District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Former Bureau of Prisons Chaplain Pleads Guilty to Sexual Assault and Lying to Federal AgentsRead the Press Release
James Theodore Highhouse, 49, a former chaplain with the Federal Bureau of Prisons (BOP) pleaded guilty today in federal court in the Northern District of California to five felonies for sexually abusing a female inmate and subsequently lying to federal agents during their investigation into his misconduct.
According to court documents, from May 15, 2018, through Feb. 9, 2019, Highhouse was employed by the BOP as a corrections worker and chaplain, and was assigned to work at FCI-Dublin, a federal prison that houses female inmates. In his role as a prison chaplain, he led religious services, and offered spiritual guidance to the female inmates. He also taught religious-based classes about boundaries and self-worth, with the understanding that many inmates with whom he interacted came from a background of trauma, abuse, and substance addiction. Highhouse met with these inmates in group settings and one-one-one in his office. At times, Highhouse also performed a custodial role, that is, he could handcuff inmates, write up incident reports and refer inmates for disciplinary action.
During the aforementioned time period, the victim, one of the female inmates housed at FCI-Dublin, came to see Highhouse for spiritual guidance. Highhouse met with her alone in his office on multiple occasions. As part of his guilty plea, Highhouse admitted that during the meetings in his office, he sexually abused the victim. He did so despite receiving training on maintaining boundaries with inmates, and attending yearly BOP refreshers about sexual abuse and prevention.
Then, once the FBI and the Department of Justice’s Office of the Inspector General (Department of Justice- OIG) opened a federal investigation into his allegations that he sexually abused an inmate, Highhouse lied to federal agents about his misconduct. Specifically, on Feb. 21, 2019, during a voluntary interview with federal agents, he knowingly made false statements when he denied engaging in sexual acts and sexual contact with the victim. Then, during a follow up interview on Feb. 3, 2020, he again misled federal agents, when he again falsely denied engaging in such conduct. Highhouse acknowledged that he repeated those denials even though on Aug. 14, 2019, he handwrote a statement, admitting that he engaged in sexual acts and sexual contact with the victim.
“Any law enforcement official who exploits their authority and position as a spiritual counselor, particularly by sexually abusing an inmate in their custody, must be held accountable for their actions,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will not stand for abuse and misconduct by its own law enforcement officials, and we will take action wherever needed to hold perpetrators accountable under the law.”
“The FBI and our Department of Justice-OIG partners take all allegations of sexual misconduct by employees of federal prisons seriously and are committed to swiftly investigating violations under the color of authority at all levels,” said Special Agent in Charge Craig D. Fair of FBI San Francisco.
“Highhouse held a position of great trust as a prison chaplain. He exploited this trust and sexually abused an inmate under his care, and then lied in an effort to cover up his crimes,” said Special Agent in Charge Zachary Shroyer of the Department of Justice Office of the Inspector General Los Angeles Field Office. “The Department of Justice Office of the Inspector General will continue to root out this kind of abuse and bring the perpetrators to justice.”
A sentencing date has been set for July 6. Highhouse faces a maximum penalty of up to 39 years in prison.
This case is being investigated by the San Francisco Division of the FBI and the Los Angeles Field Office of the Department of Justice-OIG. The case is being prosecuted by Special Litigation Counsel Fara Gold of the Criminal Section of the Civil Rights Division of the Justice Department.
Federal Jury Finds Three Men Guilty of Hate Crimes in Connection with the Pursuit and Killing of Ahmaud ArberyRead the Press Release
Following a two-week trial, three Georgia men were convicted today by a federal jury in the Southern District of Georgia for committing hate crimes and attempting to kidnap Ahmaud Arbery, a young Black man who was jogging on the public streets of a Brunswick neighborhood. Two of the men were also convicted of charges that they used firearms during that crime of violence.
Travis McMichael, 35; Travis’s father, Gregory McMichael, 65; and William “Roddie” Bryan, 51, were each convicted of one count of using force and threats of force to intimidate and interfere with Mr. Arbery’s right to use a public street because of his race.
In addition to the hate crime charges, the defendants were found guilty of attempted kidnapping. Finally, Travis McMichael was found guilty of using, carrying, brandishing, and discharging a Remington shotgun in the course of the hate crime, and Gregory McMichael was found guilty of using, carrying, and brandishing a .357 Magnum revolver.
“Today’s verdict makes clear that the Justice Department will continue to use every resource at its disposal to confront unlawful acts of hate, and to hold accountable those who perpetrate them,” said Attorney General Merrick B. Garland. “Although we welcome the jury’s verdict, the only acceptable outcome in this matter would have been Mr. Arbery returning safely to his loved ones two years ago. No one in this country should have to fear the threat of hate fueled violence. No one should fear being attacked or threatened because of what they look like, where they are from, whom they love, or how they worship. And no one should fear that if they go out for a run, they will be targeted and killed because of the color of their skin.”
Evidence at trial revealed that on Feb. 23, 2020, defendants Travis and Gregory McMichael armed themselves with a Remington shotgun and a .357 Magnum revolver, respectively, and chased Mr. Arbery. The pursuit passed by the home of defendant William “Roddie” Bryan, who did not know Mr. Arbery, but decided to get into his own truck to join the McMichaels in their pursuit of Mr. Arbery. For four to five minutes, the three defendants pursued Mr. Arbery through the neighborhood and tried to box in Mr. Arbery with their trucks. During the chase, Mr. Arbery was running with his hands empty and 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 from the defendants. Ultimately, after Mr. 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 Mr. Arbery. When Mr. Arbery tried to defend himself, Travis McMichael shot him in the chest. Mr. Arbery, wounded, grabbed for the gun. During a struggle over the gun, Travis McMichael fired two more shots into Mr. 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 Mr. Arbery that they would not have made if Mr. Arbery had been white.
Travis McMichael’s social media comments and text messages to friends showed that he 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, and that he had expressed support for vigilante efforts to catch or harm criminals.
Witnesses testified about deeply racist comments Gregory McMichael made to people he barely knew. One witness testified that during a brief encounter in a professional capacity, she commented, in passing, that it was “too bad” that Julian Bond, a Black Georgia civil rights leader, had recently passed away; Gregory angrily responded with a five-minute rant about Black people and said that he wished Mr. Bond had “been put in the ground years ago. He was nothing but trouble. Those Blacks are nothing but trouble.”
William Bryan’s text messages revealed that when defendant Bryan learned, just four days before the shooting, that his daughter was dating a Black man, he referred to the boyfriend as a “ni---” and as a “monkey.” There were other messages on social media in which Bryan referred to other Black people using those slurs and another racial slur: “bootlip.” When the police spoke to Bryan about Mr. Arbery’s death, he admitted that he had never seen or heard anything about Mr. Arbery before; he just saw a Black guy being chased and figured he must have done something wrong, and that his “instinct” told him that Mr. Arbery must be a thief or that maybe had shot someone.
The evidence at trial proved that race formed a but-for cause of the defendants’ actions on Feb. 23, 2020, meaning that, without that factor, the defendants would not have chased down a Black man whom they assumed, without evidence, was a criminal.
All three defendants face sentences of up to life in prison.
All three defendants were previously convicted in a separate state trial with felony murder and multiple other felonies for their roles in Mr. Arbery’s killing. The McMichaels were each sentenced to life imprisonment without the possibility of parole; Bryan was sentenced to life imprisonment with the possibility of parole.
The announcement was made by Attorney General Garland, Assistant Attorney General Kristen Clarke of the Justice Department's Civil Rights Division, U.S. Attorney David Estes of the Southern District of Georgia, and Acting Special Agent in Charge Philip Wislar of the FBI.
This case was investigated by both the Georgia Bureau of Investigation and the FBI, and is being 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.
Construction Company Owner Sentenced to Prison for Not Filing Tax ReturnsRead the Press Release
A Texas man was sentenced today to one year in prison for willfully failing to file tax returns.
According to court documents, Arturo Alejandro Cruz, of Houston, did not file tax returns with the IRS from 2011 through 2017 despite earning more than the minimum filing threshold each year. In 2012, for example, Cruz earned more than $460,000 from his co-ownership of a commercial construction business and the sale of that business. Cruz deposited some of this income into a bank account he held in the name of a shell company. Cruz spent the funds on personal items such as real estate and gambling.
In addition to the term of imprisonment, U.S. District Judge Kenneth M. Hoyt ordered Cruz to serve one year of supervised release and to pay approximately $164,032 in restitution to the IRS.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorneys William Montague and Parker Tobin of the Tax Division prosecuted the case.
Wisconsin Man Convicted of Sex Trafficking Adult and Minor VictimsRead the Press Release
Assistant Attorney General Kristen Clarke and U.S. Attorney Timothy M. O’Shea of the Western District of Wisconsin, today announced the conviction of Cory Hereford, 50, of Beloit, Wisconsin, on charges of sex trafficking, conspiracy to commit sex trafficking, maintaining a property for the purposes of distributing and using controlled substances, and of having committed sex trafficking of a minor while being a person previously convicted of a crime that required registering as a sex offender. The jury reached a verdict yesterday evening after five hours of deliberation following a four-day trial in federal court in Madison.
The government presented evidence at trial that Hereford targeted vulnerable young women struggling with drug addition, one of whom was a minor – 16 years old at the time – to engage in commercial sex. He enticed the victims with access to heroin, and in some instances threatened to withhold the heroin to induce withdrawal sickness as a means of compelling the victims to engage in prostitution for his profit. In other instances, Hereford threatened physical violence to achieve his criminal ends.
The evidence demonstrated that Hereford conspired with his co-defendant, Tonyiel Partee, 30, of Janesville, Wisconsin, to recruit victims and compel their commercial sex work. Partee pleaded guilty to conspiracy to commit sex trafficking in July 2021. Other evidence at trial showed that Hereford maintained a home on S. Franklin Street in Janesville, for the purposes of distributing and using controlled substances, specifically heroin and cocaine. Hereford was previously convicted of second-degree sexual assault of a child in the State of Wisconsin, which required him to register as a sex offender.
“This defendant preyed on vulnerable members of our society – young women and girls addicted to drugs,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Using their addictions to lure them deeper into the world of drugs and prostitution, he trafficked these victims for his own greed, without regard to their age, their pain, or their safety. We will continue to enforce our human trafficking laws to restore freedom and dignity to victims of this crime.”
“Mr. Hereford targeted and exploited young and vulnerable women, forcing them into commercial sex to generate income for him,” said U.S. Attorney Timothy O’Shea of the Western District of Wisconsin. “I commend the trial team, investigators, and victim advocates for their commitment and diligence. These guilty verdicts show that my office and Wisconsin law enforcement are united against sex trafficking.”
“The Janesville Police Department appreciates the assistance of our federal partners on this important and complex case,” said Chief David J. Moore of the Janesville Police Department. “This investigation illustrates the methods that human traffickers use by exploiting our most vulnerable children. Contrary to the beliefs of many, these criminals do not abduct these victims on a street corner but cultivate the victims over a lengthy period of time. As a community, we need to understand these appalling methods and look out for those in our community that may fall prey to these criminals. We need to learn that when we see suspicious activity, report it to a responsible authority.”
The court will sentence Hereford on May 12. The sex trafficking charge involving a minor carries a mandatory minimum penalty of 10 years and a maximum of life in federal prison. The charge of committing a crime involving a minor while a committed felon required to register as a sex offender has a mandatory 10-year penalty that federal law requires be served consecutive to any sentence imposed on the sex trafficking of a minor. The charge of maintaining a drug house has a maximum penalty of 20 years.
The case was investigated by Janesville Police Department, with the assistance of Wisconsin Department of Justice, Division of Criminal Investigation, and the Rock County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Julie Pfluger of the Western District of Wisconsin, and Trial Attorney Slava Kuperstein of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Pakistani Man Sentenced for Health Care Fraud and Money Laundering ConspiracyRead the Press Release
A Pakistani man was sentenced today in the Northern District of Illinois for a health care fraud scheme and money laundering conspiracy.
Muhammad Ateeq, 33, of Rawalpindi, Pakistan, was sentenced to 12 years in prison and ordered to pay approximately $48 million in restitution. In addition, Judge Manish Shah ordered the forfeiture of a $2.4 million cashier’s check and over $1 million in cash.
According to court documents, Ateeq worked in the Islamabad office of Home Health Care Consulting, an entity that controlled Medicare billing and maintenance of electronic medical records for over 20 home health agencies located in Illinois, Indiana, Nevada and Texas. While working at Home Health Care Consulting, Ateeq used a variety of fake identities, including “Nilesh Patel,” “Sanjay Kapoor” and “Rajesh Desai,” to acquire and manage home health agencies in the United States. Once the agencies were under Ateeq’s control, Ateeq caused the agencies to submit fraudulent claims to Medicare for home health services, resulting in over $40 million in payments for services that were never rendered.
As part of the money laundering conspiracy, Ateeq directed his U.S. employees to deposit checks of fraud proceeds into U.S. bank accounts designated by overseas customers of overseas money transmitting businesses. The money transmitting businesses then issued cash payments to Ateeq in Pakistan, as well as deposits into bank accounts in Pakistan under Ateeq’s control. Ateeq also directed U.S. employees to use fraud proceeds to purchase expensive watches and other luxury items in the United States and then deliver the items to Ateeq’s associates in Dubai.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney John R. Lausch, Jr. for the Northern District of Illinois; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent-in-Charge Emmerson Buie Jr. of the FBI Chicago Field Office; and Principal Deputy Inspector General Christi A. Grimm of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
The FBI Chicago Field Office and HHS-OIG investigated the case.
Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jeremy Daniel and Patrick Mott of the Northern District of Illinois prosecuted the case.
Oregon State Employee Indicted for Sexual Misconduct and Kidnapping Woman with Developmental DisabilitiesRead the Press Release
A federal grand jury in Portland, Oregon, returned an indictment today charging an Oregon Department of Human Services employee with kidnapping a woman with significant disabilities in his care, driving her to a secluded location, and engaging with her in sexual misconduct.
Zakary Glover, 28, of Lebanon, Oregon, is charged with depriving the victim of her constitutional right to bodily integrity, while acting under color of law. The indictment alleged that his conduct included attempted sexual abuse and kidnapping. Glover is also charged with kidnapping.
