera Velutini allegedly used intermediaries to convey his offer of a bribe to a witness who held himself out as a representative of Public Official A, but who was in fact acting at the direction of the FBI. As noted in the indictment, the witness was acting at the direction of the FBI during this timeframe and not actually serving as an intermediary of, or acting on behalf of, Public Official A. In August 2021, Herrera Velutini allegedly directed a $25,000 payment to a political action committee associated with Public Official A, with the understanding and expectation that Public Official A would resolve OCIF’s audit of Herrera Velutini’s bank in the manner requested by Herrera Velutini.

Vazquez Garced, Herrera Velutini, and Rossini are each charged with conspiracy, federal programs bribery, and honest services wire fraud. Vazquez Garced is scheduled to make her initial court appearance today in federal court in the District of Puerto Rico. If convicted on all counts, they each face a maximum total penalty of 20 years in prison.  A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Relatedly, the department also announced the guilty pleas of two individuals in connection with the schemes to bribe Vazquez Garced and Public Official A.

According to court documents, in March, Frances Diaz pleaded guilty to conspiring with Herrera Velutini and others to bribe Public Official A. Diaz was, until February 2022, the CEO and President of the international bank owned by Herrera Velutini. In March, John Blakeman pleaded guilty to conspiring with Herrera Velutini and Rossini to bribe Vazquez Garced, and with Herrera Velutini to bribe Public Official A.

Both Diaz and Blakeman face up to five years in prison. Their sentencing hearings have not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Muldrow for the District of Puerto Rico, and Special Agent in Charge Joseph Gonzalez of the FBI’s San Juan Field Office made the announcement. 

The FBI’s San Juan Field Office is investigating the case.

Trial Attorneys Ryan R. Crosswell, Erica O. Waymack, and Nicholas W. Cannon of the Justice Department’s Public Integrity Section and Assistant U.S. Attorney Seth A. Erbe of the U.S. Attorney’s Office for the District of Puerto Rico are prosecuting the case. Members of the Justice Department’s Money Laundering and Asset Recovery Section also provided assistance with the investigation, including Trial Attorneys Margaret Leigh Kessler and D. Zachary Adams, and Bank Integrity Unit Acting Chief Molly Moeser.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal court issued a temporary restraining order prohibiting a Tampa-area pharmacist from filling prescriptions for opioids and other controlled substances, the Department of Justice announced today.

In a complaint filed on August 1 and unsealed today, the United States alleges that Nathaniel Esalomi unlawfully distributed powerful opioids by filling prescriptions he knew were not valid at Apexx Pharmacy in Hudson, Florida, where he is the owner and sole pharmacist. The complaint alleges that Esalomi charged dramatically inflated prices to fill opioid prescriptions and accepted thousands of dollars in cash for the drugs. The complaint further alleges that Esalomi instructed individuals to forge signatures on certain forms and to falsify addresses. The complaint also alleges that Esalomi filled numerous controlled substance prescriptions for persons who were deceased.

“Pharmacists who knowingly fill invalid prescriptions for opioids and other controlled substances violate the law and endanger our communities,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with its law enforcement partners to prosecute medical professionals who put profit over public safety.”

“The illegal distribution of opioids by medical professionals has caused great harm to people in our communities, and has led to a nationwide epidemic,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We are committed to using every enforcement tool available to stop those individuals whose unlawful actions and abandonment of their professional responsibilities have fueled the opioid crisis.”

“In the midst of a deadly overdose epidemic in our country, addressing the diversion of opioids and other controlled substances is a top priority for DEA,” said Special Agent in Charge Deanne L. Reuter of the DEA Miami Field Division. “DEA remains steadfast in our commitment to working with our law enforcement partners to ensure that our communities are safe and healthy.”

The temporary restraining order was issued by U.S. District Judge Thomas Barber in the U.S. District Court for the Middle District of Florida. The pending complaint seeks to permanently enjoin Esalomi from filling prescriptions for opioids and other controlled substances, and from owning or supervising a pharmacy.

DEA’s Tactical Diversion Squad in the Tampa District Office is conducting the ongoing investigation.

Assistant U.S. Attorney Carolyn B. Tapie and Trial Attorneys Thomas S. Rosso and Scott B. Dahlquist of the Justice Department’s Consumer Protection Branch are handling the case.

The claims made in the complaint are merely allegations that the United States must prove if the case proceeds to trial.

A federal grand jury in Louisville, Kentucky, returned two indictments that were unsealed today, and the Department of Justice filed a third charging document today, in connection with an investigation into the circumstances surrounding the death of Breonna Taylor, a 26-year-old woman who was shot and killed in her Louisville home on March 13, 2020, by police officers executing a search warrant.

“The Justice Department has charged four current and former Louisville Metro Police Department officers with federal crimes related to Breonna Taylor’s death,” said Attorney General Merrick B. Garland. “Among other things, the federal charges announced today allege that members of LMPD’s Place-Based Investigations Unit falsified the affidavit used to obtain the search warrant of Ms. Taylor’s home, that this act violated federal civil rights laws, and that those violations resulted in Ms. Taylor’s death. Breonna Taylor should be alive today. The Justice Department is committed to defending and protecting the civil rights of every person in this country.  That was this Department’s founding purpose, and it remains our urgent mission.”

“On March 13, 2020, Breonna Taylor should have awakened in her home as usual, but tragically she did not,” said Assistant Attorney General Kristen Clarke. “Since the founding of our nation, the Bill of Rights to the United States Constitution has guaranteed that all people have a right to be secure in their homes, free from false warrants, unreasonable searches and the use of unjustifiable and excessive force by the police. These indictments reflect the Justice Department’s commitment to preserving the integrity of the criminal justice system and to protecting the constitutional rights of every American.”

