Southern District of Ohio
Press releases recorded for this federal judicial district.
Athens County Man Sentenced for Receiving Child PornographyRead the Press Release
COLUMBUS, Ohio – James R. Harrah, 51, formerly of Albany, Ohio, was sentenced in U.S. District Court to 60 months in prison for receiving child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, Westerville Police Chief Joseph Morbitzer and other members of the FBI’s Child Exploitation Task Force announced the sentence handed down today by Chief U.S. District Judge Edmund A. Sargus, Jr.
According to court documents, in March 2015, an FBI Task Force Officer received information from a tip submitted to the National Center for Missing and Exploited Children cyber tipline regarding images of child pornography that had been uploaded through a Gmail account.
Investigators linked Harrah to the activity through computer IP addresses and his phone number. Further investigation revealed additional cyber tipline reports and incident reports from Google, Inc. and Twitter related to the uploading of child pornography of young females.
One of Harrah’s social media profiles used the username “I Luvem Yung” and the description “Luv girls 10-15 if you in Ohio Hmu if U wanna play…let’s make a baby.”
Forensic examination of Harrah’s phones revealed more than 500 images and 80 videos of child pornography. When law enforcement officers submitted the recovered child pornography files to the National Center for Missing and Exploited Children, it was determined that at least 14 identified child victims were depicted.
Harrah was charged by a Bill of Information and pleaded guilty on July 21, 2016 to one count of receiving child pornography in interstate commerce.
The defendant was also sentenced to 15 years of supervised release. During that time, any cell phone or computer that he owns, uses or has access to that is connected to the Internet will be monitored and reviewed.
“The files recovered in this case confirm that child pornography is not a victimless crime,” U.S. Attorney Glassman said. “These were missing child victims who had been sexually abused, and Harrah’s receipt of images of that abuse warrants the sentence he received today.”
U.S. Attorney Glassman commended the cooperative investigation by the FBI’s Child Exploitation Task Force, as well as Assistant United States Attorney Jessica H. Kim, who is representing the United States in this case.
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Jury Convicts 2 Steubenville Brothers of Running Heroin RingRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Frederick A. McShan, 37, and David McShan, 42, both of Steubenville, Ohio, of running a Steubenville-area heroin-trafficking organization.
Specifically, Frederick McShan was convicted of one count of conspiracy to possess with intent to distribute more than one kilogram of heroin, 12 counts of possession with intent to distribute heroin and one count of conspiracy to commit money laundering. David McShan was also convicted of one count of conspiracy to possess with intent to distribute heroin and one count of possession with intent to distribute heroin.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Betsy Steinfeld Jividen, Acting U.S. Attorney for the Northern District of West Virginia Betsy, Karl Colder, Special Agent in Charge, DEA, Washington, D.C. field office, Jefferson County Prosecutor Jane M. Hanlin and members of the Jefferson County Drug Task Force and the Hancock-Brooke-Weirton Drug Task Force announced the verdict reached early Friday evening, which was returned following a trial that began on Monday, March 6th before Chief U.S. District Judge Edmund A. Sargus, Jr.
According to court documents and testimony, the McShan brothers helped lead a drug organization that was supplied out of Chicago and was responsible for street-level heroin sales in Steubenville, Ohio, including in the Market Street apartment public housing area, Weirton, W.Va., Wheeling, W.Va. and Bellaire, Ohio.
A yearlong investigation in this case by local, state and federal law enforcement culminated in the seizure of eight firearms, three vehicles and approximately $110,000 of narcotics proceeds.
Four co-defendants in this case have pleaded guilty and been sentenced. They include:
Donae F. Grier, 38, of Irving, Texas, sentenced to 60 months in prison;
Christopher J. Bishop, 32, of Weirton, W.Va., sentenced to 120 months in prison;
Kerris D. Moncrease, 32, of Weirton, W.Va., sentenced to 42 months in prison; and
Perrier D. Coleman, 21, of Steubenville, Ohio, sentenced to 15 months in prison.
Terrence J. Smith, 27, Michael K. Greathouse, 25, and Erica L. Jury, 37, all of Steubenville, Ohio have pleaded guilty and await sentencing.
Conspiracy to possess with intent to distribute more than one kilogram of heroin is a federal crime punishable by 10 years to up to life in prison. Both conspiracy and possession with intent to distribute heroin and conspiracy to commit money laundering are crimes punishable by up to 20 years in prison.
U.S. Attorney Glassman commended the cooperative efforts of law enforcement, as well as Deputy Criminal Chief Michael Hunter, and Special Assistant United States Attorney Jane M. Hanlin who are prosecuting the case.
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Former Local Employee Sentenced to 15 Months for ExtortionRead the Press Release
CINCINNATI –Carlos Ruiz-Rodriguez, 25, of Cincinnati, Ohio, was sentenced to 15 months for extortion against a Cincinnati-based company.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the sentence handed down yesterday by U.S. District Judge Michael R. Barrett.
Ruiz-Rodriguez was indicted by a federal grand jury in August 2016. He pleaded guilty on November 30, 2016 to intruding computers, stealing proprietary information from his employer, and then extorting his employer.
He had been employed at the company for approximately two years as a call center employee. In his role, he had access to the company’s customer service portal and personally identifiable information for certain clients. He used credentials for another employee to obtain the proprietary company information.
Ruiz-Rodriguez sent multiple extortion emails to the company between November 2015 and January 2016 via the internet claiming that he had hacked the company. He also provided proof of compromise of the company’s data. He stated that if the company did not pay a Bitcoin ransom, then the company schematics and client data would be released to the public.
Ruiz-Rodriguez, through an intermediary, then posted the company’s data on an internet “dark web” forum and received two separate ransom payments from the employer totaling approximately $15,000. Ruiz-Rodriguez was also ordered to pay restitution of $277,278.98 to the employer and $259,212.74 to the employer’s insurer.
U.S. Attorney Glassman commended the investigation of this case by the FBI, and Assistant United States Attorney Tim Mangan, who is prosecuting the case.
'Buckeye Bandit’ Pleads Guilty to 8 Armed RobberiesRead the Press Release
COLUMBUS – Ikechi W. Emeaghara, 27, of Columbus, pled guilty today to eight counts of armed bank robbery. Emeaghara is the armed robber dubbed as the “Buckeye Bandit” by law enforcement.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office; Columbus Police Chief Kim Jacobs; Franklin County Sheriff Dallas Baldwin; Delaware County Sheriff Russell L. Martin; Ohio State University Police Chief Craig Stone; Worthington Police Chief Jerry L. Strait, Jr.; Upper Arlington Police Chief Tracy Hahn and Gahanna Police Chief Dennis Murphy announced the guilty pleas entered today.
According to court documents, Emeaghara brandished a dangerous weapon and demanded cash from bank teller’s drawers on the following occasions:
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October 31, 2013 at the Wesbanco Bank on South Stygler Road in Gahanna
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November 30, 2013 at the Cooper State Bank on West 5th Avenue in Columbus
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December 6, 2013 at the Wesbanco Bank on South Stygler Road in Gahanna
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July 9, 2014 at the Smart Federal Credit Union on North High Street in Columbus*
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January 12, 2015 at the Cooper State Bank on Sawmill Road in Columbus*
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April 26, 2015 at the Cooper State Bank on Sawmill Road in Columbus*
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March 17, 2016 at the First Merit Bank on East Powell Road in Powell
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October 21, 2016 at the Key Bank on Frantz Road in Columbus (original indictment)
* Denotes armed robbery charges that also include forcing one or more persons to accompany him within the bank.
Emeaghara was indicted by the federal grand jury in initial and superseding indictments in November and December 2016.
Armed bank robbery is a crime punishable by up to 25 years in prison. Armed robbery including forcing one or more persons to accompany the defendant without their consent is punishable by a mandatory minimum 10 year prison term, with a possible 25 year maximum.
U.S. Attorney Glassman commended the cooperative investigation by law enforcement and Deputy Criminal Chief Gary L. Spartis and Assistant U.S. Attorney Salvador A. Dominguez, who are prosecuting the case.
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Second Defendant Pleads Guilty to Dog-Fighting ConspiracyRead the Press Release
COLUMBUS, Ohio – Randall J. Frye, 58, of Columbus, pleaded guilty in U.S. District Court to conspiring to participate in a dog-fighting ring in central Ohio.
In November 2016, Charles A. Granberry, 40, of Columbus pleaded guilty to the same dog-fighting charge and to illegally possessing a firearm.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Anthony Mohatt, Special Agent in Charge, Midwest Region, U.S. Department of Agriculture Office of Inspector General, Columbus Police Chief Kim Jacobs, Franklin County Prosecuting Attorney Ron O’Brien, and Capital Area Humane Society Executive Director Rachel D.K. Finney announced the plea entered today before U.S. Magistrate Judge Terrance P Kemp.
According to court documents, law enforcement officers found dogs at the homes of Frye and Granberry. Each house was used to train, fight and sell dogs, including at least 20 fighting dogs in the rear yard and attic of one house and at least nine dogs at Frye’s residence, some that were chained to heavy automobile axles buried in the ground.
Officers executed search warrants on April 5, 2016 at five Columbus houses. Agents seized evidence including more than 40 dogs along with cages, treadmills, heavy chains and collars and other items. Agents found canine blood on the floor and walls of the basement of one home indicating that the area was used as a dog fighting pit.
Items seized specifically at Frye’s residence also included dog fighting publications, articles authored by Frye about his well-known fighting dogs “Stein” (circa 1987) and “Miles Davis” (circa 1997) and shipping documents showing interstate and international shipment of fighting dogs.
Frye was charged by a Bill of Information on February 16.
Conspiracy is punishable by up to five years in prison and a fine of up to $250,000.
U.S. Attorney Glassman commended the ongoing investigation by the USDA-OIG, Columbus Police and the Humane Society, as well as Assistant U.S. Attorneys J. Michael Marous and Jessica Knight, and Franklin County Assistant Prosecutor Heather Robinson, who are representing the United States in this case.
Chemical Company and Its Owner Sentenced for Rebate Scheme, False Statements to U.S. CustomsRead the Press Release
COLUMBUS, Ohio – Alden Leeds, Inc., a New Jersey swimming pool and spa chemicals company, and its president, Mark Epstein, were sentenced in U.S. District Court for convictions related to customs and import violations. The case was unsealed today. Epstein was sentenced to serve eight months in prison and four months of home confinement for his role in an elaborate rebate scheme which involved false statements to U.S. Customs, followed by inflated payments for imported chemicals and then rebates paid back to Alden Leeds, Inc. The company was also sentenced, receiving three years of probation and ordered to pay restitution to Customs in the amount of $2.25 million.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, the Environmental and Natural Resources Division of the Department of Justice, Steve Francis, Acting Special Agent in Charge, U.S. Department of Homeland Security Investigations (HSI), Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and John K. Gauthier, Acting Special Agent in Charge, U.S. Environmental Protection Agency (EPA) criminal enforcement program announced the sentences handed down on February 1 by Senior U.S. District Judge James L. Graham.
Epstein and Alden Leeds, Inc. had an agreement with a middleman to establish two prices for the imported chlorine – an “actual price” that the company was paying and a higher “invoice price” that would be used for documentation at U.S. Customs to avoid suspicions of dumping.
Dumping occurs when foreign merchandise is sold in the United States for less than fair market value, which prevents fair competition between United States companies and foreign industry.
According to court documents, from 1998 through at least June 2012, various businesses in Columbus, Ohio served as the American representative for domestic companies seeking to import swimming pool sanitizing agents from China.
As the middleman, Caiwei Sheng operated the Columbus businesses and engaged in a scheme that involved using a shell corporation in Vietnam to make it appear that the chlorine was manufactured there instead of China. This was done to avoid a 286 percent anti-dumping duty or tax that was ordered by the Department of Commerce beginning in 2005. No such anti-dumping duty existed for Vietnam as it did China.
As part of the rebate scheme, the price of the chlorine was deliberately overstated at Customs. the time the chlorine was imported. Sheng would receive payment for the inflated, invoice price and he would then wire the lesser actual price for the chlorine to the originating companies in Vietnam and China before wiring a rebate to Alden Leeds, Inc.
At the request of Alden Leeds, Inc., the rebate was labeled a “consulting fee” and sent to one of the company’s sister corporations in another state.
“The Alden Leeds company and its president, Mark Epstein, conspired with others to make false statements to Customs about the price of the chlorine they were buying from China and Vietnam, in order to avoid potentially higher duties aimed at ensuring fair competition between United States companies and foreign industry,” U.S. Attorney Glassman said. “Now, not only do they have to pay Customs $2.5 million and fines and forfeiture of $500,000, but Epstein must serve time in federal prison and Alden Leeds will spend three years on probation. Those who import goods from overseas must tell the truth to Customs and play fair with American companies.”
Epstein pleaded guilty on February 1 to one count of conspiracy to make false statements and violate United States’ customs and importation laws and one count of entry of goods by means of false statement. As part of the plea agreements, Epstein is paying $500,000 in restitution and forfeiture and Alden Leeds, Inc. is paying $2.25 million in restitution. Alden Leeds, Inc. also agreed to donate 2,765 gallons of hospital grade disinfectant to the Ministry of Public Health and Population of Haiti.
Sheng pleaded guilty to violating Customs laws as well as USEPA laws requiring truthful statements concerning the importation of chemicals into the United States, and on August 21, 2015, was sentenced to a prison term of 12 months and one day in prison and ordered to pay restitution of $100,000.
U.S. Attorney Glassman commended the investigation of this case by HSI, IRS Criminal Investigation, FBI and U.S.EPA, as well as Assistant United States Attorneys J. Michael Marous and Jessica W. Knight and Department of Justice Senior Trial Attorney Christopher J. Costantini who are representing the United States in this case.
Jackson County Men Sentenced for Digging up Native American Human RemainsRead the Press Release
COLUMBUS, Ohio – Brian K. Skeens, 49, and Toby Lee Thacker, 56, of Wellston, Ohio were sentenced in U.S. District Court for violating the Native American Graves Protection and Repatriation Act by trafficking the human remains of Native Americans. The case is the first criminal enforcement of the Native American Graves Protection and Repatriation Act in the Southern District of Ohio.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Jackson County Sheriff Tedd E. Frazier and Rick Perkins, Chief Ranger, National Park Service at Hopewell Culture National Historical Park, announced the sentences.
Skeens was sentenced to 90 days in prison and Thacker to 30 days in prison for engaging in the excavation and sale of the human remains of a Native American.
