Northern District of Ohio
Press releases recorded for this federal judicial district.
J. Kevin Kelley Sentenced to Six Years in Prison for BribesRead the Press Release
Former Cuyahoga County employee and Parma School Board member J. Kevin Kelley was sentenced today to six years in prison and ordered to pay $605,035 for his involvement in several bribery schemes, federal law enforcement officials announced today.
Kelley, 44, formerly of Parma, previously pleaded guilty in U.S. District Court to multiple counts of Hobbs Act conspiracy, conspiracy to commit mail fraud, conspiracy to commit theft or bribery concerning programs receiving federal funds, theft or bribery concerning programs receiving federal funds and making false tax returns.
“Kevin Kelley, the last of more than 60 indicted individuals in Operation Airball to be sentenced, exploited his corrupt connections in order to line his pockets,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “The FBI will continue efforts to combat misuse of taxpayers’ dollars at any level.”
Kelley previously pleaded guilty to several bribery schemes involving Cuyahoga County Auditor Frank Russo, Cuyahoga County Commissioner Jimmy Dimora, Anthony O. Calabrese, Ferris Kleem and others.
Kelley admitted to helping organize a bribery scheme in which Cuyahoga County officials Jimmy Dimora and Frank Russo were sent to Las Vegas in exchange for supporting county funding for the agency. Kelley was paid my by Alternatives Agency for “consulting services” and he used a portion of the money to purchase first-class airfare to Las Vegas for Dimora, Russo and Russo’s companion, according to court documents.
Kelley organized the trip in coordination with Ferris Kleem and then helped Kleem get an inspector he specifically requested to the Snow Road resurfacing project, which was being performed by Kleem’s company, according to court documents.
Calabrese hired Kelley as a consultant for Alternatives Agency, paying up to $4,900 a month, but Kelley performed little actual work for the agency. Instead the money was paid in order to obtain favorable consideration from Kelley and others on business matters unrelated to Alternatives Agency, according to court documents.
On several occasions, Kelley also steered county contracts and Parma schools contracts to companies that paid bribes to him or to his friends and associates, according to court documents.
Kelley also filed false tax returns in years 2003-2007 in which he did not disclose $189,659 of income, according to court documents.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon, Ann C. Rowland and Nancy L. Kelley following an investigation by the FBI and IRS – Criminal Investigation.
Three Men from Toledo Area Indicted for $23 Fraud SchemeRead the Press Release
A federal grand indicted three men from the Toledo area for their roles in the operation of a $23 million fraud scheme involving the sale of Iraqi dinar currency and two non-existent hedge funds, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati field office.
Those indicted are: Bradford L. Huebner, 66, of Ottawa Hills, Ohio; Charles N. Emmenecker, 66, of Sylvania, Ohio, and Michael L. Teadt, 67, of Maumee, Ohio.
Rudolph M. Coenen, age 47, of Jacksonville, Florida, has already pleaded guilty to crimes related to his role in the conspiracy.
The men are charged with conspiracy to commit wire fraud and wire fraud. Huebner is also charged with multiple counts of money laundering, structuring and willful failure to file currency and transaction reports.
As a result of the defendants’ conduct, investors lost about $23.8 million from dinar sales and more than $700,000 from the sale of non-existent hedge fund “seats” and “placements,” according to the indictment.
“These defendants made false statements time and again to convince people to part with their savings and hard-earned cash,” Dettelbach said. “The fact that they falsely claimed one member of the conspiracy was wounded while fighting in Iraq is particularly egregious.”
“Illegal activity involving the investment industry has brought financial ruin to many Americans,” Enstrom said. “IRS Criminal Investigation is committed to unraveling complex investment schemes to ensure that the promoters of these schemes do not use the financial-services industry for personal gain.”
The indictment charges that beginning about August 2010, Huebner, Coenen, Emmenecker and Teadt conspired to operate “BH Group” in Toledo and “Bayshore Capital Investments” in Jacksonville in order to defraud investors through investments in the Iraqi dinar currency and two non-existent hedge funds.
The conspirators promoted the dinar and non-existent hedge funds through the dissemination of a series of material falsehoods conveyed primarily through weekly interstate conference calls and through the conspirators’ web site, according to the indictment.False claims included statements about the U.S. Treasury Department’s holdings of dinar and involvement in the Iraqi dinar investment market, according to the indictment.
Additional material false statements made by all the defendants include, but are not limited to, portrayal of Coenen as a former vice president at JP Morgan Chase and a former Marine who was awarded the Purple Heart after being wounded in Iraq during Operation Desert Storm.
Coenen worked for JP Morgan Chase for one day as an account executive/loan officer. He never served in the first Gulf War, was never wounded in combat and never received a Purple Heart, according to the indictment.
If convicted, the defendants’ sentence will be determined by the court after a review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ roles in the offense and the characteristics of the violation. The sentence will not exceed the statutory maximum and in most cases will be less than the maximum.
This case is being handled by Assistant United States Attorneys Gene Crawford and Matthew W. Shepherd following an investigation by the Internal Revenue Service – Criminal Investigation.
An indictment is only a charge and is not evidence of guilty. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Mexican Man Charged with Illegal Re-EntryRead the Press Release
A grand jury returned a one-count indictment charging Jose Isabel Sandate-Lozano, age 30, with illegally reentering the United States following his deportation, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Sandate-Lozano is an alien who was previously removed or deported from the United States to Mexico on July 19, 2005, subsequent to a conviction for an aggravated felony.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Gregory C. Sasse, following investigation by agents of the Homeland Security Investigations of the Immigration and Customs Enforcement Agency.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Mansfield Man Faces ChargesRead the Press Release
A grand jury returned a two-count indictment charging Cameron J. Lawhorn, 21, of Mansfield, Ohio, with one count of damage to and interference with an air navigation facility and one count of theft of government property, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Lawhorn willfully damaged, destroyed, and disabled a Federal Aviation Administration air navigation facility located in Shelby, Ohio. The indictment further alleges that Lawhorn knowingly stole Federal Aviation Administration property, including a laptop computer, multimeter, and oscilloscope.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation and the Richland County Sheriff’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Eight People Indicted for $40 Million Mortgage FraudRead the Press Release
Eight people were indicted for their roles in a $40 million mortgage fraud conspiracy involving dozens of properties along Florida’s Gulf Coast, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Named in the 45-count indictment are: Ileana E. Osborne, 44, of Santa Rosa Beach, Fla.; Kyle F. Conrad, 63, and Linda K. Conrad, 62, both of Hartville, Ohio; John J. Dubay, 48, of Delray Beach, Fla.; Jon R. Jacobson, 50, of North Canton, Ohio; Harry S. Kaplan, 50, of Hillsboro Beach, Fla.; David B. Romsey, 67, of Uniontown, Ohio, and Grace M. Wollerman, 49, of Mentor, Ohio.
Also named but not charged in the indictment is Jack R. Coppenger, of Akron. Coppenger is currently serving 10 years in federal prison for his role in the schemes.
The indictment details conduct that took place between 2004 and 2006, when Osborne owned and operated a mortgage brokerage company and a consulting company and Copppenger operated several businesses related to real estate development. The other seven people served as straw buyers, according to the indictment.
The defendants conspired to use straw buyers to make mortgage loan applications, to make false statements, misrepresentations and omissions in the mortgage loan applications and to conceal the scheme to avert detection from lending institutions, according to the indictment.
At Osborne and Coppenger’s request, a real estate agent or property finder located a property for sale. Osborne, Coppenger and others conviced the property owner to allow them and others to assist in the sale and purchase for a price satisfactory to the seller. Coppenger located a straw buyer with good credit and solicited his or her participation in the fraudulent scheme by promising payments of as much as $25,000 in return for using the straw buyer’s name and credit to purchase the property, according to the indictment.
In some instances, Osborne, the straw buyer, Coppenger and others agreed to a sales price of the property in excess of the asking price and divided the excess amount between Osborne and Coppenger, their respective companies and others, according to the indictment.
Coppenger represented to the straw buyer that his or her credit information was needed only to make the purchase, and once purchased the straw buyer would not be responsible for the payments on the mortgage loan. However, he also promised straw buyers a split on future profits from the investment developed in and development of the property, according to the indictment.
Osborne, as a licensed mortgage broker, along with the straw buyer, filled out a loan application for the straw buyer. She and the straw buyer included false information, including inflating income amounts, falsely representing that the property would be used as a second residence, failing to disclose that the straw buyer was not the source of the down payment for the property and other false statements, according to the indictment.
The indictment lists fraudulent transactions for nine properties on Ann Street in Santa Rosa, Fla.
Through their schemes, the defendants obtained numerous home mortgage loans under false and fraudulent pretenses with a total face value of approximately $40 million in order to illicitly enrich themselves and their co-conspirators. Many of these loans are now in default and/or foreclosure, according to the indictment.
Osborne was also indicted for her role in a bank fraud conspiracy involving Jason A. Herceg and Andrew D. Norman in 2006 in which all three used straw buyers to make mortgage loan applications, made false statements and misrepresentation in the mortgage loan applications and concealed the scheme from lending institutions. That scheme involved four properties in Santa Rosa Beach, Florida, and caused an additional loss of approximately $5 million.
Herceg and Norman were sentenced to federal prison after being found guilty of crimes related to their role in the conspiracy.
This case is being prosecuted by Assistant U.S. Attorneys Robert J. Patton and Om Kakani following an investigation by the Federal Bureau of Investigation.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offenses and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Cleveland Heights Man Charged with Making Interstate ThreatsRead the Press Release
A federal grand jury sitting in returned an indictment charging Justin Michael Krueger, age 23, whose last known address was Cleveland Heights, Ohio, with two counts of threats to another by interstate communication, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
While in Kansas and California, Krueger made interstate threats against relatives in Ohio, threatening to injure and kill them, according to the indictment.
Krueger was arrested on December 6, 2013, by the FBI and Safe Streets Task Force on a federal arrest warrant. Assisting the FBI with the arrest was the Cleveland Heights Police Department.
If convicted, Krueger’s sentence will be determined by the Court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Teresa Dirksen.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Canton Man Faces Cocaine ChargesRead the Press Release
A federal grand jury returned a three-count indictment charging Thomas Joseph Brown, age 42, of Canton, Ohio, with possession with intent to distribute approximately 446 grams of cocaine, possession of cocaine and attempted possession of cocaine, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Brown was arrested on a complaint on November 14, 2013 when Postal Inspectors in Cleveland were alerted to two suspicious packages. After further investigation and surveillance Brown was arrested by U.S. Postal Inspectors and members of the Ohio State Highway Patrol and Medway Drug Enforcement Agency.
If convicted, Brown’s sentence will be determined by the Court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Kevin Culum, Trial Attorney.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Ashtabula Man Sentenced to 13 Years in Prison for Trafficking Heroin That Led to the Death of WomanRead the Press Release
An Ashtabula man was sentenced today to 13 years in prison for selling heroin that resulted in the death of an Ashtabula woman last year, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Jamarce Miller, 37, previously pleaded guilty to conspiracy to distribute heroin. The count included a “death specification” that the heroin he sold directly resulted in the death of a person.