The first indictment charges former Louisville Metro Police Department (LMPD) Detective Joshua Jaynes, 40, and current LMPD Sergeant Kyle Meany, 35, with federal civil rights and obstruction offenses for their roles in preparing and approving a false search warrant affidavit that resulted in Taylor’s death. The second indictment charges former LMPD Detective Brett Hankison, 46, with civil rights offenses for firing his service weapon into Taylor’s apartment through a covered window and covered glass door. The third charging document — an information filed by the Department of Justice — charges LMPD Detective Kelly Goodlett with conspiring with Jaynes to falsify the search warrant for Taylor’s home and to cover up their actions afterward.

The first indictment — charging Jaynes and Meany in connection with the allegedly false warrant — contains four counts. Count One charges that Jaynes and Meany, while acting in their official capacities as officers, willfully deprived Taylor of her constitutional rights by drafting and approving a false affidavit to obtain a search warrant for Taylor’s home. The indictment alleges that Jaynes and Meany knew that the affidavit contained false and misleading statements, omitted material facts, relied on stale information, and was not supported by probable cause.  The indictment also alleges that Jaynes and Meany knew that the execution of the search warrant would be carried out by armed LMPD officers, and could create a dangerous situation both for those officers and for anyone who happened to be in Taylor’s home. According to the charges, the officers tasked with executing the warrant were not involved in drafting the warrant affidavit and were not aware that it was false. This count alleges that the offense resulted in Taylor’s death.

Count Two charges Jaynes with conspiracy, for agreeing with another detective to cover up the false warrant affidavit after Taylor’s death by drafting a false investigative letter and making false statements to criminal investigators. Count Three charges Jaynes with falsifying a report with the intent to impede a criminal investigation into Taylor’s death. Count Four charges Meany with making a false statement to federal investigators. 

The second indictment —against Hankison — includes two civil rights charges alleging that Hankison willfully used unconstitutionally excessive force, while acting in his official capacity as an officer, when he fired his service weapon into Taylor’s apartment through a covered window and covered glass door. Count One charges him with depriving Taylor and a person staying with Taylor in her apartment of their constitutional rights by firing shots through a bedroom window that was covered with blinds and a blackout curtain. Count Two charges Hankison with depriving three of Taylor’s neighbors of their constitutional rights by firing shots through a sliding glass door that was covered with blinds and a curtain; the indictment alleges that several of Hankison’s bullets traveled through the wall of Taylor’s home and into the apartment unit occupied by her neighbors. Both counts allege that Hankison used a dangerous weapon, and that his conduct involved an attempt to kill.

The information charging Goodlett with conspiracy contains one count. It charges Goodlett with conspiring with Jaynes to falsify the warrant affidavit for Taylor’s home, and file a false report to cover up the false affidavit.

All of the civil rights charges involve alleged violations of Title 18, United States Code, Section 242, which makes it a crime for an official acting under color of law — meaning an official who is using or abusing authority given to that person by the government — to willfully violate a person’s constitutional rights. A violation of this statute carries a statutory maximum sentence of life imprisonment where the violation results in death or involves an attempt to kill.  The obstruction counts charged in the indictments carry a statutory maximum sentence of 20 years; and the conspiracy counts carry a statutory maximum sentence of five years, as does the false-statements charge. Actual sentences, in case of conviction, are determined by a judge.

The charges announced today are separate from the Justice Department’s Civil Rights Division’s pattern or practice investigation into Louisville Metro Government and the Louisville Metro Police Department, which Attorney General Garland announced on April 26, 2021. The charges announced today are criminal against individual officers, while the ongoing pattern or practice investigation is a civil investigation that is examining allegations of systemic violations of the Constitution and federal law by LMPD and Louisville Metro. The civil pattern or practice investigation is being handled independently from the criminal case by a different team of career staff.

The charges announced today are also separate from the charges previously filed by the Commonwealth of Kentucky against Hankison related to the shooting at Taylor’s home. The federal charges allege violations of the U.S. Constitution, rather than of state law. The federal charges also allege excessive use of force with respect to Taylor and a person staying in her apartment; violations not included in the Commonwealth’s case.

These federal cases were investigated by the FBI Louisville Field Office. Trial Attorneys Michael J. Songer and Anna Gotfryd of the Civil Rights Division are prosecuting the cases with Assistant U.S. Attorney Zachary Dembo of  the Eastern District of Kentucky.

An indictment or an information is merely a formal allegation of criminal conduct.  The defendants are presumed innocent unless and until they are proven guilty beyond a reasonable doubt in a court of law.

El martes, los extensos esfuerzos de coordinación y cooperación entre las autoridades del orden público de los Estados Unidos y Guatemala culminaron con la realización por parte de la Policía Nacional Civil de Guatemala (PNC) de una importante operación para desarticular y desmantelar una organización transnacional de tráfico de personas. Esta operación incluyó la detención de cuatro presuntos traficantes de personas que han sido imputados en los Estados Unidos.

El 2 de agosto, las fuerzas del orden público guatemaltecas ejecutaron 26 órdenes de allanamiento en Huehuetenango, El Quiché, Totonicapán, y Alta y Baja Verapaz, y arrestaron a 19 individuos, incluyendo a los cuatro fugitivos estadounidenses. Como resultado de las órdenes de allanamiento, las fuerzas del orden público recuperaron 10 vehículos de alto valor, armas de fuego y dinero en efectivo.