According to the indictment, Glover served as a direct support crisis specialist for the Oregon Department of Human Services, Office of Developmental Disabilities Stabilization and Crisis Unit (SACU). SACU operates several 24-hour crisis residential programs in Oregon that serve individuals with intellectual and developmental disabilities. Glover was tasked with ensuring the health, safety and security of the individuals who lived at the residential facility where he worked. The victim, who has severe autism, cognitive deficits and communicates mostly by using pictures, videos and drawings, was one of the individuals under Glover’s care.
As part of his duties, Glover took the victim on outings in a secure van to fast-food restaurants. On Nov. 2, 2021, while on an outing with the victim, Glover is alleged to have driven down a dead-end road toward a cemetery in Aumsville, Oregon. Upon reaching the dead-end, he parked the van, opened the passenger rear door where the victim was sitting, lowered his shorts, grabbed the victim and engaged in sexual misconduct.
If convicted, Glover faces a maximum sentence of life in prison.
Assistant Attorney General Kristen Clarke and U.S. Attorney Scott Erik Asphaug made the announcement.
This case is being investigated by the FBI's Portland Field Office with assistance from the Oregon State Police. It is being prosecuted by Assistant U.S. Attorney Gavin Bruce for the District of Oregon, and Special Litigation Counsel Fara Gold and Trial Attorney Daniel Grunert of the Civil Rights Division's Criminal Section.
An indictment is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.
Queens Business Owner Pleads Guilty to Payroll Tax FraudRead the Press Release
A New York woman pleaded guilty today to employment tax crimes.
According to court documents, Catherine Manzione, of Queens, co-owned and operated All American Transit Mix Crop (All American), a concrete company, with her father, Rocco Manzione. From the second quarter of 2013 through the third quarter of 2017, Catherine and Rocco Manzione withheld federal employment taxes from the wages of All American’s employees, but they did not timely file All American’s employment tax returns, nor did they pay over the required taxes to the IRS. For the second quarter of 2017 alone, they did not pay more than $38,000 in payroll taxes they had withheld from their employees’ wages. In total, Catherine Manzione caused a tax loss to the IRS of approximately $311,135.
In addition to All American, Rocco Manzione owned and operated at least two other concrete companies. He previously pleaded guilty to payroll tax fraud and tax evasion related to his operation of all three companies. Rocco Manzione is scheduled to be sentenced on April 26.
Catherine Manzione is scheduled to be sentenced on May 25. She faces a maximum penalty of five years in prison, as well as 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 made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Brittney Campbell and Kathryn Carpenter of the Tax Division are prosecuting the case.
New Jersey Couple Charged with Forced Labor and Other CrimesRead the Press Release
A federal grand jury yesterday returned an eight-count indictment charging a Burlington County, New Jersey, couple with the forced labor and other crimes involving two undocumented individuals, Assistant Attorney General Kristen Clarke of the Justice Department's Civil Rights Division and U.S. Attorney Philip Sellinger announced today.
Bolaji Bolarinwa, 47, and Isiaka Bolarinwa, 65, both of Moorestown, New Jersey, are both charged with two counts of forced labor. Bolaji Bolarinwa is also charged with two counts of bringing in and harboring certain undocumented individuals and two counts of unlawful conduct with respect to documents in furtherance of forced labor. Both defendants appeared today by videoconference before U.S. Magistrate Judge Sharon A. King.
According to the indictment from 2015 to 2016, Bolaji Bolarinwa unlawfully obtained labor and services from one victim by means of serious harm or threats of serious harm, and from another victim by means of force or threats of force. She abused and threatened abuse of legal process against both victims. Bolarinwa’s spouse, Isiaka Bolarinwa, participated in the scheme and financially benefitted from the victims’ forced labor.
Bolaji Bolarinwa knew that both victims had entered the United States illegally and harbored them from detection for her own financial gain. She confiscated and possessed the passports and visas of both victims.
Both defendants face a maximum penalty on each forced labor count of 20 years in prison. Bolaji Bolarinwa faces a maximum penalty on each undocumented individual harboring count of 10 years in prison and a maximum penalty on each unlawful document conduct count of five years in prison. They also each face a fine on each count of up to $250,000 or twice the gross gain or gross loss from the offense, whichever is greatest.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorneys Elizabeth Hutson and Vasantha Rao of the Department of Justice’s Civil Rights Division.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Justice Department Resolves Lawsuits to Ensure Equal Access to Health Care for People with HIVRead the Press Release
The Justice Department today announced that it has filed proposed consent decrees with two obstetrician-gynecologist (OB/GYN) doctors in Bakersfield, California. The consent decrees, which are subject to approval by the U.S. District Court for the Eastern District of California, resolve the department’s lawsuits against the doctors, Umaima Jamaluddin MD, and Chibuike Enyereibe Anucha MD, PC, under the Americans with Disabilities Act (ADA). The department sued Dr. Jamaluddin and Dr. Anucha alleging violations of the ADA based on their refusal to provide routine medical care to a patient because the patient has HIV. Title III of the ADA prohibits doctors and other health care providers from discriminating against people with disabilities, including HIV.
One lawsuit alleged that Dr. Anucha told the patient that she needed a Pap smear and refused to perform it because the patient has HIV. The other lawsuit alleged that Dr. Jamaluddin refused to allow the same patient to make an appointment for routine preventative care because the patient has HIV.
“People with HIV have the right to equal access to doctors and medical services,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department remains steadfast in our commitment to eradicate discrimination against people with HIV and combat the spread of unfounded stereotypes and misinformation.”
“Of all people, medical providers should understand that erecting barriers to basic medical care based on an individual’s HIV status is unconscionable,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “It should not take a federal lawsuit to break down such barriers, however, the U.S. Attorney’s Office and our partners in the Civil Rights Division stand ready to litigate to vindicate the rights of individuals with disabilities.”
Under the consent decrees, the doctors have agreed to pay a total of $75,000 to the patient ($37,500 in each case) and to pay a $5,000 civil penalty to the United States in each case. The consent decrees also require the defendants to take and provide their staff with training; implement a non-discrimination policy; and comply with record-keeping obligations, including providing regular reports to the department.
These cases were handled jointly by the Disability Rights Section of the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of California. For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. ADA complaints may be filed online at www.ada.gov/complaint.
View the Anucha consent decree here. View the Jamaluddin consent decree here.
Justice Department Announces First Director of National Cryptocurrency Enforcement TeamRead the Press Release
The Justice Department today announced the selection and appointment of Eun Young Choi to serve as the first Director of the National Cryptocurrency Enforcement Team (NCET).
Ms. Choi is a seasoned prosecutor with nearly a decade of experience within the department, and most recently served as Senior Counsel to the Deputy Attorney General. She will assume her duties full-time effective today.
“With the rapid innovation of digital assets and distributed ledger technologies, we have seen a rise in their illicit use by criminals who exploit them to fuel cyberattacks and ransomware and extortion schemes; traffic in narcotics, hacking tools and illicit contraband online; commit thefts and scams; and launder the proceeds of their crimes,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The NCET will serve as the focal point for the department’s efforts to tackle the growth of crime involving these technologies. Eun Young is an accomplished leader on cyber and cryptocurrency issues, and I am pleased that she will continue her service as the NCET’s inaugural Director, spearheading the department’s efforts in this area.”
The NCET was established to ensure the department meets the challenge posed by the criminal misuse of cryptocurrencies and digital assets, and comprises attorneys from across the department, including prosecutors with backgrounds in cryptocurrency, cybercrime, money laundering and forfeiture. The NCET will identify, investigate, support and pursue the department’s cases involving the criminal use of digital assets, with a particular focus on virtual currency exchanges, mixing and tumbling services, infrastructure providers, and other entities that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity. The NCET will set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to coordinate with domestic and international law enforcement partners, regulatory agencies and private industry to combat the criminal use of digital assets. Finally, the NCET will enhance the Criminal Division’s existing efforts to provide support and training to federal, state, local, and international law enforcement to build capacity to aggressively investigate and prosecute serious crimes involving cryptocurrency and digital assets in the United States and around the world.
The NCET’s work will be furthered through close collaboration with components across the department, including the Criminal Division’s Computer Crime and Intellectual Property Section and Money Laundering and Asset Recovery Section; the U.S. Attorneys’ offices; the National Security Division; and the FBI, including the FBI’s new Virtual Asset Exploitation Unit, a specialized team of cryptocurrency experts dedicated to providing analysis, support, and training across the FBI, as well as innovating its cryptocurrency tools to stay ahead of future threats.
“The department has been at the forefront of investigating and prosecuting crimes involving digital currencies since their inception,” said Director Choi. “The NCET will play a pivotal role in ensuring that as the technology surrounding digital assets grows and evolves, the department in turn accelerates and expands its efforts to combat their illicit abuse by criminals of all kinds. I am excited to lead the NCET’s incredible and talented team of attorneys, and to get to work on this important priority for the department. I would like to thank Assistant Attorney General Polite and the Criminal Division’s leadership for this opportunity.”
Prior to her service as Senior Counsel to Deputy Attorney General Lisa O. Monaco, Director Choi began her career at the department as an Assistant U.S. Attorney for the Southern District of New York, where she served as the office’s Cybercrime Coordinator and investigated and prosecuted cyber, complex fraud and money laundering crimes, with a particular focus on network intrusions, digital currency, the dark web and national security investigations. She served as lead prosecutor in a variety of cases, including the investigation of a transnational organization responsible for the hacking of J.P. Morgan Chase and a dozen other financial companies; the operation of Coin.mx, an unlicensed virtual currency exchange; and the only U.S. prosecution brought in connection with the “Panama Papers.” In addition, she successfully argued the appeal before the Second Circuit in the case against Ross Ulbricht, the founder and chief administrator of the Silk Road, the first darknet marketplace. Earlier in her career, she served as a law clerk to the Honorable Naomi Reice Buchwald of the U.S. District Court for the Southern District of New York, and the Honorable Reena Raggi of the U.S. Court of Appeals for the Second Circuit. She is a graduate of Harvard College and Harvard Law School.
Former North Carolina Police Sergeant Resentenced for Using Excessive Force Against an ArresteeRead the Press Release
The Justice Department announced today that Robert George, 49, was resentenced today by U.S. District Judge Kenneth D. Bell to three years in prison and one year of supervised release in connection with a 2013 incident that occurred while he was a Sergeant with the Hickory Police Department in North Carolina.
On Jan. 17, 2019, a federal jury convicted George of using excessive force for assaulting a woman whom he had arrested and transported to the Hickory Police station. George was previously sentenced to a term of probation by a different U.S. District Court judge following the trial, but the Fourth Circuit Court of Appeals reversed and remanded the case for resentencing.
The evidence at trial established that on Nov. 11, 2013, George assaulted a woman following her arrest. George forcibly pulled the handcuffed woman out from his police car and slammed her face-down onto the ground in the driveway just outside of the police station’s sally port. The forceful impact with the pavement caused the woman to suffer serious injuries that included a broken nose, severe dental trauma that required multiple surgeries and facial lacerations. Following the assault, George locked the woman in a cell and placed a spit-hood over her head because she was bleeding severely. The assault was captured by the police station’s security camera.
“Police officers who violently and unlawfully assault people in their custody, causing severe physical injuries and trauma, are not above the law and will be held accountable,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “This sentencing sends a strong message that the Justice Department will continue to aggressively prosecute officers who abuse their power by using unlawful force on people in their custody.”
“A person’s constitutional rights do not cease to exist during or after an arrest,” said U.S. Attorney Dena J. King of the Western District of North Carolina. “A federal jury rightfully decided that former police sergeant George used excessive force against an individual in his custody, and today’s resentencing reflects the seriousness of his unlawful conduct. As federal prosecutors, we have a duty to protect everyone’s civil rights and to investigate and prosecute federal law violations involving police misconduct. We owe it to the people living in the Western District and to the thousands of law enforcement officers who serve and protect the public with honor and dedication.”
“The security video of George's actions that day in 2013, is sickening,” said Special Agent in Charge Robert R. Wells of the FBI Charlotte Division. “We are grateful to our partners at the Hickory Police Department who immediately began an internal investigation and requested state and federal assistance. We hope today's resentencing sends a message that no one is above the law, and everyone deserves to be treated with respect and dignity.”
The case was investigated by the FBI and prosecuted by Civil Rights Division Criminal Section Trial Attorney Sanjay Patel and Assistant U.S. Attorney Kimlani Ford from the U.S. Attorney’s Office for the Western District of North Carolina.
Former Massachusetts Resident Pleaded Guilty to Conspiracy to Commit Sex Trafficking and Related ChargesRead the Press Release
A former Brockton, Massachusetts, resident pleaded guilty today to conspiracy to commit sex trafficking and related charges. Matthew Engram, 35, pleaded guilty to one count of conspiracy to commit sex trafficking by force, fraud or coercion, two counts of transportation of an individual for purposes of prostitution, and one count of conspiracy to commit interstate travel in aid of a racketeering enterprise.
As part of the plea hearing held in federal court, Engram admitted that from January 2009 until August 2015, he and a co-conspirator recruited and trafficked three victims from a residence in Brockton, and elsewhere, and Engram took all or part of the proceeds. Engram advertised the victims on websites, exchanged text messages with his co-conspirator to share advertisements, organized prostitution dates, and reserved hotel rooms. When these victims did not comply with Engram’s demands to prostitute for his profit, he physically assaulted them or directed a co-conspirator to physically assault them. Engram also admitted that he transported, or caused the transport of the victims to other states, including Connecticut, Pennsylvania, New York, Virginia, Florida and Maine, to perform commercial sex acts.
“Human trafficking is an insidious crime that exploits vulnerable members of our society, causing unimaginable and lasting harm,” said Assistant Attorney General Kristen Clarke of the Civil Rights Division. “The Justice Department is committed to using every available resource to prosecute human traffickers and to support human trafficking survivors.”
Sentencing in this matter has been set for May 19, 2022. The charge of conspiracy to commit sex trafficking through force, fraud, or coercion provides for a maximum sentence of life in prison, no fewer than five years of supervised release and a fine of up to $250,000. The charges of transportation of an individual for purposes of prostitution provides for a sentence of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000. The charge of conspiracy to commit interstate travel in aid of racketeering provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Homeland Security Investigations conducted the investigation with the assistance of the Boston Police Department. Assistant U.S. Attorney Suzanne Sullivan Jacobus of U.S. Attorney Rollins’s Major Crimes Unit and Trial Attorneys Shan Patel and Vasantha Rao of the Civil Rights Division prosecuted the case.