“Today there is a young girl being raised without a mother because of the heroin sold by Jamarce Miller,” Dettelbach said. “We hope today’s sentence gives this defendant time to reflect upon the devastation he caused to that girl, that family and our community.”
“Jamarce Miller is the typical drug dealer that routinely does not consider the consequences of his actions,” said Geno Corley, Resident Agent in Charge of the Drug Enforcement Administration’s Cleveland office. “DEA and it’s law enforcement partners will continue to investigate and ultimately stop the reign of terror by the Jamarce Millers of the world. Today, the community is safer because there is one less dope peddler selling poison on our streets.”
Miller was part of a conspiracy led by Rayshawn Reed, who arranged for multiple kilogram quantities of heroin to be brought into Northeast Ohio from the Chicago area from March 2012 to August 15, 2012.
The heroin was then distributed to co-conspirators in Ashtabula, including Miller, who then resold the heroin to other co-conspirators and to heroin users. Heroin from the conspiracy that had been distributed by Miller resulted in the fatal heroin overdose of an Ashtabula-area resident on or about July 7, 2012, according to court documents.
Reed, Miller and the nine other people have been found guilty for their roles in the conspiracy. Reed was sentenced to 14 years in prison.
This case is being prosecuted by Assistant U.S. Attorneys Vasile Katsaros and Linda Barr following an investigation by the U.S. Drug Enforcement Administration and the Federal Bureau of Investigation, with assistance from the Ashtabula County Sheriff’s Office, the Ashtabula Police Department, the Trumbull/Ashtabula Group Task Force (TAG), the Ohio Bureau of Criminal Identification and Investigation (BCI), the Cuyahoga County Sheriff’s Office, and the Ohio State Highway Patrol.
Daniel Gallagher Sentenced to Four Years in Prison for Bribery Involving Public OfficialsRead the Press Release
Former Cuyahoga County employee Daniel Gallagher was sentenced to four years in prison today for engaging in a series of bribery conspiracies involving public officials, federal law enforcement officials announced today.
Gallagher, 62, of Strongsville, was also ordered to pay $87,000 in restitution by U.S. District Judge Sara Lioi. He previously pleaded guilty to eight counts, including Hobbs Act conspiracy, conspiracy to bribe programs receiving federal funds, destruction of records and subscribing a false tax return.
“This defendant was involved in several bribery schemes involving public officials,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “The FBI will continue efforts to root out corruption at any level.”
Gallagher admitted to his involvement in several bribery schemes involving Frank Russo, Jimmy Dimora, J. Kevin Kelley, Kevin Payne, Samir Mohammad, Anthony Ma, Anthony Calabrese and others. All of those defendants have previously been found guilty of related offenses.
Gallagher worked as an employee in the Cuyahoga County Engineer’s Office until his retirement in 2002; he subsequently started a company called Eagle Consulting.
A company paid approximately $143,000 to Gallagher and Eagle Consulting related to efforts to keep theCounty Engineer’s Office at the Stonebridge complex. Gallagher in turn gave a portion of the money to Kevin Payne, who used it to pay for limousines, gambling trips and personal services for Dimora, according to court documents.
Other bribery schemes included orchestrating the use of certain software for the Engineer’s Office, with payments then going to Eagle Consulting, and helping steer another county contract to a business that paid $115,000 to Gallagher, which was distributed to Payne, Kelley and others. Eagle Consulting was also used as a way to funnel bribes to Kevin Kelley, who was a member of the Parma School Board, from a company that received a $1.8 million contract from the Parma Schools, according to court documents.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon and Ann C. Rowlandfollowing an investigation by the FBI and IRS – Criminal Investigation.
Olmsted Falls Man Sentenced to Two Years in Prison for Copper TheftRead the Press Release
An Olmsted Falls man was sentenced to two years in prison today, the fifth person sentenced to prison for their roles in a conspiracy to steal copper from two dozen substations in Northeast Ohio owned by First Energy or Cleveland Public Power, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
William Bertini, 26, was also ordered to pay more than $206,000 in resitution to First Energy Corp. by U.S. District Judge Benita Pearson.
Bertini and six other men pleaded guilty earlier this year to conspiracy to damage energy facilities. Previously sentenced are:
Christopher M. Butts, 27, of Cleveland, to four years and seven months in prison.
Jason B. Kauffman, 35, of Cleveland, to three years and one month in prison.
Julio Torres, 46, of Cleveland, to two year and three months in prison.
Jon T. Lefort, 26, of Cleveland, to one year and three months in prison
Keven Wenson, 22, of Lakewood, to two years of supervised release.
Michael T. Butts, 33, of Brooklyn, is scheduled to be sentenced early next year.
“These sentences should send a message that the theft of copper and other scrap metal is a serious problem in our region, and the targeting of energy facilities additionally poses a significant threat to our national security infrastructure.” Dettelbach said.
“The potential of harm posed by these individuals to enrich themselves while risking lives and posing serious threats to our community will not be tolerated. The FBI and our law enforcement partners will aggressively pursue and bring to justice those individuals who place our community in harm’s way.”
The thefts took place between January and May 2013 and included substations in Brooklyn, Parma, Brecksville, Fairlawn, Medina, Cleveland, Wadsworth, Lakewood, Cuyahoga Heights, Independence, Vermillion, Lorain, Avon Lake, Westlake and Valley View, according to court documents.The 24 substations listed in the indictment have copper material around their bases that facilitated the transmission of electricity. Removal of the copper material from a substation causes a substantial risk of electrical blackouts as well as possible injury or death to utility company employees responsible for maintaining, servicing and repairing the substations, according to court documents.
Christopher and Michael Butts instructed Lefort, Bertini, Kauffman, Wenson and Torres how to remove the copper material from the substation in a way that would minimize the risk of physical harm to the person cutting the wire or cable. The defendants used bolt cutters to cut fencing and/or locks protecting the substations, according to court records.
The defendants then unlawfully extracted the copper wire and materials from the substations, manually carrying it in garbage cans, duffel bags, contractor bags and other containers to “staging areas.” From there, the copper material was transported to scrap yards, where it was sold for cash, according to court documents.
Court documents detail 25 copper thefts and five attempted thefts. It also lists 53 instances where at least some of the defendants sold stolen copper to area scrap yards between January and April 2013.
The defendants collectively sold the stolen copper for more than $15,000. They have collectively been ordered to pay $242,626 to First Energy Corp. for the cost of repairs to the substations.
This case is being prosecuted by Assistant U.S. Attorneys Thomas E. Getz and M. Kendra Klump following an investigation by the Federal Bureau of Investigation, Avon Lake Police Department, Brecksville Police Department, Medina County Sheriff’s Office, Middleburgh Heights Police Department, Valley View Police Department and Northeast Ohio Regional Fusion Center, and assistance from the Medina County Prosecutor’s Office.
Toledo Man Sentenced to Prison for His Role in Illegal Dumping of AsbestosRead the Press Release
A Toledo man was sentenced to one year in prison and ordered to pay a $2,000 fine for his role in the illegal removal and disposal of asbestos-containing material, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
John J. Mayer, 52, pleaded guilty in July to violating the Clean Air Act.
“Mr. Mayer ignored the laws and regulations that are in place to protect the public,” Dettelbach said. “Protecting the environment, including the air we breathe, is a priority of my office and the Justice Department.”
“Improper removal and disposal of asbestos endangers human health, and exposure to asbestos fibers can prove fatal,” said Randall K. Ashe, Special Agent in Charge of U.S. EPA’s criminal enforcement program in Ohio. “The Defendant oversaw the illegal removal of large quantities of asbestos-containing materials, which were ultimately dumped in three residential areas in Toledo. This case should serve notice that U.S. EPA and its partner agencies are prepared to prosecute those who 'cut corners' by avoiding the costs of handling or disposing of asbestos properly.”
Mayer directed individuals to remove asbestos-containing insulation from boilers, duct work and pipes in a former manufacturing facility in Toledo between September and December 2010, in order that Mayer could sell the scrap metal from those items. This work was performed in violation of the federal Clean Air Act regulations regarding asbestos abatement, according to court documents.
The asbestos-containing insulation was not wetted at any time during the removal process; the City of Toledo, Division of Environmental Services, was not notified prior to the work commencing and there was not on site a person trained in the provisions of the federal asbestos regulations, according to court documents.
The illegally removed asbestos-containing insulation was placed into approximately 82 garbage bags, which were dumped at various locations throughout Toledo in violation of the requirement that such material be disposed at a site operated in accordance with federal law, according to court documents.
Timothy Byes, 32, of Toledo, also pleaded guilty to violating the Clean Air Act and is scheduled to be sentenced at a later date.
The investigating agencies in this case are the U.S. EPA Criminal Investigation Division, the Ohio Bureau of Criminal Identification and Investigation, the Ohio Environmental Protection Agency – Office of Special Investigations, the City of Toledo – Division of Environmental Services, all members of the Northwest Ohio Environmental Crimes Task Force. The case was prosecuted by Assistant United States Attorney Gene Crawford and Special Assistant United States Attorney James J. Cha.
Fremont Man Sentenced to 24 Years in Prison for Child Pornography ConvictionRead the Press Release
A Fremont man was sentenced to more than 24 years in prison after previously being found guilty of three counts related to child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Robert Lehman, 57, was arrested in January after investigators determined he downloaded more than 50 images of young boys being sexually abused.
Lehman was previously sentenced to eight years in state prison for corruption of a minor in 1987 and nine years in state prison for corruption of a minor and sexual imposition in 2009, according to court documents.
This case was prosecuted by Assistant U.S Attorney Alissa Sterling following an investigation by Immigration and Customs Enforcement -- Homeland Security Investigations.
Antun Lewis Convicted of Arson for Setting Fire That Killed Nine PeopleRead the Press Release
A federal jury found Antun Lewis guilty of setting the May 2005 fire that killed nine people in Cleveland, Ohio, said United States Attorney Steven M. Dettelbach announced today.
Lewis, 29, of Cleveland, is scheduled to be sentenced March 18, 2013. He was convicted of one count of arson in U.S. District Court in Cleveland.
“Justice took a longer time coming, but justice was delivered,” Dettelbach said. “This case came about because of the incredible work and cooperation from the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cleveland Police and Fire Departments and the prosecutors in the U.S. Attorney’s Office.”
“We hope this verdict brings some small measure of comfort to the families of the deceased,” Dettelbach said.
“This case highlights the fact that arson is a violent crime capable of destroying lives in addition to property,” said Michael Boxler, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Columbus Field Division. “The ATF agents and prosecutors in this case were unwavering in their dedication to the victims and their pursuit of justice.”
The arson at 1220 East 87th Street on May 21, 2005, killed eight children and one adult, making it the deadliest intentionally set fire in Cleveland’s history. It occurred during a children’s sleepover birthday party, according to trial testimony.