Felipe Diego Alonzo, alias “Siete,” 38; Nesly Norberto Martínez Gómez, alias “Canche,” 37; López Mateo Mateo, alias “Bud Light,” 42; y Juan Gutiérrez Castro, alias “Andrés,” 45; fueron arrestados en Guatemala a solicitud de los Estados Unidos en virtud de cargos previamente presentados en el Distrito Oeste de Texas (WDTX) y dados a conocer ayer. Los acusados supuestamente conspiraron con otros traficantes para facilitar el viaje de un gran número de migrantes desde Guatemala a través de México y, ultimadamente a los Estados Unidos, cobrando a los migrantes y a sus familias aproximadamente US$10,000 a US$12,000 por el viaje peligroso. Además del prolífico tráfico de migrantes a los Estados Unidos, se alega que los traficantes de personas que fueron objeto de esta operación son responsables de la muerte de una joven indígena guatemalteca que murió en Texas en abril de 2021. Las autoridades guatemaltecas arrestaron a Diego Alonzo, Martínez Gómez, Mateo Mateo y Gutiérrez Castro en virtud de las solicitudes de extradición de Estados Unidos.

La familia de la víctima pagó a los sindicados aproximadamente $10,000 dólares por el viaje a los Estados Unidos. Según la imputación, los sindicados y sus cómplices la guiaron durante varios días a través del desierto hasta Odessa, Texas, donde finalmente pereció. Al enterarse de su muerte, los sindicados y sus cómplices trabajaron rápidamente para deshacerse del cuerpo y lo tiraron a la orilla de un camino rural en el Condado Crane, Texas. Los sindicados y sus cómplices organizaron entonces el pago a la familia de la víctima.

“La Fuerza de Tarea Conjunta Alpha fue creada para investigar y procesar a las redes internacionales responsables de actividades peligrosas y abundantes de tráfico de personas que explotan y victimizan a los migrantes,” dijo el asistente del fiscal general Kenneth A. Polite, Jr., de la División Criminal del Departamento de Justicia. “Estas imputaciones demuestran el compromiso del Departamento de Justicia de responsabilizar a las organizaciones criminales que se aprovechan de las personas vulnerables para obtener ganancias. El personal dedicado de la Fuerza de Tarea Conjunta Alpha (JTFA), junto con nuestros socios internacionales encargados de hacer cumplir la ley, están trabajando incansablemente para desarticular y desmantelar estas redes dañinas de tráfico y trata.”

“Estos arrestos recientes son la culminación de más de un año de esfuerzos de coordinación e investigación internacional de esta extensa operación de tráfico de personas,” dijo la Fiscal Federal de EE. UU. Ashley C. Hoff. “Esta organización delictiva específica ha traficado a un gran número de migrantes de Guatemala, entre ellos una joven que murió mientras estaba siendo traficada, y cuyo cuerpo posteriormente fue arrojado cruelmente por los traficantes en el Condado Crane, Texas. Junto con nuestros socios, la Fiscalía Federal de EE. UU. para el Distrito Oeste de Texas está comprometida en hacer justicia para ella y a hacer que todos los delincuentes rindan cuentas de sus crímenes, incluyendo a los miembros de la organización criminal que permanecen en Guatemala.”

“HSI está profundamente inmerso en la lucha global contra el tráfico de personas, y eso incluye nuestras Operaciones Internacionales en Centroamérica y Sur América,” dijo Steve Francis, director ejecutivo en funciones de Investigaciones de Seguridad Nacional (HSI). “La lucha contra este horrible crimen transnacional es una de nuestras principales prioridades: nuestros agentes especiales están activamente involucrados con los socios de las fuerzas del orden y las fuerzas de tarea de todo el mundo que trabajan para desmantelar las redes criminales que tratan la vida humana como una mercancía. Continuaremos erradicando a los involucrados en este crimen y llevando a los presuntos autores, como estos cuatro, ante la justicia.”

“Las organizaciones criminales transnacionales siguen poniendo en peligro imprudentemente las vidas de personas que trafican para su propio beneficio financiero, sin importarles la vida humana,” dijo el subcomisionado de CBP, Troy Miller. “CBP apoya a la Fuerza de Tarea Conjunta Alpha mediante el intercambio de información y el análisis de su personal de primera línea y el Centro Nacional de Objetivos de CBP. Esa coordinación es esencial para identificar organizaciones criminales transnacionales y llevar a los traficantes de humanos ante la justicia.”

Las imputaciones contra Diego Alonzo, Martínez Gómez, Mateo Mateo y Gutiérrez Castro, y la asistencia prestada por las autoridades estadounidenses a las fuerzas del orden público de Guatemala fueron coordinadas por la Fuerza de Tarea Conjunta Alpha (JTFA). La JTFA fue creada por el fiscal general en junio de 2021 en alianza con el Departamento de Seguridad Nacional (DHS), para fortalecer los esfuerzos generales del Departamento para combatir estos delitos basados en el aumento del abundante y peligroso tráfico que surge de Centroamérica y afecta a nuestras comunidades fronterizas. El objetivo de la JTFA es desbaratar y desmantelar las redes de tráfico y trata de personas que operan en El Salvador, Guatemala, Honduras y México, centrándose en las redes que ponen en peligro, abusan o explotan a los migrantes, presentan riesgos de seguridad nacional o participan en otros tipos de crimen organizado transnacional.