Department of Justice Announces Initiative to Protect Americans from Collusive Schemes Amid Supply Chain DisruptionsRead the Press Release
In the wake of persistent price increases initially stemming from supply chain disruptions caused by the COVID-19 global pandemic, the Antitrust Division and the FBI announced an initiative today to deter, detect and prosecute those who would exploit supply chain disruptions to engage in collusive conduct.
“Temporary supply chain disruptions should not be allowed to conceal illegal conduct,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The Antitrust Division will not allow companies to collude in order to overcharge consumers under the guise of supply chain disruptions.”
“The lingering challenge of supply chain disruptions from the COVID-19 pandemic has created an opportunity for criminals to fix prices and overcharge customers,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners will continue to collaborate and investigate schemes that violate our antitrust laws and stifle our economic recovery.”
As part of the initiative, the Antitrust Division is prioritizing any existing investigations where competitors may be exploiting supply chain disruptions for illicit profit and is undertaking measures to proactively investigate collusion in industries particularly affected by supply disruptions. The Antitrust Division has also formed a working group focusing on global supply chain collusion with its global partners, the Australian Competition and Consumer Commission, the Canadian Competition Bureau, the New Zealand Commerce Commission and the United Kingdom Competition and Markets Authority. The working group is developing and sharing intelligence, utilizing existing international cooperation tools, to detect and combat collusive schemes.
Economies across the globe have faced significant challenges caused by supply chain disruptions resulting from the COVID-19 global pandemic. Transportation constraints, disruptions to routine business operations and difficulty in obtaining raw materials have all led to increased costs of production and shipment, which in turn have resulted in higher prices for consumers. Supply chain disruptions have been broad in scope, affecting a variety of industries ranging from agriculture to health care.
While many individuals and businesses across various sectors in the economy have responded and will continue to respond to supply chain disruptions caused by the pandemic with laudable ingenuity — bringing goods to communities in need, expanding existing capacity and developing products and services to meet new needs — others may seek to use supply chain disruptions as a cover for collusive schemes. For those who seek to exploit supply chain disruptions for their own illicit gain, the Antitrust Division, along with the FBI, will investigate and prosecute criminal violations of the antitrust laws, including agreements between individuals and businesses to fix prices or wages, rig bids or allocate markets. Anyone with information on price fixing, bid rigging, market-allocation agreements or other anticompetitive conduct should call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit http://www.justice.gov/atr/report-violations.
The Department of Justice is committed to working closely with the public, the business community and other federal agencies to enforce the antitrust laws for the protection and welfare of the American people.
Blackstone Labs Founder Sentenced for Conspiracy to Sell Anabolic Steroids and Unlawful Dietary SupplementsRead the Press Release
A Florida man who co-founded a sports and dietary supplements retailer was sentenced today to 54 months in prison for conspiring to sell illegal anabolic steroids and other products marketed as dietary supplements that were unlawful under federal law. A second Florida man was sentenced to 13 months in prison for his role in the scheme.
According to court documents, Phillip Braun, 41, of Boca Raton, founded and operated Blackstone Labs LLC, a Boca Raton-based sports and dietary supplements retailer. Braun, who pleaded guilty in November 2021 to conspiracy to distribute controlled substances and to selling unapproved new drugs, is also the CEO of Blackstone. U.S. District Judge William P. Dimitrouleas of the Southern District of Florida sentenced Braun to 54 months in prison and ordered him to forfeit $3 million. The court also ordered Blackstone Labs to pay $1.2 million in forfeiture.
Anthony Ventrella, 43, of Delray Beach, Florida, operated a series of companies that manufactured many of the illegal products marketed and sold by Blackstone. Ventrella, who pleaded guilty in September 2021 to conspiracy to commit mail and wire fraud as part of the scheme, was sentenced to 13 months in prison. The court also ordered Ventrella’s company, Ventech Labs, to forfeit equipment used to make the illegal products.
“Selling controlled substances and unapproved drugs falsely labelled as dietary supplements is illegal and potentially dangerous,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice will work with law enforcement partners to investigate and prosecute individuals and companies who disregard public safety to make a profit.”
“Drug products that are disguised as supplements can pose a serious risk to the health of U.S. consumers,” said Special Agent in Charge Justin C. Fielder of the Food and Drug Administration Office of Criminal Investigations (FDA OCI) Miami Field Office. “We will continue to investigate and bring to justice those who jeopardize public health.”
On Jan. 27, Aaron Singerman, who co-founded and operated Blackstone Labs with Braun, was sentenced to 54 months in prison and ordered to forfeit $2.9 million.
In total, eight individuals and three companies were convicted in connection with the activities of Blackstone Labs. James Boccuzzi, who was convicted by a jury on Dec. 9, 2021 of one count of conspiracy to defraud the FDA and one count of conspiracy to distribute controlled substances, is scheduled to be sentenced on March 11.
FDA OCI investigated the case.
Trial Attorneys Alistair Reader and Stephen Gripkey, Senior Litigation Counsel David A. Frank and Assistant Director John W. Burke of the Civil Division’s Consumer Protection Branch are prosecuting the cases with assistance from Assistant U.S. Attorney Daren Grove of the U.S. Attorney’s Office for the Southern District of Florida. Laura Akowuah, Brian Furlong and Sarah Hawkins from the FDA’s Office of Chief Counsel provided assistance with the investigation and prosecution.
Tennessee Man Sentenced to Seven Years for Series of Church ArsonsRead the Press Release
A Tennessee man was sentenced today for the arson of four Nashville area churches.
Alan Douglas Fox, 29, of Nashville, was sentenced to seven years in federal prison and three years of supervised release. He had previously been charged by criminal information on Aug. 25, 2021, and had previously pleaded guilty to all counts on Oct. 20, 2021.
According to court documents and statements made during the plea and sentencing hearings, Fox intentionally set fire to the Crievewood United Methodist Church on June 17, 2019; the Crievewood Baptist Church on June 25, 2019; the Saint Ignatius of Antioch Catholic Church on June 25, 2019; and the Priest Lake Community Baptist Church on June 26, 2019, all because of their religious character. Fox also carried and used a handgun to break into the Crievewood Baptist Church to facilitate the arson. The fires resulted in significant damage to all four churches.
“This defendant has now been held accountable for his dangerous arson spree that caused damage to a Catholic church, a Methodist church and two Baptist churches, all pillars of the Nashville community,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “Attacks on houses of worship are attacks on people of faith that undermine the fundamental right to practice one’s religion free from fear or violence. The Civil Rights Division will continue to vigorously enforce federal laws that protect all houses of worship, regardless of denomination.”
This case was investigated by the FBI, the Tennessee Bureau of Investigation, the Metropolitan Nashville Police Department and the Nashville Fire Department. It was prosecuted by Trial Attorney Kyle Boynton of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Brooke Schiferle.
Statement from Attorney General Merrick B. Garland on the Life of Walter E. Dellinger IIIRead the Press Release
U.S. Attorney General Merrick B. Garland released today the following statement on the passing of Walter E. Dellinger III:
“The passing of Walter Dellinger is an enormous loss for those of us at the Justice Department who worked alongside and learned from him, for his family who cherished him, and for our nation, which was made better because of him.
“It is difficult to know where to begin in remembering someone who lived as fully and gave of himself as generously as Walter did. Throughout his life, Walter created communities of friends, students, and mentees who shared his passion for the law and his devotion to the pursuit of justice.
“I first had the privilege to work alongside Walter at the Justice Department when he came to Washington, D.C. from Duke Law with his beloved wife, Anne, and served as a professor in residence in the Appellate Section of the Civil Division. I worked with him again when he served as Assistant Attorney General for the Office of Legal Counsel, and then as Acting Solicitor General. His exuberance and passion for life and the law were palpable in everything he did.
“Walter approached the law not as a career, but as a calling. He believed it was his privilege to be able to use the law to make our democracy work better for everyone. He was a tireless advocate on behalf of those with whom he worked, and on behalf of the American people for whom he worked. He did not hesitate to lend his voice in service of lifting up the voices of others. His work had an enormous impact on all of us at the Justice Department, and on the lives of millions of people he would never know.
“For Walter, tackling the most urgent, complex, and important questions of law was not exclusive of living a life filled with joy. He filled his life — and the lives of those of us lucky enough to have known him — with light.
“All of us at the Department extend our deepest condolences to his loving family. We join them in mourning Walter’s passing, and in expressing our gratitude for his extraordinary legacy.”
Justice Department Files Suit to Prevent Missouri from Restricting Enforcement of Federal Firearms LawsRead the Press Release
The Department of Justice has today filed a lawsuit to prevent the State of Missouri from enforcing House Bill 85 (H.B. 85). Signed into law in June 2021, the Missouri law declares five categories of federal firearms laws “invalid” and deters and penalizes their enforcement by federal, state and local law enforcement officers. The government’s complaint seeks declaratory and injunctive relief prohibiting enforcement of H.B. 85 and further clarifying that state and local officials may lawfully participate in joint federal task forces, assist in the investigation and enforcement of federal firearm crimes, and fully share information with the federal government without fear of H.B. 85’s penalties. Specifically, the complaint alleges that H.B. 85 is invalid under the Supremacy Clause, is preempted by federal law, and violates the doctrine of intergovernmental immunity.
“This act impedes criminal law enforcement operations in Missouri,” said Attorney General Merrick B. Garland. “The United States will work to ensure that our state and local law enforcement partners are not penalized for doing their jobs to keep our communities safe.”
“A state cannot simply declare federal laws invalid,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This act makes enforcement of federal firearms laws difficult and strains the important law enforcement partnerships that help keep violent criminals off the street.”
The complaint alleges that the restrictions imposed by H.B. 85 have hindered cooperation and other activities that assist federal, state, and local law enforcement efforts. Federal law enforcement agencies within the state report that enforcement of federal firearms laws in Missouri has grown more difficult since H.B. 85 became effective. The penalties associated with H.B. 85 have prompted state and local agencies and individuals within those entities to withdraw support for federal law enforcement efforts, including by not sharing critical data used to solve violent crimes and withdrawing from joint federal task forces. The complaint challenges the constitutionality of the law and seeks to enforce the supremacy of federal law. Dozens of state and local officers have resigned from federal joint-task forces in the state as a result of the law. According to Missouri’s own statistics, nearly 80% of violent crimes are committed with firearms.
According to the complaint, Missouri enacted H.B. 85 despite its conflict with the fundamental constitutional principles of supremacy of federal law, preemption, and intergovernmental immunity. The restrictions imposed by the statute are premised on a declaration that several categories of federal statutes are “invalid,” but a state may not lawfully declare federal law invalid under the Constitution. In addition to penalizing individuals for working on joint federal-state law enforcement task forces, the statute penalizes current federal employees by barring them from state employment if they enforced the purportedly invalid laws. The statute further directs the state judiciary to “protect” against the federal laws declared invalid.
Former Defense Contractor Executive Pleads Guilty to Tax EvasionRead the Press Release
An Ashland, Oregon, employee of a defense contractor pleaded guilty today to tax evasion.
According to court documents, Charles D. Squires was the director of operations for a U.S. Department of Defense contracting company, eventually serving as its chief executive officer for part of the year in 2015. From 2010 through 2019, Squires did not report on his individual income tax returns all of the compensation he earned from the defense contracting firm. In total, Squires did not report to the IRS more than $1.8 million in compensation he earned during this period, causing a tax loss to the government of approximately $666,080.
Squires is scheduled to be sentenced at a later date and faces a maximum penalty of five years in prison. 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 Matthew M. Graves for the District of Columbia made the announcement.
IRS-Criminal Investigation and the Special Inspector General for Afghanistan Reconstruction are conducting the investigation.
Assistance was provided by the Joint Chiefs of Global Tax Enforcement (J5), which brings together the taxing authorities of Australia, Canada, Netherlands, United Kingdom and the United States.
Senior Litigation Counsel Nanette Davis and Trial Attorneys Brittney Campbell and Sarah Ranney of the Tax Division, and Assistant U.S. Attorney Leslie Goemaat of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.
Court Permanently Shuts Down Chicago Tax PreparerRead the Press Release
A federal court in the Northern District of Illinois has permanently enjoined a Chicago, Illinois, tax return preparer from preparing returns for others and from owning, operating or franchising any tax return preparation business in the future.
According to the court’s order, Melissa Gasca, individually and doing business as Su Familia Income Tax, as well as related tax preparation business FinancialPlus Services Inc., consented to entry of the injunction. The terms of the order require that Gasca and FinancialPlus Services Inc. send notice of the injunction to multiple individuals. The order permits the United States to conduct discovery against Gasca going forward to monitor her compliance with the terms of the injunction.
The complaint alleges that Gasca prepared tax returns which significantly understated the customers’ tax liabilities by falsely reporting inflated Form W-2 federal income tax withholdings. The complaint further alleges that this fraudulent activity resulted in a loss to the Treasury of more than $5 million.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a checklist of things to remember when filing income tax returns in 2022.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free. The IRS has tips on how seniors and individuals with low to moderate income can get other help or guidance on tax return preparation, too.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Two Former Federal Correctional Officers Plead Guilty to Bribery and Contraband Smuggling SchemeRead the Press Release
Two former correctional officers pleaded guilty today to engaging in bribery and smuggling contraband into Leavenworth Detention Center.
According to court documents, Jacqueline Sifuentes, 26, of Laredo, Texas, and Cheyonte Harris, 29, of Raytown, Missouri, previously worked as correctional officers at Leavenworth Detention Center, a privately-run maximum-security federal prison in Leavenworth, Kansas. Sifuentes used her position to smuggle contraband — including methamphetamine, marijuana and tobacco — into the prison in exchange for bribes from a federal inmate. Harris used her position to smuggle contraband into the prison in exchange for bribes from inmates and their associates.