Killed were: Fakih Jones, age 7; Malee’ya Williams, age 12; Shauntavia Mitchell, age 12; Earnest Tate, Jr., age 13; Miles Golden Cockfield, age 13; Antwon Jackson, Jr., age 14; Moses Williams Jr., age 14; Devonte Carter, age 15, and Medeia Carter, 33.
This case is being prosecuted by Assistant U.S. Attorneys David J. Sierleja, Robert W. Corts, Michael L. Collyer following an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Cleveland Police Department and Cleveland Fire Department.
Owners and Managers at Restraurant Chain Indicted for Conspiracy to Hire Undocumented WorkersRead the Press Release
A grand jury returned a 23-count indictment charging six people for their roles in a conspiracy to hire undocumented workers at a chain of restaurants in Stark and Summit counties and pay them less than minimum wage and sometimes only in tips, said Steven M. Dettelbach, United States Attorney for the Northern District.
Prosecutors are also seeking to forfeit more than $16 million generated by the restaurants.
Indicted are owners Miguel Castro, age 44, and Monica Castro, age 43, both of Uniontown, Ohio; and managers Cesar Castro, age 28, of Akron; Aldo Castro, age 42, of Akron; Pedro Cervantes, age 39, of Mexico; and Gustavo Torres, age 45, of Kent, Ohio.
“The owners and managers of these restaurants took advantage of their workers’ immigration status for their own profit,” Dettelbach said.
“Employers have a legal responsibility to protect the integrity of their workforce,” said Marlon Miller, special agent in charge of ICE’s Homeland Security Investigations in Detroit, which covers Michigan and Ohio. “When companies engage in schemes that flout immigration laws, workers are often exploited and businesses that play by the rules are put at a significant disadvantage.”
The defendants face charges including conspiracy to harbor undocumented aliens, aiding and abetting the harboring of undocumented aliens, harboring undocumented aliens, conspiracy to commit mail fraud and mail fraud. Miguel Castro and Monica Castro also are charged with making false statements to federal law enforcement officers.
Since 2002, the defendants owned and/or managed the seven “Mariachi Locos” and “Mariachi Cocos” chain of restaurants with locations in Akron, Stow, Tallmadge and North Canton.
The defendants engaged in the practice of hiring undocumented workers who were illegally present in the United States and conspired to shield these workers from detection by paying them in cash, excluding them from payrolls, leasing housing for the workers, and aiding the workers in obtaining fraudulent work documentation, according to the indictment.
The defendants also used the U.S. mail to submit false wage reports to the state of Ohio. The defendants’ employment practices enabled them to enrich themselves because they paid the undocumented workers less than minimum wage and did not pay these workers for overtime hours worked, according to the indictment.
In some cases, the defendants paid these workers only the tips that the workers received from their customers, according to the indictment.
The indictment seeks the forfeiture of $16,474,870 in gross proceeds that the defendants earned as a result of the offenses.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ roles in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorneys Lauren Bell and Phillip J. Tripi, following a joint investigation by agents of Department of Homeland Security and the Department of Labor -- Office of Inspector General.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
The Owners of Ohio Head Shops Among Five Indicted for Distribution of Synthetic Cannabinoids Sold as Spice or K2Read the Press Release
The owners of a chain of head shops were among five people indicted for conspiracy to distribute synthetic cannabinoids for their sale of products with names such as spice and K2, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are: Sean Lightner and Sherry Lightner, both 38 and both of Grafton; Dale Drummond, 39, of Cleveland; Mark Picard, 32, of Whittier, Calif. and Nathan Albright, 28, of Glendale, Arizona.
“These defendants sold a product that was designed to mimic an illegal drug,” Dettelbach said. “No matter what it was labeled or whatever clever name it was given, it was illegal.”
Synthetic cannabinoids are a large family of chemically unrelated structures functionally similar to THC. Synthetic cannabinoids may contain Schedule I controlled substances or controlled substance analogues and have purported physchotropic effects when smoked or ingested.
The Lightners operated a chain of head shops (retail stores specializing in drug and smoking paraphernalia) doing business as Twilight Boutique, where they sold synthetic cannabinoids along with accessories such as bongs, pipes and rolling papers, according to the indictment.
They franchised the Twilight Boutique on Madison Avenue in Lakewood to Dale Drummond for a percentage of the store’s monthly revenue. Drummond also sold synthetic cannabinoids from the store, according to the indictment.
The Lightners expanded their business to include several locations in Ohio after they began selling synthetic cannabinoids. They control Twilight Corp., located on Royalton Road in Grafton, and the Twilight Boutique stores located on State Route 43 in Streetsboro, Cleveland Road West in Sandusky, Pearl Road in Brunswick, North Abbe Road in Elyria, Lorain Road in Fairview Park, Whipple Avenue in Plain Township, North Court Street in Athens, Midway Plaza in Tallmadge, South Alex Road in West Carrollton, West Fourth Street in Ontario and Clinton Plaza Drive in Oneonta, N.Y., according to the indictment.
The Lightners presented laboratory reports to others, including employees, alleging that the synthetic cannabinoids sold in the Twilight Boutique stores did not contain controlled substances or controlled substance analogues in an effort to give the appearance that the synthetic cannabinoids were legal when the Lightners knew they were illegal, according to the indictment.
Albright sold synthetic cannabinoids through his company, Desert Distribution, LLC and Albright and Picard sold synthetic cannabinoids through their company, Royal Dutch, LLC.
Prosecutors are also seeking to forfeit more than $225,000 in cash seized, as well as three vehicles and property in Grafton, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Teresa Dirksen following an investigation by the Drug Enforcement Administration Drug Enforcement Administration—Tactical Diversion Squad, Internal Revenue Service -- Criminal Investigations, Lorain County Drug Task Force, Medina County Drug Task Force, Portage County Drug Task Force, Westshore Enforcement Bureau, MEDWAY Drug Enforcement Agency, METRICH Enforcement Unit, Cuyahoga County Sheriff’s Office, Linndale Police Department, Lakewood Police Department, Cleveland Police Department, Ontario Police Department, Sandusky Police Department, Ohio HIDTA and the Ohio State Patrol.
If convicted, the defendants’ sentences will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge. The defendants are innocent until proven guilty beyond a reasonable doubt.
Canton Couple Indicted for Defrauding Department of Education Out of $2.3 MillionRead the Press Release
A Canton couple and one of their employees were indicted for engaging in a conspiracy to defraud the United State Department of Education of more than $2.3 million by obtaining fake high school diplomas for prospective students, fraudulently applying for financial aid on their behalf by representing that the students had the necessary educational credentials, and then enrolling them in the college that the couple operated, law enforcement officials said.
Named in the seven-count indictment are: John “Richard” Ceroni, 64, and Adale “Marie” Cernoni, 62, both of Canton, and Tammy Pyle, 43, of Waynesburg, Ohio.
All three are charged with conspiracy to commit mail fraud and wire fraud. The Ceronis are also charged with one count of conspiracy to launder money and four counts of engaging in monetary transactions in property derived from unlawful activity. Richard Ceroni also faces one count of making a false statement.
“These defendants stole millions of dollars that were intended to help students pay for college and insteadblew it on jewelry, lingerie, cruises, and a Vegas vacation,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “We will continue to root out waste, fraud and abuse of federal programs wherever we find it.”
“These defendants ripped off taxpayers to the tune of more than $2 million,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “They are now being brought to justice thanks to a collaborative effort.”
“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. It is not to be used as a personal slush fund, which today's indictment alleges this couple did,” said Thomas D. Utz Jr. Special Agent in Charge of the U.S. Department of Education Office of Inspector General's North Central Regional Office. “As the law enforcement arm of the U.S. Department of Education, our mission is to ensure that those who steal student aid or game the system for their own selfish purposes are stopped and held accountable for their criminal actions.”
"Richard Ceroni and his co-defendants built a house of cards laced with a web of financial lies," said Kathy Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "The underlying structure fell apart and exposed these individuals for who they really are.. Operating a not-for-profit college does not give you a license to steal."
The Ceronis were co-founders Carnegie Career College. From at least 2003, Carnegie College held itself out to the public as a private not-for-profit college that offered a select number of associate degrees, as well as various “certificate” programs in areas such as blood drawing.
Around 2002, Richard Ceroni applied with the Department of Education to participate in the federal student financial aid (SFA) program. That application was approved in December 2003, according to the indictment.
Richard Ceroni was dean and director of education at Carnegie College, while Marie Ceroni was the director of Carnegie and was responsible for financial matters at the school. They and Pyle purported to work as volunteers at Carnegie.
Richard Ceroni was also founder of Historical Chapel Ministries (HCM), which was registered as a tax-exempt charitable organization. It had offices in the same building as Carnegie College in Suffield, Ohio. Both Ceronis held themselves out as ministers of HCM, but it did not have regular services or congregants, according to the indictment.
In February 2007, Carnegie College opened a branch “campus” that operated in a single-family home in Canton. In 2010, Carnegie moved its branch campus to a commercial building in North Canton, which also hosted a variety of other Ceroni ventures, including a driving school and a massage service, according to the indictment.
From June 2007 through May 2012, the Ceronis and Pyle fraudulently obtained approximately $2.3 million from the Department of Education by submitting applications for SFA funds that stated students at Carnegie College had obtained valid high school diplomas; they also falsely told prospective students they would earn a valid high school diploma at the same time they attended Carnegie College and that such a diploma would be paid for by a “scholarship from a church” in order to increase enrollment and access to SFA funds, according to the indictment.
The Ceronis recruited students who had not earned high school diplomas or G.E.D. certificates, and thus were not eligible for SFA funds, and submitted fraudulent financial aid documents to the Department of Education. They used online high schools, including Australia-based Adison High School, to purchase fake high school diplomas and coursework transcripts for students who were not required to attend any classes or complete any coursework, according to the indictment.
Pyle took a “high school diploma test” for students, while at other times provided test answers to the students. Marie Ceroni paid Adison High School, which provided diplomas using the graduation date on which the student would have graduated from high school had they completed high school in the normal course. According to the indictment, sometimes those dates predated general public access to the Internet.
The Ceronis comingled fraudulently obtained money in several accounts and used that money to fund personal expenditures and expand Carnegie College. Between February 2011 and February 2012, for example, Marie Ceroni made more than $475,000 in large cash withdrawals from two accounts that operated under the Historical Chapel Ministries name. Money from those accounts was used to make under-the-table cash payments to the defendants and other Carnegie College employees who the Ceronis claimed were unpaid volunteers, according to the indictment.