Desde su creación, la JTFA ha aumentado con éxito la coordinación y colaboración entre el Departamento de Justicia, el DHS y otros participantes interinstitucionales de las fuerzas del orden público, y con asociados extranjeros de las fuerzas del orden público, entre ellos El Salvador, Guatemala, Honduras y México; dirigido a aquellas organizaciones que tienen mayor impacto en los Estados Unidos, y coordinaron importantes acusaciones de tráfico y esfuerzos de extradición en las fiscalías de los Estados Unidos en todo el país. A la fecha, el trabajo de la JTFA con sus socios ha resultado en acusaciones criminales y más de cien de arrestos nacionales e internacionales, incluyendo importantes líderes, organizadores y facilitadores de las actividades de tráfico de personas; varias docenas de condenas; se han impuesto importantes sentencias de cárcel; y sustanciales decomisos de activos. La JTFA está compuesta por el personal de las Fiscalías de EE. UU. de la frontera suroeste, incluyendo el Distrito Sur de Texas, el Distrito Oeste de Texas, el Distrito de Arizona y el Distrito Sur de California, y al programa también le proporcionan apoyo numerosos componentes de la División Criminal que forman parte de la JTFA – dirigidos por la Sección de Derechos Humanos y Procesos Especiales (HRSP), y apoyados por la Oficina de Desarrollo, Asistencia, y Capacitación Fiscal (OPDAT), la Sección de Narcóticos y Drogas Peligrosas (NDDS), la Sección de Lavado de Dinero y Recuperación de Activos (MLARS), la Oficina de Operaciones de Cumplimiento (OEO), la Oficina de Asuntos Internacionales del Departamento de Justicia (OIA) y la Sección del Crimen Organizado y Pandillas (OCGS). La JTFA es posible gracias a una importante inversión en las fuerzas del orden por el DHS, el FBI, la Administración de Control de Drogas (DEA) y otros socios.

HSI Midland lideró los esfuerzos de investigación de Estados Unidos, trabajando en conjunto con HSI Guatemala, y la Unidad de Tráfico de Personas de HSI en Washington, D.C. HSI recibió una asistencia sustancial de las Operaciones de Aplicación y Remoción del Servicio de Migración y Control de Aduanas de Estados Unidos (ICE), el Centro Nacional de Objetivos/Operación Centinela de Aduanas y Protección Fronteriza de los Estados Unidos; la Patrulla Fronteriza de los Estados Unidos, el Servicio de Alguaciles Federales, los Departamentos de Policía de Odessa y Midland; el Departamento de Seguridad Pública de Texas; y las Oficinas del Sheriff del Condado de Ector, el Condado de Midland y el Condado de Crane. La HRSP, la OIA y la OPDAT prestaron una importante asistencia en este asunto. El Departamento de Justicia agradece a las fuerzas del orden público guatemaltecas, quienes fueron fundamentales en el avance de esta investigación.

El caso está siendo manejado por el subdirector de la JTFA James Hepburn del HRSP, los Fiscales Federales Auxiliares Adrián Gallegos y José Luis Acosta del WDTX y la JTFA, y el Fiscal Federal Auxiliar John Fedock del WDTX, con la asistencia de la historiadora del HRSP/especialista en América Latina Joanna Crandall.

Los cargos en una imputación son sólo alegaciones, y se presume que todos los sindicados son inocentes hasta que se demuestre su culpabilidad más allá de toda duda razonable en un tribunal de justicia.

Yesterday, Attorney General Merrick B. Garland, Deputy Attorney General Lisa O. Monaco and Associate Attorney General Vanita Gupta participated in the 39th Annual National Night Out. Established in 1984 from a Department of Justice Bureau of Justice Assistance (BJA) grant, the goal of National Night Out is to build relationships with and between communities and law enforcement. National Night Out is an annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, better places to live. In most areas of the country, the program occurs annually on the first Tuesday of August.

“Public trust is essential to public safety, and the Justice Department is committed to strengthening the bonds of partnership between law enforcement and the communities we serve,” said Attorney General Garland.  “Each year, National Night Out provides an important opportunity to build upon these efforts and to celebrate our shared obligations to each other as neighbors and as Americans.”

The Attorney General participated in two National Night Out events in Baltimore, alongside U.S. Attorney Erek L. Barron of the District of Maryland. They joined the Baltimore Police Commissioner Michael S. Harrison at a community event organized by the No Boundaries Coalition and later visited a block party in the Western Police District. The Attorney General spoke with community members and local and federal law enforcement partners. Prior to the National Night Out events, the Attorney General met with staff of the U.S. Attorney’s Office in Baltimore.

Deputy Attorney General Monaco and U.S. Attorney Adair Ford Boroughs attended two National Night Out events in Charleston and North Charleston, South Carolina, with the Charleston Police Department and North Charleston Police Department. The Deputy Attorney General visited Mall Park and Riverfront Park, where she heard from local law enforcement and community members working to strengthen partnerships throughout both neighborhoods. She also had an opportunity to talk with Deputy Chief Chito Walker of the Charleston Police Department and Chief Reggie Burgess of the North Charleston Police Department about their Department’s participation in the Department’s National Public Safety Partnership program which promotes public safety by providing participating communities with specialized law enforcement expertise and resources.

Associate Attorney General Gupta attended two National Night Out events with the U.S. Attorney for the Eastern District of Virginia Jessica D. Aber. In Richmond, VA they joined Richmond Police Chief Gerald M. Smith, and other local law enforcement and community members, including representatives from the DEA. They discussed the Department’s funding for community policing and other community-police trust-building initiatives. The Associate Attorney General and Acting COPS Director Robert Chapman then participated in a Chesterfield County, VA National Night Out event, where they met with Colonel Jeffrey S. Katz, Chief of the Chesterfield County Police Department, and shared information about the Justice Department’s funding of National Night Out, which dates back to 1982.

Deputy Attorney General (Deputy AG) Lisa O. Monaco traveled to South Carolina this week to see firsthand how the Justice Department is working with local communities to protect public safety.

The Deputy AG attended two National Night Out events on Tuesday evening in Charleston and North Charleston, South Carolina. Joined by U.S. Attorney Adair Ford Boroughs of the District of South Carolina, the Deputy AG talked with law enforcement officers from the Charleston Police Department (CPD) and the North Charleston Police Department (NCPD), as well as local residents working to strengthen partnerships throughout both communities. 