Both defendants pleaded guilty to conspiracy to accept bribes and provide contraband to inmates of a federal prison. Each is scheduled to be sentenced on May 17, and each faces a maximum penalty of five 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, Special Agent in Charge William J. Hannah of the Department of Justice Office of Inspector General (DOJ-OIG) Chicago Field Office, and Special Agent in Charge Charles A. Dayoub of the FBI’s Kansas City Field Office made the announcement.
The FBI and DOJ-OIG are investigating the cases.
Trial Attorneys Rebecca M. Schuman and Dahoud A. Askar of the Justice Department’s Public Integrity Section are prosecuting the cases.
The cases are part of the Justice Department’s ongoing efforts to combat prison corruption. In addition to the above matters, the Public Integrity Section recently obtained convictions against two other former Leavenworth Detention Center officials for similar conduct. See United States v. Willie Golden, Case No. 2:21-cr-20061 (D. Kan.); United States v. Janna Grier, Case No. 2:22-cr-20001 (D. Kan.). Separately, the Public Integrity Section has obtained convictions against three former North Carolina prison officials who smuggled contraband, including narcotics, into a state facility in exchange for bribes. See United States v. Ollie Rose, III, No. 4:20-CR-96 (E.D.N.C.); United States v. Kenneth Farr, No. 4:21-CR-9 (E.D.N.C.); and United States v. Jeremy Chambers, No. 4:21-CR-38 (E.D.N.C.).
Three Men Sentenced for $2.7 Million COVID-19 Relief Fraud SchemeRead the Press Release
Three men were sentenced yesterday in the Middle District of North Carolina for fraudulently seeking over $2.7 million in Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDLs) guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act.
Joseph Marsell Cartlidge, 30, of Greensboro, North Carolina, was sentenced to 72 months in prison; David Christopher Redfern, 32, of Trinity, North Carolina, was sentenced to 60 months in prison; and Eric Alexander McMiller, 30, of Chicago, Illinois, was sentenced to 66 months in prison. Each defendant was also ordered to pay $498,657 in restitution.
According to court documents, Cartlidge, Redfern and McMiller joined a scheme led by James Stote, who with others, recruited the defendants to apply for fraudulent PPP loans for registered businesses, with the understanding and agreement they would provide a portion of the PPP loan proceeds to their recruiter. Between May and June 2020, the defendants submitted fraudulent PPP loan applications misrepresenting the number of employees and the average monthly payroll expenses of the defendants’ various businesses. The defendants submitted false tax and bank records in support of their loan applications. The defendants also independently applied for fraudulent EIDLs and misrepresented the number of employees, gross revenues, and costs of goods sold for each business. In total, the defendants sought over $2.7 million in PPP loans and EIDL funds. The defendants then used the loan proceeds for their own personal benefits, including for luxury purchases and cash withdrawals.
Stote pleaded guilty on Dec. 15, 2021, to conspiracy to commit wire fraud in the Northern District of Ohio.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Sandra J. Hairston of the Middle District of North Carolina; Acting Special Agent in Charge Mona Passmore of the IRS-Criminal Investigation (IRS-CI) Charlotte Field Office; Special Agent in Charge Kyle Myles of the FDIC-OIG Atlanta Region; Special Agent in Charge Mark Morini of the U.S. Treasury Inspector General for Tax Administration (TIGTA) Southeast Field Division; and Special Agent in Charge Amaleka McCall-Brathwaite of the SBA’s Office of Inspector General (SBA-OIG) Eastern Region made the announcement.
TIGTA, FDIC-OIG, and IRS-CI investigated the case. The Justice Department thanks SBA-OIG for their support and assistance.
Trial Attorneys Jennifer Bilinkas and Jessee Alexander-Hoeppner of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Nicole Dupre for the Middle District of North Carolina and Meredith Ruggles, formerly of the U.S. Attorney’s Office for the Middle District of North Carolina, prosecuted the case.
In May 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, among other methods, 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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Justice Department Issues Guidance on Ballot Drop Box Accessibility Requirements Under the Americans with Disabilities ActRead the Press Release
The Justice Department announced today it has issued guidance under the Americans with Disabilities Act (ADA) on how to ensure that ballot drop boxes are accessible to voters with disabilities. The publication, “Ballot Drop Box Accessibility, the Americans with Disabilities Act,” is intended to help election officials understand the ADA’s requirements, including the physical accessibility standards applicable to ballot drop boxes, and for voters with disabilities to understand their rights under federal law.
“The right to vote is the fundamental right upon which our democracy is built,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “For too long in our history, many voters with disabilities have faced barriers in exercising their voting rights. Many of these barriers continue even today, including physical barriers that prevent them from entering polling places or accessing a ballot drop box. The ADA requires election officials to select and provide accessible ballot drop box locations so that voters with disabilities can have the same voting opportunities as other voters. The Justice Department is fully committed to vigorous enforcement of the ADA to ensure that voters with disabilities no longer face discrimination in the election process.”
The publication covers the elements and features of a ballot drop box that election officials should consider meeting the ADA’s accessibility requirements. The publication discusses the requirements for an accessible route to a ballot drop box, such as a level walkway without gaps and steps. It also discusses accessibility features of a ballot drop box such as a handle or lever that can be operated with one hand and without tight grasping, pinching or twisting of the wrist. The guidance includes a checklist of the accessibility standards used to assess a ballot drop box.
The ballot drop box guidance is intended to be used together with the department’s “ADA Checklist for Polling Places,” a guidance document that discusses local governments’ obligations under the ADA to provide polling places that are physically accessible to voters with disabilities. The ADA Checklist for Polling Places covers the accessibility requirements for features that may be present at a ballot drop box location, such as parking, passenger drop off areas and building entrances.
The Ballot Drop Box Accessibility publication may be found at ADA.gov homepage; the ADA Checklist for Polling Places publication may be found at ADA Checklist for Polling Places. Those interested in learning more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at Step 1: Contact - Contact the Civil Rights Division | Department of Justice. Information about the department’s enforcement of federal civil and criminal laws related to voting may be found at Voting | Department of Justice.
Columbus Man Pleads Guilty to Threatening Local Reproductive Health Services FacilityRead the Press Release
A Columbus, Ohio, man pleaded guilty in federal court this morning for making threats to a local reproductive health services facility.
Carlos Manuel Rodriguez Brime, 25, admitted to threatening to kill a patient who indicated she planned to get an abortion at the clinic, and for threatening to bring a bomb to the clinic.
Brime made two separate telephone threats on April 11, 2021, to a local reproductive health care clinic.
During the first call, he told clinic staff, “My girlfriend is a patient there and I’m going to bring the heat. If she kills my baby, I’m going to kill her.” A short time later, he called the clinic again and said, “My organization will be bringing a bomb to your facility. I suggest you close your doors.”
Brime admitted to violating the Freedom of Access to Clinic Entrances (FACE) Act – which makes it a federal crime to threaten the use of force to intimidate anyone receiving or providing reproductive health services – and to transmitting a threat in interstate commerce.
Threatening freedom of access to clinic entrances is a federal crime punishable by up to one year in prison and transmitting threats in interstate commerce carries a potential maximum sentence of five years in prison. Congress sets the maximum statutory sentence. Sentencing of the defendant will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
“People should be able to freely access clinics that provide reproductive health services, free from violence and threats of violence,” Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “This defendant threatened to kill a woman because she was seeking reproductive health services and further threatened to bomb the clinic providing those services. This conviction should send a strong message that the Justice Department will hold accountable those who would resort to violence and threats of violence to deny people access to reproductive health clinics in our country.”
Brime was indicted by a grand jury and arrested in September 2021. A sentencing date has not yet been set.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division; U.S. Attorney Kenneth L. Parker for the Southern District of Ohio; Special Agent in Charge William Rivers of the FBI Cincinnati Division; and Columbus Police Chief Elaine Bryant announced the plea entered into today before U.S. District Judge Edmund A. Sargus Jr. Assistant U.S. Attorneys Emily Czerniejewski and S. Courter Shimeall and Civil Rights Division Trial Attorney Sanjay Patel are representing the United States in this case.
Maryland Accountant Sentenced to Three Years in Prison for Preparing False Tax ReturnsRead the Press Release
A Maryland woman was sentenced today to three years in prison for preparing false tax returns for District of Columbia residents as part of a nationwide tax fraud scheme.
According to court documents and evidence presented at trial, Charese Johnson, of Aberdeen, prepared 13 false income tax returns that collectively sought more than $6.6 million in refunds from the IRS. Between 2014 and 2016, scheme participants held seminars throughout the country where they promoted the purported ability of taxpayers to utilize their mortgages and other debts to generate tax refunds. Information was then collected from clients and provided to Johnson and others for use in the preparation of false returns. Those returns falsely claimed that banks and other financial institutions had withheld large amounts of income taxes from the clients, which entitled the clients to refunds. In reality, the financial institutions had not paid any income to or withheld any taxes from the clients.
Johnson tried to conceal her role in the scheme by convincing one of her clients to mislead the IRS about Johnson’s involvement in the preparation of the client’s tax returns.
On July 1, 2021, Johnson was convicted at trial of three counts of helping others prepare false tax returns. Thus far, more than a dozen other individuals around the country have been charged or convicted for their involvement in this multimillion-dollar scheme.
In addition to the term of imprisonment, U.S. District Judge Randolph D. Moss ordered Johnson to serve one year of supervised release.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorneys Jeffrey McLellan and George Meggali, and former Trial Attorney Abigail Burger Chingos, of the Tax Division prosecuted the case.
Hermanos peruanos condenados a más de siete años de cárcel por estafar a miles de inmigrantes de habla hispanaRead the Press Release
Dos ciudadanos peruanos responsables de operar una serie de centros de llamadas en Perú que estafaban y amenazaban a residentes de habla hispana en los Estados Unidos fueron sentenciados en el Tribunal de Distrito de EE.UU. del Distrito Sur de Florida a cumplir condena de cárcel. El 9 de febrero de 2022, el Juez de Distrito de EE.UU., Robert N. Scola Jr., condenó a Josmell Espinoza Huerta (Josmell Espinoza), de 32 años, a cumplir 88 meses en prisión. Hoy mismo, el Juez Scola ordenó que Carlos Alberto Espinoza Huerta (Carlos Espinoza), de 40 años, fuera encarcelado durante 102 meses.
Josmell Espinoza y su hermano Carlos Espinoza se declararon culpables a finales de 2021 de conspirar para cometer fraude postal y fraude electrónico a través de varios centros de llamadas peruanos de los que eran propietarios y operadores. Según los documentos del Tribunal, Josmell Espinoza y Carlos Espinoza eran copropietarios y operaban el centro de llamadas JFC Peru en Perú. Además, Josmell Espinoza era propietario y operador de los centros de llamadas Camino Al Progreso y Latin Shop, y Carlos Espinoza era propietario y operador por separado de los centros de llamadas Latinos en Acción y Latin Force en Perú.
Desde abril de 2011 hasta julio de 2019, los hermanos Espinoza y sus cómplices en Perú llamaban a las víctimas, muchas de las cuales eran inmigrantes recientes de Centroamérica, México y otros países de habla hispana. Amenazaban a las víctimas fraudulentamente con consecuencias legales si no hacían pagos por productos supuestamente entregados y honorarios de liquidación para clases de inglés. Los demandados y sus cómplices usaban declaraciones falsas y amenazas para obtener dinero de las víctimas de todos los Estados Unidos. Les decían falsamente que estaban obligadas a aceptar y pagar cursos de inglés y otros productos educativos, y que no hacerlo las pondría en una situación legal riesgosa. Los demandados y sus cómplices entonces amenazaban falsamente con procurar que sus víctimas fueran arrestadas y deportadas para que les pagaran.
Al declararse culpables, ambos demandados admitieron que ellos y sus empleados afirmaron falsamente ser abogados, funcionarios del tribunal, agentes federales y representantes de un supuesto "tribunal de delitos menores", que no existe. Las personas que llamaban amenazaban falsamente a las víctimas con procedimientos judiciales, calificaciones negativas en sus informes de crédito, encarcelamiento y consecuencias migratorias si no pagaban inmediatamente los productos supuestamente entregados y los honorarios de liquidación. Carlos Espinoza causó a las víctimas una pérdida de más de 1.3 millones de dólares, y Josmell Espinoza causó a las víctimas una pérdida de más de 700 mil dólares.
"La sección de Protección al Consumidor del Departamento de Justicia investigará y procesará a los delincuentes transnacionales que defrauden a los consumidores vulnerables de los Estados Unidos", declaró el fiscal general adjunto interino Brian M. Boynton, de la División Civil del Departamento de Justicia. "Estas dos sentencias demuestran que los demandados que usen amenazas para aprovecharse de nuestras comunidades de inmigrantes serán enjuiciados y rendirán cuentas en los tribunales de los Estados Unidos".
"Este caso demuestra que la justicia no tiene límites cuando se trata de alcanzar a los defraudadores que se aprovechan de las poblaciones más vulnerables de nuestra nación", dijo el Fiscal Federal del Distrito Sur de Florida, Juan Antonio Gonzalez. "Seguiremos trayendo ante la justicia estadounidense a los delincuentes transnacionales que usen tácticas de miedo e intimidación para robar el dinero de los inmigrantes, personas mayores y otras personas que viven en este país".
"Durante muchos años, el Servicio de Inspección Postal de EE. UU. y sus colaboradores en la aplicación de la ley han investigado y procesado a redes delictivas internacionales que tienen como objetivo a los consumidores estadounidenses para robarles el dinero que tanto les ha costado ganar", declaró el inspector encargado Joseph Cronin, de la División de Miami del Servicio de Inspección Postal de EE. UU. "Seguiremos investigando de forma diligente a estos delincuentes para asegurarnos de que sean procesados con todo el peso de la ley".
Al incluir la sentencia de Carlos Espinoza en Miami hoy, los siete acusados en este caso se han declarado culpables y han sido condenados a penas de cárcel. Cinco acusados fueron detenidos por las autoridades peruanas con base en una solicitud de extradición presentada por los Estados Unidos y fueron extraditados al Distrito Sur de Florida en octubre de 2020. Cada uno de estos acusados fue condenado a cumplir una sentencia de prisión a principios de este año. Henrry Milla fue condenado a 110 meses en prisión, Jerson Renteria fue condenado a 100 meses en prisión y Evelyng Milla, Fernan Huerta y Omar Cuzcano fueron sentenciados cada uno a 90 meses en prisión. Carlos Espinoza y Josmell Espinoza evadieron el arresto cuando sus cómplices fueron arrestados. Posteriormente fueron localizados en Perú y extraditados a los Estados Unidos el 25 de junio de 2021.