There were also payments using comingled funds from a several accounts, including: on July 8, 2010, Marie Ceroni wrote a check for $100,038 to pay off a personal line of credit; on Dec. 17, 2010, Marie Ceroni wrote a check for $119,230 to pay off a personal line of credit that was used, among other things, to purchase two Jeep vehicles; in 2012, the Ceronis wrote check to pay credit card balances that included charges for fake Adison High School diplomas and transcripts; in 2010, Marie Ceroni made and caused to be made electronic fund transfers to pay for credit cards that included charges of more than $4,300 from Royal Caribbean Cruises and more than $800 from Airtran; in 2011, similar electronic transfers were made to pay off credit card charges from stores including Victoria’s Secret, Wine & Spirits, Simply Tans and the University of Akron bookstore; on July 11, 2011, Marie Ceroni wrote a check for $15,650 to Jared Jewelers; on Nov. 22, 2011, she wrote a check for $24,808 to Zale’s to pay for wedding bands for the couple’s daughter; on Jan. 12, 2012, she wrote a check for $3,806 to Jared Jewelers and nine days later wrote another check to Jared Jewelers for $9,782, according to the indictment.
This case is being prosecuted by Assistant U.S. Attorneys Rebecca Lutzko and Robert Patton following an investigation by the United States Department of Education – Office of Inspector General, the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division.
An indictment is only a charge. The defendants are innocent until proven guilty beyond a reasonable doubt.
Eric Bartoli Arrested in Peru After A Decade as A FugitiveRead the Press Release
Eric V. Bartoli, who was indicted in 2003 on a 10-count indictment and has been a fugitive for more than a decade, has been arrested in Peru, said Stephen D. Anthony, Special Agent in Charge of the Cleveland Division of the Federal Bureau of Investigation and Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Bartoli is accused of operation a large-scale ponzi scheme from 1995 through 1999. Bartoli allegedly created and operated a company by the name of Cyprus Funds, Inc., which was based in Doylestown, Ohio and incorporated in Central America and Belize. Bartoli and his co-conspirators allegedly operated Cyprus to sell certificates of deposit and unregistered mutual funds. Cyprus raised approximately $65 million from an estimated 800 investors in Latin America and the United States. Some of Cyprus’s victims include retirees, according to court records.
Bartoli was sued in 1999 by the Securities and Exchange Commission on charges involving the Cyprus Funds, Inc. Bartoli did not appear at a scheduled hearing regarding the SEC charges. He was subsequently found in contempt of court and a civil arrest warrant was issued. Bartoli had fled Ohio and was arrested in New Hampshire. Bartoli was not detained at that time and became a fugitive.
A 10-count federal indictment was filed against Bartoli in the U.S. District Court for the Northern District of Ohio in October 2003. He was charged with conspiracy, securities fraud, sale of unregistered securities, wire fraud, mail fraud, money laundering, and attempted income tax evasion.
Bartoli has been featured on shows including American Greed and Life on the Run and on a wanted poster by the FBI posted on www.fbi.gov.
Bartoli was taken into custody this morning at 6:15a.m. in Chorillos, Lima, Peru by the Peruvian National Police without incident. The operation was a joint effort between the FBI, Diplomatic Security Service, and the Peruvian National Police. The United States Government appreciates the Government of Peru’s cooperation on this sensitive case.
“We are thankful for our continued partnership with the international law enforcement community. A team of Cleveland and international FBI resources worked closely with the Peruvian authorities to locate and apprehend Eric Bartoli,” Anthony said. “We hope that the long awaited prosecution of Bartoli will provide some satisfaction to the many individuals he defrauded.”
“We are gratified by the all the hard work that was done to bring Mr. Bartoli into custody,” Dettelbach said.
Three Cleveland Men Given Lengthy Prison Sentences for Bank RobberiesRead the Press Release
Three Cleveland men sentenced to lengthy prison terms this week for their roles in unrelated bank robberies, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Perry Johnson, 21, was sentenced to 25 years in prison. Charles D. Moore, 28, was sentenced to more than 16 years in prison and Mitchell Perkins, 28, was sentenced to nearly 12 years in prison.
“These three defendants put everyday customers in grave danger,” Anthony said. “The sentences demonstrate that the FBI Violent Crimes Task Force will continue efforts to investigate and remove menacing criminals from our streets.”
Johnson was found guilty of two armed robberies of CVS pharmacies last year in which he threatened the use of a firearm and took cash and prescription medication.
Johnson robbed the CVS pharmacy at 10022 Madison Avenue on Nov. 16 and the CVS pharmacy at 3171 West Boulevard on Nov. 23, 2012.
In the first robbery, he threatened the use of a firearm and took five bottles of prescription medication and cash from a CVS employee, according to the indictment. In the second robbery, Johnson pointed a firearm at CVS employees and took cash, 30 bottles of prescription medication and other merchandise, according to court documents.
Moore was found guilty of one count of armed bank robbery. This charge arises from the July 9, 2013, bank robbery of the PNC Bank at 20711 Chagrin Boulevard. in Shaker Heights, when Moore held the bank manager at gunpoint and stole approximately $46,000 from the bank's tellers, according to court documents.
Perkins was found guilty of armed bank robbery and using a firearm during the commission of a felony. He robbed the U.S. Bank at 5154 Wilson Mills Road in Richmond Heights, Ohio, on May 29, 2012, according to court documents.
The cases were all investigated by the Federal Bureau of Investigation and handled by prosecutors in the U.S. Attorney’s Office.
Parma Heights Man Sentenced to Three Years in Prison, Ordered to Pay Nearly $1.2 Million for Tax FraudRead the Press Release
A Parma Heights man was sentenced to more than three years in prison and ordered to pay nearly $1.2 million in restitution, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Bryan D. McCallum previously pleaded guilty to a two-count information charging him with a false claims conspiracy and with making 30 false claims. McCallum is 40 years old, according to court records.“Those individuals who engage in this type of financial fraud should know they will not go undetected and will be brought to justice,” Dettelbach said.
“This sentence sends an important message to America’s taxpayers who play by the rules that we have no tolerance for those who make up their own rules,” Enstrom said.
McCallum worked as an accountant/bookkeepr for two corporations owned and controlled by Brian D. Krantz, 46, of Twinsburg. These companies engaged in financial services and/or real estate investment business activities.
From approximately April 2009 through June 8, 2010, Krantz and McCallum conspired to make false claims for tax refunds using income tax returns filed with the IRS in the names of Krantz, companies formed by Krantz and McCallum, and several “shelf” companies purchased by Krantz. A “shelf” company is a corporate or other formal non-operating business entity established for the purpose of being held for sale to another person, according to court documents.
The scheme involved the use of fake IRS Forms 2439, titled “Notice to Shareholder of Undistributed Long-Term Capital,” which is a form to be issued by a regulated investment company (RIC) or real estate investment trust (REIT) to report undistributed capital gains and taxes withheld from those gains on behalf of the shareholders. Under federal tax law, RICs and REITs are entities that are not taxed on their earnings but instead pass those earnings to their shareholders who, in turn, have the obligation to report those earnings and any resulting tax liabilities on the shareholders’ income tax returns. The returns filed pursuant to the conspiracy claimed substantial amounts of Form 2439 withholding credits, when, in fact, none of the companies listed on the forms were actually RICs or REITs or had any undistributed capital gains or withheld taxes, according to court documents.
Krantz used more than $1 million of the refund proceeds to finance a real estate venture he established with other partners, known as Phoenix Ventures Partners LLC. Krantz and McCallum misled Krantz’s real estate partners to believe that a group of Colorado-based hard money lenders had provided the funds.
Krantz was pleaded guilty to earlier this year to a 31-count indictment related to filing income tax refunds totaling more than $8.8 million. The U.S. Treasury issued 17 refund checks totaling approximately $3,615,586 payable to Krantz and various corporations controlled by Krantz as a result of the alleged scheme, according to the court documents.
He is scheduled to be sentenced in March.
The government’s case is being prosecuted by Assistant United States Attorneys John M. Siegel and Justin J. Roberts, following an investigation by the Internal Revenue Service, Criminal Investigation.
Coshocton Pharmacist Sentenced to More Than Four Years in Prison for Health Care FraudRead the Press Release
A Coshocton pharmacist was sentenced to more than four years in prison and ordered to pay more than $2.1 million in restitution related to health care fraud, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Ohio Attorney General Mike DeWine.
Barbara Elise Miller pleaded guilty earlier this year in federal court to to five counts of health care fraud and one count of adulteration of drugs after an investigation found that she fraudulently received more than $2 million from state, federal, and private medical insurance companies by way of fraudulent billing practices.
“This defendant not only defrauded victims out of millions of dollars, but her adulteration of drugs also caused health complications for a child,” Dettelbach said.
"This defendant likely thought she could get away with these crimes, but there are checks and balances in place to make sure that those engaging in heath care fraud don't get away with it," DeWine said.
The crimes happened during Miller's time as the owner and operator of Coshocton's Three Rivers Infusion and Pharmacy Specialists, a medial infusion supply company which also provided home health services and medical supplies. Between 2003 and 2009, Miller knowingly and willfully executed a scheme to defraud health care benefit programs such as Ohio Medicaid, Medical Mutual of Ohio, Anthem Blue Cross/Blue Shield of Ohio, TriCare, and Medicare, according to court documents.Miller filed more than $1 million worth of claims for services using a false provider name, overstated the amount of nursing time needed to provide certain injections, and made fraudulent claims regarding the dosage and frequency of which certain drugs were dispensed, according to court documents.
Miller also altered the purity, quality, and strength of the drug Kineret, which is used to reduce the pain and swelling associated with moderate to severe rheumatoid arthritis, according to court documents.
The case was prosecuted by Assistant U.S. Attorney Rebecca Lutzko and attorneys with Ohio Attorney General DeWine's Health Care Fraud Section. The case was investigated by Attorney General DeWine's Medicaid Fraud Control Unit, the Ohio Department of Insurance, the United States Department of Health and Human Services, Office of the Inspector General, and the Federal Bureau of Investigation.
Cleveland Woman Sentenced to Nearly Four Year in Prison for Financial CrimesRead the Press Release
A Cleveland woman was sentenced to nearly four years in prison and ordered to pay $78,004 in restitution for financial crimes, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Jocelyn Hale, 32, was sentenced to 45 months of incarceration after pleading guilty in October to one count of conspiracy to commit bank fraud and money laundering, one count of conspiracy to commit wire fraud and money laundering, one count of conspiracy to commit mail fraud and money laundering, four counts of mail fraud, and one count of aggravated identity theft.
Hale’s co-defendant, Angelique Bankston, 42, of South Euclid, was convicted by a jury on November 21, 2013 after almost a three week trial of all 23 counts against her, including the counts listed above and one count of wire fraud, five counts of bank fraud, four additional counts of mail fraud, four additional counts of aggravated identity theft, one count of money laundering, and one count of making a false statement.
In her plea agreement, Hale admitted to using identities of several individuals without their authority, and assisting Bankston to defraud Citizens Bank, Lending Club Corporation, and
Wells Fargo Bank. Bankston and Hale funded one Wells Fargo Bank account with fraudulent checks totaling $13,027.22, and then attempted to quickly remove and launder the fraudulent proceeds.Bankston and Hale also funded a second Wells Fargo Bank account with a fraudulent tax return check in the amount of $6,172, and a Citizens Bank account with illegally obtained funds from a fraudulently obtained Lending Club loan in the amount of $30,000. Once the illegal obtain funds were deposited, Bankston and Hale again quickly attempted to remove and launder those funds. Finally, Hale admitted to assisting Bankston to defraud the Ohio Department of Job and Family Services by filing false and fraudulent claims for unemployment benefits using a fictitious company and fictitious employees based on stolen identities.