She also spoke with CPD Deputy Chief Chito Walker and NCPD Chief Reggie Burgess about their agencies’ participation in the Justice Department’s National Public Safety Partnership National Public Safety Partnership program, which promotes public safety by providing participating communities with specialized law enforcement expertise and resources. Deputy AG Monaco thanked both departments for their partnership. 

On Wednesday, the Deputy AG met in Charleston with members of the U.S. Attorney’s Office from across the District of South Carolina. She received a briefing from U.S. Attorney Ford Boroughs and her leadership team and hosted an “all-hands” meeting with the office’s prosecutors and professional staff to thank them for their work. The Deputy AG also convened a meeting with the heads of federal law enforcement agencies in South Carolina to discuss public safety issues, including violent crime and domestic terrorism.

Finally, the Deputy AG visited Mother Emanuel AME Church to pay her respects to the Emanuel Nine and survivors of the 2015 mass shooting.

BOISE – A Greenleaf man was sentenced to 78 months in federal prison and 3 years supervised release for unlawful possession of a firearm and assaulting a federal officer.

According to court records, Erik Konrad Ehrlin, 33, of Greenleaf, Idaho was investigated for vandalism on U.S. Government Property in the Mann Creak Area starting in March of 2021 by the U.S. Forest Service (USFS). The vandalism included markings of “SAI,” which refers to the Sovereign Alliance of Idaho.  The vandalism also included threats to federal employees.  The USFS identified Erik Ehrlin as a possible suspect.  It was reported that Ehrlin was potentially carrying a firearm.  Ehrlin was previously convicted of Sexual Abuse in the First Degree in Oregon and cannot lawfully possess firearms.

On April 30, 2021, a USFS Special Agent and a Washington County Sheriff’s Deputy contacted Ehrlin at a campsite in the Mann Creek Area.  The deputy observed Ehrlin with a firearm in his possession.  During the encounter, Ehrlin entered his truck, attempted to flee, and struck the USFS agent with a part of the truck.  He was taken into custody shortly after.  In Ehrlin’s campsite, law enforcement located a semi-automatic rifle.  In Ehrlin’s truck, law enforcement located body armor, eight loaded high-capacity magazines, a 9mm handgun with four additional loaded magazines, handcuffs, a red and blue siren, and a “POLICE” patch.  On Ehrlin’s person, law enforcement located a Boise Police badge.  Ehrlin is not a police officer.  Ehlrin also possessed ammunition with that contained writing on it, stating “DIE McLean,” “FUCK FEDS,” and “FUK BLM.”

A search of Ehrlin’s cell phone revealed text messages where Ehrlin described ways to commit mass violence against those with differing political views than him.  Specifically, he described wearing body armor while using an assault rifle to shoot hundreds of protesters. These text messages occurred in the context of discussing Black Lives Matter protests in October of 2020. 

The Federal Bureau of Investigation obtained a search warrant for Ehrlin’s residence in Greenleaf.  At Ehrlin’s residence, agents located a journal with references to SAI and the Sovereign Alliance of Idaho.  The journal also contained a “Sovereign Citizen’s Oath.”  Agents also located two additional firearms, a .22 caliber rifle and a .22 caliber revolver. 

U.S. Attorney Josh Hurwit, of the District of Idaho, made the announcement and commended the cooperative efforts of the Federal Bureau of Investigation, U.S. Forest Service, and Washington County Sheriff's Office, which led to charges.

This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

 

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FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced it has recently been notified of phone calls that spoof the Arlington Immigration Court as part of a misinformation campaign. The callers will often “spoof,” or fake, the immigration court’s main line, 703-305-1300, so the calls appear to be coming from EOIR on the recipient’s caller ID.

In this scam, fraudulent callers posing as EOIR employees or officers advise individuals that their social security number has been compromised and request money from the victims. These calls are fraudulent; EOIR personnel do not call individuals regarding social security numbers or to request money. To protect yourself, be wary of answering phone calls from numbers you do not recognize. Never give out your personal information over the phone to individuals you do not know.

If you have a question about your immigration court case, please call the Automated Case Information Hotline at 1-800-898-7180, or visit the Automated Case Information System or the Immigration Court Online Resource.

BOISE B A Whittier, California man was sentenced to 65 months in federal prison for the unlawful possession of a firearm.

According to court records, Alejandro Velasquez, 49, was found in the back seat of a vehicle that was stopped for a traffic violation in Nampa, Idaho. A K-9, trained to detect odors of controlled substances, positively alerted to the presence of controlled substances in the vehicle.  When police searched the vehicle, they discovered approximately 100 fentanyl pills and a Ruger 9mm pistol. Velazquez was prohibited from possessing firearms because of a prior felony drug conviction from California. He admitted to possessing the firearm and that he intended to distribute the fentanyl pills found in his possession.

Velasquez has a criminal history spanning 29 years with prior state convictions for receiving stolen property, transporting controlled substances, possession of controlled substances, and manufacturing controlled substances. 

U.S. District Judge Scott W. Skavdahl, from the District of Wyoming, sitting by designation, also ordered Velasquez to serve 3 years of supervised release following his prison sentence. Velasquez pleaded guilty to the charge on May 9, 2022.

U.S. Attorney Joshua D. Hurwit, of the District of Idaho, made the announcement and commended the investigation by the Nampa Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, which led to the charges.     