Mark M. Beatty, 57, purchased the human remains. He was sentenced in August to serve three years of probation including three months of home confinement, pay a $3,500 fine and pay $1,000 in restitution to the Miami Tribe of Oklahoma, to be used for re-burial of the Native American remains. The remains will be transferred to the federally recognized tribes who have assisted with this case, and re-buried in Ohio at an undisclosed location and in private once all the court proceedings are completed.
According to court documents, a witness saw people digging in a rock shelter on property on Sour Run Road in Jackson County, Ohio in November 2012 and chased them off. They left behind shovels, dirt sifters, buckets and trash. Sheriff Frazier’s investigators confirmed that three Wellston men – David E. Skeens, 40, Brian K. Skeens, and Thacker – had been digging on the property and had unburied human remains and artifacts. And subsequently, Beatty illegally bought those remains.
An anthropologist confirmed that the human remains were consistent with Native Americans, specifically identifiable by cradle boarding, a cultural activity used only by Native American Indians in North America. The identity of the remains was also confirmed by an archeologist, who verified that rock shelters were used extensively for burials in Southern Ohio and specifically in Jackson County. DNA testing confirmed a direct connection between tribes living thousands of years ago to present day Native Americans.
David Skeens was sentenced on July 21, 2016 to 30 days’ incarceration followed by a year of supervised release and ordered to pay $1,000 in restitution after pleading guilty to one count of illegal trafficking of Native American remains.
U.S. Attorney Glassman commended the investigation by the Jackson County Sheriff’s Office and the Department of the Interior, and the participation from an archeologist from Wayne National Forest and researchers from Ohio University, The Ohio State University, Washington State University and the FBI, as well as Assistant United States Attorneys J. Michael Marous and Brian Martinez, who are representing the United States in this case.
Former Corrections Officer Pleads Guilty to Attempted ExtortionRead the Press Release
DAYTON – Michael Rose, 29, of New Carlisle, Ohio, pleaded guilty in U.S. District Court to attempted extortion under the color of law.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Montgomery County Sheriff Phil Plummer announced the plea entered into today before U.S. District Judge Walter H. Rice.
According to the Statement of Facts in this case, Rose began working as a corrections officer at the Montgomery County Jail in spring 2016. In September of that year, Rose agreed to bring contraband – namely, a cell phone – into the jail in exchange for cash from an inmate. Likewise, in November 2016, Rose smuggled in a second cell phone and met with an associate of an inmate near a Dayton retail store to receive $1,500 as payment. Rose provided the phone knowing that the inmate intended to use it to direct drug trafficking activities from jail.
“Corruption by a corrections officer harms not only the jail where he or she works, but it also undermines confidence in law enforcement and our system of justice generally,” U.S. Attorney Glassman said. “That’s why it’s so important for us to investigate and prosecute instances of public corruption like this one.”
Rose pleaded guilty to attempted extortion under color of official right, which is a crime punishable by up to 20 years in prison.
U.S. Attorney Glassman commended the investigation of this case by the Montgomery County Sheriff’s Office RANGE Task Force and the FBI, as well as Assistant United States Attorney Brent Tabacchi, who is representing the United States in this case.
Previously Convicted Felon Sentenced for Gun PossessionRead the Press Release
DAYTON – Tony Chancellor, 24, of Dayton, was sentenced in U.S. District Court to 84 months in prison for possessing a firearm after having been convicted of a felony.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Dayton Police Chief Richard Biehl, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), who are all members of the Community Initiative to Reduce Gun Violence (CIRGV), announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
According to court documents, on November 9, 2015 during routine patrol, Dayton Police attempted to make contact with Chancellor, who was standing in the middle of the street. As they approached, Chancellor fled police and dropped a 9mm firearm he was carrying. At the time he possessed the firearm, he had previously been convicted of felony offenses, including aggravated robbery with a deadly weapon in 2010 and robbery with use of force in 2014.
He pleaded guilty on January 25, 2016 to a Bill of Information charging him with one count of possession of a firearm by a convicted felon.
U.S. Attorney Glassman commended the cooperative investigation by those involved in the Community Initiative to Reduce Gun Violence, as well as Assistant United States Attorney Andrew Hunt, who is representing the United States in this case.
Inmate Charged with Mailing Threats, Powder to Federal OfficialsRead the Press Release
CINCINNATI – A federal grand jury has charged Rodney D. Cydrus, 47, formerly of Chillicothe, with charges related to threatening United States judges and federal law enforcement officials in an indictment returned in Cincinnati. Cydrus is currently an inmate at Lebanon Correctional Institution.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), and Mark Porter, Special Agent in Charge, U.S. Secret Service, announced the indictment returned yesterday afternoon.
The indictment alleges that on five separate occasions, from January 17 through January 31, 2017, Cydrus mailed letters threatening to injure numerous government officials, including the President of the United States, federal judges, the FBI and the Federal Public Defender’s Office. Four of the letters were addressed to the FBI and one letter was addressed to the Federal Public Defender’s Office. In addition, two of the letters included a powdered substance as part of the threat, although the powder was determined to be non-toxic.
Mailing threatening communications is a crime punishable by up to 10 years in prison.
U.S. Attorney Glassman commended the investigation of this case by the FBI and U.S. Secret Service, and Assistant United States Attorney Timothy S. Mangan, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Springfield Postal Employee Sentenced for Stealing MailRead the Press Release
DAYTON – Leanna Heskett, 47, of Springfield, was sentenced in U.S. District Court today to serve five months in prison for more than 100 instances of stealing items from packages she handled as a mail processing clerk at the Springfield, Ohio Post Office in 2015.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio and Monica Weyler, Special Agent in Charge, U.S. Postal Service Office of Inspector General Eastern Area Field Office announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
According to court testimony, Heskett’s job with the Postal Service was to receive and sort mail and packages and prepare them for delivery by postal carriers. In 2014, customers in Springfield reported receiving packages with items missing from inside the packages. Several postal carriers in Springfield also reported noticing open parcels among those they received for delivery. USPS-OIG investigators determined that Heskett had been opening and stealing mail. Heskett pleaded no contest on August 1, 2016 to one count of mail theft.
Security video documented Heskett placing packages into her pants and leaving the work area, as well as opening packages, removing the contents and resealing the packages.
Heskett was also sentenced to two years of supervised release, to be served following her release from prison, including seven months of home confinement.
U.S. Attorney Glassman commended the investigation of this case by the USPS-OIG and First Assistant United States Attorney Vipal Patel, who represented the United States in this case.
Local Businessman Pleads Guilty in $70 Million Ponzi SchemeRead the Press Release
DAYTON – William M. Apostelos, 55, formerly of Springboro, Ohio, pleaded guilty in U.S. District Court today to charges related to a $70 million Ponzi scheme that defrauded nearly 500 victims. Specifically, Apostelos pleaded guilty to conspiracy to commit wire and mail fraud and conversion of funds from an employee benefit fund.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI); Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service; James Vanderberg, Special Agent in Charge, U.S. Department of Labor Office of Inspector General; Joe Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration; and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced the plea entered into today before U.S. District Judge Thomas M. Rose.
Apostelos and his wife, Connie, also known as Connie Coleman, were indicted in October 2015. According to court documents, beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $20 million collectively. Apostelos received $70 million in investment funds in total.
William Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He falsely reported that he held a degree in mathematics and was a registered securities broker.
Connie Apostelos also operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were allegedly operated through improper use of investor funds to William Apostelos’ companies.
The couple recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.
Rather than investing the money, the couple used it to pay for personal luxuries. According to court documents, William Apostelos was spending $35,000 per month on his wife’s horse racing company and $400 per month on Victoria’s Secret lingerie.
When the defendants became late on interest payments to the victims, they advised that their bank account had been hacked, a bank mistakenly failed to wire payment and/or the deal the victim had invested in was temporarily on hold.
The government has seized two race horses, vehicles, jewelry, artwork and cash totaling approximately $650,000 from the couple.
“William Apostelos took advantage of nearly 500 people, defrauding them of honestly earned money, in order to fuel his own lavish lifestyle,” U.S. Attorney Glassman said. “We will hold schemers like Apostelos accountable for their actions.”
“The investigation of William Apostelos uncovered a multi-million dollar Ponzi scheme laced with a web of financial lies that left approximately 500 investors in financial peril,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime. Combining the financial investigative expertise of the IRS with the skills and resources of our law enforcement partners and the U.S. Attorney’s Office makes a formidable team for combating major, greed-driven crimes.”
“William Apostelos engaged in an extensive fraud scheme that impacted hundreds of victims, including American workers who lost approximately $1.9 million in ERISA covered pension assets. We will continue to work with our law enforcement partners to safeguard employee benefit plan assets," stated James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the United States Department of Labor, Office of Inspector General.
William Apostelos pleaded guilty to conspiracy to commit mail and wire fraud and theft or embezzlement from an employee benefit plan. As part of his plea agreement, the parties involved have recommended to the court a sentence of 180 months in prison. That sentencing recommendation will be considered by the Judge at a future sentencing hearing, which has yet to be scheduled.
Steven Scudder, 62, of Centerville, an attorney who served as trustee of the WMA Trust, pleaded guilty in U.S. District Court on January 19 to wire fraud, admitting that he used his position as an attorney to facilitate the fraudulent investment scheme.
U.S. Attorney Glassman commended the investigation of this case by law enforcement, and Assistant United States Attorney Brent G. Tabacchi and Deputy Criminal Chief Laura Clemmens, who are prosecuting the case.
Jury Convicts Buckeye Lake Man of Receiving, Possessing Child Pornography While on Supervised ReleaseRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Joshua D. Chapman-Sexton, 31, of Buckeye Lake, Ohio, of all counts, which include receipt and possession of child pornography. Chapman-Sexton had been previously convicted of similar federal charges in 2010 and had been released from prison after serving his sentence. He was on supervised release when he committed the new offenses.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Westerville Police Chief Joe Morbitzer, Buckeye Lake Police Chief Jimmy Hanzey and members of the FBI’s Child Exploitation Task Force announced the verdict reached yesterday evening, which was returned following a trial that began on February 6 before U.S. District Judge Algenon L. Marbley.
According to court documents and testimony, a thumb drive in Chapman-Sexton’s Playstation contained more than 700 images of children engaged in sexual activity.
Despite the defendant’s claim that he had been set up and the child pornography was planted on the device when it was stolen on February 28, 2016, forensic evidence revealed that the child pornography had been downloaded continuously from July 2014 until February 27, 2016.
Chapman-Sexton was indicted by a federal grand jury of two counts of receipt of child pornography and one count of possession of child pornography on July 21, 2016.
Receipt of child pornography in this case is punishable by a range of 15 to 40 in prison per count because of Chapman-Sexton’s prior conviction. Likewise, because of the prior conviction, possession of child pornography in this case includes a potential maximum sentence of 20 years in prison.
This case was prosecuted by Assistant United States Attorneys Heather A. Hill and Jessica W. Knight. It was investigated by FBI’s Child Exploitation Task Force.
Columbus ‘Pimp’ Indicted for Trafficking WomenRead the Press Release
COLUMBUS, Ohio – A federal grand jury has charged Lerenzo M. White, aka “Justice” and “Justin,” 30, of Columbus, with five counts of human trafficking in an indictment returned in Columbus.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine and members of the Central Ohio Human Trafficking Task Force, including Steve Francis, Acting Special Agent in Charge, Homeland Security Investigations (HSI), Franklin County Prosecutor Ron O’Brien, Columbus Police Chief Kim Jacobs and Franklin County Sheriff Dallas Baldwin announced the indictment returned January 26, which was unsealed today at White’s initial appearance. White was arrested yesterday by Task Force agents.
The indictment alleges that White, through force, fraud or coercion, trafficked at least five females for the purpose of commercial sex acts. According to the indictment, White allegedly recruited and harbored women from at least July 2013 through May 2016. It is alleged that he used violence and the threat of drug withdrawal, namely heroin, to force young women to prostitute themselves at various hotels and residences throughout Ohio for his financial benefit.
Sex trafficking by force, fraud or coercion is punishable by a range of 15 years up to life in prison.
U.S. Attorney Glassman commended the investigation of this case by the Ohio Attorney General’s Ohio Organized Crime Investigations Commission Human Trafficking Task Force, which includes authorities from the U.S. Homeland Security Investigations, Columbus Division of Police, Ohio State Highway Patrol, the Franklin County Sheriff’s Office, the Franklin County Prosecutor’s Office and the Delaware County Prosecutor's Office, as well as Assistant U.S. Attorney Heather A. Hill and Special Assistant U.S. Attorney Jennifer M. Rausch, Director of the Franklin County Special Victims Unit, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Anyone with information regarding this case is encouraged to contact the ICE HSI Tip Line at 866-DHS-2-ICE (866-347-2423).
Federal Probation, BMV Launch New ID Exchange ProgramRead the Press Release
COLUMBUS, Ohio – The U.S. Probation Office for the Southern District of Ohio and the Ohio Department of Public Safety, Bureau of Motor Vehicles have created a supervision ID card for inmates leaving federal prison. The ID serves as a legitimate form of identification to obtain a state of Ohio ID or driver’s license.
The Department of Justice urged districts nationwide to enhance the identification process as part of BOP reforms announced in November 2016, recognizing that possession of government-issued identification documents is critical to successful reentry. Without such documentation, men and women leaving correctional facilities face significant challenges securing employment and housing, registering for school, opening bank accounts and accessing other benefits, such as health care, that are critical to successful integration.
The initiative in the Southern District of Ohio, which launched last month, allows recently released eligible offenders to obtain an Ohio ID card, learner’s permit, driver’s license or commercial driver’s license. Eligible offenders include those who have been released from the U.S. Bureau of Prisons system, are citizens or legal residents of the United States and who reside in Ohio.
The Probation Office will provide the offender with a U.S. Offender Release Card, which contains the individual’s photograph, legal name, date of birth, social security number and an expiration date. That Card can then be exchanged for the official state ID at the BMV.
“I commend Chief U.S. Probation Officer John Dierna and his team for bringing to fruition a practical and tangible solution for inmates leaving our federal facilities and returning to the Southern District of Ohio,” U.S. Attorney Glassman said. “Obtaining an ID seems simple enough, but for many of the men and women leaving federal prison, it can pose an enormous barrier to gaining employment and moving forward with productive and law-abiding lives. Removing this kind of barrier promotes public safety by improving the likelihood of successful reentry.”