Bankston’s sentencing is currently scheduled for April 23, 2014 at 10:00 a.m. at the United States Federal Courthouse in Akron, Ohio.
This case was prosecuted by Assistant United States Attorney Mark S. Bennett and Special Assistant United States Attorney Perry D. Mastrocola, following an investigation by the Internal Revenue Service - Criminal Investigation, Federal Bureau of Investigation, and United States Postal Inspection Service offices in Cleveland.
Construction Executive Steven Pumper Sentenced to Eight Years in Prison for Paying Bribes to Public OfficialsRead the Press Release
A Cuyahoga Falls man was sentenced to more than eight years in prison and ordered to pay more than $2 million in restitution for paying bribes to public officials as part of the Cuyahoga County corruption investigation, law enforcement officials said.
Steven W. Pumper, 49, was sentenced to 97 months in prison by U.S. District Judge Sara Lioi. She also ordered Pumper to pay restitution in the amounts of $1.7 million to Phillips Health Care, $186,000 to Cuyahoga County, $117,000 to Maple Heights City Schools and $15,000 to Parma City Schools.
Pumper previously pleaded guilty to a nine-count information for charges including conspiracy to commit bribery of programs receiving federal funds, obstruction of justice, bribery, mail fraud, structuring and mail fraud.
Pumper, the former president and CEO of DAS Construction, admitted to paying bribes to public officials in return for official actions on his behalf. For example, Pumper provided $33,000 in cash to then-Cuyahoga County Commissioner Jimmy Dimora, and also provided free improvements to Dimora’s home worth tens of thousands of dollars. These actions were done in return for Dimora’s support on several projects in which Pumper was involved, including securing funding for development projects.
In another example, Pumper provided a political donation to the Cuyahoga County Democratic Party that was specifically to be used by the campaign of Parma School Board member J. Kevin Kelley. In return, Kelley helped Pumper’s company secure a $96,000 contract from the school district.
Dimora is currently serving a 28-year prison sentence while Kelley is scheduled to be sentenced later this month.
This case was prosecuted by Assistant U.S. Attorneys Ann C. Rowland and Antoinette T. Bacon following an investigation by the Federal Bureau of Investigation’s Cleveland office and the Internal Revenue Service – Criminal Investigation.
Willowick Woman Sentenced to 4 1/2 Years in Prison for Tax ConvictionRead the Press Release
Margaret Monone Greenaway was sentenced today to 54 months imprisonment for claiming false income tax refunds totaling $5,271,794 for the years 2010 and 2011, said Steven M. Dettelbach, United States Attorney. The sentence was imposed by United States District Judge David D. Dowd, Jr., who also imposed a three-year term supervised release following Greenaway’s incarceration.
Greenaway pleaded guilty to the two-count indictment against her on October 17, 2013. In her written plea agreement, Greenaway admitted to filing income tax returns under her name during a prior marriage, Margaret M. Demaria-Susevich, using a “single” filing status, on which she claimed refunds to which she was not entitled of $1,326,671 for 2010 and $3,945,123 for 2011. The claimed refunds were based on purported wages and withholding reflected in fake W-2 forms she attached to the returns. She fabricated the W-2 forms by using the employer information on W-2 forms issued to her husband and inserting made-up amounts of wages and withholding purportedly paid to her. Greenaway never worked for that employer. Greenaway received the requested $3.9 million refund check for 2011 and deposited it into new bank accounts she opened. The bank, however, alerted law enforcement authorities of possible fraud involving the check, enabling the IRS to retrieve the funds before she could spend them.
Greenaway, age 53, resided in Willowick, Ohio, until being placed in pre-trial detention in early July 2013. After being arrested on the indictment on May 16, 2013, she was initially released on bond. Judge Dowd revoked her bond, however, after finding that she had violated the terms of her release. She has been in federal custody since that time, including a period in which she was evaluated for mental competency to stand trial. After a hearing in which he found Greenaway to be competent, Judge Dowd scheduled the case for trial. Greenaway pleaded guilty the day before her trial was set to begin.The case was prosecuted by Assistant United States Attorney John M. Siegel following an investigation by the Internal Revenue Service – Criminal Investigation, Cleveland, Ohio.
Two Conneaut Men Indicted for Stealing Firearms from Lake County StoreRead the Press Release
A federal grand jury returned a two-count indictment charging Jory Rhodes, age 26, and Brandon Haley, age 28, both of Conneaut, Ohio, with theft of firearms from a Federal Firearms Licensee and possession of a stolen firearm, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that on October 25, 2012, Rhodes and Haley stole a firearm from a Federal Firearms Licensee, Great Lakes Outdoor Supply, in Madison Township. Specifically, it is alleged that Rhodes and Haley visited the Great Lakes Outdoor Supply with the intent to steal something of value, and that when the employees were not looking, Rhodes reached into a display case and stole a $1,129 Remington Arms .45 caliber pistol while Haley acted as lookout.
If convicted, the defendants’ sentence will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ role in the offense, and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The matter is being prosecuted by Assistant United States Attorney Adam Hollingsworth.
An indictment in only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Man Indicted for Illegal ReentryRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced that a federal grand jury returned a one-count indictment charging Oscar Mejia Gomez, age 29, of Honduras, with illegal re-entry into the United States after deportation.
The indictment charges that or about November 7, 2013, Gomez , an alien, was found in the United States after having been deported on or about August 11, 2011, at or near the Phoenix Mesa Gateway Airport, Mesa, Arizona, and not having obtained the express consent of the Secretary of Homeland Security to reapply for admission to the United States.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
Kent Woman Faces Tax ChargesRead the Press Release
A Kent, Ohio, woman is accused of underreporting her taxable income by more than $240,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Youlanda Banks, age 57, was charged via criminal information with two counts of making or subscribing a false tax return.
Banks filed a tax return for 2007 stating her total income was $54,059 when, in fact, it was approximately $157,238. She filed a tax return for 2008 stating her total income was $3,169 when, in fact, it was $143,765, according to the information.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton following an investigation by the Internal Revenue Service.
A charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Justice Department Files Lawsuit Alleging Disability-Based Discrimination at Hartville Condominium ComplexRead the Press Release
The Justice Department filed a lawsuit late yesterday against the owners, builders and designers of a 54-unit condominium complex in Hartville, Ohio, for violations of the Fair Housing Act (FHA). The lawsuit alleges that the defendants violated the law when they designed and constructed the complex with barriers that make it inaccessible to persons with disabilities.
“Since 1991, the Fair Housing Act has required that when new multifamily housing is built, it be accessible to persons with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division. “When condominium complexes are built with steps and other barriers, those with disabilities are denied that equal housing opportunity.”
“We will continue to work to make sure people with disabilities are free to live where they choose, as is their legal right,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio.
The suit, filed in U.S. District Court in Cleveland alleges that various barriers at the Windham Bridge property in Hartville deny persons with disabilities equal access to 52 condominiums and the associated public and common-use areas at the property that are covered by the FHA. Such barriers include inaccessible building entrances; no accessible parking spaces; insufficient accessible routes into and through the units; and kitchens and bathrooms that are inaccessible to persons in wheelchairs.
The lawsuit arises from a complaint filed with the Department of Housing and Urban Development (HUD) by the Fair Housing Advocates Association (FHAA), a private nonprofit corporation whose mission is to provide education regarding fair housing laws and to ensure compliance with those laws in Ohio. FHAA inspected the Windham Bridge property and observed accessibility barriers. After conducting an investigation, HUD issued a charge of discrimination and referred the case to the Justice Department.
“The Fair Housing Act's accessibility requirements have been on the books for over two decades. So, today, when a person with a disability cannot enter the front door of a condominium complex, or find accessible parking there, it sends the message: 'You are not welcome here,'" said HUD's Acting Assistant Secretary Bryan Greene for Fair Housing and Equal Opportunity. “HUD and DOJ are committed to enforcing the nation’s fair housing laws to make certain persons with disabilities have the same access to multifamily housing as anyone else."
Named in the suit are the prior owners and builders of the property, Noble Homes Inc., Guardian Property Management Inc., Dean Windham, Hersh Construction Inc., and John Hershberger, as well as the designer of the property, Milton Studer, and his firm, Studer Architects LLC. The suit seeks a court order requiring the defendants to retrofit the Windham Bridge property to bring it into compliance with the FHA, as well as monetary damages for FHAA and for persons harmed by the lack of accessibility at the complex.
The federal FHA prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability. Among other things, the Act requires all multifamily housing constructed after March 12, 1991, to have basic accessibility features, including accessible routes without steps to all ground floor units. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in federal court.
Toyo Tire & Rubber Co. Ltd. Agrees to Plead Guilty to Price Fixing on Auto Parts and to Pay $120 Million Criminal FineRead the Press Release
Osaka, Japan-based Toyo Tire & Rubber Co. Ltd. has agreed to plead guilty and to pay a $120 million criminal fine for its role in two separate conspiracies to fix the prices of automotive components involving anti-vibration rubber and driveshaft parts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a two-count felony charge filed today in U.S. District Court for the Northern District of Ohio in Toledo, Toyo engaged in a conspiracy to allocate sales of, to rig bids for, and to fix the prices of automotive anti-vibration rubber parts it sold to Toyota Motor Corp., Nissan Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and certain of their subsidiaries, affiliates and suppliers, in the United States and elsewhere. According to the charge, Toyo and its co-conspirators carried out the anti-vibration rubber parts conspiracy from as early as March 1996 until at least May 2012.
In addition, according to the charge, Toyo engaged in a separate conspiracy to allocate sales of, and to fix, raise and maintain the prices of automotive constant-velocity-joint boots it sold to U.S. subsidiaries of GKN plc, a British automotive parts supplier. According to the charge, Toyo and its co-conspirators carried out the constant-velocity-joint boots conspiracy from as early as January 2006 until as late as September 2010.
Toyo, which has subsidiaries based in Franklin, Ky., and White, Ga., has agreed to cooperate with the department’s ongoing investigation. The plea agreement is subject to court approval.
“Today’s charge is the latest step in the Antitrust Division’s effort to hold automobile part suppliers accountable for their illegal and collusive conduct,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal and anticompetitive means.”
Automotive anti-vibration rubber parts are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration. Automotive constant-velocity-joint boots are composed of rubber or plastic, and are used to cover the constant-velocity-joints of an automobile to protect the joints from contaminants.
The department said the company and its co-conspirators carried out the conspiracies through meetings and conversations, discussed and agreed upon bids, price quotations and price adjustments, and agreed to allocate among the companies certain sales of the anti-vibration rubber and constant-velocity-joint boots parts sold to automobile and component manufacturers.