El Servicio de Inspección Postal de EE.UU. y la sección de Protección al Consumidor de la División Civil investigaron el caso. El fiscal principal Phil Toomajian y el fiscal Max Goldman, de la sección de Protección al Consumidor, estuvieron a cargo del caso penal. La Comisión Federal de Comercio, la Oficina de Asuntos Internacionales del Departamento de Justicia, la Fiscalía de EE.UU. del Distrito Sur de Florida, el Servicio de Seguridad Diplomática del Departamento de Estado y la Policía Nacional del Perú brindaron ayuda esencial.
La información sobre la Iniciativa contra el Fraude a Personas Mayores del Departamento de Justicia está disponible en https://www.justice.gov/elderjustice-espanol. Hay más información sobre la sección de Protección al Consumidor y sus medidas para combatir el fraude contra las personas mayores en www.justice.gov/civil/consumer-protection-branch. Si usted o alguien que conoce tiene 60 años o más y ha sido víctima de un fraude financiero, puede recibir ayuda si llama a la línea telefónica nacional contra el fraude a personas mayores: 1-833-FRAUD-11 (1-833-372-8311).
In English
Former Queens Business Owner Pleads Guilty to Tax FraudRead the Press Release
The former owner of a drywall business in Queens pleaded guilty today to helping prepare a false corporate tax return for his business.
According to court documents, Osvaldo Caceres, of Queens, New York, owned and operated OSVI Drywall Corporation. Caceres helped prepare the company’s corporate tax return for the tax period ranging from Feb. 1, 2013, through Jan. 31, 2014, which underreported the business’s gross receipts. Caceras caused a total tax loss to the IRS of $926,379.
Sentencing is scheduled for June 14. Caceres faces a maximum penalty of three years in prison, as well as 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 made the announcement. He thanked the U.S. Attorney’s Office for the Eastern District of New York for providing substantial assistance in this matter.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Sarah Ranney and Sam Bean of the Tax Division are prosecuting the case.
Bagel Company Owner Pleads Guilty to Tax Evasion and Wire Fraud ConspiracyRead the Press Release
A New York man pleaded guilty today to tax evasion and a wire fraud conspiracy.
According to court documents and statements made in court, Joseph Smith, of Fishkill, owned and operated New York Bagel, a business that operated in Pennsylvania and other states. Smith and Dennis Mason conspired to defraud individuals who sought to open new franchises of New York Bagel. Smith and Mason induced the prospective franchisees to open up New York Bagel stores by understating the startup costs, overstating the number of franchises that were up and running, and exaggerating the financial success of existing franchises. Smith and Mason charged prospective franchisees fees ranging between $7,500 and $44,500 to gain rights to open stores. When prospective franchisees learned of the misrepresentations, Smith refused to refund these fees.
For the years 2014 through 2016, Smith deposited more than $1.3 million in franchise fees into New York Bagel bank accounts he controlled. Smith spent these funds on personal items wholly unrelated to New York Bagel including rent for his personal home, recreational travel, car payments for personal vehicles and everyday living expenses. Smith did not timely file corporate or individual income taxes for these three years, or pay the taxes owed to the IRS, even though he was required by law to do so.
Mason previously pleaded guilty to wire fraud and conspiracy to commit wire fraud on June 25, 2020.
Smith is scheduled to be sentenced on May 24. He faces a maximum penalty of five years in prison on both the tax evasion and conspiracy charges, as well as 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 Jennifer Arbittier Williams for the Eastern District of Pennsylvania made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorney Eric B. Powers of the Justice Department’s Tax Division and Assistant U.S. Attorney David Ignall of the U.S. Attorney’s Office are prosecuting the case.
Maine Man Indicted for Hate Crime Offenses Relating to Arson of Massachusetts Predominately Black ChurchRead the Press Release
A Maine man was indicted today by a federal grand jury in Springfield, Massachusetts, in connection with the Dec. 28, 2020, fire that destroyed a predominately Black church in Springfield.
Dushko Vulchev, 45, of Houlton, Maine, was indicted by a federal grand jury on four counts of damage to religious property involving fire and one count of use of fire to commit a federal felony. Vulchev was previously charged by criminal complaint in April 2021.
According to court documents, in the early morning hours of Dec. 28, 2020, law enforcement observed a fire at the Martin Luther King Jr. Community Presbyterian Church (MLK Church) which caused significant damage to the building. During a subsequent investigation, it was determined that the fire was related to other incidents, including arsons and malicious damage to vehicles, that occurred on church property and the surrounding area. These included a fire at the backdoor of the MLK Church on Dec. 13, 2020, and two additional fires near the backdoor of the church on Dec. 15, 2020. Further investigation, including the review of video surveillance, identified Vulchev as the alleged perpetrator.
According to court documents, during a subsequent search of Vulchev’s vehicle, multiple electronic storage devices containing images demonstrating Vulchev’s racial animus toward Black people, including a “White Lives Matter” mural and a photo of Adolf Hitler in a track suit were seized. Vulchev’s electronic devices also allegedly contained messages revealing Vulchev’s hatred of Black people dating back several years, with Vulchev’s recent messages from December 2020 calling to “eliminate all N****s.” According to the court documents, individuals familiar with Vulchev told law enforcement that Vulchev frequently displayed racial animus towards non-whites and routinely referred to Black people using a racial epithet.
The charge of damage to religious property involving fire provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of use of fire to commit a federal felony provides for a sentence of at least 10 years in prison, in addition to any sentence received for the other charged crimes. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division; U.S. Attorney Rachael S. Rollins for the District of Massachusetts; Special Agent in Charge Joseph R. Bonavolonta of the FBI; James M. Ferguson of the Bureau of Alcohol, Tobacco and Firearms, Boston Field Division; and Peter Ostroskey, Massachusetts State Police Fire Marshal, made the announcement today. Assistance was provided by Hampden District Attorney’s Office; Berkshire District Attorney’s Office; Springfield Police Department; Springfield Fire Department; Pittsfield Police Department; American International College Police Department; Houlton (Maine) Police Department; and Newington (Conn.) Police Department.
The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla, Chief of Rollins’s Springfield Branch Office and Trial Attorney Kyle Boynton of the Civil Rights Division.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Kansas Man Pleads Guilty to Racially Motivated Federal Hate Crime Targeting Black ManRead the Press Release
The Justice Department announced today that Colton Donner, 27, pleaded guilty in federal court to threatening an African American man with a knife because of the man’s race, and in order to intimidate and interfere with the man’s right to fair housing.
According to documents filed in connection with the plea, on Sept. 11, 2019, Donner was driving through a residential area of Paola, Kansas, when he saw the victim, an African American man, walking on the sidewalk. Donner stopped, got out of the car, and approached the victim while brandishing a knife. Donner threatened the victim, yelled racial slurs, and told the victim that Paola is a “white town.”
“Using racially motivated threats of violence to drive someone out of their home or community is a deplorable crime, and the Justice Department stands ready to use our nation’s hate crimes laws to hold perpetrators accountable,” said Assistant Attorney General Kristen Clarke for the Department’s Civil Rights Division. “Racially motivated hate crimes have no place in our society today. All people deserve to feel safe and secure living in their communities, regardless of race, color or national origin.”
“Any attempt to deny someone an opportunity to live where he or she chooses based on race, color or national origin is wrong and a violation of that person’s civil rights,” said U.S. Attorney Duston Slinkard for the District of Kansas. “It is the responsibility of the Justice Department to prosecute such offenses to ensure the equal protection under the law to which we all are entitled, and we take that responsibility very seriously.”
“Every individual has the right to occupy a home free from racial discrimination, yet the defendant targeted the victim for no other reason than the victim’s race,” said Special Agent in Charge Charles Dayoub of the FBI Kansas City Field Office. “The defendant’s actions directly undermined the victim’s right to reside in a community in Paola, Kansas, and to enjoy the protections afforded under the federal civil rights act. The FBI, along with our law enforcement partners, have no tolerance for this type of fear and intimidation and are committed to protecting residents regardless of their race, color, religion, gender, national origin or familial status.”
Donner faces a maximum sentence of 10 years in prison and a $250,000 fine for the civil rights offense.
The case was investigated by the Paola Police Department and the Kansas City Field Office of the FBI. The case is being prosecuted by Assistant U.S. Attorney Tristan Hunt of the District of Kansas and Trial Attorney Anita Channapati of the Civil Rights Division’s Criminal Section.
Former Government Contractor Executives Indicted for Unlawful Campaign ContributionsRead the Press Release
Three Hawaii-based executives of a government contractor were indicted today in the District of Columbia for allegedly making unlawful campaign contributions to a candidate for Congress and a political action committee.
According to the indictment, Martin Kao, 48, Clifford Chen, 48, and Lawrence “Kahele” Lum Kee, 52, all of Honolulu, were employed by a defense contractor prohibited from making contributions in federal elections. The defendants allegedly created a shell company and then used that shell company to make an illegal contribution to a political action committee supporting the election of a candidate for the U.S. Senate using government contractor funds. The defendants also allegedly used family members as conduits to make illegal contributions to the campaign committee of the same candidate, and then reimbursed themselves for those donations using funds obtained from their employer.
All three defendants are charged with conspiracy to defraud the United States and to make conduit and government contractor contributions, making conduct contributions, and making government contractor contributions. Kao is also charged with two counts of making false statements for causing the submission of false information to the Federal Election Committee.
Kao, Chen and Lum Kee will make their initial appearance at a later date. If convicted, the defendants face up to five years in prison and a $250,000 fine 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, U.S. Attorney Matthew M. Graves for the District of Columbia, Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office, and Special Agent in Charge Christopher Dillard, Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office, made the announcement.
The FBI’s Washington Field Office and DCIS’s Mid-Atlantic Field Office are investigating the case.
Trial Attorney Lauren Castaldi of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Liz Aloi and Joshua Rothstein of the Fraud, Public Corruption and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia 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.
California CEO Sentenced to Prison for Employment Tax CrimesRead the Press Release
A California man was sentenced today to 18 months in prison for employment tax crimes.
According to court documents and statements made in court, Michael Todd Lucas controlled TradeMotion Inc. (TradeMotion), a company that sold software to automotive dealerships. Lucas controlled TradeMotion’s business and financial affairs, and therefore had a legal duty to withhold employment taxes on behalf of the company’s employees and pay those funds to the IRS. From the fourth quarter of 2011 through the third quarter of 2015, Lucas collected more than $2.1 million in withholdings from TradeMotion employees and issued them W-2 forms. However, he paid only $760,017 of these funds to the IRS. Lucas also did not pay to the IRS employment taxes withheld on behalf of the employees of other companies he controlled, causing an additional tax loss of more than $3.5 million.
In addition to the term of imprisonment, U.S. District Judge Anthony J. Battalia ordered Lucas to serve three years of supervised release and to pay approximately $4.9 million in restitution.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Randy S. Grossman of the Southern District of California made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorney Charles A. O’Reilly of the Justice Department’s Tax Division prosecuted the case.
Statement from Deputy Attorney General Lisa O. Monaco on the Introduction of the Violence Against Women ActRead the Press Release
Deputy Attorney General Lisa O. Monaco issued the following statement today after the introduction of the Violence Against Women Act (VAWA) in Congress:
“The Department of Justice applauds the introduction of legislation by a bipartisan group of Senators to reauthorize the Violence Against Women Act (VAWA). Last fall, I had the honor of testifying before the Senate Judiciary Committee about the enormous impact that VAWA has had in combating domestic violence, dating violence, sexual assault and stalking. As I told the Senate Judiciary Committee then, I know from my personal experience helping to research the original VAWA legislation in the 1990s that the new tools and resources from this reauthorization are critical to modernizing our efforts to prevent and end these crimes. The department urges Congress to swiftly pass this essential legislation.”
Sex Trafficker Leader Pleads Guilty to Kidnapping in Relation to Sex Trafficking SchemeRead the Press Release
Joshua Lankford, aka “20-20,” aka “Light Bright,” aka “Yellow,” 33, of Manchester, Maryland, pleaded guilty today to kidnapping in relation to a sex trafficking conspiracy.
According to his guilty plea, from Oct. 25, 2018, to Oct. 30, 2018, Lankford led and organized a conspiracy to commit sex trafficking by force, fraud or coercion, and to commit kidnapping. The evidence indicated that Lankford recruited the victim, a young adult woman, to engage in prostitution under fraudulent pretenses. Lanford knew that the victim was addicted to heroin and withheld drugs from her when she did make enough money for him engaging in commercial sex. When the victim attempted to escape, Lankford and his three co-defendants drove the victim to a rural road on Maryland’s Eastern Shore where they beat, whipped and choked her with a belt, and then drove her to a hotel in Delaware to engage in prostitution. All of Lankford’s co-defendants have already pleaded guilty for their participation in this crime.
“Sex trafficking is a horrific crime that deprives some of the most vulnerable people in our society of their freedom and dignity,” said Assistant Attorney General Kristen Clarke for the Justice Department’s the Civil Rights Division. “This defendant preyed on a vulnerable young woman and cruelly exploited her for his profit. The Civil Rights Division will continue its vigorous enforcement of our human trafficking laws to hold perpetrators accountable and to seek justice for their victims.”
“This case is a prime example of the horrendous realities surrounding human trafficking and why our office works fiercely to combat it,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Lankford took advantage of an at-risk woman’s drug addiction and her desire to be reunited with her son to lure her into a dehumanizing sex trafficking trap. He then intended to kill her to undermine the federal prosecution of his crimes at trial. Our office remains dedicated to the prosecution of sex traffickers, and most importantly, to the protection of sex trafficking survivors within our cases.”
“Joshua Lankford’s crimes are nothing short of horrific; he kidnapped and victimized a vulnerable woman then plotted to kill her in order to save himself,” said Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore. “Fortunately, he will now face the consequences of his actions. HSI Baltimore is proud to have partnered with the Maryland State Police, the Delaware State Police and the Federalsburg Police Department to bring Lankford to justice. HSI remains committed to investigating human trafficking organizations as they prey upon the most vulnerable populations in our communities.”