Huber Heights Man Sentenced for Possessing Child PornographyRead the Press Release
DAYTON – Richard C. Webber, 54, of Huber Heights, Ohio, was sentenced in U.S. District Court today to serve 24 months in prison and 10 years of supervised release for possession of child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division and Montgomery County Sheriff Phil Plummer announced the sentence handed down today by U.S. District Judge Walter H. Rice.
Webber was charged on March 25, 2016 in a bill of information and pleaded guilty on May 9, 2016. According to court documents, Webber used “Peer-to-Peer” software and file-sharing programs and applications to obtain, download, view, possess with intent to distribute, share and transfer child pornography.
Webber possessed videos depicting child pornography on a shared file folder on his home desktop computer and various storage devices in his home in Huber Heights. Upon executing a search warrant, investigators discovered more than 1,200 pictures and 170 video files of child pornography, including those depicting prepubescent minors.
Webber’s sentence includes a requirement that he register as a sex offender anywhere that he lives, works or attends school. He was also ordered to pay restitution and forfeit various computers and computer media.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Glassman commended the investigation of this case by the FBI and Montgomery County Sheriff’s Office, as well as Assistant United States Attorney Andrew J. Hunt and First Assistant United States Attorney Vipal Patel, who represented the United States in this case.
City of Cincinnati to Receive $450,000 from Drug Assets Seized in Federal ProsecutionRead the Press Release
CINCINNATI – U.S. Attorney Benjamin C. Glassman announced a final order of forfeiture has been filed in U.S. v. Christopher Whitfield, Tonia Whitfield and Steven Griffin, ordering the forfeiture of the more than $1 million in cash, among other things, that had been seized during the execution of search warrants in this case.
The Cincinnati Police Department will net approximately $450,000 from equitable sharing.
Also included in forfeiture in this case are: seven firearms, three properties in Cincinnati, five vehicles including two luxury vehicles and a motorcycle, multiple pieces of jewelry, Gucci and Rolex watches, two ballistic vests, a number of “mink” fur coats and vests, 13 designer handbags and Beats headphones and ear buds.
“This is a great illustration of the value of criminal forfeiture,” U.S. Attorney Glassman said. “Instead of enriching drug dealers, these proceeds will now be put to use combatting addiction and the other ravages of drug trafficking.”
“One of the government's most powerful weapons is the ability to seize through asset forfeiture the assets associated with narcotics-related crimes,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations.”
Christopher Whitfield, 42, of Cincinnati, Ohio was sentenced on November 3, 2016 to 120 months in prison after pleading guilty to one count of conspiracy to commit money laundering.
Tonia Whitfield, 41, of Cincinnati, Ohio was sentenced on December 14, 2015 to 12 months and one day in prison on three counts of money laundering.
Steven Griffin, 41, of Cincinnati, Ohio was sentenced on January 13, 2016 to 87 months in prison on one count each of possession with intent to distribute heroin and a felon in possession of a firearm.
A federal grand jury indicted the defendants in a 23-count indictment returned in April 2015. The indictment outlined that the group conspired to facilitate an illegal drug business, primarily cocaine and heroin.
As part of the conspiracy, the defendants operated “stash” houses to process, cut, package and store the drugs as well as firearms and money. In order to conceal the money generated from the drug sales, defendants would launder the profits by purchasing real and personal property and place assets in the names of other individuals.
This case was investigated by IRS-Criminal Investigation, FBI and the Cincinnati Police Department and was prosecuted by Assistant U.S. Attorneys Karl Kadon and Jessica W. Knight.
Ohio Doctor Pleads Guilty to Running South Side Medical Center as Drug Premises and Evading More Than $3.5 Million in TaxesRead the Press Release
Today the government unsealed a plea agreement with the owner and operator of Columbus Southern Medical Center, which provided unlawful prescriptions of controlled substances to addicts throughout the Midwest and who engaged in a series of schemes to evade more than $3.5 million in taxes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio.
Kevin B. Lake, 50, of New Albany, Ohio, pleaded guilty to drug, tax and fraud charges and agreed to the forfeiture of what remains from the $29 million in seized funds earned from the clinic’s illegal activities, after restitution is paid from the funds.
According to court documents, Lake owned and managed Columbus Southern Medical Center through one or more corporate or trust entities which he used to insulate himself from the illegal drug trafficking being conducted at the clinic.
In the filed plea document, he admitted that between 2006 and 2013, he knew doctors and staff at the 2912 South High Street clinic prescribed controlled substances to patients without a legitimate medical purpose. During that time, hundreds of patients showed up daily – 85 percent of whom were returning patients – to receive prescriptions of oxycodone, hydrocodone and Xanax. The percentage of patients who were prescribed these controlled substances rose each year, jumping from nearly 60 percent in 2004 to nearly 92 percent in 2009 and 2010.
Lake agreed to plead guilty to maintaining the clinic as a drug premises. He also admitted that he exclusively controlled all of the proceeds generated by the illegal activity being conducted by the doctors, physician assistants and staff at the clinic, which was more than $38 million in payments for patient visits. He admitted to engaging in more than $20 million in money laundering transactions with these illegal drug proceeds.
The doctor also agreed to plead guilty to tax evasion on his personal income tax returns and admitted to filing fraudulent tax returns for his corporations and trusts. He paid himself more than $90,000 in 2010 through 2013 from the clinic entities, which he did not report as income, but instead disguised as phony rental payments ostensibly for use of his personal residence for corporate retreats. He also took inflated charitable contribution deductions on his individual income tax returns. In addition, Lake admitted causing the filing of corporate tax returns that falsely claimed inflated depreciation deductions for nearly $7.4 million in so-called “equipment” purchases by his corporations from his trust for tax years 2005 through 2011. He also admitted to falsely reporting these purchases as capital gains on his trust tax returns rather than as ordinary income, thereby securing a much lower tax rate. Lake’s tax crimes caused a tax loss of more than $3.5 million.
After the DEA first appeared at the clinic in June 2010, Lake took several steps to separate himself from the drug premises; he stopped paying himself a salary, and instead filed a fraudulent claim for disability payments from his two disability insurers. The insurance companies ultimately denied his claims, and only paid out $18,000. Lake also sold the clinic’s remaining stock to employees through an Employee Stock Ownership Plan (ESOP) for the inflated price of $14 million.
After the ESOP sale and the denial of his fraudulent disability claim, Lake fraudulently filed for and collected unemployment benefits, stealing more than $20,000 in government funds.
Finally, the doctor admitted to defrauding the Bureau of Workers’ Compensation by having employees upcode office visits in order to bill for higher level medical services in addition to those provided by physician assistants as if they were provided by physicians, causing a loss of more than $260,000.
As part of the plea agreement, and due to Lake’s cooperation in the government’s investigation, the parties involved recommended to the court that Lake receive a sentence of 60 months in prison. Judge Watson will consider the recommended sentence at a sentencing hearing that has yet to be scheduled.
“At the same time Dr. Lake was running his medical center as an illegal drug premises, he took every opportunity to cheat the U.S. Treasury out of millions of dollars in taxes,” said Acting Deputy Assistant Attorney General Goldberg. “As the income tax filing season begins, Lake’s guilty plea is a stark reminder of what awaits those filing false returns -- no matter their profession, income level or the complexity of their scheme.”
“For seven years, Kevin Lake operated Columbus Southern Medical Center as a pill mill,” said U.S. Attorney Glassman. “He got rich by feeding the addictions of hundreds and hundreds of people. Thanks to the thorough investigation of federal, state, and local law enforcement agencies, however, Lake has agreed to plead guilty to drug, tax, and fraud charges, forfeit his ill-gotten gains, and serve time in federal prison for his misdeeds.”
“Today’s guilty plea exemplifies DEA’s determination to combat the troubling prescription drug and opiate abuse problem currently plaguing this country,” said Drug Enforcement Administration (DEA) Special Agent in Charge Timothy J. Plancon. “Kevin Lake abused his position of trust and jeopardized the lives of many individuals, by conspiring with others to illegally prescribe controlled substances that ended up being consumed throughout Ohio and the surrounding states. This investigation uncovered the elaborate lengths that Lake undertook to conceal his illegal profits, and the seizure of $29 million from Lake is indicative of the scope of his illegal activity. Lake’s guilty plea should serve as a warning to all medical professionals that if you prescribe medicine for personal gain, you will be prosecuted to the fullest extent of the law. This investigation was a success thanks to the outstanding investigative work by all of our federal, state, and local law enforcement partners.”
“Dr. Lake’s conduct detailed in this case is egregious and had such a negative impact on our community,” said Acting Special Agent in Charge Troy N. Stemen of Internal Revenue Service Criminal Investigation (IRS-CI), Cincinnati Field Office. “This is an important victory for the citizens of Central Ohio. Dr. Lake not only fueled the prescription drug problem in Central Ohio, but he supported addiction in several parts of the country. As a result of this joint investigative effort, the government has seized a significant portion of the illegal proceeds through asset forfeiture, and Dr. Lake is faced with having to pay back taxes with interest and steep penalties.”
“The Office of Inspector General congratulates the U.S. Attorney’s Office and all of the investigators on this important case,” said Special Agent in Charge James Vanderberg of the U.S. Department of Labor, Office of Inspector General’s Chicago Region. “The OIG will continue to work with our law enforcement partners to investigate unemployment insurance fraud and employee retirement plan fraud schemes.”
“There is no doubt that today’s opiate epidemic is due in large part to the overprescribing of prescription pain medication across this state,” said Ohio Attorney General Mike DeWine. “This defendant preyed on those battling addiction in an effort to make millions from their suffering. An incredible amount of hard work went into investigating and prosecuting this case. Because of this team effort, this pill mill operation has been shut down.”
“We place trust in our healthcare professionals to provide quality treatment that improves the health of injured workers,” said Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Sarah Morrison. “We’re pleased to do our part to address the problem of prescription drug abuse in Ohio, as well as put an end to Dr. Lake’s fraudulent billing scheme.”
“It is through the hard work of the investigators and the cooperation of agencies at the federal, state, and local level that led to the successful investigation and prosecution of this pill mill,” said Columbus Police Deputy Chief Michael Woods.
Three co-defendants have pleaded guilty as part of this case. Dr. Terry Dragash was sentenced in October 2014 to one year in prison for conspiracy to distribute drugs as a result of his conduct in prescribing at the clinic. Dr. David Rath pleaded guilty to a similar conspiracy charge. And in December 2015, Karen Climer – another employee of Lake’s – pleaded guilty to conspiracy and was sentenced to six months in prison after the government revealed she was cooperating in the investigation into Lake.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Glassman commended the investigation of this case by the DEA Tactical Diversion Squad – including the Ohio Attorney General’s Bureau of Criminal Investigation (BCI) and Columbus Division of Police – IRS Criminal Investigation, Ohio Bureau of Workers’ Compensation, Department of Labor OIG and Employee Benefits Security Administration, Central Ohio Drug Enforcement Task Force, Franklin County Sheriff’s Office, Ohio State Board of Pharmacy and the State Medical Board of Ohio, as well as Assistant U.S. Attorney Kenneth F. Affeldt and Department of Justice Tax Division Trial Attorneys Richard M. Rolwing and Carl F. Brooker, who are representing the United States in this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Columbus Doctor to Plead Guilty to Running Medical Center as Drug Premises, Tax ChargesRead the Press Release
COLUMBUS, Ohio – Today the government unsealed a plea agreement with the owner and operator of Columbus Southern Medical Center, which provided unlawful prescriptions of controlled substances to addicts throughout the Midwest and who engaged in a series of schemes to evade more than $3.5 million in taxes.
Kevin B. Lake, 50, of New Albany, Ohio, pleaded guilty to drug, tax and fraud charges and agreed to the forfeiture of what remains from the $29 million in seized funds earned from the clinic’s illegal activities, after restitution is paid from the funds.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Department of Justice’s Tax Division; Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Agency (DEA); Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation; James Vanderberg, Special Agent in Charge, U.S. Department of Labor Office of the Inspector General; Joe Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration; Ohio Attorney General Mike DeWine; Ohio Bureau of Workers’ Compensation Administrator/CEO Sarah Morrison and Columbus Police Chief Kim Jacobs announced the plea that is scheduled to be entered into today at 2pm before U.S. District Judge Michael H. Watson.
According to court documents, Lake owned and managed Columbus Southern Medical Center through one or more corporate or trust entities which he used to insulate himself from the illegal drug trafficking being conducted at the clinic.
In the filed plea document, he admitted that between 2006 and 2013, he knew doctors and staff at the 2912 South High Street clinic prescribed controlled substances to patients without a legitimate medical purpose. During that time, hundreds of patients showed up daily – 85 percent of whom were returning patients – to receive prescriptions of oxycodone, hydrocodone and Xanax. The percentage of patients who were prescribed these controlled substances rose each year, jumping from nearly 60 percent in 2004 to nearly 92 percent in 2009 and 2010.
Lake agreed to plead guilty to maintaining the clinic as a drug premises. He also admitted that he exclusively controlled all of the proceeds generated by the illegal activity being conducted by the doctors, physician assistants and staff at the clinic, which was more than $38 million in payments for patient visits. He admitted to engaging in more than $20 million in money laundering transactions with these illegal drug proceeds.
The doctor also agreed to plead guilty to tax evasion on his personal income tax returns and admitted to filing fraudulent tax returns for his corporations and trusts. He paid himself more than $90,000 in 2010 through 2013 from the clinic entities, which he did not report as income, but instead disguised as phony rental payments ostensibly for use of his personal residence for corporate retreats. He also took inflated charitable contribution deductions on his individual income tax returns. In addition, Lake admitted causing the filing of corporate tax returns that falsely claimed inflated depreciation deductions for nearly $7.4 million in so-called “equipment” purchases by his corporations from his trust for tax years 2005 through 2011. He also admitted to falsely reporting these purchases as capital gains on his trust tax returns rather than as ordinary income, thereby securing a much lower tax rate. Lake’s tax crimes caused a tax loss of more than $3.5 million.
After the DEA first appeared at the clinic in June 2010, Lake took several steps to separate himself from the drug premises; he stopped paying himself a salary, and instead filed a fraudulent claim for disability payments from his two disability insurers. The insurance companies ultimately denied his claims, and only paid out $18,000. Lake also sold the clinic’s remaining stock to employees through an Employee Stock Ownership Plan (ESOP) for the inflated price of $14 million.
After the ESOP sale, and the denial of his fraudulent disability claim, Lake fraudulently filed for and collected unemployment benefits, stealing more than $20,000 in government funds.
Finally, the doctor admitted to defrauding the Bureau of Workers’ Compensation by having employees upcode office visits in order to bill for higher level medical services in addition to those provided by physician assistants as if they were provided by physicians, causing a loss of more than $260,000.
