Southern District of Ohio
Press releases recorded for this federal judicial district.
Columbus Woman Sentenced for Embezzling HUD Program Funds, Filing False Income Tax ReturnsRead the Press Release
CONTACT: Fred Alverson
Public Affairs OfficerCOLUMBUS – Wendy Harper, 44, of Columbus, Ohio was sentenced in U.S. District Court to 24 months in prison, three years of supervised release, and ordered to pay restitution in the amounts of $588,121.46 to the U.S. Department of Housing and Urban Development (HUD) for embezzling HUD program funds from her employer, and $126,345.36 to the Internal Revenue Service (IRS) for filing a false federal income tax return.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Brad Geary, Special Agent in Charge, U.S. Department of Housing and Urban Development Office of Inspector General, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation announced the sentence handed down today by U.S. District Judge Gregory L. Frost.
According to court documents, Harper was responsible for managing payroll and payment functions for her employer, Harvest Management Group, Inc., which managed more than 900 units for elderly and disabled people who qualify for HUD assistance. Harper manipulated the payroll system to give herself unauthorized salary increases and unauthorized mileage reimbursements between 2009 and 2012. According to calculations made by criminal investigators in this case, Harper would have had to have driven more than 1,200,000 miles in order for the mileage reimbursements to have been legitimate.
Harper pleaded guilty to the aforementioned charges on February 6, 2014. In her plea agreement, Harper acknowledged that the U.S. showed the amount of money she embezzled was $588,121.46 and that she concealed her crime by filing false federal income tax returns for 2009, 2010 and 2011, on which she failed to report the HUD program funds she stole. Harper’s theft of these program funds contributed to Harvest Management Group, Inc. having difficulties maintaining the properties to minimum HUD standards and paying its property taxes.
U.S. Attorney Stewart commended the investigation by HUD and the IRS, the Reynoldsburg Police who referred the case for federal investigation, and Assistant U.S. Attorney Dale E. Williams Jr., who represented the United States in this case.
Real Estate Business Owner Sentenced to Prison in Mortgage Fraud SchemeRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
Antonio Weathers, 42, of Cincinnati, Ohio was sentenced in Cincinnati today to 17 months in prison for his role in a mortgage fraud scheme involving several mortgage lenders that were defrauded as a result of falsified loan documents submitted for purchases of multiple Cincinnati-area properties.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service, announced the sentence handed down by Chief United States District Judge Susan J. Dlott.
Weathers pleaded guilty on April 8, 2013 to one count of mail fraud and one count of money laundering. According to court documents, Weathers formed a real estate business in which he arranged for the purchase and resale of mostly low income properties. Weathers committed mail fraud by securing mortgage closing funds for the purchase of a property located in Cincinnati, Ohio which resulted in a U.S. Postal Service Express Mail package to be sent from Strongtower Title Agency to the lender, Preferred Capital. Weathers then transferred $42,532.43 in mail fraud proceeds from one bank account to another bank account in the name of Antonio Weathers, d/b/a, KI Enterprises.
Weathers was also sentenced to serve three years of supervised release after his prison term and was ordered to pay $242,340 in restitution to the victim lenders.
On June 25, 2013 Sylvia Odia Thomas, 41, formerly of West Chester, Ohio was sentenced by Senior U.S. District Judge Herman J. Weber to 30 months in prison for her role in this mortgage fraud scheme. She pleaded guilty on November 6, 2012 to one count of mail fraud and one count of filing false income tax returns. Both crimes were committed in connection with her business as a mortgage broker. “She habitually falsified documentation for loan applications for her clients and failed to report her correct income to the IRS,” Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing.
Thomas willfully filed false federal income tax returns with the IRS for the 2006 through 2009 income tax years. These federal income tax returns did not include substantial amounts of additional income that was paid to Thomas in the form of broker closing and processing fees that were obtained from brokering and closing client loans. In total, Thomas underreported her gross receipts by $312,882 for the 2006 through 2009 income tax years, resulting in a tax loss of $95,422.14. The Court determined the amount of loss attributable to Thomas from mortgage fraud was $313,021.
Thomas operated a home renovation company and later started her own mortgage brokerage business. Eventually, she began writing false income and employment information on loan applications in order to get her clients approved. She also fabricated false supporting documents that were sent to the lenders and created false down payments for her clients by making cashier’s checks to look like earnest money from the clients.