Including Toyo, 22 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. All 22 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.8 billion in criminal fines. Of the 26 executives, 20 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
Toyo is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.
New York Man Charged with Traveling to Engage in Sex with MinorRead the Press Release
Gary C. Green, Jr., 43, of Johnstown, New York, was charged with travel to engage in illicit sexual contact with a minor, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The criminal information charges that from on or about August 3, 2013, through on or about August 4, 2013, Green knowingly traveled in interstate commerce, from the State of New York to the State of Ohio, for the purpose of engaging in illicit sexual conduct with another person, that is, a fifteen-year-old girl.
If convicted, the sentence in this case will be determined by the Court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Carol M. Skutnik. The case was investigated by the Federal Bureau of Investigation, Youngstown Office.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Justice Department Employees to Be Awarded for Service in Major CasesRead the Press Release
Several Department of Justice employees will be honored for their exemplary service in cases that had a profound impact on Northern Ohio.
The employees are being honored for their work on the Cuyahoga County corruption investigation, the investigation into Omnicare Corp. that resulted in a $50 million settlement, the successful prosecution of the LSP street gang in Youngstown for racketeering, including attempted and narcotics trafficking and two dozen convictions following the collapse of the St. Paul Croatian Federal Credit Union.
“Each of these people represents the best of federal law enforcement,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “They worked for months -- sometimes years -- to make Northern Ohio a safer place by bringing down a decade-old cycle of corruption or ensuring the elderly would receive proper healthcare or dismantling a violent street gang. They have taken on the hard challenges and succeeded in making our community better.”
“Each one of these well-deserving recipients went above and beyond to get the job done and serve our community,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office. “They were determined and dedicated to seeing justice prevail, and for that, we honor and thank them”
“The IRS, Criminal Investigation Chief's Investigative Excellence Award is presented in recognition and appreciation of the outstanding commitment and dedication to excellence by the multiple agencies in support of their investigative efforts relative to the Cuyahoga County corruption investigation. In addition, the multiple agencies who were involved in the St. Paul Croatian Federal Credit Union investigation were presented the Commendation Award for Excellence in support of their investigative efforts,” said Kathy A. Enstrom, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office. “These investigations exemplify the outstanding partnership and cooperation.”
Cuyahoga County Corruption Investigation
The Cuyahoga County corruption investigation has resulted in more than 60 convictions, including the former County Commissioner, County Auditor and two Common Pleas Judges. The case uncovered several pay-to-play bribery schemes in which public officials awarded jobs, contracts and other favors in exchange for cash, trips and other gifts. Former County Commissioner Jimmy Dimora’s 28-year prison sentence is believed to be the longest sentence handed out for a public corruption conviction. The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service.
Those being honored with the Attorney General’s Award for Distinguished Service are: Assistant United States Attorneys Antoinette T. Bacon, Henry DeBaggis, Nancy L. Kelley, Sharon L. Long, Robert J. Patton, Justin J. Roberts, Ann C. Rowland, Bernard A. Smith, FBI Special Agents Gregory D.L. Curtis, Melissa L. Fortunato, Raymond Michael Massie, Kirk P. Spielmaker, William M. Werner, Christine C. Oliver and IRS Special Agent Kelly D. Fatula.
Omnicare Settlement
Omnicare, Inc. paid a $50 million civil penalty to resolve claims that its various pharmacy facilities improperly dispensed controlled substances to patients at long-term care facilities across the country, such as routinely dispensing controlled substances to residents of long-term facilities without a prescription signed by a practitioner. The case was investigated by the Drug Enforcement Administration.
Receiving the Director’s Award for Superior Service by an Assistant United States Attorney – Civil and a DEA Commendation are Kent W. Penhallurick and Steven J. Paffilas. Receiving the United States Attorney’s Award for Distinguished Public Service is DEA Special Agent Scott Brinks.
LSP Gang Prosecution
Twenty-two people were convicted of racketeering and other crimes for their roles in a conspiracy in which the LSP street gang used violence, including drive-by shootings, to control territory and sell heroin, cocaine and other drugs in Youngstown. Gang leaders Derrick Johnson Jr. was sentenced to 65 years in prison and Daquann Hackett was sentenced to 37 years in prison. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Youngstown Police Department.
Receiving the Director’s Award for Superior Service by an Assistant United States Attorney – Criminal are Robert F. Corts and Daniel J. Riedl. Receiving the United States Attorney’s Award for Distinguished Public Service is ATF Special Agent John Smerglia.
St. Paul Croatian Federal Credit Union Investigation
When the St. Paul Croatian Federal Credit Union went into conservatorship and then forced liquidation in 2010, the resulting $170 million loss made it the largest credit-union failure in American history. The subsequent criminal investigation revealed a decade-long scheme in which the credit union’s Chief Financial Officer Anthony Raguz made more than 1,000 fraudulent loans and payments in return bribes, gifts and other kickbacks. More than two dozen people were convicted for their roles in the conspiracy, including Raguz (currently serving 14 years in federal prison) and Koljo Nikolovski (currently serving an 18-year prison sentence), a man who wired more than $2.3 million in ill-gotten money to Macedonia.
Those being honored with the IRS Commendation Award are Assistant U.S. Attorneys John D. Sammon (retired), Bridget M. Brennan, James Morford, Paralegal Specialist Daniel Nugent, IRS Special Agents Frank Brown and Rob Thatcher, FBI Special Agents Derek Kleinmann, Steve Sloan, and Mike West, FBI Forensic Accountant Leann Royal, Eastlake Detectives Ted Kroczak and Chris Bowersock, and FBI TFO John Ypsilantis.
FBI Director James Comey is scheduled to present the awards during a private ceremony in Cleveland on Nov. 25.Crestline Man Charged with Child Pornography OffensesRead the Press Release
Miles E. Price, 29, of Crestline, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about June 3, 2013, through on or about September 2, 2013, Price knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
The indictment also charges that from on or about June 3, 2013, through on or about October 23, 2013, Price possessed a computer that contained child pornography.
The actual sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Canton office of the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two Executives Indicted for Roles in Fixing Prices on Auto Parts Sold to ToyotaRead the Press Release
A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.
The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.
Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.
The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements. The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.
“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
Hayashi and Nonoyama are charged with a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at (216) 522-1400.
Man Charged with Stealing $57,000 in Social Security PaymentsRead the Press Release
A grand jury returned a one-count indictment charging Fred M. Mallard, 69, with one count of Theft of Government Property, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Mallard stole and converted to his own use, approximately $57,252 in Social Security payments made to his mother after her death.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Lauren Bell, following investigation by agents of the Social Security Administration Office of Inspector General.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Four People Indicted for Defrauding Cleveland Heights Charter School Out of $400,000Read the Press Release
Four people were indicted on charges of wire fraud, mail fraud and conspiracy to launder money for their roles in a scheme to defraud a Cleveland Heights charter school out of more than $400,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are: Joel B. Friedman, 65, of Mayfield Heights; Jeffrey A. Pope, 46, of Bowie, Maryland; Marianne Stefanik, 64, of Parma, and Virgil B. Holley, 51, of Cleveland Heights.
“These defendants are accused of taking money intended for students and using it to enrich themselves,” Dettelbach said.
“Joel Friedman and his co-conspirators violated the trust of taxpayers and the students of Greater Heights Academy,” said Kathy Enstrom Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Running a charter school does not give you a license to steal.”
Friedman served as chairman of Greater Heights Academy, a charter school located in Cleveland Heights. Stefanik worked as Friedman’s secretary at the school. Pope operated a consulting business in Maryland known as R&D International. Holley worked as Friedman’s employee at GHA in various capacities, including starting Holley Enterprises to provide security at GHA.
Around 2006, Friedman approached Pope with a proposition for Pope to make extra money. Friedman and Stefanik provided Pope with legitimate previous orders to use as templates, which he then used to create fraudulent invoices on R&D letterhead. Stefanik then processed the payments, knowing the invoices were false. Friedman then called Pope and instructed him on how much of the money he could keep and how much he should return to Friedman, according to the indictment.
The defendants caused a loss of approximately $287,269 to GHA and its students as a result of the scheme, $14,000 of which was retained by Pope, according to the indictment.
Beginning in 2006, Holley, at Friedman’s suggestion, began submitting false invoices to GHA for work that Holley Enterprises did not perform. Upon receipt of a check from GHA, Friedman would tell Holley whether the payment was for a legitimate invoice or whether the proceeds were to be diverted to Friedman personally or an entity Friedman controlled, according to the indictment.
As a result of this scheme, the defendants caused a loss to GHA and its students of approximately $117,000, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton. The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Teller at Taupa Lithuanian Credit Union Charged for His Role in CollapseRead the Press Release
A former employee of Taupa Lithuanian Credit Union was criminally charged for his role in a conspiracy that led to the Cleveland institution’s collapse earlier this year, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Michael Ruksenas, 33, of Naples, Florida, was charged via criminal information with one count of conspiracy to commit theft or embezzlement from a credit union. His role in the conspiracy resulted in a loss to Taupa of more than $480,000, according to the charges
“This defendant is part of a group that took advantage of the trust of hundreds of people for their own personal gain,” Dettelbach said.
“Michael Ruksenas is accused of being a willful beneficiary of a financial scam being committed on members of the Taupa Lithuanian Credit Union,” Anthony said. “The FBI will continue efforts to see that fraudsters such as Mr. Ruksenas are brought to justice.”
From 2007 through this year, Ruksenas, Alex Spirikaitis (not charged herein) and others engaged in a conspiracy to commit theft or embezzlement from the credit union, according to the information.
Ruksenas worked as a teller from 1999 through 2006 at Taupa, which was located at 767 East 185th Street in Cleveland. Spirikaitis routinely reviewed the daily share draft report, circled names of certain members listed on the report with NSF checks, and instructed Ruksenas in his capacity as teller to honor and pay the NSF checks Spirikaitis had circled, according to the information.
After Ruksenas learned Spirikaitis honored overdrafts from certain accounts, he withdrew funds from his two accounts. Spirikaitis then transferred funds from Taupa directly into Ruksenas’ personal accounts to cover Ruksenas’ overdrafts, according to the information.
Also, Ruksenas worked as a home health aide for one of Spirikaitis’ relatives from 2007 through 2009, during which time Spirikaitis used credit union funds to purchase Ruksenas a Jeep Cherokee, according to the information.
As a result of the conspiracy, Taupa and the National Credit Union Association (which insures credit unions) lost approximately $481,502, according to the information.
On July 12, 2013, the NCUA and the Ohio Department of Commerce took possession of Taupa and placed it into receivership due to its insolvency. Taupa had about 1,150 members and assets of approximately $24 million, according to the information.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton and Special Assistant United States Attorney Derek Kleinmann. The case was investigated by the Federal Bureau of Investigation.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Toledo Man Sentenced to Nine Years in Prison for Heroin and Firearms CrimesRead the Press Release
A Toledo man was sentenced to more than nine years in prison for drug and firearms convictions, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
United States Senior District Judge James G. Carr sentenced Rashaad J. Doyle, age 30, to 100 months imprisonment, for possessing with intent to distribute approximately 350 grams of heroin and for being a felon in possession of a firearm.