Lankford was arrested two days later and informed officers that he deleted the contents of his cell phone in anticipation of his apprehension. While incarcerated, Lankford told a co-conspirator that he intended to kill the victim to prevent her from testifying against them at trial.
Lankford and the government have agreed that, if the court accepts the plea agreement, Lankford will be sentenced to 17 years in federal prison. U.S. District Judge Catherine C. Blake has scheduled sentencing for April 29 at 9:30 a.m.
Report suspected instances of human trafficking and sex trafficking to HSI's tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.
The guilty plea was announced by Assistant Attorney General Clarke; U.S. Attorney Barron; Special Agent in Charge Mancuso of HSI Baltimore; Colonel Woodrow W. Jones III, Superintendent of the Maryland State Police; Chief Michael McDermott of the Federalsburg Police Department; and Colonel Melissa Zebley of the Delaware State Police Department.
The case is being prosecuted by Assistant U.S. Attorney Mary Setzer of the District of Maryland and Trial Attorney Leah L. Branch of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Kentucky Man Criminally Charged for Discharge of Oil and Brine into Adair County CreekRead the Press Release
A federal grand jury in Bowling Green, Kentucky, issued an indictment charging Columbia resident Joshua M. Franklin, 32, with violating the Clean Water Act. The charge stems from a 2018 discharge of oil and brine water into Adair County creeks.
Franklin was an operator at an oil lease tank battery in Columbia. His duties included ensuring that brine water, a waste product from oil production, was separated from the oil before it was delivered to customers. The indictment alleges that on Aug. 22, 2018, the oil/water separator at the site used to remove brine water was not functioning. Instead, to remove the brine water, Franklin attached a conduit to the bottom of the oil tank and placed the open end of the conduit yards from a nearby creek. Franklin opened the tank valve, allowing a mixture of brine water and oil to discharge from the tank. With the valve still open, Franklin left the site. As a result, approximately 100 barrels (about 4,000 gallons) of the oily mixture discharged into a nearby creek and eventually flowed into connecting tributaries.
The Environmental Protection Agency and the Kentucky Department of Environmental Protection conducted the investigation. The maximum penalty under the Clean Water Act is three years’ imprisonment and a fine of $250,000. A court may also impose a restitution payment for the costs of the cleanup.
The government is represented by Senior Trial Attorney Daniel Dooher and Trial Attorney Ryan Connors of the Department of Justice’s Environmental Crimes Section.
An indictment is only an allegation, and the defendant is presumed innocent until proven otherwise before a jury at trial.
Two Oklahoma Men Indicted for Hate CrimesRead the Press Release
The Justice Department announced today that a federal grand jury in the Western District of Oklahoma returned a two-count indictment charging two men with committing hate crimes.
The indictment alleges that on June 22, 2019, Brandon Killian and Devan Johnson, aiding and abetting each other, willfully caused bodily injury to two victims because of the perceived or actual race of one of the victims, who is a Black man. The victims are identified in the indictment only as J.C. and M.W. The assaults occurred in the parking lot of the Brickhouse Saloon, in Shawnee, Oklahoma.
If convicted, Killian and Johnson each face a maximum sentence of 10 years in prison, three years of supervised release and a fine of up to $250,000.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division and Acting U.S. Attorney Robert Troester for the Western District of Oklahoma made the announcement.
The case was investigated by the Oklahoma City FBI Field Office. Assistant U.S. Attorney Julia Barry of the Western District of Oklahoma and Trial Attorney Avner Shapiro of the Civil Rights Division are prosecuting the case.
An indictment is merely an allegation, and the defendants are presumed innocent unless proven guilty.
Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen CryptocurrencyRead the Press Release
View Deputy Attorney General Monaco's Remarks here.
Two individuals were arrested this morning in Manhattan for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, presently valued at approximately $4.5 billion. Thus far, law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack.
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”
“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.”
Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York, are scheduled to make their initial appearances in federal court today at 3:00 p.m. in Manhattan.
According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex’s platform after a hacker breached Bitfinex’s systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein’s control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan. The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack. After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein. Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure.
“Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “The Department of Justice and our office stand ready to confront these threats by using 21st century investigative techniques to recover the stolen funds and to hold the perpetrators accountable.”
The criminal complaint alleges that Lichtenstein and Morgan employed numerous sophisticated laundering techniques, including using fictitious identities to set up online accounts; utilizing computer programs to automate transactions, a laundering technique that allows for many transactions to take place in a short period of time; depositing the stolen funds into accounts at a variety of virtual currency exchanges and darknet markets and then withdrawing the funds, which obfuscates the trail of the transaction history by breaking up the fund flow; converting bitcoin to other forms of virtual currency, including anonymity-enhanced virtual currency (AEC), in a practice known as “chain hopping”; and using U.S.-based business accounts to legitimize their banking activity.
“In a methodical and calculated scheme, the defendants allegedly laundered and disguised their vast fortune,” said Chief Jim Lee of IRS-Criminal Investigation (IRS-CI). “IRS-CI Cyber Crimes Unit special agents have once again unraveled a sophisticated laundering technique, enabling them to trace, access and seize the stolen funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $3.6 billion.”
“Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead,” said FBI Deputy Director Paul M. Abbate. “Thanks to the persistent and dedicated work of our FBI Investigative teams and law enforcement partners, we're able to uncover the source of even the most sophisticated schemes and bring justice to those who try to exploit the security of our financial infrastructure.”
“Financial crime strikes at the core of our national and economic security. With a hack of this magnitude, public and private sector collaboration is crucial to ensure continued consumer confidence in our financial system,” said Acting Executive Associate Director Steve Francis of Homeland Security Investigations (HSI). “Ilya Lichtenstein and his wife Heather Morgan attempted to subvert legitimate commerce for their own nefarious purposes, operating with perceived anonymity. Today’s action demonstrates HSI’s commitment and ability to work with a collation of the willing to unravel these technical fraud schemes and identify the perpetrators, regardless of where they operate.”
Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The investigation was led by IRS-CI Washington, D.C. Field Office’s Cyber Crimes Unit, the FBI’s Chicago Field Office, and HSI-New York. The Ansbach Police Department in Germany provided assistance during this investigation.
The case is being prosecuted by Trial Attorneys Jessica Peck and C. Alden Pelker of the Justice Department’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Christopher B. Brown of the U.S. Attorney’s Office for the District of Columbia. Paralegal Specialists Angela De Falco and Brian Rickers and Legal Assistant Jessica McCormick provided valuable assistance. Significant assistance was also provided by Trial Attorney Christen Gallagher of the Office of International Affairs, the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania and Southern District of New York, HSI-Philadelphia, and former Assistant U.S. Attorney Jessica C. Brooks.
A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department and FTC Sue to Stop Fast-Casual Burger Restaurant Franchisor’s Deceptive Sales PracticesRead the Press Release
The Department of Justice, together with the Federal Trade Commission (FTC), announced the filing of a civil enforcement action against two companies and their founder for allegedly selling fast-casual burger franchises using false representations.
According to a complaint filed in the U.S. District Court for the Central District of California, defendants Burgerim Group USA Inc., Burgerim Group Inc. and founder Oren Loni made false representations to prospective franchisees to induce them to sign a franchise agreement and pay a franchise fee of between $50,000 and $70,000. Specifically, the government alleges that the defendants failed to refund those fees under certain conditions, including as promised by defendants, and failed to disclose material information. The complaint alleges violations of the Franchise Rule, which requires franchisors to provide prospective purchasers of franchises with the material information they need in order to weigh the risks and benefits of purchasing a franchise. The complaint also alleges violations of the FTC Act, which prohibits unfair and deceptive conduct. The complaint seeks civil penalties and equitable monetary and injunctive relief to stop the defendants from continuing to make deceptive claims in connection with the sale of franchises.
“The FTC’s Franchise Rule is designed to stop franchisors from taking advantage of prospective franchisees who are considering opening their own businesses,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Consumer Protection Branch will vigorously pursue those who violate the law by using misrepresentations to sell franchises.”
“Burgerim promised consumers, including veterans, the American dream, only to leave them in a nightmare of debt and deceit,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “For other franchisees facing predatory practices, we are making it easier for them to tell us about what happened. Visit ReportFraud.FTC.gov and file a report to help us root out deception and other illegal conduct in the franchise industry.”
This matter is being handled by Trial Attorney Marcus P. Smith of the Civil Division’s Consumer Protection Branch. Attorneys Christine M. Todaro and Christopher E. Brown represent the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.
Texas Man Pleads Guilty to Sending Violent Threats to Maryland Doctor Who Had Been a Vocal Advocate of the Covid-19 VaccineRead the Press Release
Scott Eli Harris, 51, of Aubrey, Texas, pleaded guilty today in federal court to one count of willfully transmitting in interstate commerce a threat to injure a Maryland doctor who had been a vocal proponent of the COVID-19 vaccine.
According to documents and statements made in connection with the plea hearing, Harris sent a threatening message from his cellular phone to the doctor. The message from Harris included violent and explicit threats, such as, “Never going to take your wonder drug. My 12 gauge promises I won’t,” and “I’m a 5th generation U.S. Army veteran and a sniper… I can’t wait for the shooting to start.” The message also referenced the doctor’s Asian-American race and national origin.
“During the pandemic, we have seen a disturbing increase in threats of violence targeting doctors and public health advocates,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Public health officials and doctors deserve our respect for their tireless efforts during the ongoing pandemic, and individuals who seek to use threats of violence to intimidate and silence them will be held accountable.”
“Threats and intimidation should not be tolerated,” said U.S. Attorney Erek L. Barron for the District of Maryland. “This office and our law enforcement partners will continue to investigate and prosecute such conduct.”
“These threats are taken very seriously and the response to them is an example of the FBI’s dedication to keeping our community safe,” said Special Agent in Charge Thomas J. Sobocinski of the FBI Baltimore Field Office. “No one should live in fear for doing their job. Posting a threat online, through mail or over the phone is a crime and comes with consequences, whether or not the person intended to carry out the threat.”
Harris faces a maximum sentence of five years in prison and a fine of up to $250,000.
This case was investigated by the FBI. Assistant U.S. Attorney P. Michael Cunningham of the District of Maryland and Trial Attorney Katherine G. DeVar of the Justice Department’s Civil Rights Division are prosecuting the case.
Justice Department Finds that Pennsylvania Courts Discriminated Against People with Opioid Use DisorderRead the Press Release
The Justice Department found that the Unified Judicial System of Pennsylvania, through the actions of its component courts, violated the Americans with Disabilities Act (ADA) by prohibiting or limiting the use of disability-related medication to treat Opioid Use Disorder (OUD) by individuals under court supervision. The letter of findings demands that Pennsylvania addresses the civil rights violations identified during the course of the investigation conducted by the Justice Department’s Civil Rights Division and the U.S. Attorneys’ Offices for the Eastern, Middle and Western Districts of Pennsylvania.
The Justice Department identified three specific individuals with OUD who had been discriminated against by the Northumberland and Jefferson County Courts of Common Pleas. Two individuals alleged that the Jefferson County Court ordered all probationers to stop using their prescribed medication for OUD. A third individual alleged that the Northumberland County Court required her to stop using her prescribed OUD medication to graduate from drug court. The department’s investigation corroborated these allegations and additionally found evidence that multiple other county courts in Pennsylvania have treatment court policies that discriminate against individuals with OUD.
Pursuant to Title II of the ADA, the department provided the Pennsylvania judiciary with written notice of the supporting facts for these findings and the minimum remedial measures necessary to address them.
“Individuals with Opioid Use Disorder are protected by the ADA but too often face discrimination rooted in stereotypes and myths rather than in science. This is exactly the sort of discrimination the ADA was designed to prevent,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Ensuring that court-involved individuals with Opioid Use Disorder have access to the medications they need is critical to support recovery efforts and to break the cycles of opioid addiction that have harmed families and communities across our country. Ensuring that courts are employing science-driven and data-informed approaches to this crisis is an important priority for the Civil Rights Division.”
For more information on the ADA, please call the Department’s toll-free ADA Information Line at 1-800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. For more information on the Civil Rights Division, please visit www.justice.gov/crt. The letter can be viewed here.
President of Manpower Agency in the Northern Mariana Islands Sentenced for Visa Fraud SchemeRead the Press Release
Saipan, MP - SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant ALEJANDRO TUMANDAO NARIO, age 65, a citizen of the Republic of the Philippines and a lawful permanent resident in the Commonwealth of the Northern Mariana Islands (CNMI), was sentenced in the United States District Court for the Northern Mariana Islands to 21 months imprisonment for Fraud and Misuse of Visas (Visa Fraud), in violation of 18 U.S.C. § 1546. The Court also ordered three years of supervised release, a $7,000.00 fine, and a $100.00 special assessment fee.
Alejandro T. Nario is the owner, president, and manager of A&A Enterprises, CNMI LLC, a manpower agency business in the CNMI. Since its incorporation in January 2019, A&A Enterprises facilitated an unlawful scheme to acquire CW-1 nonimmigrant visas for foreign citizens to enter and remain in the CNMI.
Nario and his staff submitted petitions to U.S. Citizenship and Immigration Services for at least 99 known foreign citizens. The petitions included contracts of employment, specifying terms, hours, and wages to be paid. A&A Enterprises did not intend to employ these foreign citizens. The scheme was merely a mechanism to get them temporary immigration status. After paying $1,500.00 to $2,000.00 to A&A Enterprises for their CW-1 visas, once in the CNMI, these foreign workers would gain nondocumented jobs such as in construction, groundskeeping, and housekeeping, and then pay A&A Enterprises a fee of $194.00 every two weeks to keep their status.
The CW-1 visa program requires businesses petitioning for foreign workers to prove there is a demand for certain jobs and that those jobs for some reason cannot be filled by available United States citizens. The petitioning business must also pay the administrative fees and travel expenses for the foreign workers. But in this case, foreign workers were required to pay for these expenses and acquire their own jobs, while A&A Enterprises profited.
At the same hearing, a second defendant, ROSALEE BANGOT ABEJO, age 47, a citizen of the Republic of the Philippines residing in the CNMI, was sentenced to six months of home confinement and 36 months of probation for Conspiracy to Defraud the United States, in violation of 18 U.S.C. § 371. The Court also ordered 72 months of supervised release, 50 hours of community service, and a $100.00 special assessment fee.