This case was prosecuted by the Special Assistant United States Attorney hired by the Ada County Prosecuting Attorney’s Office with funds provided by the High Intensity Drug Trafficking Areas (HIDTA) program.  HIDTA is part of the Office of National Drug Control Policy (ONDCP) created by Congress with the Anti-Drug Abuse Act of 1988.  It provides assistance to federal, state, and local law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States.  Idaho is part of the Oregon-Idaho HIDTA.  The Idaho HIDTA is a collaboration of local, multi-jurisdictional law enforcement drug task forces, and prosecuting agencies dedicated to addressing regional drug trafficking organizations that operate in Ada, Canyon, Bannock, Kootenai, and Malheur Counties.

 

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A California businessman pleaded guilty yesterday to willfully failing to account for and pay over employment taxes to the IRS.

According to court documents, Larry Kudsk, of Berkeley, operated two construction businesses, Kudsk Construction Inc. and M. Gutierrez Inc. The companies served as a general contractor or subcontractor on various construction projects, including some government projects. For both companies, Kudsk was responsible for filing quarterly employment tax returns and collecting and paying to the IRS payroll taxes withheld from employees’ wages. Kudsk, however, did not timely file employment tax returns or pay over withholdings to the IRS, for 2014 and the last three quarters of 2015 for M. Gutierrez Inc., and for 2016 for Kudsk Construction Inc. In all, Kudsk caused a tax loss to the IRS of more than $250,000.

Kudsk is scheduled to be sentenced on November 8. He faces a maximum of five years in prison for willful failure to account for and pay over employment taxes. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Stephanie Hinds for the Northern District of California made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Charles A. O’Reilly and Julia M. Rugg of the Tax Division and Assistant U.S. Attorney Katherine Lloyd-Lovett of the U.S. Attorney’s Office are prosecuting the case.

A Nevada restaurant owner pleaded guilty today to tax evasion.

According to court documents and statements made in court, Raul Gil, 63, owned and operated three Casa Don Juan restaurants in Las Vegas. From 2014 through 2018, Gil directed his bookkeeper to prepare false books and records for Gil’s restaurants that underreported cash sales at the restaurants by approximately $5.1 million. Gil then provided the false records to his tax return preparer, who annually prepared the Casa Don Juan corporate tax returns and Gil’s individual tax returns. As a result, the Casa Don Juan corporate tax returns were false for each of these years. Because the restaurant profits flowed through to Gil personally, his individual income tax returns for these years were false as well. Finally, because Gil directed the three restaurants to underreport their total sales, the Nevada sales tax returns for the restaurants also were false during these years.

In July 2018, the IRS initiated an audit of Gil. During the audit, Gil instructed his accountant to provide to the IRS false profit and loss statements that matched the figures reported on the tax returns. Gil also directed his bookkeeper to provide to the IRS false daily cash and sales reports purportedly printed from the restaurants’ point-of-sale systems. During interviews with the IRS, Gil falsely stated to the revenue agent conducting the audit, and later to IRS-Criminal Investigation special agents, that the falsified daily cash reports and point-of-sale records were accurate.

In total, Gil caused a tax loss to the IRS of approximately $1.6 million.

“Owners of restaurants that conduct a large number of cash transactions have to report all of their income, just like everyone else,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “We will investigate and prosecute those who shortchange their honest competitors and fellow citizens by willfully evading these laws.”

“In today’s challenging economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” said IRS-Criminal Investigation Special Agent in Charge Albert Childress. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t.”

Gil is scheduled to be sentenced on November 10 and faces a maximum sentence of five years in prison for tax evasion. He also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Thomas Flynn and Jacob Green of the Tax Division and Assistant U.S. Attorney Eric Schmale of the U.S. Attorney’s Office for the District of Nevada are prosecuting the case. Former Trial Attorneys Michael Landman and Stephen Moulton of the Tax Division also provided valuable assistance.

The Justice Department today filed a lawsuit to protect the rights of patients to access emergency medical care guaranteed by federal law. The suit challenges Idaho Code § 18-622 (§ 18-622), which is set to go into effect on Aug. 25 and imposes a near-total ban on abortion.

The complaint seeks a declaratory judgment that § 18-622 conflicts with, and is preempted by, the Emergency Medical Treatment and Labor Act (EMTALA) in situations where an abortion is necessary stabilizing treatment for an emergency medical condition. The United States also seeks an order permanently enjoining the Idaho law to the extent it conflicts with EMTALA.

“On the day Roe and Casey were overturned, we promised that the Justice Department would work tirelessly to protect and advance reproductive freedom,” said Attorney General Merrick B. Garland.  “That is what we are doing, and that is what we will continue to do. We will use every tool at our disposal to ensure that pregnant women get the emergency medical treatment to which they are entitled under federal law. And we will closely scrutinize state abortion laws to ensure that they comply with federal law.” 

“Federal law is clear: patients have the right to stabilizing hospital emergency room care no matter where they live,” said Department of Health and Human Services Secretary Xavier Becerra. “Women should not have to be near death to get care. The Department of Health and Human Services will continue its work with the Department of Justice to enforce federal law protecting access to health care, including abortions.”

“One critical focus of the Reproductive Rights Task Force has been assessing the fast-changing landscape of state laws and evaluating potential legal responses to infringements on federal protections,” said Associate Attorney General Vanita Gupta. “Today’s lawsuit against the State of Idaho for its near-absolute abortion ban is the first public example of this work in action. We know that these are frightening and uncertain times for pregnant women and their providers, and the Justice Department, through the Task Force’s work, is committed to doing everything we can to ensure continued lawful access to reproductive services.”

EMTALA requires hospitals that receive federal Medicare funds to provide necessary stabilizing treatment to patients who arrive at their emergency departments while experiencing a medical emergency. When a physician reasonably determines that the necessary stabilizing treatment is an abortion, state law cannot prohibit the provision of that care. The statute defines necessary stabilizing treatment to include all treatment needed to ensure that a patient will not have her health placed in serious jeopardy, have her bodily functions seriously impaired, or suffer serious dysfunction of any bodily organ or part.