As part of the plea agreement, and due to Lake’s cooperation in the government’s investigation, the parties involved recommended to the court that Lake receive a sentence of 60 months in prison. Judge Watson will consider the recommended sentence at a sentencing hearing that has yet to be scheduled.
“At the same time Dr. Lake was running his medical center as an illegal drug premises, he took every opportunity to cheat the U.S. Treasury out of millions of dollars in taxes," said Acting Deputy Assistant Attorney General Goldberg. "As the income tax filing season begins, Lake’s guilty plea is a stark reminder of what awaits those filing false returns -- no matter their profession, income level or the complexity of their scheme.”
"For seven years, Kevin Lake operated Columbus Southern Medical Center as a pill mill," said U.S. Attorney Glassman. "He got rich by feeding the addictions of hundreds and hundreds of people. Thanks to the thorough investigation of federal, state, and local law enforcement agencies, however, Lake has agreed to plead guilty to drug, tax, and fraud charges, forfeit his ill-gotten gains, and serve time in federal prison for his misdeeds."
“Today’s guilty plea exemplifies DEA’s determination to combat the troubling prescription drug and opiate abuse problem currently plaguing this country.” Special Agent in Charge Timothy J. Plancon said. “Kevin Lake abused his position of trust and jeopardized the lives of many individuals, by conspiring with others to illegally prescribe controlled substances that ended up being consumed throughout Ohio and the surrounding states. This investigation uncovered the elaborate lengths that Lake undertook to conceal his illegal profits, and the seizure of $29 million from Lake is indicative of the scope of his illegal activity. Lake’s guilty plea should serve as a warning to all medical professionals that if you prescribe medicine for personal gain, you will be prosecuted to the fullest extent of the law. This investigation was a success thanks to the outstanding investigative work by all of our federal, state, and local law enforcement partners.”
“Dr. Lake’s conduct detailed in this case is egregious and had such a negative impact on our community,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "This is an important victory for the citizens of Central Ohio. Dr. Lake not only fueled the prescription drug problem in Central Ohio, but he supported addiction in several parts of the country. As a result of this joint investigative effort, the government has seized a significant portion of the illegal proceeds through asset forfeiture, and Dr. Lake is faced with having to pay back taxes with interest and steep penalties.”
“The Office of Inspector General congratulates the U.S. Attorney’s Office and all of the investigators on this important case. The OIG will continue to work with our law enforcement partners to investigate unemployment insurance fraud and employee retirement plan fraud schemes, “stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
“There is no doubt that today’s opiate epidemic is due in large part to the overprescribing of prescription pain medication across this state. This defendant preyed on those battling addiction in an effort to make millions from their suffering,” said Ohio Attorney General Mike DeWine. “An incredible amount of hard work went into investigating and prosecuting this case. Because of this team effort, this pill mill operation has been shut down.”
“We place trust in our healthcare professionals to provide quality treatment that improves the health of injured workers,” said BWC Administrator/CEO Sarah Morrison. “We’re pleased to do our part to address the problem of prescription drug abuse in Ohio, as well as put an end to Dr. Lake’s fraudulent billing scheme.”
“It is through the hard work of the investigators and the cooperation of agencies at the federal, state, and local level that led to the successful investigation and prosecution of this pill mill,” Columbus Police Deputy Chief Michael Woods said.
Three co-defendants have pleaded guilty as part of this case. Dr. Terry Dragash was sentenced in October 2014 to one year in prison for conspiracy to distribute drugs as a result of his conduct in prescribing at the clinic. Dr. David Rath pleaded guilty to a similar conspiracy charge. And in December 2015, Karen Climer – another employee of Lake’s – pleaded guilty to conspiracy and was sentenced to six months in prison after the government revealed she was cooperating in the investigation into Lake.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Glassman commended the investigation of this case by the DEA Tactical Diversion Squad – including the Ohio Attorney General’s Bureau of Criminal Investigation (BCI) and Columbus Division of Police – IRS Criminal Investigation, Ohio Bureau of Workers’ Compensation, Department of Labor OIG and Employee Benefits Security Administration, Central Ohio Drug Enforcement Task Force, Franklin County Sheriff’s Office, Ohio State Board of Pharmacy and the State Medical Board of Ohio, as well as Assistant United States Attorney Kenneth F. Affeldt and Department of Justice Tax Division Trial Attorneys Richard M. Rolwing and Carl F. Brooker, who are representing the United States in this case.
Former College Professor Sentenced for Possessing Child PornographyRead the Press Release
CINCINNATI – Holt Parker, 59, of Cincinnati, was sentenced in U.S. District Court to 48 months in prison, 15 years of supervised release, and ordered to pay a $40,000 fine for possession of child pornography, admitting that he attempted to destroy a thumb drive containing nearly 1,000 video files, the majority of which depicted child pornography that he had downloaded from the Internet.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division announced the sentence handed down yesterday afternoon by U.S. District Judge Timothy S. Black.
According to court documents, FBI agents executed a search warrant at his home in the Clifton neighborhood on March 15, 2016. Agents seized a laptop computer and a damaged thumb drive. Parker told agents that when he realized law enforcement officers were searching his house, he attempted to destroy the thumb drive because he had recently downloaded hundreds of images and videos of child pornography. Forensic analysis confirmed that the drive contained video files and images, including an image of an infant.
Parker pleaded guilty to one count of possession of child pornography in October.
“Child pornography is not a victimless crime,” U.S. Attorney Glassman said. “These are real children being abused and possessing such explicit material will have real consequences in the court of law.”
U.S. Attorney Glassman commended the cooperative investigation by the FBI, as well as Assistant United States Attorney Kyle Healey, who is representing the United States in this case.
Ambulance Company Owner Sentenced for Health Care FraudRead the Press Release
CINCINNATI – Terry Johnson, 43, of Hamilton Ohio, was sentenced in U.S. District Court to 24 months in prison for health care fraud and money laundering in a scheme to defraud Medicare and Medicaid.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office, Lamont Pugh, Special Agent in Charge, Health and Human Services Office of Inspector General (HHS-OIG), and Ohio Attorney General Mike DeWine announced the plea sentence handed down today by U.S. District Judge Michael R. Barrett.
According to court documents, Johnson is the owner and operator of Community Angels Ambulance Service, LLC, which provided medical transportation to dialysis patients from at least 2007 through 2012. He also operated the ambulance company Starlite Transportation.
For approximately seven years, Johnson fraudulently billed Medicare and Medicaid for ambulance and ambulette transports. Approximately $1.1 million was fraudulently billed to Medicare for Community Angels. The loss to Medicaid from both companies totaled more than $354,000.
In addition, Johnson was ordered to file amended personal and corporate (Community Angels Ambulance) income tax returns with the IRS for the 2008-2011 income tax years.
U.S. Attorney Glassman commended the cooperative investigation by the IRS, HHS-OIG and the Ohio Attorney General’s Medicaid Fraud Control Unit, as well as Assistant United States Attorney Timothy Mangan, who is representing the United States in this case.
6 Defendants Sentenced in Racketeering, Murder CaseRead the Press Release
COLUMBUS, Ohio – Six of 19 defendants to be sentenced in a gang-related racketeering and murder case received their sentences this week in U.S. District Court.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien and Columbus Police Chief Kim Jacobs announced the sentences handed down by U.S. District Judge Algenon Marbley.
Johnathan Holt, 24, of Columbus, was sentenced to life in prison with no chance of parole, plus an additional 25 years. He was convicted on all counts by a United States District Court jury following trial in December 2016.
Holt was the final of 20 individuals who were indicted in October 2014 in a racketeering case, with charges that include murders, attempted murders, drug trafficking, weapons offenses, extortion and robbery. Of the 20 total defendants, five others were convicted at trial, 13 pleaded guilty and one has died.
Holt’s specific charges include murder in aid of racketeering and murder through the use of a firearm during and in relation to a drug trafficking crime.
“Johnathan Holt earned every minute of the life sentence that he received today,” U.S. Attorney Glassman said. “For anyone starting down the road that Holt and his co-defendants traveled, I hope these sentences will make them think twice and take another path.”
The five other defendants sentenced this week all pleaded guilty to racketeering and/or murder charges. They include:
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Ismael Bowers – sentenced to 14 years.
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Tommy Coates – sentenced to 7 years.
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Joseph Hill – sentenced to 18 years.
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Freddie Johnson – sentenced to 10 years.
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Chris Warton – sentenced to 18 years.
Robert Wilson and Troy Patterson are scheduled to be sentenced tomorrow. Wilson pleaded guilty to racketeering conspiracy, and Patterson pleaded guilty to murder in aid of racketeering.
U.S. Attorney Glassman commended the two-year investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, Franklin County Prosecutor Ron O’Brien’s Office, Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are representing the United States in this and the related cases.
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Budget Finance Company Owner Sentenced to 121 Months for $31 Million Ponzi SchemeRead the Press Release
WHEELING, W. Va. – Donna S. Brown, 65, of Clarington, Ohio, was sentenced by Senior Judge Frederick P. Stamp in U.S. District Court for the Northern District of West Virginia today to 121 months in prison for defrauding investors of more than 800 investment accounts totaling more than $31 million. Brown, who owned Budget Finance Company in New Martinsville, W. Va., was sentenced for charges of wire fraud, mail fraud and money laundering, to which she had entered pleas of guilty on October 24, 2016.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Raymond P. Duda, Assistant Special Agent in Charge, Federal Bureau of Investigation (FBI), Pittsburgh Field Division; Thomas J. Holloman, Interim Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office; Tommy Coke, Inspector in Charge, U.S. Postal Inspection Service; West Virginia Attorney General Patrick Morrisey, West Virginia State Auditor and Securities Commissioner Lisa Hopkins; Commissioner Andrea Seidt of the Ohio Division of Securities; Acting Commissioner Dawn Holstein of the West Virginia Division of Financial Institutions; and Wetzel County Prosecutor Tim Haught announced the sentence handed down today.
According to court documents, Brown owned and operated Budget Finance company which was both a licensed consumer loan company and an unlicensed investment company. Between 2005 and 2015, she lured potential investors into investing funds with Budget Finance by promising annual returns of between eight and 12 percent.
Brown mailed checks to investors who requested periodic payments and sent them fraudulent quarterly investment statements reflecting their account balances and interest paid. She also mailed investors IRS 1099 forms, but never sent those forms to the IRS.
Brown abruptly closed the doors of Budget Finance without warning in November 2015.
The actual losses in this case currently are estimated to be somewhere between $9.5 million and $25 million, and the crimes resulted in substantial financial hardship to many of the investor/victims.
U.S. Attorney Glassman commended the investigation of this case by the agencies and Assistant United States Attorney Daniel A. Brown and Deputy Criminal Chief Brenda Shoemaker, who are representing the United States in this case.
Local Woman Pleads Guilty to Aiding in Kidnapping of Elderly ManRead the Press Release
DAYTON – Taylor Karas, 25, of Dayton, pleaded guilty today in U.S. District Court for her role in the kidnapping of an elderly man.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the plea entered into today before Senior U.S. District Judge Water H. Rice.
According to the Statement of Facts in this case, on October 6, 2016, Karas and co-defendants James Marriott and Andrew Azzalina kidnapped an adult male victim and transported him across state lines. Karas lured the victim to a motel by calling him and asking him to borrow money. The victim agreed to her request and they arranged to meet.
When the elderly man arrived, Marriott threatened him with a gun while he and Azzalina demanded any items of value and bank and credit card information. Acting under Marriott’s direction, the three located the victim’s car keys, moved him from the motel to his Ford Explorer, and forced him to accompany them to various places in western Ohio and eastern Indiana where they attempted to use his bank cards to withdrawal cash and buy items.
They took him to a bank in Englewood and when the victim could not remember his PIN code, they drove him to a Dollar General and eventually to a Dick’s Sporting Goods in Richmond, Indiana to purchase items for the defendants.
Believing that the victim had requested help from the sales clerk during the purchase of clothing and other items at Dick’s Sporting Goods, the trio abandoned the elderly man at the store and fled back to Ohio in his vehicle.
Marriott, Karas and Azzalina were indicted in October 2016 on charges of aiding and abetting in kidnapping and taking a stolen vehicle across state lines. Marriott and Azzalina were also charged with brandishing a firearm during a crime of violence. Marriott faces additional charges for possessing a firearm as a convicted felon and while a fugitive from justice for sentencing on guilty pleas to aggravated possession of drugs and having weapons under disability.
Karas pleaded guilty to one count of aiding and abetting kidnapping, which is punishable by a maximum potential sentence of up to life in prison. Marriott and Azzalina are scheduled for trial on March 6.
U.S. Attorney Glassman commended the investigation of this case by the FBI as well as Assistant United States Attorney Brent G. Tabacchi, who is prosecuting this case.
Local Attorney Pleads Guilty to Wire FraudRead the Press Release
DAYTON – Steven Scudder, 62, of Centerville, pleaded guilty in U.S. District Court to wire fraud, admitting that he used his position as an attorney to facilitate a fraudulent investment scheme operated by someone else.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration and James Vanderberg, Special Agent in Charge of the U.S. Department of Labor Office of the Inspector General, announced the plea entered yesterday afternoon before U.S. District Judge Thomas M. Rose.
Court documents state that between July 2013 and July 2014, Scudder served as trustee of the WMA Trust, a land trust that purported to secure investments that individuals had made with William Apostelos. Scudder ultimately resigned from this position during mid-summer 2014. Scudder said Apostelos instructed him to continue to falsely hold himself out as the trustee of the WMA Trust until September 2014. Based on Scudder’s false representations, an investment group of approximately 10 people in another state invested more than $1 million with Apostelos. Apostelos allegedly used the funds to pay earlier investors rather than investing the money as promised.
Wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000 or twice the gain or gross loss from the crime, whichever is greater. Judge Rose will schedule a date for sentencing following a pre-sentence investigation by the court.
U.S. Attorney Glassman commended the investigation of this case by the IRS, FBI and two Department of Labor agencies, as well as Assistant United States Attorney Brent G. Tabacchi and Deputy Criminal Chief Laura Clemmens, who are representing the United States in this case.
Jury Convicts Registered Sex Offender of New Sex Crimes Against ChildrenRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Thomas A. Sweeney, 48, of Columbus of all counts, which include production of child pornography, attempted coercion/enticement of a minor, receipt of child pornography and commission of a sex offense while registered as a sex offender.