A federal grand jury returned a two-count indictment against Doyle on October 17, 2012 stemming from the seizure of the heroin and a rifle recovered from Doyle’s residence on September 21, 2012.
Doyle was forbidden by law from having a firearm due to previous convictions in Lucas County Common Pleas Court for possession of marijuana, aggravated assault and having weapons while under disability.
This case is being prosecuted by Assistant United States Attorneys Thomas P. Weldon and Matthew Spaulding. The case was investigated by the Federal Bureau of Investigation, the Toledo Police Department and the Toledo Metro Drug Task Force.
Toledo Man Sentenced to Nine Years for Firearms ConvictionRead the Press Release
A Toledo man was sentenced to more than nine years in prison for a firearms conviction, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Robert Leal, 62, was sentenced to 100 months in prison by U.S. District Judge James Carr after pleading guilty earlier this year to being a felon in possession of a firearm.
On Jan. 25, 2013, law enforcement officers searched Leal’s home and was found to have a Raven 25-caliber handgun and a Mossberg 12-gauge pistol grip shotgun. He was forbidden by law from having a firearm due to previous convictions Michigan related to drug and firearms crimes, according to court documents.
This case is being prosecuted by Assistant United States Attorney Alissa P. Sterling. The case was investigated by the Federal Bureau of Investigation, the Toledo Police Department and the Toledo Metro Drug Task Force.
U.S. Attorney's Office, Cleveland Clinic and Others to Host Daylong Summit on Heroin EpidemicRead the Press Release
The Cleveland Clinic and United States Attorney’s Office, together with many partners, will host a daylong summit on the growing heroin epidemic in Northeast Ohio on Thursday, November 21 at the InterContinental Hotel.
“Heroin: A Crisis Facing Our Entire Community” will look at heroin abuse from the perspectives of the medical, treatment, education, prevention and law enforcement communities. The day will culminate with the development of community action plan that will lay out strategies and next steps in turning back the tide of heroin addiction.
“Greater Cleveland’s leading institutions are coming together to find solutions to this public health crisis,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “The fight against heroin is not just about arrests. It is also about prevention and treatment.”
“We support the efforts of the U.S. Attorney’s Office for bringing together this collaboration to stop the escalating abuse of heroin taking place in our communities,” said David Rowan, Cleveland Clinic’s Chief Legal Officer. “Through this summit, we have an opportunity to fight this battle on multiple levels by bringing together healthcare providers, criminal investigators, and experts in addiction and counseling.”
The summit will take place Nov. 21 from 8 a.m. until 3:30 p.m at the InterContinental Hotel, 9801 Carnegie Ave., Cleveland, 44106.
The threat is real. Heroin overdose fatalities are up about 400 percent in recent years in parts of Northeast Ohio. Police and prosecutors report a huge influx in both the availability of heroin and the number of heroin-related crimes.
There are also significant challenges from this crisis that are facing the medical profession. Doctors are grappling with how to effectively treat pain will responsibly prescribing opioids. Treatment professionals struggle with how to provide resources and help to people struggling with addiction, while parents, educators and others search for effective strategies to keep people from trying heroin in the first place.
The daylong event will feature speakers at the forefront of dealing with the heroin epidemic, as well as panel discussions and breakout sessions.
The summit is sponsored by the United States Attorney’s Office, the Cleveland Clinic, the Cuyahoga County Executive, the Ohio Attorney General, MetroHealth Medical Center, University Hospitals, Cuyahoga County Common Pleas Court, the Cleveland Division of Police, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Ohio State Medical Board, the Ohio State Pharmacy Board, Cuyahoga County Board of Health, the Cuyahoga County Medical Examiner, the ADAMHS Board., the Westshore Enforcement Bureau and others.
Youngstown Man Indicted for $1 Million Fraud Involving Distressed HomesRead the Press Release
A federal grand jury returned a 59-count indictment charging a Youngstown fraudulently obtaining ownership of more than two dozen distressed properties in Mahoning County and resold them for about $1 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Ondrea Shabazz, 47, faces multiple counts of real estate fraud, identity fraud and mail fraud.
“This defendant is accused of taking advantage of blight and distress in Youngstown neighborhoods as a way to enrich himself,” Dettelbach said.
“This defendant willfully decided that greed beat out any sense of decency when he forged signatures to fraudulently obtain ownership of distressed, soon-to-be-demolished homes and sold them to his clients for a profit,” Anthony said.
Counts 1 through 29 of the indictment charge that beginning in or about October 2011, through June 2013, Shabazz knowingly devised a scheme to defraud real estate owners and unsuspecting third parties in order to obtain money and property by means of false and fraudulent pretenses, representations, and promises. The manner and means used to accomplish the objectives of the scheme included the following, according to the indictment:
a. Shabazz and others known and unknown operated Real Estate Investment Connection, LLC, a company that fraudulently obtained and resold distressed properties in the Youngstown, Ohio, area.
b. Shabazz identified distressed properties that were foreclosed and/or targeted for demolition. After identifying these properties, Shabazz created fraudulent quit claim deeds that contained forged signatures of the real estate owners and, in some instances, the forged signature of a Notary Public. The deeds purported to transfer the property to Ondrea Shabazz, Real Estate Investment Connection, LLC, or others associated with Shabazz.
c. Shabazz and others working at his direction then filed the fraudulent quit claim deeds with the Recorder’s Office or the Auditor’s Office in Mahoning County. Once the filing fee was paid and the deed was recorded, the recorded deed was mailed to Ondrea Shabazz, Real Estate Investment Connection, LLC, or others associated with Shabazz.
d. After receiving the recorded deed in the mail, Shabazz resold the property to individuals and companies under the false pretense that the property was legally owned by Shabazz, Real Estate Investment Connection, LLC, or others associated with Shabazz.
e. In other instances, Shabazz fraudulently acted as an intermediary who had the authority to broker real estate transactions between the real estate owners and an unsuspecting third party. Shabazz prepared quit claim deeds with forged signatures of the property owners and/or of a notary public. Shabazz then gave the deeds to the unsuspecting third party and instructed them to record the deeds with the Recorder’s Office or the Auditor’s Office in Mahoning County. Once the filing fee was paid and the deed was recorded, the recorded deed was mailed to the unsuspecting third-party.
f. As a result of this activity, Shabazz defrauded property owners and unsuspecting third parties out of money and property valued over $1 million.
g. Shabazz, for the purpose of executing such scheme and artifice, placed and caused to be placed in any post office and any authorized depository for mail matter, any matter or thing, to-wit: 29 fraudulent quit claim deeds to be delivered by the United States Postal Service to Shabazz, Real Estate Investment Connection, LLC, or others associated with Shabazz.
Counts 30-59 of the indictment charge that from October 2011 through June 2013, Shabazz did knowingly possess and use, without lawful authority, a means of identification of another person during and in relation to mail fraud.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment in only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two Mahoning Valley Men Indicted on Federal Firearms ChargesRead the Press Release
Two men from the Mahoning Valley were indicted on federal firearms charges, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
A federal grand jury returned a one-count indictment charging Kenneth D. Key, age 28, of Warren, Ohio, with being a felon in possession of a firearm.
The indictment charges that on or about August 18, 2013, Key possessed a Ruger, model P95, 9mm pistol, serial number 316-53865, and ammunition, despite a previous conviction for possession of firearms in furtherance of drug trafficking crime, United States District Court, Northern District of West Virginia Case No. 2:04CR22 on or about May 12, 2005.
In an unrelated case, a federal grand jury returned a one-count indictment charging Leroy Gore, age 40, of Campbell, Ohio, with being a felon in possession of a firearm.
The indictment charges that on or about October 12, 2013, Gore possessed a Glock, model 30, .45 caliber pistol, after he had been previously convicted of involuntary manslaughter and felonious assault in the Mahoning County, Ohio, Court of Common Pleas.
If convicted, the defendants’ sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigations preceding the indictments were conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Campbell Police Department. The cases are being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment in only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Ohio Pair Indicted for Marijuana ConspiracyRead the Press Release
A federal grand jury returned a one-count indictment charging Tyler J. Lilley, age 33, of Akron, Ohio, and Tyler J. Bell, age 31, of Louisville, Ohio, with conspiracy to distribute and possession with intent to distribute marijuana, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from at least as early as the Summer of 2012 to on or about June 26, 2013, Lilley conspired to distribute and to possess with the intent to distribute 100 kilograms or more of marijuana; and Bell conspired to distribute and to possess with intent to distribute 50 kilograms or more of marijuana.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Drug Enforcement Administration. The matter is being prosecuted by Assistant United States Attorney Samuel A. Yannucci.
New York Man Indicted for Identity Theft and Bank FraudRead the Press Release
A federal indictment was filed today charging Gregory Frazier, aka Gregory Fernandez, age 53, of New York, New York, with bank fraud and aggravated identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that the defendant executed and attempted to execute a scheme to defraud JP Morgan Chase Bank, and to obtain money owned by and under the custody of the bank by means of false and fraudulent pretenses, representations and promises, on October 23, 2013.
Under this scheme, the defendant obtained counterfeit New York State drivers licenses containing his photograph, and the personal identifier information of three individuals who resided in New York State, according to the indictment.
On October 23, 2013, the defendant entered JP Morgan Chase Bank branches in Streetsboro, Twinsburg, Bedford Heights and Beachwood, Ohio, seeking to withdraw cash from accounts maintained by the three individuals whose personal identifying information had been stolen, according to the indictment.
The case is being prosecuted by Assistant United States Attorneys Robert W. Kern and Miranda Dugi following an investigation by the United States Secret Service, and the Beachwood and Streetsboro Police Departments.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Trio Accused of Using Counterfeit $100 BillsRead the Press Release
Three people were indicted on charges that they conspired to pass counterfeit money totalling more than $10,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are Barbara Hendricks, 20, of Wilmington, Delaware; Jaonta Scarlett, age 25, of Monticello, New York, and Harlin Mack, age 25, of Hempstead, New York.
They are accused of traveling to stores in Northwest Ohio and Southeast Michigan in 2013 and purchasing items at large department stores, including WalMart, Meijer, Home Depot and Toys R Us, with counterfeit $100 bills. They would then return the items at different locations of the same store for genuine U.S. currencty, according to the indictment.