As explained in the complaint, once § 18-622 enters into effect in Idaho, a prosecutor can indict, arrest and prosecute a physician merely by showing that an abortion has been performed, without regard to the circumstances. A physician who provides an abortion in Idaho can ultimately avoid criminal liability only by establishing as an affirmative defense that “the abortion was necessary to prevent the death of the pregnant woman” or that, before performing the abortion, the pregnant patient (or, in some circumstances, their parent or guardian) reported an “act of rape or incest” against the patient to a specified agency and provided a copy of the report to the physician. The law provides no defense for an abortion necessary to protect the health of the pregnant patient. 

Idaho’s criminal prohibition of all abortions, subject only to the statute’s two limited affirmative defenses, directly conflicts with EMTALA and stands as an obstacle to the accomplishment of EMTALA’s federal objectives of providing stabilizing care and treatment to anyone who needs it.

The Justice Department is committed to protecting access to reproductive services. Following the Supreme Court’s decision in Dobbs, the Justice Department established the Reproductive Rights Task Force, chaired by Associate Attorney General Gupta. The Task Force is charged with protecting access to reproductive freedom under federal law. For additional information on the work of the Task Force visit www.justice.gov/reproductive-rights.

The U.S. Department of Justice transmitted a request to Argentinian authorities today to seize a Boeing 747-300M cargo plane following the unsealing of a seizure warrant in the U.S. District Court for the District of Columbia. The warrant, which was issued on July 19, 2022, alleges that the U.S.-made plane is subject to forfeiture based on violations of U.S. export control laws related to the unauthorized transfer of the plane from Mahan Air, an Iranian airline affiliated with the Islamic Revolutionary Guard Corp-Qods Force (IRGC-QF), a designated terrorist organization, and Empresa de Transporte Aéreocargo del Sur, S.A. (EMTRASUR), a Venezuelan cargo airline and subsidiary of Consorcio Venezolano de Industrias Aeronáuticas y Servicios Aéreos, S.A (CONVIASA), a Venezuelan state-owned company.

In 2008, the Department of Commerce issued, and has since periodically renewed, a Temporary Denial Order prohibiting Mahan Air from, among other things, engaging in any transaction involving any commodity exported from the United States that is subject to the Export Administration Regulations. As alleged in the seizure warrant, in or around October 2021, Mahan Air violated the Temporary Denial Order and U.S. export control laws when it transferred custody and control of the Boeing aircraft to EMTRASUR without U.S. Government authorization. Additional violations of U.S. export control laws subsequently occurred between February and May 2022 when EMTRASUR reexported the aircraft between Caracas, Venezuela; Tehran, Iran; and Moscow, Russia, without U.S. Government authorization.

Further, as alleged in the seizure warrant, in June 2022, Argentinian authorities detained the flight crew of the Boeing aircraft, including five Iranians. The registered captain of the aircraft was identified as an ex-commander for the IRGC and a shareholder and member of the board of Iranian airline Qeshm Fars Air. Argentinian law enforcement also searched the aircraft and found a Mahan Air flight log documenting the aircraft’s flights after the unlawful transfer to EMTRASUR, including a flight to Tehran, Iran, in April 2022. Mahan Air was designated in 2011 by the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC) for providing material support to the IRGC-QF, and Qeshm Fars Air was designated in 2019 for being controlled by Mahan Air and for providing material support to the IRGC-QF.

In addition, CONVIASA, EMTRASUR’s parent company, was designated by OFAC in 2020, and its fleet was blocked pursuant to Executive Order in 2019. Concurrent with today’s action, the Department of Commerce issued a Temporary Denial Order denying the export privileges of EMTRASUR for 180 days with the possibility of renewal.

“The Department of Justice will not tolerate transactions that violate our sanctions and export laws,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Working with our partners across the globe, we will give no quarter to governments and state-sponsored entities looking to evade our sanctions and export control regimes in service of their malign activities.”

“The seizure of this aircraft demonstrates our determination to hold accountable those who seek to violate U.S. sanctions and export control laws,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “We will aggressively seek to prevent sanctioned entities from gaining access to America-made items or profiting from their illegal transfer. Working with our federal and international partners, we will be unflagging in our efforts to bring to justice those who violate these sanctions and to seize assets where appropriate and lawful.”

“Today’s coordinated actions target the unlawful transfer of an Iranian cargo plane to a Venezuelan airline and the airline’s subsequent operation of that plane in violation of our rules,” said Assistant Secretary of Export Enforcement Matthew S. Axelrod of the U.S. Department of Commerce’s Bureau of Industry and Security. “We will continue to take significant and direct enforcement action against foreign airlines operating U.S.-origin aircraft in violation of U.S. export controls.”

“This seizure demonstrates the FBI’s persistence in using all of our tools to hold the Iranian Government and affiliated individuals and companies accountable when they violate U.S. laws,” said Acting Assistant Director of Counterterrorism Kevin Vorndran of the FBI. “The FBI, along with our international partners, will continue to seek out those individuals who contribute to the advancement of Iran’s malign activities and ensure they are brought to justice, regardless of where, or how, they attempt to hide.”

This matter is being investigated by the Department of Commerce, Bureau of Industry and Security’s Miami Field Office and the FBI Miami Field Office.

Assistant U.S. Attorney Rajbir Datta of the U.S. Attorney’s Office for the District of Columbia, Assistant U.S. Attorney Andy Camacho of the Southern District of Florida, and Trial Attorney Elizabeth Abraham of the Counterintelligence and Export Control Section are handling the seizure and investigation, with assistance from Paralegal Specialist Brian Rickers and Legal Assistant Jessica McCormick. The Justice Department’s Office of International Affairs provided significant assistance in working with the Argentinian authorities.