Vipal Patel, First Assistant United States Attorney for the Southern District of Ohio, Steve Francis, Acting Special Agent in Charge, U.S. Department of Homeland Security Investigations (HSI), Franklin County Sheriff Dallas Baldwin and other members of the Franklin County Internet Crimes Against Children (ICAC) Task Force announced the verdict reached today, which was returned following a trial that began on January 17 before U.S. District Judge Michael H. Watson.
According to court documents and testimony, Sweeney enticed a 14-year-old female to take sexually explicit pictures and send them to Sweeney’s phone. He also used his phone to attempt to coerce the minor victim into engaging in sexual activity.
Sweeney had been convicted in 2004 in Franklin County Common Pleas Court for two counts of rape involving a minor. He was sentenced to two consecutive terms of five years in prison for that conviction.
Sweeney was charged by a criminal complaint in this case on February 11, 2016 and was indicted by a federal grand jury on March 31, 2016 and in a superseding indictment on January 12, 2017.
Production of child pornography is punishable by a range of 25 to 50 years in this case. Coercion of a minor carries a potential life sentence and receipt of child pornography is punishable by a range of 15 to 40 years in prison in this case. Committing these crimes while registered as a sex offender includes a 10-year sentencing enhancement to be served consecutive to any other term of imprisonment.
This case was prosecuted by United States Attorney Benjamin C. Glassman and Assistant United States Attorney Heather A. Hill. It was investigated by Franklin County ICAC Task Force members.
The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer facilitated crimes against children. The following agencies are members:
Franklin County Sheriff’s Office
Ohio ICAC
Grove City Police Department
Columbus Police Department
Grandview Heights Police Department
Westerville Police Department
Hilliard Police Department
Franklin County Prosecutor's Office
Homeland Security Investigations (HSI)
Ohio Attorney General’s Office (BCI)
The Ohio State University Police Department
Upper Arlington Police Department
Circleville Police Department
Pickaway County Sheriff’s Office
Delaware County Sheriff’s Office
Harrison County Man Sentenced to 264 Months for Brandishing Machine Gun During Robbery in Freeport, OhioRead the Press Release
COLUMBUS, Ohio – Nicholas T. Billman, 20, of Flushing, Ohio, was sentenced in U.S. District Court to 264 months in prison for brandishing a machine gun while he robbed a general store in Freeport, Ohio on October 22, 2015.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Harrison County Sheriff Ronald J. Myers announced the sentence handed down yesterday by Senior U.S. District Judge James L. Graham.
Billman pleaded guilty in September to one count of robbery of a business that is engaged in interstate commerce and one count of carrying and brandishing a machine gun during a crime of violence.
Testimony during the plea hearing confirmed that Billman entered the Hilltop General Store brandishing an AK-47 type rifle. Billman wore a handgun holstered on his right hip and a sheathed knife on his left hip. He robbed the store of cash and cigarettes then fled. A witness followed Billman but stopped after Billman fired three shots toward him.
Acting on information received from the public and other witnesses, investigators obtained a warrant and searched Billman’s residence two days later. They found an AK-47 similar to the one used in the robbery as well as other firearms and evidence indicating that Billman had committed the crimes. Forensic tests determined that the weapon was fully automatic. Sheriff’s deputies arrested Billman on state charges, then contacted ATF to pursue federal charges. A federal grand jury indicted Billman in February 2016. He has been in custody since sheriff’s deputies arrested him.
U.S. Attorney Glassman commended Assistant U.S. Attorney Timothy Prichard, who is representing the United States in this case.
Rolls-Royce plc Agrees to Pay $170 Million Criminal Penalty to Resolve Foreign Corrupt Practices Act CaseRead the Press Release
Company Agrees to $800 Million Global Resolution with authorities in the United States, the United Kingdom and Brazil
Rolls-Royce plc, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors, has agreed to pay the U.S. nearly $170 million as part of an $800 million global resolution to investigations by the department, U.K. and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts.
U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio, Chief Andrew Weissmann of the Fraud Section of the Justice Department’s Criminal Division, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
“Bribery of government officials undermines the integrity of a free and fair market,” said U.S. Attorney Glassman. “This multinational resolution imposes significant criminal penalties on Rolls-Royce for its multinational corruption.”
“For more than a decade, Rolls-Royce repeatedly resorted to bribes to secure contracts and get a competitive edge in countries throughout the world,” said Chief Weissmann. “The global nature of this crime requires a global response, and this case is yet another example of the strong relationship between the United States and U.K. Serious Fraud Office and Brazilian Ministério Público Federal, and the collective efforts to ensure that ethical companies can compete on an even playing field anywhere in the world.”
“Rolls-Royce knowingly acted outside the law by conspiring to bribe foreign officials to gain an unfair advantage,” said Assistant Director Richardson. “No company is above the law. This resolution will stand as a warning to big and small companies all across the world that the FBI will not tolerate the foreign corruption that threatens our fair and competitive markets.”
“This successful parallel investigation is a tremendous example of the central importance of working cooperatively alongside our international partners to achieve a fair and meaningful resolution,” said Assistant Director in Charge Abbate. “This outcome is a reflection of the immense reach and capabilities of the FBI’s Washington Field Office international corruption squad and the global impact of the anti-corruption program.”
According to admissions made in court papers unsealed today, Rolls-Royce admitted that between 2000 and 2013, the company conspired to violate the Foreign Corrupt Practices Act (FCPA) by paying more than $35 million in bribes through third parties to foreign officials in various countries in exchange for those officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and affiliated entities (collectively, Rolls-Royce):
- In Thailand, Rolls-Royce admitted to using intermediaries to pay approximately $11 million in bribes to officials at Thai state-owned and state-controlled oil and gas companies that awarded approximately seven contracts to Rolls-Royce during the same time period.
- In Brazil, Rolls-Royce used intermediaries to pay approximately $9.3 million in bribes to bribe foreign officials at a state-owned petroleum corporation that awarded multiple contracts to Rolls-Royce during the same time period.
- In Kazakhstan, between approximately 2009 and 2012, Rolls-Royce paid commissions of approximately $5.4 million to multiple advisors, knowing that at least a portion of the commission payments would be used to bribe foreign officials with influence over a joint venture owned and controlled by the Kazakh and Chinese governments that was developing a gas pipeline between the countries. In 2012, the company also hired a local Kazakh distributor, knowing it was beneficially owned by a high-ranking Kazakh government official with decision-making authority over Rolls-Royce’s ability to continue operating in the Kazakh market. During this time, the state-owned joint venture awarded multiple contracts to Rolls-Royce.
- In Azerbaijan, between approximately 2000 and 2009, Rolls-Royce used intermediaries to pay approximately $7.8 million in bribes to foreign officials at the state-owned and state-controlled oil company, which awarded multiple contracts to Rolls-Royce during the same time period.
- In Angola, between approximately 2008 and 2012, Rolls-Royce used an intermediary to pay approximately $2.4 million in bribes to officials at a state-owned and state-controlled oil company, which awarded three contracts to Rolls-Royce during this time period.
- In Iraq, from approximately 2006 to 2009, Rolls-Royce supplied turbines to a state-owned and state-controlled oil company. Certain Iraqi foreign officials expressed concerns about the turbines and subsequently threatened to blacklist Rolls-Royce from doing future business in Iraq. In response, Rolls-Royce’s intermediary paid bribes to Iraqi officials to persuade them to accept the turbines and not blacklist the company.
Rolls-Royce entered into a deferred prosecution agreement (DPA) in connection with a criminal information, filed on Dec. 20, 2016, in the Southern District of Ohio and unsealed today, charging the company with conspiring to violate the anti-bribery provisions of the FCPA. Pursuant to the DPA, Rolls-Royce agreed to pay a criminal penalty of $195,496,880, subject to a credit discussed below. The company has also agreed to continue to cooperate fully with the department’s ongoing investigation, including its investigation of individuals.
In related proceedings, Rolls-Royce also settled with the United Kingdom’s Serious Fraud Office (SFO) and the Brazilian Ministério Público Federal (MPF). As part of its resolution with the SFO, Rolls-Royce entered into a DPA and admitted to paying additional bribes or failing to prevent bribery payments in connection with Rolls-Royce’s business operations in China, India, Indonesia, Malaysia, Nigeria, Russia and Thailand between in or around 1989 and in or around 2013, and Rolls-Royce agreed to pay a total fine of £497,252,645 ($604,808,392). As part of its leniency agreement with the MPF, Rolls-Royce also agreed to pay a penalty of approximately $25,579,170 for the company’s role in a conspiracy to bribe foreign officials in Brazil between 2005 and 2008. Because the conduct underlying the MPF resolution overlaps with the conduct underlying part of the department’s resolution, the department credited the $25,579,170 that Rolls-Royce agreed to pay in Brazil against the total fine in the United States. Therefore, the total amount to be paid to the United States is $169,917,710, and the total amount of penalties that Rolls-Royce has agreed to pay is more than $800 million.
A number of factors contributed to the department’s criminal resolution with the company, including that Rolls-Royce did not disclose the criminal conduct to the department until after the media began reporting allegations of corruption and after the SFO had initiated an inquiry into the allegations and that the conduct was extensive and spanned 12 countries. However, the company did cooperate with the department’s investigation. Rolls-Royce has also taken significant remedial measures, including terminating business relationships with multiple employees and third-party intermediaries who were implicated in the corrupt scheme; enhancing compliance procedures to review and approve intermediaries; and implementing new and enhanced internal controls to address and mitigate corruption and compliance risks. Thus, the criminal penalty reflects a 25-percent reduction from the bottom of the U.S. Sentencing Guidelines fine range. In addition, the department considered the parallel resolutions reached by the SFO and MPF in determining the resolution.
The U.S. Postal Inspection Service and the FBI’s International Corruption Squad in Washington, D.C., investigated the case. Trial Attorneys Ephraim Wernick, Kevin Gingras and Dennis Kihm of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Michael J. Marous and Jessica Kim of the Southern District of Ohio are prosecuting the case.
The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The SFO and the MPF provided significant cooperation and assistance in this matter, as did law enforcement colleagues in Austria, Germany, the Netherlands, Singapore and Turkey.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Rolls-Royce DPA Rolls-Royce InformationRolls-Royce PLC Agrees to Pay $170 Million Criminal Penalty to Resolve Foreign Corrupt Practices Act CaseRead the Press Release
WASHINGTON – Rolls-Royce plc, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors, has agreed to pay the U.S. nearly $170 million as part of an $800 million global resolution to investigations by the department, U.K. and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts.
U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio, Chief Andrew Weissmann of the Fraud Section of the Justice Department’s Criminal Division, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
“Bribery of government officials undermines the integrity of a free and fair market,” said U.S. Attorney Glassman. “This multinational resolution imposes significant criminal penalties on Rolls-Royce for its multinational corruption.”
“For more than a decade, Rolls-Royce repeatedly resorted to bribes to secure contracts and get a competitive edge in countries throughout the world,” said Chief Weissmann. “The global nature of this crime requires a global response, and this case is yet another example of the strong relationship between the United States and U.K. Serious Fraud Office and Brazilian Ministério Público Federal, and the collective efforts to ensure that ethical companies can compete on an even playing field anywhere in the world.”
“Rolls-Royce knowingly acted outside the law by conspiring to bribe foreign officials to gain an unfair advantage,” said Assistant Director Richardson. “No company is above the law. This resolution will stand as a warning to big and small companies all across the world that the FBI will not tolerate the foreign corruption that threatens our fair and competitive markets.”
“This successful parallel investigation is a tremendous example of the central importance of working cooperatively alongside our international partners to achieve a fair and meaningful resolution,” said Assistant Director in Charge Abbate. “This outcome is a reflection of the immense reach and capabilities of the FBI’s Washington Field Office international corruption squad and the global impact of the anti-corruption program.”
According to admissions made in court papers unsealed today, Rolls-Royce admitted that between 2000 and 2013, the company conspired to violate the Foreign Corrupt Practices Act (FCPA) by paying more than $35 million in bribes through third parties to foreign officials in various countries in exchange for those officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and affiliated entites (collectively, Rolls-Royce):
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In Thailand, Rolls-Royce admitted to using intermediaries to pay approximately $11 million in bribes to officials at Thai state-owned and state-controlled oil and gas companies that awarded approximately seven contracts to Rolls-Royce during the same time period.
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-
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In Brazil, Rolls-Royce used intermediaries to pay approximately $9.3 million in bribes to bribe foreign officials at a state-owned petroleum corporation that awarded multiple contracts to Rolls-Royce during the same time period.
-
In Kazakhstan, between approximately 2009 and 2012, Rolls-Royce paid commissions of approximately $5.4 million to multiple advisors, knowing that at least a portion of the commission payments would be used to bribe foreign officials with influence over a joint venture owned and controlled by the Kazakh and Chinese governments that was developing a gas pipeline between the countries. In 2012, the company also hired a local Kazakh distributor, knowing it was beneficially owned by a high-ranking Kazakh government official with decision-making authority over Rolls-Royce’s ability to continue operating in the Kazakh market. During this time, the state-owned joint venture awarded multiple contracts to Rolls-Royce.
-
In Azerbaijan, between approximately 2000 and 2009, Rolls-Royce used intermediaries to pay approximately $7.8 million in bribes to foreign officials at the state-owned and state-controlled oil company, which awarded multiple contracts to Rolls-Royce during the same time period.
-
In Angola, between approximately 2008 and 2012, Rolls-Royce used an intermediary to pay approximately $2.4 million in bribes to officials at a state-owned and state-controlled oil company, which awarded three contracts to Rolls-Royce during this time period.
-
In Iraq, from approximately 2006 to 2009, Rolls-Royce supplied turbines to a state-owned and state-controlled oil company. Certain Iraqi foreign officials expressed concerns about the turbines and subsequently threatened to blacklist Rolls-Royce from doing future business in Iraq. In response, Rolls-Royce’s intermediary paid bribes to Iraqi officials to persuade them to accept the turbines and not blacklist the company.
-
Rolls-Royce entered into a deferred prosecution agreement (DPA) in connection with a criminal information, filed on Dec. 20, 2016, in the Southern District of Ohio and unsealed today, charging the company with conspiring to violate the anti-bribery provisions of the FCPA. Pursuant to the DPA, Rolls-Royce agreed to pay a criminal penalty of $195,496,880, subject to a credit discussed below. The company has also agreed to continue to cooperate fully with the department’s ongoing investigation, including its investigation of individuals.