During its investigation of A&A Enterprises, Homeland Security Investigations discovered Abejo was assisting the company by providing documents and other templates included with fraudulent visa petitions by A&A Enterprises. Abejo also relied upon staff at A&A Enterprises to electronically modify documents, which Abejo used to fraudulently submit CW-1 and CW-2 petitions for two friends, and her own husband.
“The CW-1 program continues to be abused by certain employers in the CNMI,” stated U.S. Attorney Anderson. “The public and the workers deserve a visa system that is free from fraud and waste. We will prosecute this unlawful conduct to hold employers accountable and to promote fairness among those seeking employment in the CNMI.”
"These business owners defrauded many people who believed they were coming to the CNMI for legitimate jobs," said John F. Tobon, Special Agent in Charge of Homeland Security Investigations Honolulu. "HSI will continue to investigate these crimes vigorously to protect the integrity of our immigration system and those who are victimized by these con-artists.”
The case was investigated by Homeland Security Investigations and prosecuted by Albert S. Flores Jr., Assistant United States Attorney for the District of the Northern Mariana Islands.
National Institute of Justice Funded Research Amasses Details of a Half Century of United States Mass ShootingsRead the Press Release
The Office of Justice Programs’ National Institute of Justice (NIJ) today published an article discussing the NIJ-supported and publicly available Violence Project Database that identifies common traits of persons who engaged in mass shootings between 1966 and 2019.
During that time, mass shootings in the United States notably increased, with more than half occurring after 2000, and 20% occurring during the last five years of the study period. The death toll in mass shootings in the last decade has grown dramatically. In the 1970s, mass shootings claimed an average of eight lives per year. From 2010 to 2019, the average was 51 deaths per year.
“This study — one of the most extensive assessments of mass violence to date—reveals a deeply unsettling trend: more Americans are dying at the hands of mass shooters than at any point in recent history,” said OJP Principal Deputy Assistant Attorney General Amy L. Solomon. “This analysis paints a portrait of shooters, giving us a better idea of who commits these crimes and helping us detect the warning signals for these appalling acts of violence.”
The database draws information exclusively from open sources, such as social media sites and online newspapers, in order to build a broader understanding on the part of the public, the justice system and the research community of who mass shooters are and what motivates them. Funded by NIJ, it covers 172 mass public shooters and more than 150 psychosocial history variables, such as those individuals’ mental health history, past trauma, interest in past shootings and situational triggers.
Analysis of the database shows that persons who committed public mass shootings in the U.S. over the last half century were commonly troubled by personal trauma before the shooting, nearly always in a state of crisis at the time and, in most cases, engaged in leaking their plans before opening fire. Most were insiders of a targeted institution, such as an employee or student. Except for young school shooters who stole the guns from family members, most used legally obtained handguns in those shootings.
The study includes a discussion of demographics, motivations, warning signs and other key findings. The article is available at “Public Mass Shootings: Database Amasses Details of a Half Century of U.S. Mass Shootings with Firearms, Generating Psychosocial Histories.” The research described in this article is based on the grantee report, A Multi-Level, Multi-Method Investigation of the Psychosocial Life Histories of Mass Shooters, September 2021, by Co-Principal Investigators Jillian Peterson and James Densley.
To receive notifications of new NIJ publications, register here.
The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.
Magic Valley Man Sentenced to 10 Years in Drug Distribution CaseRead the Press Release
BOISE – A Gooding man was sentenced to ten years in federal prison for distribution of methamphetamine.
According to court records, beginning in early 2020, law enforcement officers received information that Ruben Robles-Ramos, 49, of Gooding, was involved in the distribution of methamphetamine in the Magic Valley. An investigation was initiated and revealed that Robles-Ramos sold methamphetamine to another person on three occasions. During later investigative efforts, law enforcement learned about storage units that were used by Robles-Ramos and others to store controlled substances. A search of these storage units led to the seizure of approximately 30 pounds of methamphetamine, 1½ pounds of heroin, and five firearms, including an AK-47 style assault rifle.
Senior U.S. District Judge B. Lynn Winmill also ordered Robles-Ramos to serve five years of supervised release. It is expected Robles-Ramos will be deported to Mexico upon the completion of his sentence.
U.S. Attorney Rafael M. Gonzalez, Jr., of the District of Idaho made the announcement and commended the cooperative efforts of the Idaho State Police, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Twin Falls, Gooding, Jerome, Minidoka, and Cassia County Sheriff's Offices, Twin Falls Police Department, and the Jerome County Prosecutor’s Office, which led to charges.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
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Justice Department, ICE and the FBI Recognize International Day of Zero Tolerance for Female Genital MutilationRead the Press Release
The Human Rights Violators and War Crimes Center (HRVWCC), including the Justice Department’s Human Rights and Special Prosecutions Section (HRSP), U.S. Immigration and Customs Enforcement (ICE) and the FBI’s International Human Rights Unit (IHRU), will join U.S. and international law enforcement partners, non-governmental organizations (NGOs) and others this Sunday, Feb. 6 in recognizing the International Day of Zero Tolerance for Female Genital Mutilation (FGM).
“There will be no tolerance – today or any other day – for this harmful and traumatic practice,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Department of Justice is dedicated to the enforcement of the STOP FGM Act to protect young women from this traumatic experience.”
“The FBI stands with our partners in acknowledging this International Day of Zero Tolerance in support of the victims of this horrendous crime,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “We reaffirm our commitment to protecting young women and girls by bringing to justice those who violate this vulnerable group.”
“The International Day of Zero Tolerance provides us the opportunity to raise awareness of this issue and remember the women and girls who have suffered from this human rights abuse, including those who have died or live with the health complications from this practice,” said ICE Homeland Security Investigations (HSI) Assistant Director for National Security Andre R. Watson.
Federal agencies have engaged in a variety of initiatives aimed at protecting women and girls in the United States who have been subjected to or who may be at risk of FGM. For example:
- To help raise awareness, HSI special agents regularly conduct outreach at U.S. international airports to inform travelers of the dangers of FGM and the consequences for those who commit this horrific abuse. In December, HSI special agents conducted outreach at international airports in Dulles, Virginia, and Dallas, Texas, under an initiative called Operation Limelight USA. Operation Limelight USA was initiated in 2017 by ICE’s HRVWCC, and modeled after the U.K.’s Operation Limelight, a joint initiative by the U.K.’s Border Force and police services.
- The Justice Department’s Office for Victims of Crime awarded over five million dollars in three-year grants to support community projects around the country designed to increase direct services, education, and community partner engagement to stop the victimization of women and girls through FGM. For more info, see press release: Justice Department announces nearly $3 million to address female genital mutilation and cutting.
- Justice Department, DHS, and FBI conducted a variety of trainings for local, state and federal law enforcement (prosecutors, local and state police, child protective services professionals, and others) to raise awareness about the applicability of federal and state laws barring FGM, best practices for interactions with FGM survivors, and where to find support services. Similar trainings and meetings were held for educators, immigrant and refugee service providers, and medical professionals.
FGM is a serious human rights violation and a federal crime. In 2013, Congress amended the federal FGM statute to add section 116(d), which prohibits the transportation of a person from the United States to another country for purposes of having FGM performed upon them.
On Jan. 5, 2021, the STOP FGM Act 2020 was signed into law, further aligning the U.S. definition of FGM with the World Health Organization’s definition. Violations of this law may result in imprisonment and potential removal from the United States.
Individuals suspected of FGM, including sending girls overseas to be harmed, may be investigated by the HRVWCC and prosecuted by the Department of Justice accordingly.
On Jan. 13, 2021, the Department of Justice indicted a Texas woman for allegedly transporting a minor out of the United States for FGM, the first time that charges were brought under the provision of the law which prohibits taking a girl out of the United States for the purpose of FGM. The FBI’s Houston Field Office investigated the case with support from the Human Rights Violators and War Crimes Center.
According to UNICEF, more than 200 million girls and women alive today have undergone FGM, which refers to procedures that injure the female genital organs for non-medical reasons. While primarily concentrated in north, west and central Africa, as well as parts of the Middle East and Asia, FGM also occurs in the United States. The Centers for Disease Control estimates that approximately 500,000 women and girls in the United States are either victims of FGM or are at risk of being subjected to it. The practice is global in scope and found in multiple geographies, religions and socioeconomic classes.
ICE’s HRVWCC is focused on investigating global atrocities and the perpetrators of human rights violations and war crimes. Initiated by ICE’s HSI in 2008, the HRVWCC leverages the knowledge and expertise of a select group of special agents, attorneys, intelligence analysts, criminal research specialists and historians who are charged with preventing the United States from becoming a safe haven to individuals who engage in the commission of war crimes, genocide, torture and other forms of serious human rights abuses from conflicts around the globe. The center also brings together other DHS components and federal partners, to include the FBI and the Department of Justice, who work collaboratively alongside HSI to investigate human rights violators and to pursue war crimes investigations and prosecutions.
Anyone with information about victims or perpetrators of FGM is encouraged to call the toll-free ICE tip line at (866) 347-2423 or the FBI tip line at 1-800-CALL-FBI (800-225-5324). To submit a tip online, complete the ICE online tip form, or the FBI online tip form at tips.fbi.gov. The FBI’s call center and online portal are available anytime, and tips may be provided anonymously. For more information about FGM visit the United Nations' Zero Tolerance Day website.
Former Guam Army National Guard Soldier Sentenced to 10 years for Attempted Enticement of a MinorRead the Press Release
Hagatña, Guam - SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant CHRISTOPHER DE LEON GUERRERO, age 31, from Yigo, Guam, was sentenced to 10 years in federal prison for Attempted Enticement of a Minor, in violation of 18 U.S.C. §§ 2422(b) and 2. The sentencing followed a guilty verdict at trial in November 2021. The Court also ordered the defendant to serve five years of supervised release and pay a mandatory $200.00 special assessment fee.
Beginning on November 17, 2020, through November 20, 2020, the defendant used his cell phone to chat on the Whispr and Whatsapp applications with a person he believed to be a 13-year-old female. The female minor was actually an undercover law enforcement agent. During the next several days the defendant sent sexually explicit messages to entice the alleged minor to engage in sexual activity with him. The defendant made plans to meet at the minor’s house, located on Andersen Air Force Base, when he believed the minor would be home alone. On November 20, 2020, the defendant purchased food and a box of condoms and drove to the minor’s residence with the intent to engage in sexual activity with the minor. When the defendant arrived at the house, he was met by federal law enforcement agents. After agreeing to speak to agents, the defendant admitted to writing numerous sexual messages to the alleged minor. He also stated that he was prepared to have sex with her even though she was only 13 years of age. A search of the defendant’s truck revealed the box of condoms and the cell phone he used during the offense.
“This case is another reminder of the dangers faced by children on the internet,” stated U.S. Attorney Anderson. “Our Project Safe Childhood initiative continues to target those who seek to prey on the young and vulnerable. The success of this priority program is due to the outstanding working relationships among our federal agencies. We applaud their efforts.”
"The FBI will use all resources available to track, locate, and arrest those who seek to harm our children,” said FBI Special Agent in Charge Steven Merrill. “This sentence reflects the serious nature of the offense and acts as proof of our commitment, in collaboration with the Air Force Office of Special Investigation, to protect our children within our communities."
This case was part of the Project Safe Childhood (PSC) initiative, a nationwide initiative by the U.S. Department of Justice to aggressively prosecute people who engage in the sexual victimization of children, possess, or receive child pornography, and fail to register as sex offenders. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
The case was investigated by the Federal Bureau of Investigation and the Air Force Office of Special Investigation. This case was prosecuted by April Owen, Assistant United States Attorney for the District of Guam.
Former Executive Director of International Adoption Agency Pleads Guilty to Fraudulent Adoption SchemeRead the Press Release
The former executive director of an Ohio-based international adoption agency pleaded guilty today in the Northern District of Ohio to defrauding the U.S. and Polish authorities in connection with the adoption of a Polish child.
According to court documents, Margaret Cole, 74, of Strongsville, Ohio, admitted to conspiring with Debra Parris and others to deceive authorities regarding the adoption of a child from Poland. When Cole learned that clients of the adoption agency determined they could not care for one of the two Polish children they were set to adopt, Cole and her co-conspirators took steps to transfer the Polish child to Parris’s relatives, who were not eligible for intercountry adoption.
Cole, Parris and others agreed to defraud U.S. authorities to conceal their improper transfer of the Polish child. Following the adoption, the child was injured and hospitalized while living with Parris’s relatives. Thereafter, Cole made a false statement to the Polish authority responsible for intercountry adoptions about the transfer of the child that, among other things, concealed the role of Cole and others in arranging the transfer of the child to Parris’s relatives.
Cole pleaded guilty to conspiracy to defraud the United States and making a false statement to a Polish authority. She is scheduled to be sentenced on May 27. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Co-defendant Debra Parris previously pleaded guilty to conspiracy to defraud the United States in connection with the Poland scheme, as well as conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit visa fraud in connection with a scheme to corruptly and fraudulently procure adoptions of children from Uganda through bribes paid to Ugandan officials. Robin Longoria also previously pleaded guilty to conspiracy to violate the FCPA and to commit visa fraud and wire fraud in connection with the Ugandan scheme. Co-defendant Dorah Mirembe, who is charged in connection with the Ugandan scheme, remains at large.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Bridget M. Brennan for the Northern District of Ohio; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Eric B. Smith of the FBI’s Cleveland Field Office made the announcement.
If you believe you are a victim of this offense, please visit https://www.justice.gov/criminal-fraud/victim-witness-program or call (888) 549-3945.
The FBI’s Cleveland Field Office is investigating the case.
Trial Attorneys Jason Manning and Alexander Kramer of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Chelsea Rice of the Northern District of Ohio are prosecuting the case. The Justice Department’s Office of International Affairs assisted in the investigation.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
An indictment is merely an allegation, and Mirembe is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Alabama Correctional Lieutenant Sentenced for Failing to Intervene in Unlawful Inmate AssaultRead the Press Release
The Justice Department today announced that Willie M. Burks III, 41, a former Alabama Department of Corrections (ADOC) lieutenant, was sentenced in federal court to nine years’ imprisonment, with two years of supervised release to follow. Burks was convicted by a federal jury on July 21, 2021, of failing to stop an officer under his command from assaulting an inmate at ADOC’s Elmore Correctional Facility.