If convicted, the defendants’ sentences will be determined by the Court after reviewing factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the United States Secret Service, Toledo, Ohio. The case is being handled by Assistant United States Attorney Angelita Cruz Bridges.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Toledo Man Charged with Child Pornography OffensesRead the Press Release
An indictment was filed charging Joshua J. Burchett, 33, of Toledo, with receipt and distribution of child pornography and possession of child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Department of Homeland Security, Cleveland, Ohio. The case is being handled by Assistant United States Attorney Alissa M. Sterling.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Firearms Charge Filed Against Canton ManRead the Press Release
A federal grand jury sitting in Cleveland returned a one-count indictment charging Larico Wesley, aka Rico, age 33, of Canton, Ohio, with being a felon in possession of a firearm, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Wesley was arrested on October 31, 2013 by members of the FBI Stark County Safe Street Task Force and Canton Police after an investigation conducted by Canton Police Department.
On August 25, 2013, Canton Police responded to calls of shots fired in the 700 block of Fourth Street, SW. Upon arrival officers observed Wesley pacing near and around a black SUV in the parking lot. Further investigation pertaining to Wesley’s physical location revealed a semi-automatic handgun on the bumper of the vehicle, according to the indictment.
If convicted, his sentence will be determined by the court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Teresa Dirksen.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Cleveland Man Indicted for Using A Firearm to Rob Richmond Heights BankRead the Press Release
A federal grand jury returned a two-count indictment charging Marcus Cross, age 23, of Cleveland, with armed bank robbery and using a firearm during the commission of a felony, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Cross robbed a Huntington Bank in Richmond Heights, Ohio, stole approximately $2,306 from the bank, and discharged a firearm during the commission of the robbery.
If convicted, Cross’ sentence will be determined by the Court after review of factors unique to this case, including Cross’ prior criminal record, if any, his role in the offense and the unique characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum
The case is being prosecuted by Assistant U.S. Attorney Adam J. Hollingsworth following an investigation by the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt
Cleveland Man Indicted for Robbing Garfield Heights BanksRead the Press Release
A grand jury returned a one-count indictment charging Daniel Leotto Johnson, 44, of Cleveland, with bank robbery, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Johnson robbed U.S. Bank, 5695 Turney Road, Garfield Heights, Ohio, on October 15, 2013.
The case is being prosecuted by Assistant U.S. Attorney Justin Seabury Gould, following investigation by agents of the Federal Bureau of Investigation, and members of the Garfield Heights Police Department.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
California Man Charged with Threatening Four in Stark CountyRead the Press Release
A federal grand jury sitting in Cleveland returned a four-count indictment charging Daniel Dillon, age 50, of Los Angeles, with making interstate threatening communications, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Dillon sent threatening communications from California to Ohio. The communications, by fax, e-mail and voicemail, contained threats to injure and kill four victims, including a Stark County judge, a Stark County public official, a court-appointed guardian and the guardian’s attorney.
The indictment resulted from an investigation conducted by the Federal Bureau of Investigation in Canton, Ohio and the case is being prosecuted by Assistant U.S. Attorney Nancy Kelley.
If convicted, his sentence will be determined by the Court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Avon Lake Man Faces Child Pornography ChargesRead the Press Release
Craig A. Hulbert, 38, of Avon Lake, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about May 20, 2011, through on or about March 29, 2013, Hulbert knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
The indictment also charges that on October 15, 2013, Hulbert possessed two computers and an additional hard drive, all that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Department of Homeland Security, Homeland Security Investigations.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Additional Conspiracy and Fraud Charges Filed Against Former Director of the Cleveland and Dayton VA Medical CentersRead the Press Release
A 65-count superseding indictment was filed today charging the former director of the Cleveland and Dayton VA Medical Centers with a scheme to enrich himself and his conspirators by working as a consultant for, and taking money from, a design firm pursuing more than $1 billion in VA contracts and sharing confidential information about VA construction projects while still employed by the VA, law enforcement officials said.
William D. Montague, 61, of Brecksville, was previously charged with conspiracy to commit honest services mail fraud, bribery, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information and other charges. The charges unsealed today include conspiracy to commit honest services fraud, Hobbs Act conspiracy, violating the Hobbs Act and additional counts of mail and wire fraud.
“As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the Veterans Administration,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office. “The new charges against Montague reflect law enforcement’s continued dedication to root out corruption at any level.”
“VA directors who use their official position for personal enrichment will be held to account,” said Gavin McClaren, United States Department of Veterans Affairs – Office of Inspector General, Resident Agent in Charge, Cleveland. “Our nation’s veterans deserve public officials and contracts who serve veterans’ needs and not their own.”
Montague served as director of the Cleveland VA Medical Center from 1995 until Feb. 3, 2010. On March 11, 2011, Montague began working as director of the Dayton VA Medical Center, a position he held through Dec. 17, 2011, according to the indictment.
The superseding indictment details interactions between Montague and a company identified as Business 75, an integrated design firm with offices throughout the United States, including New York, Illinois, Virginia, Missouri and California. The company performed work for the VA directly and through its participation in joint ventures and other teaming agreements, according to the indictment.
From January 2010, Montague, Business 75 and employees of the company conspired to defraud the VA of its right to the honest and faithful service of Montague through bribery and kickbacks, and to defraud the VA and other potential VA contractors by means of false and fraudulent pretenses, according to the indictment.
Montague secretly used his position as Dayton VA Medical Center director to enrich himself and his designees (including House of Montague, a company Montague operated) by soliciting and accepting gifts, payments and other things of value from Business 75 in exchange for favorable official actions, according to the indictment.
Montague solicited money and a consulting contract from Business 75 in exchange for information related to VA contracts and projects, which would benefit Business 75, Business 75’s principal and their designees, according to the indictment.
This was done to give Business 75 an advantage in obtaining VA contracts and projects. Montague gave false and misleading information to VA employees about his reasons for requesting VA documents and information, according to the indictment.
For example, on March 1, 2011, Business 75 issued a $20,000 check payable to Montague, which he deposited into the House of Montague’s account. Ten days later, Business 75’s principal sent an email to some employees with Montague’s consulting agreement explaining: “His job is to help us bring in more work from the VA, in part by helping us access key decision makers,” according to the indictment.
On March 14, 2011, Business 75’s principal sent another email to some employees stating that Business 75 will end the current “$15 [million VA] IDIQ contract with just slightly over $12M in sales. $3M in fee, therefore, will be left on the table…[O]ne of MONTAGUE’s jobs will be to fill up the bucket by directing task orders toward our contract, Going forward, we have two $15M buckets to fill (Central and Eastern regions). That’s a lot of shoveling to get to $30M…BILL has the relationships to help us maximize the contracts…On the VA ‘major construction’ front here is the list of medical centers and their approximate construction cost in the pipeline: West Los Angeles, CA: $750M; San Francisco, CA: $125M, Reno, NV: $115M, Alameda, CA: $225M. Montague told us about these before they were advertised, which has allowed us to get an early start in developing the team. If we bring him on board, he can help us pull in one or two of these large projects,” according to the indictment.
According to the indictment, on or about April 5, 2011 at approximately 5:50 p.m., Montague sent Business 75’s principal an email from Montague=s sbcglobal.net email account, with a subject line AMajor Construction.@ The email body indicated, AAs promised.@ On or about June 21, 2011 at approximately 11:12 a.m., Business 75 Principal forwarded the email to Business 75 Employee 7, writing, AThis is confidential. Please don=t distribute. This document is not classified or secret, but it is not intended for public distribution.@ Business 75 Principal attached a file entitled, “Detail of Request.docs.”
On or about July 30, 2011, in response to an email Business 74 employee, BE76, sent on or about July 28, 2011 suggesting that Business 74 “put on hold [Montague’s] quarterly stipends,” Montague sent an email from his sbcglobal.net email account to Business 74 employee, BE76, with a carbon copy to Business 74 employee, BE75, with a subject “Re: VA contract update.” Montague informed Business 74 “I have had dificulty [sic] figuring out what [Business 74] wants or needs. I have just, for example, obtained the priority scored list of all scored projects for next fiscal year. It is unpublished and unavailable elsewhere. This is considered the motherlode [sic] by my other clients, all of whom pay more than $5000 a quarter. These lists would be excellent examples of a project by project system. This is every project in the entire VA in priority order by category. I also have obtained all planned Major projects through 2022,” according to the indictment.
On or about September 12, 2011 at approximately 2:24 p.m., Business 75 Principal sent an email to Business 75 employees in response to a previous email sent by another Business 75 employee on September 6, 2011 at approximately 9:48 p.m., which announced Business 75=s selection as the architect and engineer for the VA West LA VAMC. Business 75 Principal wrote:
AI=m reminded B as I approve Bill Montague’s invoiceBthat it was Bill Montague (our VA consultant) who alerted me to this project at West LA. I think we may have won this with or without Bill=s early warning, but getting in early on a large VA pursuit is critical. We currently are working four large FY13 VA project leads worth over $1B in aggregate based on information that Bill has provided. I would not have been able to find out what was in the Administration=s FY13 budget until early February, when it is sent to Congress. I think we are ahead of virtually all our competitors on these four. Bill has arranged for a meeting with the medical center director at one of the four locations (Lexington). Business 75 Employee 10 will attend this meeting. The risk is that not all four of these leads may make it into the final version of the bill. But so far, Bill=s info has proved accurate. . . . I would not have come up with this information on my own, regardless of how many hours I invested. I just don=t have access to the VA staffers that control the money. He has the relationships within Capital Asset Managements. Our contacts are all within CFM. So in my opinion, BILL=s contacts and experiences broadens [sic] our understanding of VA Processes and expands our relationships.@
On or about September 13, 2011 at approximately 3:46 p.m., in response to an email from Business 75 Employee 6 to Business 75 Principal and Business 75 Employee 5 asking whether Business 75 would expect to keep Montague=s $30,000 per year consulting contract in light of Business 75=s plan to pursue a marketing person to work with Business 75 Principal in the Federal market, Business 75 Principal replied, AYes, I may want both for a period of time. But I do not see BILL=s contract as running on forever . . . Currently, BILL is the interim Medical Director of VA Dayton. As such, he has extraordinary access right now to information. When that position ends, his access and influence will begin to diminish,@ according to the indictment
On or about September 14, 2011 at approximately 3:46 p.m., Business 75 Employee 5 replied to Business 75 Principal=s email, and included Business 75 Employee 11, AInteresting mathB At $30k per year for BILL, we would have to win [$]300,000 in VA fee[s] every year ($30k profit) for us to break even. I think VA West LA is worth $20,000,000,@ according to the indictment.
Montague further engaged in self-dealing by double-billing the VA and his consulting clients for the same travel expenses. For example, the superseding indictment charges that on May 26, 2011, Montague travelled to Washington DC on official VA business. On June 17, 2011, he caused to be submitted a government expense report seeking reimbursement for $1,204 for hotels, hotel taxes, parking, per diems and other expenses. On June 12, 2011, Montague caused to be sent a $2,741 invoice to Business 75 for “consulting services” for work performed at “Wash/Cleve/Dayton.” The invoice included $211 for hotel and $30.60 for hotel taxes incurred on May 26, 2011, according to the indictment.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon and Nancy L. Kelley following an investigation by the FBI and United States Department of Veterans Affairs – Office of Inspector General.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offenses and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.