- related proceedings, Rolls-Royce also settled with the United Kingdom’s Serious Fraud Office (SFO) and the Brazilian Ministério Público Federal (MPF). As part of its resolution with the SFO, Rolls-Royce entered into a DPA and admitted to paying additional bribes or failing to prevent bribery payments in connection with Rolls-Royce’s business operations in China, India, Indonesia, Malaysia, Nigeria, Russia and Thailand between in or around 1989 and in or around 2013, and Rolls-Royce agreed to pay a total fine of £497,252,645 ($604,808,392). As part of its leniency agreement with the MPF, Rolls-Royce also agreed to pay a penalty of approximately $25,579,170 for the company’s role in a conspiracy to bribe foreign officials in Brazil between 2005 and 2008. Because the conduct underlying the MPF resolution overlaps with the conduct underlying part of the department’s resolution, the department credited the $25,579,170 that Rolls-Royce agreed to pay in Brazil against the total fine in the United States. Therefore, the total amount to be paid to the United States is $169,917,710, and the total amount of penalties that Rolls-Royce has agreed to pay is more than $800 million.
A number of factors contributed to the department’s criminal resolution with the company, including that Rolls-Royce did not disclose the criminal conduct to the department until after the media began reporting allegations of corruption and after the SFO had initiated an inquiry into the allegations and that the conduct was extensive and spanned 12 countries. However, the company did cooperate with the department’s investigation. Rolls-Royce has also taken significant remedial measures, including terminating business relationships with multiple employees and third-party intermediaries who were implicated in the corrupt scheme; enhancing compliance procedures to review and approve intermediaries; and implementing new and enhanced internal controls to address and mitigate corruption and compliance risks. Thus, the criminal penalty reflects a 25-percent reduction from the bottom of the U.S. Sentencing Guidelines fine range. In addition, the department considered the parallel resolutions reached by the SFO and MPF in determining the resolution.
Assistant United States Attorneys Michael J. Marous and Jessica Kim of the Southern District of Ohio and Trial Attorneys Ephraim Wernick, Kevin Gingras and Dennis Kihm of the Criminal Division’s Fraud Section are prosecuting the case. The U.S. Postal Inspection Service and the FBI’s International Corruption Squad in Washington, D.C., investigated the case.
- Criminal Division’s Office of International Affairs provided significant assistance in this matter. The SFO and the MPF provided significant cooperation and assistance in this matter, as did law enforcement colleagues in Austria, Germany, the Netherlands, Singapore and Turkey.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
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Vice President of Local Drywall Company Pleads Guilty to Income Tax FraudRead the Press Release
COLUMBUS, Ohio – Robert E. Porter, 53, of Westerville, Ohio pleaded guilty to filing a false income tax return with the Internal Revenue Service (IRS). Porter faces a maximum of three years in prison and a fine of up to $250,000.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, James Vanderberg, Special Agent in Charge, the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Brad Geary, Special Agent in Charge, United States Department of Housing and Urban Development, Office of Inspector General, and Marlon Miller, Special Agent in Charge, Homeland Security Investigations announced the guilty plea entered before U.S. District Judge Michael. H. Watson.
According to court documents, between 2009 and 2013 Porter was the Vice President of Porter Drywall and was also the Vice President of Black Star Drywall, Inc. Porter Drywall contracted to provide drywall installation and drywall supplies to residential and commercial contractors in Central Ohio. As well as being Vice President, Porter was a jobsite supervisor and estimator for Porter Drywall’s private and corporate clients.
Porter diverted numerous customer payments to his personal bank account. Acting on behalf of Porter Drywall, Porter provided estimates for certain projects and assigned Porter Drywall’s employees and/or subcontractors to complete the work. On “diverted income” projects, all expenses, including labor and materials, were incurred by Porter Drywall and all revenue/payments generated were deposited into Porter’s personal bank account.
“Income tax fraud is not a victimless crime,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Individuals who corruptly violate the law to further their business interests and intentionally evade paying their fair share of taxes undermine public confidence in our tax system and unfairly disadvantage businesses that play by the rules.”
Porter has also agreed to ensure that Porter Drywall subscribes to proper governmental forms and otherwise complies with all tax and immigration laws with respect to its employees.
U.S. Attorney Glassman commended the investigation of this case by the IRS, U.S. Department of Labor, U.S. Department of Housing and Urban Development, and Homeland Security Investigations, and Assistant U.S. Attorney Daniel A. Brown, who is prosecuting the case.
Dayton Men Plead Guilty to Dealing Heroin, Fentanyl that Resulted in User DeathsRead the Press Release
DAYTON – Antonio J. Spiva, 25, of Dayton, pleaded guilty to conspiracy to possess with intent to distribute heroin and fentanyl that resulted in the death of at least two individuals. A co-defendant, Charles M. McBeath, 33, of Dayton, had pleaded guilty to the same last week.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Montgomery County Sheriff Phil Plummer, Dayton Police Chief Richard Biehl and other members of the Heroin Eradication Apprehension Team (HEAT) announced the plea that was entered into yesterday before U.S. District Judge Thomas M. Rose.
Both men were originally indicted by a federal grand jury in December 2015 and have remained in custody since. According to court documents, through late May 2015, McBeath and Spiva distributed heroin, fentanyl and crack cocaine while maintaining operations at residences located on E. Fifth Street, S. Torrence Street and S. Horton Street, all in Dayton. Their distribution of fentanyl resulted in the overdose death of two individuals and the non-fatal overdose of at least three others.
As part of Spiva’s plea agreement, all parties involved are recommending a sentence of 12 to 18 years in prison to the court. Likewise, the plea agreement for McBeath includes a recommended sentence of 10 to 18 years in prison. Those recommendations will be considered by a U.S. District Judge at sentencing hearings in April.
The HEAT initiative was announced in May 2015 and includes the U.S. Attorney’s Office, DEA, Dayton Police Department, Montgomery County Sheriff’s Office, Montgomery County Coroner’s Office, and the Miami Valley Regional Crime Laboratory. The intent of the task force is to prosecute heroin and fentanyl suppliers who contribute to both fatal and non-fatal overdoses in Montgomery County.
U.S. Attorney Glassman commended the investigation of this case by HEAT, and Assistant U.S. Attorneys Sheila G. Lafferty and Dominick S. Gerace, who are prosecuting the case.
Sunbury Man Sentenced to 180 Months for Distribution of Child PornographyRead the Press Release
COLUMBUS, Ohio – Mark W. Wolfe, 51, of Sunbury, Ohio, was sentenced in U.S. District Court to 180 months in prison, 20 years of supervised release and ordered to pay $12,000 in restitution for distribution of child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Westerville Police Chief Joseph Morbitzer announced the sentence handed down today by Chief U.S. District Judge Edmund A. Sargus, Jr.
According to court documents, undercover investigators observed files containing child pornography being shared through an IP address belonging to Wolfe. During a search warrant executed on July 31, 2015 at Wolfe’s residence, investigators discovered a laptop containing approximately 486 videos and 203 images of child pornography.
The files were located in several folders on the computer under the user name “Mark.” Some of the videos showed children as young as eight to ten months old being sexually abused. Approximately 67 of the videos found on the Dell computer were live webcam sessions depicting children being repeatedly sexually assaulted, that WOLFE watched and recorded utilizing screen capture software.
Further forensic analysis of the computer revealed Skype chat messages between Wolfe and several other individuals. In these conversations, Wolfe distributed child pornography files, claimed to have previously engaged in sex acts with minors and stated that his favorite age is five to ten years old.
Wolfe was charged by indictment in September 2015 and pleaded guilty in March 2016.
U.S. Attorney Glassman commended the investigation by the FBI Columbus Child Exploitation Task Force, which includes officers from the Westerville Police Department, Reynoldsburg Police Department, Powell Police Department and Belmont County Sheriff’s Office, as well as Assistant U.S. Attorney Heather A. Hill, who is prosecuting the case.
Las Vegas Oxy Ring Leader Sentenced to 72 Months in PrisonRead the Press Release
COLUMBUS, Ohio – Sukita M Williams, 44, of Las Vegas and Hilliard, Ohio, was sentenced in U.S. District Court to 72 months in prison for her role in an Oxycodone ring between Las Vegas and Columbus.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy Plancon, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service (USPIS) and Ohio Attorney General Mike DeWine announced the sentence handed down today by U.S. District Judge Michael H. Watson.
Williams is one of six defendants to be sentenced in this case on charges of conspiracy to possess with intent to distribute Oxycodone and/or conspiracy to commit money laundering. They include:
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Danny R. Williams, 30, of Las Vegas, who was sentenced in July to 90 months in prison;
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Dontonyo Courtney, 22, of Columbus, who was sentenced in August to 33 months in prison;
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Alfred David James, Sr., 36, of Columbus, who was sentenced in September to 30 months in prison;
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Joquline D. Harris, 29, of Columbus, who was sentenced in September to five years of probation; and
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Rashod D. Todd, 29, of Columbus, who was sentenced in October to 70 months in prison.
Two defendants have yet to be sentenced in this case. Tiauna Castro, 28, of Las Vegas, pleaded guilty in September to conspiracy to commit money laundering and is scheduled to be sentenced on July 12, 2017.
Larissa Harris-Patterson, 46, of Las Vegas, pleaded guilty in November to charges of conspiracy to possess with intent to distribute Oxycodone and conspiracy to commit money laundering. Her sentencing is yet to be scheduled.
According to court documents, between 2012 and November 2015, Sukita Williams, Danny Williams and Rashod Todd conspired to import, possess and distribute Oxycodone from Las Vegas. Sukita and Danny Williams each personally went to physicians to obtain fraudulent prescriptions for Oxycodone and arranged for other members of the conspiracy to do the same. The trio also used middlemen to obtain Oxycodone. Once they obtained bulk amounts of Oxycodone, the pills were transported to Columbus, Ohio via the mail or on commercial airlines to be sold on the street to drug users.
The three attempted to conceal their illicit proceeds by depositing money into others’ bank accounts. In addition, these cash deposits funded the purchase of airline tickets that enabled couriers to transport Oxycodone to Columbus and to transport bulk amounts of cash back to them in Las Vegas.
Joquline Harris conducted financial transactions to funnel the proceeds of the illegal distribution of Oxycodone through two separate Ohio bank accounts opened by Sukita Williams, to bank accounts owned by Sukita Williams in Las Vegas. Harris further used the money in these accounts and other illicit drug proceeds from Sukita Williams to purchase airline tickets for members of the drug ring and make payments on a vehicle used in the operation.
Tiauna Castro deposited proceeds from the illegal sale of Oxycodone to a bank account in Columbus that was held in the name of a front business. The account was actually controlled by someone Castro knew was trafficking illegally obtained pills from Las Vegas to Columbus.
Harris-Patterson went to physicians to obtain fraudulent prescriptions for Oxycodone and arranged for other members of the conspiracy to do the same. She also used middlemen to obtain Oxycodone. Once she obtained bulk amounts of the drug, the pills were transported to Columbus, Ohio via the mail or on commercial airlines to be sold on the street to drug users.
“This is an important victory for the citizens of Columbus,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “These individuals not only fueled the drug problem in Central Ohio, but they supported addiction in several parts of the country. The harm inflicted by these drugs is matched only by the profit potential for those who sell them.”
U.S. Attorney Glassman commended the cooperative investigation by the DEA, IRS, USPIS and Ohio Bureau of Criminal Investigation (BCI), as well as Deputy Criminal Chief Michael J. Hunter, who is representing the United States in these cases.
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Air Force Reservist Pleads Guilty to RapeRead the Press Release
DAYTON – Kyle Jordan, 31, of Franklin, Ohio pleaded guilty in U.S. District Court to one count of sexual abuse.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Lt. Col. Randal Pendleton, Commander, Air Force Office of Special Investigations 10th Field Investigations Squandron, and Angela L. Byer, Special Agent in Charge, Federal Bureau of Investigations (FBI), announced the plea entered into today before U.S. Magistrate Judge Michael J. Newman.
According to the signed Statement of Facts attached to the plea agreement, in December 2015, Jordan knowingly had sex with an unconscious woman while staying at a Temporary Lodging Facility located on Wright-Patterson Air Force Base.
Jordan raped the victim in a bedroom after they both consumed alcohol.
Sexual abuse carries a potential maximum sentence of up to life in prison and at least five years and up to a lifetime of supervised release.
U.S. Attorney Glassman commended the investigation of this case by the Air Force OSI and FBI, as well as Assistant United States Attorneys Alex R. Sistla and Andrew J. Hunt, and Special Assistant United States Attorney Amy M. Smith, who are representing the United States in this case.
Cincinnati Man Charged with Promoting Child PornographyRead the Press Release
CINCINNATI – A federal grand jury has charged James Denney, 30, of Cincinnati, with two counts related to the promotion of child pornography in an indictment returned in Cincinnati.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Steve Francis, Acting Special Agent in Charge, Homeland Security Investigations (HSI) announced the indictment returned today.
The indictment alleges that in December Denney knowingly promoted a URL on the DarkWeb containing child pornography and that Denney allegedly aided another in accessing the pornography of a minor engaging in sexually explicit conduct.
According to investigators, Denney allegedly provided an undercover agent with web links to an online board featuring dozens of links to child pornography chat rooms, video/image board sites, as well as “community” support groups and online security advice for child pornographers.
Promoting a URL that contains child pornography is punishable by a range of five to 20 years in prison. Aiding in accessing child pornography carries a maximum potential penalty of 20 years in prison. Each crime also includes a potential lifetime of supervised release.
U.S. Attorney Glassman commended the investigation of this case by HSI, and Assistant United States Attorney Karl P. Kadon, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Justice Department Reaches Settlement with Ohio-Based Banks to Resolve Allegations of Lending DiscriminationRead the Press Release
CINCINNATI – The Justice Department filed a consent order today to resolve allegations that Union Savings Bank and Guardian Savings Bank engaged in a pattern or practice of “redlining” predominantly African-American neighborhoods in and around Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis. “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.
The settlement, which is subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Southern District of Ohio. The complaint alleges that Union and Guardian violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that, from at least 2010 through 2014, Union and Guardian served the credit needs of the residents of predominantly white neighborhoods to a significantly greater extent than they served the credit needs of majority African-American neighborhoods. Those neighborhoods are easily recognized because each of the four metropolitan areas in which the banks operate has long maintained highly-segregated residential housing patterns for African Americans. Both banks are headquartered in Cincinnati and share common ownership and management.