The evidence at trial established that on Feb. 16, 2019, former Correctional Sergeant Ulysses Oliver Jr., Burks’ subordinate, went to an observation room holding two handcuffed and unresisting inmates. Oliver, intending to punish the inmates for bringing contraband into the prison, pulled the first inmate from the observation room into an adjacent hallway, where he struck the victim multiple times with his fists and feet, and then used his collapsible baton to repeatedly strike the victim. Burks came into the hallway after Oliver had finished beating the first inmate. Burks then stood and watched as Oliver pulled the second inmate from the observation room, threw him on the floor, and beat the inmate with his feet and his collapsible baton. Despite having the duty, ability and opportunity to intervene to stop Oliver from beating the second inmate, Burks only stood by and said, “it’s fair.” Other ADOC correctional staff who reported to Burks were present for some or all of the assaults, but none intervened to stop Oliver from beating the inmates.
After the assault, Burks allowed Oliver to come back into the observation room where the victims were held. As Burks again stood by and did nothing, Oliver entered, stood over the victims, and shoved the tip of his baton into the face of one of the victims, lacerating the victim’s face.
Oliver and two other former corrections officers have pleaded guilty in connection with this incident. Oliver pleaded guilty to assaulting the two inmates on April 2, 2019. Former ADOC correctional officers Bryanna Mosley and Leon Williams pleaded guilty in May and July 2019, respectively, to failing to intervene to stop the assaults.
“Those working inside our jails and prisons have a duty to intervene in the face of unlawful and violent conduct being carried out by their colleagues,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Under the Constitution, correctional officers may not physically assault inmates for violations of prison rules, and any officials who see this happening must do what they can to stop it. The Department of Justice will vigorously prosecute officers who stand by and do nothing while other officers brutalize inmates in their charge.”
“The job of a correctional officer can be difficult and hazardous,” said U.S. Attorney Sandra J. Stewart for the Middle District of Alabama. “A vast majority of them serve with honor and are dedicated to upholding their duty to protect and serve. Unfortunately, some choose to ignore their sacred oaths and engage in criminal conduct or turn a blind eye when others do so. This office will continue to vigorously enforce our nation’s laws and hold officers who break the law accountable.”
“The unacceptable actions of Willie Burks in no way reflect the hard and tireless work of our corrections staff, who endeavor each day to provide a safe and rehabilitative environment for all incarcerated people,” said Arnaldo Mercado, the ADOC’s Law Enforcement Services Division’s Chief Law Enforcement Officer. “We condemn in the strongest possible terms Burks’ behavior and blatant violation of his sworn oath to serve. Any and all incidents such as this are thoroughly investigated and, if appropriate, referred to the proper prosecuting authority. We extend our thanks to the Department of Justice for their assistance in bringing forth justice in this case.”
“The mission to protect the civil rights of American citizens is a priority of the men and women of the FBI and does not end after incarceration,” said Acting Special Agent in Charge Bryan D. Duchene of the FBI’s Mobile Division. “The actions of the corrections officers in this case will not be tolerated and we are proud to be a part of bringing them to justice.”
This case was investigated by the FBI’s Mobile Division and ADOC’s Law Enforcement Services Division. Assistant U.S. Attorney Eric Counts of the Middle District of Alabama and Trial Attorneys Katherine DeVar and David Reese of the Civil Rights Division prosecuted the case.
Federal Court Shuts Down South Florida Tax PreparersRead the Press Release
On Feb. 3, a federal court in the Southern District of Florida permanently enjoined two North Lauderdale tax return preparers and their business from preparing federal income tax returns or operating any tax return preparation business in the future. It also ordered the tax preparers to pay $353,000 in disgorgement to the United States.
The civil complaint filed in the case alleged that Wendell Devallon and Berald Dominique, co-owners of Tax Time Group Inc., prepared tax returns for customers that claimed fraudulent self-employment expenses, fictitious education credits, false fuel tax credits and fake charitable contributions, among other schemes. The complaint also alleged that Devallon and Dominique acted as “ghost” preparers, meaning that they acted as paid tax return preparers but did not sign the returns they prepared, as required by law.
In a June 2021 order, the court found the defendants in contempt for violating a preliminary injunction that restricted their tax preparation activities while this case was pending. Devallon, Dominique and Tax Time Group consented to entry of the court’s contempt order and admitted that sufficient evidence existed to show that they had violated the preliminary injunction. In August 2021, the court entered an order requiring the defendants to pay $211,000 in sanctions for their violations of the preliminary injunction.
Yesterday’s permanent injunction, to which Devallon, Dominique and Tax Time Group consented, forever bars them from any involvement in the preparation of federal tax returns. They must immediately close and cease all operations at any Tax Time Group office location, including the company’s North Lauderdale offices located at 995 Rock Island Road and 1675 S State Rd 7. They must also pay an additional $142,000 to the United States for their fraudulent return preparation activities that pre-dated the complaint. The permanent injunction requires Devallon and Dominique to give up their ownership of the “Tax Time Group” brand. If they sell the business, all proceeds will be applied to the $353,000 they must pay the United States. If Devallon, Dominique or Tax Time Group is found to have prepared another return, they must pay the United States $2,000 plus any fees they received for preparing the return.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a checklist of things to remember when filing income tax returns in 2022.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free. The IRS has tips on how seniors and individuals with low to moderate income can get other help or guidance on tax return preparation, too.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Two Florida Residents Sentenced to Prison for COVID-19 Relief FraudRead the Press Release
A Florida woman was sentenced today to 44 months in prison for defrauding the Paycheck Protection Program (PPP) of more than $3.3 million in loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to court documents and evidence presented at trial, Keyaira Bostic, 32, of Pembroke Pines, obtained a PPP loan of $84,515 for her company, I Am Liquid Inc., based on false information about the company’s number of employees and average payroll and on false supporting tax and bank documents. Bostic paid more than $21,000 to a co-conspirator, James Stote, as a kickback for his assistance in preparing and submitting the fraudulent loan application. The evidence showed that Bostic, in exchange for kickbacks, referred other co-conspirators to the scheme and Stote submitted fraudulent PPP loan applications on their behalf. Those loan applicants sought more than $3.3 million in fraudulent PPP loans and obtained nearly $2 million in PPP loan proceeds.
A federal jury in Fort Lauderdale found Bostic guilty of conspiracy and wire fraud on Nov. 24, 2021. In addition to her prison sentence, Bostic was ordered to serve three years of supervised released and pay approximately $1.3 million in restitution and $124,515 in forfeiture.
In addition, on Feb. 1, Luke Pierre Jr. was sentenced to two years in prison for obtaining a fraudulent PPP loan of $414,675 as part of this criminal scheme. According to court documents, Pierre, 36, of Port St. Lucie, pleaded guilty in the Southern District of Florida to conspiracy to commit wire fraud on Nov. 1, 2021. As part of the fraud scheme, Pierre obtained a PPP loan for his company, Most Wanted Bullyz LLC (MWB), a dog breeding business, in which he falsely represented that MWB had 21 employees and an average monthly payroll of $165,870. In reality, MWB had no employees and no monthly employee payroll. Pierre gave a large portion of the fraudulent loan proceeds he received to co-conspirators who helped obtain the loan, including Stote, and disguised one such payment of over $100,000 as “stud fees.” In addition to his prison sentence, Pierre was ordered to serve three years of supervised released and pay $414,675 in restitution and $414,675 in forfeiture.
Stote pleaded guilty on Dec. 15, 2021, to conspiracy to commit wire fraud in the Northern District of Ohio. He is scheduled to be sentenced on May 6.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida; Special Agent in Charge Matthew D. Line of the IRS-Criminal Investigation (IRS-CI) Miami Field Office; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Special Agent in Charge Amaleka McCall-Brathwaite of the SBA’s Office of Inspector General (SBA-OIG) Eastern Region made the announcement.
IRS-CI, the FBI, and SBA-OIG investigated the cases.
Trial Attorney Philip Trout of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Turken and David Snider of the Southern District of Florida prosecuted the cases.
The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.
In May 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, among other methods, 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.
Justice Department and U.S. Department of Agriculture Launch Online Tool Allowing Farmers, Ranchers to Report Anticompetitive PracticesRead the Press Release
Today, the U.S. Departments of Justice and Agriculture (USDA) launched farmerfairness.gov, a new online tool that allows farmers and ranchers to anonymously report potentially unfair and anticompetitive practices in the livestock and poultry sectors. The launch of the new portal will advance the goals of Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain, including by creating more competitive agricultural markets that are fairer to producers and consumers. As part of the agencies’ enforcement partnership, the agencies are signing an interagency memorandum of understanding to further foster cooperation and communication between the agencies and effectively process the complaints received through the portal.
“When we talk about protecting competition in the agricultural sector, we are talking about whether a farmer or a rancher will be paid a fair and competitive price for their goods and labor. When we talk about protecting consumers in this context, we are talking about whether food will be affordable for everyone in America,” said Attorney General Merrick B. Garland. “Today’s launch of farmerfairness.gov – a one-stop shop to report potential violations of our competitions laws – will allow the Justice Department and USDA to collaborate early and ensure economic opportunity and fairness for all.”
“This new online tool will help USDA and the Justice Department address anticompetitive actions and create livestock and poultry markets that are fairer to our nation’s producers,” said Agriculture Secretary Tom Vilsack. “I encourage producers who are aware of potential violations of competition laws to submit information to the portal so we can take appropriate action to create more competitive markets in the agricultural sector.”
Complaints or tips will go through a preliminary review by Department of Justice Antitrust Division staff and USDA Packers and Stockyards Division staff. If a complaint raises sufficient concern under the Packers and Stockyards Act or antitrust laws, it will be selected for further investigation by the appropriate agency. This action may lead to the opening of a formal investigation.
Users can submit information under their names or may submit anonymous complaints. If a complainant provides their personal information, Justice Department or USDA staff will only contact them if additional information is needed. To submit an anonymous complaint, users can provide information about the potential violation without including their names or contact information.
For any information provided, the Justice Department and USDA will follow their respective privacy and confidentiality policies found at: Justice Department Confidentiality and USDA Privacy. Packers and Stockyards regulations regarding confidentiality also apply: PSD Confidentiality. The Justice Department and USDA commit to supporting relevant whistleblower protections, including newly applicable protections for criminal antitrust complainants against unlawful retaliation.
The meatpacking industry has consolidated rapidly in recent decades. Meanwhile, farmers’ share of the value of their agricultural products has decreased, and poultry farmers, hog farmers, cattle ranchers and other agricultural workers may struggle to retain autonomy and to make sustainable incomes.
For example, ranchers received more than 60 cents of every dollar a consumer spent on beef 50 years ago, compared to approximately 39 cents today. Hog farmers fared worse over the past 50 years, as their share of the consumer dollar fell from between 40 to 60 cents 50 years ago to approximately 19 cents today.
Producers who choose not to use the farmerfairness.gov portal also can submit complaints about potentially anticompetitive practices by emailing [email protected]; calling (833) 342-5773; faxing (202) 205-9237; or mailing Stop 3601, 1400 Independence Ave. SW, Washington, D.C., 20250-3601.
Former President of Energy Company Indicted for Commodities Insider Trading and Kickback SchemesRead the Press Release
A federal grand jury in Houston returned an indictment today charging a Texas man for an illegal kickback scheme and a commodities insider trading scheme involving natural gas futures.
According to court documents, Matthew Clark, 54, of The Woodlands, worked as a natural gas trader and as president of an energy company based in Houston. The indictment alleges that Clark conspired with others to receive kickbacks from commission fees paid by Clark’s employer to Classic Energy LLC, a brokerage firm owned and operated by Matthew Webb. In exchange for these commission fee kickbacks, Clark agreed to direct his employer’s trades to Webb’s brokerage.
According to the indictment, Clark conspired with others to misappropriate his employer’s material, nonpublic information and to engage in prohibited commodities transactions, including illegal prearranged trades, in natural gas futures contracts for his own, and his co-conspirators’, personal gain. Clark and his co-conspirators caused prices to be reported, recorded and registered on designated commodities markets that were not true, bona fide prices. The profits from these fraudulent trades were split among Clark and his co-conspirators.
Clark is charged with one count of conspiracy to commit honest services wire fraud, three counts of honest services wire fraud, one count of conspiracy to violate various provisions of the Commodity Exchange Act, two counts of prohibited commodities transactions and two counts of insider trading. The defendant will make his initial court appearance before a U.S. Magistrate Judge in the U.S. District Court for the Southern District of Texas. If convicted, he faces a maximum total penalty of 130 years in prison for these charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
In a related case, Peter Miller, 41, of Puerto Rico, pleaded guilty to conspiracy to commit commodities fraud today. Miller, who is alleged to be one of Clark’s co-conspirators, is scheduled to be sentenced on May 12.
In four other related cases, Marcus Schultz, 41, of Houston; John Ed James, 51, of Katy, Texas; Webb, 51, of Tiki Island, Texas; and Lee Tippett, 62, of Jacksonville, Florida, pleaded guilty on July 20, 2020, Feb. 1, 2021, June 15, 2021, and Aug. 17, 2021, respectively. Schultz pleaded guilty to a one-count information charging him with conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act. James pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and wire fraud. Webb pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and wire fraud and to violate various provisions of the Commodity Exchange Act. Tippett pleaded guilty to a one-count information charging him with conspiracy to commit commodities fraud and honest services wire fraud.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer Lowery for the Southern District of Texas; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Acting Special Agent in Charge Richard A. Collodi of the FBI’s Houston Field Office; and Special Agent in Charge Ramsey E. Covington of the IRS-Criminal Investigation’s Houston Field Office made the announcement.
The FBI’s Houston Field Office and IRS-Criminal Investigation’s Houston Field Office are investigating the case.
Assistant Chief Leslie S. Garthwaite and Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section, and Deputy Chief Suzanne Elmilady and Assistant U.S. Attorney Zahra Fenelon of the U.S. Attorney’s Office for the Southern District of Texas 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.