JetPhotos A photograph of the TARGET Aircraft from Sept. 6, 2019 with the Mahan Air livery and logo. JetPhotos A photograph of the TARGET Aircraft from Jan. 23, 2022 with the EMTRASUR livery and logo.

Hagatña, Guam – SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant James Rumbaua Damaso, age 54, a Naturalized U.S. Citizen from the Republic of the Philippines, was sentenced in the United States District Court of Guam to three hundred months imprisonment with credit for time served for Possession of Fifty or More Grams of Methamphetamine Hydrochloride with Intent to Distribute, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(A)(viii) and 18 U.S.C. § 2.  The Court also ordered Damaso serve ten years of supervised release following imprisonment and pay a mandatory $100 special assessment fee.  In addition, defendants convicted of a federal drug offense may no longer qualify for certain federal benefits.

In July 2019, James Rumbaua Damaso, recruited others to receive packages containing methamphetamine hydrochloride. The methamphetamine was mailed to Guam using the U.S. Postal System.  U.S. Postal Inspectors intercepted one of Damaso’s packages containing 1,783 net grams of methamphetamine hydrochloride that was analyzed with a purity of 97%.  He was arrested by officers with Homeland Security Investigations (HSI) and the U.S. Postal Inspection Service (USPIS).  Damaso was found with an additional 121.4 grams of methamphetamine hydrochloride, $31,418.00 in U.S. Currency, a drug scale and paraphernalia. The methamphetamine in total weighed 1,904 grams, equivalent to 4.2 pounds.  

On November 23, 2021, James Rumbaua Damaso was found guilty after nine days of jury trial in the U.S. District Court of Guam. Damaso had prior convictions, including a serious drug felony, subjecting him to enhanced penalties. 

“This significant sentence is the result of productive teamwork by multiple agencies at all levels of government,” said John F. Tobon, Special Agent in Charge, HSI Honolulu. “HSI will continue to target individuals and organizations involved in transnational crime.” 

"This sentence is a reminder to drug traffickers that we will not tolerate using the U.S. mail to transport controlled substances in Guam or anywhere else," said Acting Inspector in Charge Kevin Rho of the U.S. Postal Inspection Service, San Francisco Division.  " I would like to thank local and federal law enforcement agencies for their partnership in stopping the spread of drugs this defendant to justice."

This case was a joint investigation conducted by Homeland Security Investigations, U.S. Postal Inspection Service, and the Guam Customs and Quarantine.  The case was prosecuted by Laura C. Sambataro and Rosetta L. San Nicolas, Assistant United States Attorneys in the District of Guam.

A California man pleaded guilty today to conspiring with others in schemes to defraud the IRS and the Paycheck Protection Program (PPP), a federal loans initiative designed to help businesses pay their employees and meet expenses during the COVID-19 pandemic.

According to court documents and statements made in court, Thanh Ngoc Rudin, 58, was a principal of Mana Tax Services, a tax preparation business in the Los Angeles area. Rudin engaged in a conspiracy to commit two sets of fraud schemes using Mana Tax.

First, from June of 2019 through July 2021, Thanh Rudin conspired with his brother, Quin Ngoc Rudin, as well as Seir Havana and others, to prepare and file with the IRS a series of false and fraudulent income tax returns on behalf of at least nine professional athletes. The false tax returns reported fabricated business and personal losses to generate refunds the athletes were not entitled to receive. The co-conspirators told the professional athletes that Mana Tax also could amend prior year tax returns to correct purported errors made by the athletes’ previous accountants to get additional refunds they were not entitled to receive. Mana Tax then charged the athletes a fee of 30% of the resulting refund.

Thanh Rudin and his co-conspirators also used Mana Tax to apply for PPP loans on behalf of a number of small businesses, shell entities controlled by the co-conspirators themselves with few or no employees, and business entities controlled by others. To obtain the PPP loans to which the applicants were not entitled, the co-conspirators grossly inflated the number of employees and monthly payroll costs claimed on the PPP loan applications and submitted fabricated tax returns in support of the applications. In exchange for processing the applications, Mana Tax charged a fee of 30% of the value of the loan received.

During the investigation, the government seized more than $11.8 million from bank accounts containing PPP loan fraud proceeds controlled by the conspirators. In addition, Havana surrendered cashier’s checks worth approximately $5.6 million, representing a portion of the fees charged to professional athletes for the preparation of their false tax returns, and a portion of the fees charged for obtaining fraudulent PPP loans. The two schemes resulted in total losses of more than $25 million.

Thanh Rudin is scheduled to be sentenced on November 9. He faces a maximum penalty of five years in prison for the conspiracy charge and 20 years in prison for wire fraud. He also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

On May 13, Quin Rudin pleaded guilty to conspiracy to defraud the United States, conspiracy to commit wire fraud, and wire fraud. His sentencing hearing is scheduled for September 14. On July 20, Havana pleaded guilty to conspiracy to defraud the United States, conspiracy to commit wire fraud, and money laundering. His sentencing hearing is scheduled for Nov. 9.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Jessica D. Aber for the Eastern District of Virginia, Special Agent in Charge Wayne A. Jacobs of the FBI Washington Field Office Criminal Division, and Special Agent in Charge Darrell J. Waldon of the Washington, D.C. Field Office, IRS-Criminal Investigation made the announcement.

The U.S. Attorney’s Office for the Central District of California provided assistance with the investigation.

Assistant Chief David Zisserson of the Tax Division and Assistant U.S. Attorneys Kimberly M. Shartar and Kimberly R. Pedersen are prosecuting the case.