As a result of the settlement, Union will open two full-service branches and Guardian will open one loan production office to serve the residents of African-American neighborhoods. Together, Union and Guardian will invest at least $9 million in majority African-American neighborhoods in the Cincinnati, Columbus, Dayton and Indianapolis metropolitan areas. That investment includes $7 million in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of majority African-American census tracts. In order to make residential mortgage loans available to residents of predominately African-American neighborhoods that were not adequately served by Union and Guardian, the banks will further invest $2 million in advertising, outreach, financial education and community partnership efforts. The settlement also requires both banks to develop robust internal controls to ensure compliance with fair lending obligations and conduct fair lending training for their employees.
“Lenders must treat all potential borrowers equally and fairly,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement embodies a win-win solution for all parties by increasing the volume of mortgage loans, driving economic activity and creating a level playing field for qualified borrowers.”
“Redlining has no place in the Southern District of Ohio,” said U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio. “This office is committed to vigorously enforcing the guarantees of the Fair Housing Act and the Equal Credit Opportunity Act so that the people in our District can borrow without prejudice based on race and color.”
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.6 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division and the U.S. Attorney’s Office of the Southern District of Ohio are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Justice Department Reaches Settlement with Ohio-Based Banks to Resolve Allegations of Lending DiscriminationRead the Press Release
Settlement Provides $9 Million to Ensure Equal Lending Services to African-American Communities in Ohio and Indiana
The Justice Department filed a consent order today to resolve allegations that Union Savings Bank and Guardian Savings Bank engaged in a pattern or practice of “redlining” predominantly African-American neighborhoods in and around Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis. “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.
The settlement, which is subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Southern District of Ohio. The complaint alleges that Union and Guardian violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that, from at least 2010 through 2014, Union and Guardian served the credit needs of the residents of predominantly white neighborhoods to a significantly greater extent than they served the credit needs of majority African-American neighborhoods. Those neighborhoods are easily recognized because each of the four metropolitan areas in which the banks operate has long maintained highly-segregated residential housing patterns for African Americans. Both banks are headquartered in Cincinnati and share common ownership and management.
As a result of the settlement, Union will open two full-service branches and Guardian will open one loan production office to serve the residents of African-American neighborhoods. Together, Union and Guardian will invest at least $9 million in majority African-American neighborhoods in the Cincinnati, Columbus, Dayton and Indianapolis metropolitan areas. That investment includes $7 million in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of majority African-American census tracts. In order to make residential mortgage loans available to residents of predominately African-American neighborhoods that were not adequately served by Union and Guardian, the banks will further invest $2 million in advertising, outreach, financial education and community partnership efforts. The settlement also requires both banks to develop robust internal controls to ensure compliance with fair lending obligations and conduct fair lending training for their employees.
“Lenders must treat all potential borrowers equally and fairly,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement embodies a win-win solution for all parties by increasing the volume of mortgage loans, driving economic activity and creating a level playing field for qualified borrowers.”
“Redlining has no place in the Southern District of Ohio,” said U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio. “This office is committed to vigorously enforcing the guarantees of the Fair Housing Act and the Equal Credit Opportunity Act so that the people in our District can borrow without prejudice based on race and color.”
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.6 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division and the U.S. Attorney’s Office of the Southern District of Ohio are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Additional information about fair lending enforcement by the Justice Department can be found on the Justice Department’s website at www.justice.gov/fairhousing.
Union Savings and Guardian Savings Complaint Union Savings and Guardian Savings Proposed Consent OrderU.S. Attorney Glassman Presents Attorney General Commendation to Cincinnati PoliceRead the Press Release
CINCINNATI – Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, presented Cincinnati Police Chief Eliot K. Isaac today with a community policing commendation on behalf of U.S. Attorney General Loretta E. Lynch.
Lynch presented the recognition as part of her Inaugural Attorney General’s Community Policing Awards Ceremony on October 6.
There, she recognized the Cincinnati Police Department for its steadfast commitment to the principles of community policing and outstanding contributions to the safety, security and welfare of Cincinnati. Specifically, the police department was honored for its efforts to strengthen bonds between citizens and law enforcement, build mutual trust and promote the public good.
Lynch launched a national community policing tour in Cincinnati in May 2015. The tour was created to highlight collaborative programs and innovative policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust and respect.
While in Cincinnati, the Attorney General, the U.S. Attorney’s Office, the Community Oriented Policing Services (COPS) office, the City of Cincinnati and the Cincinnati Police Department hosted a roundtable with city officials, law enforcement, local leaders, young people and other members of the community at the National Underground Railroad Freedom Center.
Cincinnati Police also hosted officials at their Right to Read Program at Chase Elementary School where Cincinnati police officers work with University of Cincinnati students to tutor and mentor children. As part of the tour, the Attorney General also visited with the Cincinnati Police Department where she thanked officers for their hard work and spoke to officers that were hired with COPS Office hiring grants.
“The Attorney General began her community policing tour here in Cincinnati because of this department’s outstanding community policing,” U.S. Attorney Glassman said. “Since the Attorney General’s visit, moreover, the Cincinnati Police Department has continued to innovate in this vital area. I am very pleased to partner closely with the Cincinnati Police on a daily basis, so it’s my particular pleasure to present this recognition from the Attorney General. On her behalf and all of the Department of Justice, I thank the men and women of the Cincinnati Police for their service.”
Redflex Traffic Systems Enters into Non-Prosecution Agreement with United StatesRead the Press Release
COLUMBUS, Ohio — The Department of Justice and the United States Attorney’s Offices for the Southern District of Ohio and the Northern District of Illinois have entered into a Non-Prosecution Agreement with Redflex Traffic Systems Inc., a Phoenix-based automated safety company.
The agreement was announced by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; and Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
The agreement was reached in part due to Redflex’s extensive and thorough cooperation over recent years, which is detailed in the agreement. It included cooperation with the successful prosecutions of several individuals, including a Columbus lobbyist, a high-ranking city of Chicago official and Redflex’s prior Chief Executive Officer.
Among the company’s obligations under the two-year agreement, Redflex will pay restitution of $100,000 to the City of Columbus. The company will also pay restitution and compensatory damages to the City of Chicago, the amount of which will be determined either by a final judgment or a settlement agreement in Chicago’s pending civil lawsuit against Redflex.
Further, Redflex agreed to cooperate fully with DOJ and any other law enforcement agency designated by DOJ, including the Australian Federal Police and other Australian law enforcement authorities. As part of that obligation, Redflex must, among other things, provide DOJ, the Australian Federal Police, and other Australian law enforcement authorities, upon request, all non-privileged information, documents, records, or other tangible evidence. Notwithstanding the two-year time period of the agreement, Redflex agreed to cooperate with DOJ, the Australian Federal Police, and other Australian law enforcement authorities until all of their investigations or prosecutions are concluded.
In exchange for Redflex’s fulfillment of its obligations under the agreement, DOJ agreed that it will not criminally prosecute Redflex for any of the conduct arising out of investigations in Chicago and Columbus. The agreement does not relate to any potential tax charges.
Redflex Traffic Systems is wholly owned by Redflex Holdings Group of Melbourne, Australia, which owns and operates a network of digital speed and red-light cameras worldwide. The company installs cameras that automatically record and ticket drivers who run red lights. As part of the Non-Prosecution Agreement, Redflex accepted responsibility for its conduct related to the illegal activities of its employees in recent U.S. investigations.
Its former CEO was convicted as part of the probes into bribes paid to elected officials to procure or expand Redflex’s contracts with Chicago and Columbus. The investigations also resulted in the convictions of a Chicago official and a Columbus lobbyist. John Bills, a former Chicago assistant transportation commissioner, was convicted of accepting cash and benefits from Redflex in exchange for expanding the company’s business with Chicago. The lobbyist, John Raphael, pleaded guilty to extorting cash from Redflex to pass on to elected officials in Ohio in an effort to obtain red-light camera contracts.
Since the inception of the U.S. investigations, Redflex has initiated substantial additions and changes to its compliance program, policies and procedures. The company agreed in the Non-Prosecution Agreement to revise and address any deficiencies in its compliance code, policies and procedures regarding compliance with applicable anti-bribery and anti-corruption laws. Redflex agreed to adopt new policies to ensure that it maintains a rigorous anti-bribery and anti-corruption compliance code, and to install procedures designed to detect and deter violations of such laws.
During the term of the agreement, Redflex must prepare at least four follow-up reports and periodically submit them to DOJ. If DOJ determines that Redflex has violated any provision of the Non-Prosecution Agreement, Redflex would be subject to prosecution for any applicable violation of U.S. law, including perjury and obstruction of justice.
The government in the Columbus case was represented by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio. The Columbus case was investigated by the FBI’s Cincinnati Field Office, Columbus Resident Agency, the IRS Criminal Investigation Division, and the Ohio Bureau of Criminal Investigation.
The government was represented in the Chicago case by Mr. Fardon and Assistant U.S. Attorneys Laurie Barsella and Timothy Storino of the Northern District of Illinois. The Chicago case was investigated by the FBI’s Chicago Field Office, the IRS Criminal Investigation Division, and the City of Chicago’s Inspector General’s Office.
Fairfield Man Indicted on Child Pornography ChargesRead the Press Release
CINCINNATI – A federal grand jury has charged Richard Jay Sharp, 53, previously of Fairfield, Ohio, with one count of production and two counts of possession of child pornography in an indictment returned in Cincinnati.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Steve Francis, Acting Special Agent in Charge, U.S. Homeland Security Investigations, announced the indictment returned yesterday.
The indictment alleges that Sharp distributed child pornography in June 2015 and possessed pornography of children under the age of 12 in October 2015. Sharp allegedly sent the explicit material through Internet links in a conversation with undercover investigators and is also alleged to have downloaded child pornography on a work laptop with a thumb drive.
Distribution of child pornography is punishable by a range of five to 20 years in prison. Possession of child pornography carries a maximum potential sentence of 10 years for each count.
U.S. Attorney Glassman commended the investigation of this case by the Australian Federal Police and HSI, and Assistant United States Attorney Timothy D. Oakley, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
If you believe you have information related to Sharp’s alleged conduct, please contact Homeland Security Investigations at 866-347-2423.
U.S. Attorney’s Office Collects $13 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016.Read the Press Release
CINCINNATI - U.S. Attorney Benjamin C. Glassman announced today that the Southern District of Ohio collected more than $13 million in criminal and civil actions in Fiscal Year 2016. Of this amount, $10.7 million was collected in criminal actions and $2.4 million was collected in civil actions.
Additionally, the Southern District of Ohio worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $73.5 million in cases pursued jointly with these offices. Of this amount, $62 million was collected in criminal actions and $11.5 million was collected in civil actions.
Attorney General Loretta E. Lynch announced yesterday that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
In the Southern District of Ohio, the largest single recovery in a criminal case this year involved restitution of more than $3.8 million from U.S. v. Joseph Molnar.
Molnar was a Managing Director for a Huntington National Bank subsidiary, Huntington Community Development Corporation. He embezzled approximately $4 million of the bank’s funds by falsely representing that he was paying “placement fees” or “advisory fees” for property management companies as part of several affordable housing property deals that had closed with Huntington National Bank. Instead, Molnar withdrew the funds under false pretenses and placed that money into his own accounts for his own personal use.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Man Alleged to be ‘Buckeye Bandit’ Charged with 7 more Armed RobberiesRead the Press Release
COLUMBUS – A federal grand jury indicted Ikechi W. Emeaghara, 27, of Columbus, today in a superseding indictment charging him with seven additional armed bank robberies. He was indicted on one other count of armed bank robbery on November 10.
Emeaghara is alleged to be the armed robber dubbed as the “Buckeye Bandit” by law enforcement. Investigation continues on at least 20 other robberies in central Ohio.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Brad Earman, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office; Columbus Police Chief Kim Jacobs; Franklin County Sheriff Zach Scott; Delaware County Sheriff Russell L. Martin; Ohio State University Police Chief Craig Stone; Worthington Police Chief Jerry L. Strait, Jr.; Upper Arlington Police Chief Tracy Hahn and Gahanna Police Chief Dennis Murphy announced the superseding indictment returned today.
According to public court documents, Emeaghara allegedly brandished a dangerous weapon and demanded cash from bank teller’s drawers on the following occasions:
- October 31, 2013 at the Wesbanco Bank on South Stygler Road in Gahanna
- November 30, 2013 at the Cooper State Bank on West 5th Avenue in Columbus
- December 6, 2013 at the Wesbanco Bank on South Stygler Road in Gahanna
- July 9, 2014 at the Smart Federal Credit Union on North High Street in Columbus*
- January 12, 2015 at the Cooper State Bank on Sawmill Road in Columbus*
- April 26, 2015 at the Cooper State Bank on Sawmill Road in Columbus*
- March 17, 2016 at the First Merit Bank on East Powell Road in Powell
- October 21, 2016 at the Key Bank on Frantz Road in Columbus (original indictment)
* Denotes armed robbery charges that also include forcing one or more persons to accompany him within the bank.
Armed bank robbery is a crime punishable by up to 25 years in prison. Armed robbery including forcing one or more persons to accompany the defendant without their consent is punishable by at least 10 years in prison.
U.S. Attorney Glassman commended the cooperative investigation by law enforcement and Deputy Criminal Chief Gary L. Spartis and Assistant U.S. Attorney Salvador A. Dominguez, who are prosecuting the case.
A federal indictment merely contains allegations and the defendant is presumed innocent unless proven guilty in a court of law.
Local Businessman Pleads Guilty to Wire Fraud, Money Laundering as Part of Investment Fraud SchemeRead the Press Release
COLUMBUS, Ohio – John Richard Blazer, 70, of Marion, Ohio, pleaded guilty in U.S. District Court to wire fraud and money laundering as part of an investment fraud scheme.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the plea entered into today before U.S. District Judge Michael H. Watson.
According to the Statement of Facts in this case, from approximately January 2011 until August 2013, Blazer owned and operated several businesses in central Ohio, including The Ohio Company and The Ohio Company Loan Fund. He was also a partner in The Ohio Heritage Fund.
Blazer recruited investors by promising them that their money would be invested in one of his businesses, or in a real estate fund to purchase and rehabilitate homes in central Ohio, or in a gold mining operation in Africa.
Rather than investing the victims’ funds, Blazer used the money to pay for personal expenses and to pay off previous investors.
In total, he received at least $1 million from approximately 21 victims.
Blazer pleaded guilty to one count each of wire fraud and money laundering. Each crime is punishable by up to 20 years in prison.
U.S. Attorney Glassman commended the investigation of this case by the FBI and Assistant United States Attorney Jessica H. Kim, who is representing the United States in this case.
U.S. Attorney Glassman Awards Outstanding Performance Recognitions to District EmployeesRead the Press Release
CINCINNATI – U.S. Attorney Benjamin C. Glassman recognized nine employees of the Southern District of Ohio in three categories for their distinguished public service in his first annual United States Attorney’s Awards in Outstanding Performance in three categories.
“These awards give us the opportunity to highlight some of the top-notch work that’s happening every day in our District,” Glassman said. “I commend all of the recipients for their work, which is truly exemplary of what this office does on a daily basis.”
The United States Attorney’s Award for Outstanding Performance in Legal Support is presented to a support staff individual who has executed exemplary support for the District’s attorneys. This year’s recipient, Laura Griffin, has been recognized for creating a model system for appellate sections in U.S. Attorney’s Offices across the country.
Griffin was also recognized for her legal support as this year’s recipient of the Attorney General’s Award for Excellence in Legal Support. She has implemented a system of formal moot courts for every oral argument conducted by Assistant U.S. Attorneys and is in the development of a training program for support staff on appellate rules and procedures. Griffin also assisted in the creation and development of an extensive intranet site for the Appellate Division that was praised by Evaluation and Review Staff evaluators as a model for U.S. Attorney’s Offices throughout the country.
“Laura’s hard work, enthusiasm, and innovation have served to guide the Appellate Division from its infancy into one of the most respected Appellate Divisions in the country, universally praised by members of our office, evaluators, and the Judges of the Sixth Circuit,” Glassman said.
This year’s recipient of the United States Attorney’s Office Award for Outstanding Performance as an Assistant United States Attorney leads the District’s counterterrorism efforts. Not only has Assistant U.S. Attorney Timothy Mangan successfully brought to conclusion two national security cases in recent months, but he did so simultaneously.
Mangan prosecuted Munir Abdulkader, who plotted to attack a military official and then a local police station in Southern Ohio, and Christopher Lee Cornell, who plotted to attack government officials at the State of the Union Address. Through Mangan’s diligent prosecutorial efforts, the two defendants were sentenced to 20 years and 30 years in federal prison, respectively. Mangan has also been nominated by the Department of Justice’s National Security Division for national recognition for his remarkable work.
“Tim is the type of prosecutor that works tirelessly for justice,” Glassman said. “There can be no higher priority for a U.S. Attorney’s Office than our national security, and the Southern District of Ohio is fortunate to have someone as diligent and skilled as Tim leading our efforts in some of the most difficult and important cases.”
The 2016 United States Attorney’s Award for Outstanding Performance as a Litigative Team recognizes those involved in an unprecedented series of investigations and prosecutions in this District. The successful prosecutions of the Short North Posse gang in Columbus represent the largest federal murder investigation and prosecutions in Ohio history.
Assistant United States Attorneys David DeVillers, Kevin Kelley and Brian Martinez; Paralegal Specialists Christin Werner and Emily Sroka; and Victim Witness Coordinators Barbara Vanarsdall and Acquanette Lindsay were recognized for their work on the case.
Twenty individuals were indicted in the racketeering case in October 2014, with charges that included murders, attempted murders, drug trafficking, weapons offenses, extortion and robbery. The prosecutions held the gang accountable for 14 previously unsolved homicides. Six of the defendants were convicted in two separate jury trials, 13 defendants pleaded guilty, and one died awaiting trial. All of the defendants face life in prison.
“Our team held accountable a group of men who had perpetuated a multi-generational tradition of terrorizing Columbus neighborhoods through violence and intimidation,” Glassman said. “This team’s successful prosecutions sent a clear message that the gang’s reign has ended and such behavior will not go unpunished. It is impossible to accomplish something of this magnitude without tremendous teamwork, and the recipients of this award achieved unprecedented victories for justice in the Southern District of Ohio by combining their extraordinary skill and dedication in unprecedented collaboration.”
Milford Realtor Sentenced to 97 Months for Fraudulant Investment SchemeRead the Press Release
CINCINNATI – Brenda Ashcraft, 46, of Milford, Ohio was sentenced to 97 months in prison and ordered to pay restitution to 34 victims of a fraudulent investment scheme she operated between 2009 and 2013. The victims lost more than $4.2 million according to government calculations.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI); Mark Porter, Special Agent in Charge, U.S. Secret Service and Jacqueline T. Williams, Director of the Ohio Department of Commerce, announced the sentence imposed today by Senior U.S. District Judge Sandra S. Beckwith.
According to court documents, Ashcraft operated a “Ponzi scheme” through her real estate company called French Manor Properties. Ashcraft would tell prospective investors that she had relationships with various banks which provided her with exclusive access to properties in foreclosure.
Ashcraft said she identified properties that she could purchase for a small amount from the bank, and also had a buyer for a much higher price, allowing for a quick and sizable profit. Ashcraft asked investors to contribute funds towards the initial purchase of the property, and the funds plus a large profit would be returned in approximately 2-3 months. These representations were false.
Bank records show that Ashcraft did not use investment funds to buy any properties. Ashcraft used the money to pay back earlier investors who were seeking the return of their money. Ashcraft also used the stolen funds to pay for personal expenses, including numerous trips to Cancun and Diamond Seat tickets to the Cincinnati Reds.
Ashcraft created a fake employee for her company to handle investor complaints and sent emails to investors and to herself under the fake name. Ashcraft also remotely “wiped” the contents of a cell phone FBI agents seized during the investigation in an attempt to hide the fraud.
“This case is an example of the harm that financial fraud causes,” U.S. Attorney Glassman said. “She preyed on friends, family, and the relationships she developed with other parents at her kids’ school. It's important to punish crimes like this with significant sentences, not only to achieve some measure of justice for the victims, but also to deter others who might be tempted to commit similar crimes.”
Ashcraft pleaded guilty in April 2015 to one count of wire fraud, one count of securities fraud one count of destruction of evidence, and one count of money laundering.
Glassman commended the cooperative investigation of this case by FBI and Secret Service agents, Ohio Department of Commerce, Division of Securities staff, and Assistant U.S. Attorney Timothy Mangan and Deputy Criminal Chief Emily Glatfelter, who prosecuted the case.
Trio Sentenced for Roles in Interstate Vehicle Theft RingRead the Press Release
DAYTON, Ohio – Three individuals were sentenced in U.S. District Court yesterday for their roles in an interstate vehicle theft ring.
Merle Jay Lunsford, 57, of Dayton was sentenced to 60 months in prison. Shane Lunsford, 34, of Dayton, was sentenced to 24 months in prison. Joshua Jenkins, 22, of Milan, Indiana, was sentenced to time served. All three defendants were ordered to pay nearly $55,000 in restitution jointly.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division and Montgomery County Sheriff Phil Plummer announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
According to court documents, from at least June until December 2015, the trio would steal vehicles in Southern Ohio or Northern Kentucky and sell them across the state border for profit. The defendants possessed stolen vehicles, additional license plates from stolen vehicles, lock-picking tools, a firearm, heroin, methamphetamine and fentanyl.
All three defendants pleaded guilty to conspiracy to transport stolen vehicles across state lines. Merle Jay Lunsford also pleaded guilty to one count of receipt, possession and sale of a stolen vehicle which had crossed a state boundary and one count of being a felon in possession of a firearm.
Lunsford possessed a firearm after having been convicted of five previous felonies ranging in date from 1983 until 2003 and including offenses such as aggravated robbery and aggravated drug trafficking.
U.S. Attorney Glassman commended the cooperative investigation by the FBI and Montgomery County Sheriff’s Office, as well as Assistant United States Attorney Dwight Keller, who is representing the United States in this case.
Previously Convicted Felon Pleads Guilty to Possession of FirearmRead the Press Release
DAYTON, Ohio – Donald May, 32, of Springfield, Ohio pleaded guilty in U.S. District Court to one count of unlawful possession of a firearm by a previously convicted felon.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Springfield Police Chief Stephen P. Moody announced the plea entered into before U.S. District Judge Thomas M. Rose.
According to the Statement of Facts filed with the plea agreement, which May agreed were true and accurate, he was found by Springfield police officers in the driver’s seat of a vehicle that had been reported stolen in August 2016. When ordered to exit the vehicle, May fled by foot to a nearby yard but was eventually caught and arrested. Officers discovered he had a firearm in the vehicle.
May had previously been convicted of several felonies, including aggravated burglary and burglary, both in Clark County.
As part of the plea agreement, the parties agreed to recommend a sentence of 72 months in prison to the district court for the judge’s approval.
U.S. Attorney Glassman commended the investigation of this case by the Springfield Police Department and ATF, and Assistant United States Attorney Alex R. Sistla who is representing the United States in this case.
Jury Convicts Final Defendant in Racketeering, Murder CaseRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted the final defendant in the current federal Short North Posse racketeering and murder case today.
Johnathan Holt, 24, of Columbus, was convicted on all counts and now faces up to life in prison.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien and Columbus Police Chief Kim Jacobs announced the verdict reached today.
Holt is the final of 20 individuals who were indicted in October 2014 in a racketeering case, with charges that include murders, attempted murders, drug trafficking, weapons offenses, extortion and robbery.
Of the 20 total defendants, five others were convicted, 13 pleaded guilty and one has died.
Holt’s specific charges include murder in aid of racketeering and murder through the use of a firearm during and in relation to a drug trafficking crime.
“Today’s verdict completes an unprecedented investigation and series of prosecutions, thanks to which central Ohio is a safer and more just place,” U.S. Attorney Glassman said. “This success only strengthens our resolve to reduce violence and bring to justice violent offenders.”
U.S. Attorney Glassman commended the two-year investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, Franklin County Prosecutor Ron O’Brien’s Office, Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are representing the United States in this and the related cases.
Financial Advisor Pleads Guilty in $1.1 Million Investment Fraud SchemeRead the Press Release
COLUMBUS, Ohio – Mark F. Speakman, 60, of Grove City, Ohio, pleaded guilty in U.S. District Court today to one count each of wire fraud, money laundering and filing a false federal income tax return with the Internal Revenue Service (IRS). As part of his offered guilty plea, he agreed to pay nearly $1.2 million in restitution to the victims of his investment fraud scheme.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, and Grove City Police Chief Jeff Pearson announced the guilty plea offered today before U.S. Magistrate Judge Norah McCann King.
According to court documents, between 2000 and 2015, Speakman was a financial advisor at Ameriprise Financial, and between 2002 and 2015 Speakman defrauded his clients by misappropriating their funds.
Speakman persuaded his clients to remove their funds from their Ameriprise Financial accounts and invest them in Centrax, a fraudulent real estate investment trust. Rather than investing the funds in real estate, he stole the money. He took $870,000 from seven victims for the real estate scheme and used the money to pay his own expenses.
As part of this same scheme to defraud, Speakman stole from others to avoid detection by a client he had previously defrauded. In 2014, one of his clients who had previously agreed to invest in Centrax told Speakman that he wanted to cash out his investment. Speakman had already misappropriated those funds and had no way to pay back his client.
Speakman convinced another client and three of their family members to invest in gold coins so he could divert the money in order to pay back the previous victim.
In total, Speakman received $1,192,450 from others in furtherance of his fraudulent scheme.
In addition, Speakman filed a false federal income tax return with the IRS for the 2014 income tax year on which he omitted $275,000 in income generated by his fraudulent conduct. The total tax loss to the IRS for 2002 through 2014 was approximately $300,000.
"This investigation uncovered a complicated investment fraud scheme laced with a web of financial lies that generated more than a million dollars through false promises and deceit,” said Kathy A. Enstrom, Special Agent in Charge, Criminal Investigation, Cincinnati Field Office. “Investment fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible."
Wire fraud is a crime punishable by up to 20 years of imprisonment; money laundering is a crime punishable by up to 10 years in prison and filing a false income tax return is a crime punishable by up to three years of prison time.
U.S. Attorney Glassman commended the investigation of this case by the IRS and the Grove City Police Department, and Assistant U.S. Attorney Peter K. Glenn-Applegate, who is prosecuting the case.
Father, Mother and Sons Plead Guilty in Case Involving Food Stamp Fraud and Door-to-Door Meat, Drugs DeliveryRead the Press Release
DAYTON, Ohio – A father, mother and two sons pleaded guilty today in U.S. District Court for their roles in a food stamp fraud case related to retail meat home delivery services and that involved the exchange of Oxycodone, heroin and marijuana for food stamps in the Dayton area.
Scott Andrew Traum, 46; Joey Lightcap Traum, 44; Brandon Scott Traum, 22; and Dalton Andrew Traum, 21; all of Fairfield, Ohio, pleaded guilty today. The parents, Scott and Joey Traum, as well as son Dalton Traum each pleaded guilty to one count of engaging in a conspiracy to commit an offense against the United States to include: illegally acquiring, possessing and using U.S. Department of Agriculture (USDA) Supplemental Nutrition Assistance Program (SNAP) benefits. Brandon Traum pleaded guilty to unauthorized use of SNAP benefits.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and other members of the District’s electronic and financial crimes task force, announced the pleas entered into today before U.S. District Judge Thomas M. Rose.
The Southern District of Ohio Task Force is made up of approximately 60 federal, state, and local law enforcement agencies in Ohio. This task force, along with an additional 80 electronic and financial networks across the United States, has been established to prevent, detect and investigate various forms of criminal activity that have large community impact.
According to court documents, since 2011, individuals associated with U.S. Beef Cincinnati LLC in Fairfield, Ohio actively engaged in illegal/fraudulent SNAP EBT (Food Stamp) transactions in exchange for cash. The owners, managers and other employees of the door-to-door meat retailers repeatedly, continually and illegally acquired and redeemed SNAP benefits in exchange for ineligible items including money, Oxycodone, heroin and marijuana.
Scott and Joey Traum owned and operated U.S. Beef Cincinnati LLC. USDA records show that between December 2011 and May 2015, approximately 8,145 suspected fraudulent SNAP EBT transactions were completed via voucher for their employees for a total amount of approximately $1.1 million.
The other three defendants in this case have already been sentenced. They include:
- Keith Blankenship, 37, of Loveland, Ohio, who was sentenced to 30 months in prison and ordered to pay nearly $764,000 in restitution;
- Gregory M. Brown, 37, of Cincinnati, who was sentenced to 15 months in prison and ordered to pay more than $9,000 in restitution; and
- William N. King, 24, of Fairfield, Ohio, who was sentenced to 6 months in prison and ordered to pay nearly $373,000 in restitution.
U.S. Attorney Glassman commended the investigation of this case by the Southern District of Ohio Task Force and Assistant United States Attorney Dwight K. Keller, who is representing the United States in this case.