Thomas was ordered to serve three years of supervised release after her prison term and must pay $313,021 in restitution to lenders, plus $95,422.14 to the IRS.
“By now, there have been enough mortgage fraud related convictions around the country that those who are thinking about doing it ought to know that they are going to get caught,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Stewart commended the cooperative investigation conducted by IRS Special Agents and Postal Inspectors, and Assistant United States Attorney Mangan who prosecuted this case.
Milford Realtor Charged with Running $15 Million Investment Fraud SchemeRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
A federal grand jury has charged Brenda Ashcraft, 43, of Milford, Ohio, with defrauding investors of at least $15 million between 2009 and 2013 in a scheme to purchase and sell real estate through real estate investment trusts known as REITs.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI); Mark Porter, Special Agent in Charge, U.S. Secret Service; and Andre T. Porter, Director of Ohio Department of Commerce, announced the indictment that was returned on August 21, 2013.
The indictment alleges that Aschraft owned and operated French Manor Properties, which she told investors was acting as the REIT Trustee that would “secure residential and commercial real estate at wholesale pricing.” Investors believed that their investments were secured by real estate and Ashcraft promised them 40% annual returns on their investments.
Instead, the indictment alleges, Ashcraft diverted investor funds to her own personal use and benefit, including a $50,000 investor payment that she used to pay for Cincinnati Reds season tickets. Ashcraft would at times send investors checks for returns on their investments but the checks often bounced.
The indictment charges Ashcraft with one count of wire fraud and one count of securities fraud, each punishable by up to 20 years in prison. She is also charged with one count of engaging in a monetary transaction in criminally derived property and aiding and abetting, punishable by up to 10 years in prison. She faces a maximum fine of $5 million on the securities fraud charge. The wire fraud and monetary transaction charges each carry maximum fines of $250,000, or two times the loss, with restitution possible on both counts.
Ashcraft is scheduled to appear Friday, August 23, 2013 at 1:30 p.m. before United States District Court Magistrate Judge Karen L. Litkovitz to answer the charges.Stewart 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. Attorneys Timothy Mangan and Emily Glatfelter, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Blanchester Man Convicted of Selling Firearms to FelonRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
Christopher Bradley, 38, of Blanchester, Ohio was convicted by a federal court jury in Cincinnati of two counts of selling firearms to a felon.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Christopher J. Hyman, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Columbus Field Division (ATF), announced the guilty verdict returned by a jury following a five-day trial before U.S. District Court Judge Michael R. Barrett.
Bradley, and his brother Shannon Bradley, 36, of Leesburg, were indicted on April 4, 2012 on multiple counts of selling firearms to felons. Shannon Bradley previously pleaded guilty to one count of selling firearms to a felon, after obtaining guns from his brother, Chris Bradley, and then selling them to an informant.
According to trial testimony, in February 2012 Chris Bradley met with the same informant, who repeatedly mentioned that he planned to resell the firearms in Cincinnati to “people that might need to use them and ditch them” and to people that were “protecting their dope houses and not getting killed.” Bradley helped the informant carry six firearms and ammunition to the informant’s car, as he told the informant to keep the guns and ammunition separated in case he were pulled over. The informant commented that officials would never find the guns and ammunition because he was a felon, while Bradley helped the informant load his car. Bradley sold seven more guns and ammunition to the same informant two days later.
During a recorded phone call with Bradley on March 5, 2012, the informant again advised Bradley that he had one felony on his record. Bradley then sold a total of nine more guns and ammunition to the informant on March 9 and March 21, 2012. Testimony further revealed that Bradley sold guns at gun shows many times and would routinely asked people if they were felons.
Bradley faces a maximum sentence of 10 years in prison, 3 years of supervised release, and a fine of up to $250,000 on each count. He will be sentenced at a later date. His brother, Shannon, also awaits sentencing.
Stewart commended the investigation by ATF agents, along with Special Assistant United States Attorney Gregory Stephens and Cincinnati Branch Chief Anthony Springer, who are prosecuting the case.
Fourteen-year Sentence for Darke County Man Convicted of Receipt and Possession of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
Richard Trepanier, 40, of Gettysburg, Ohio was sentenced to 168 months in prison for receiving and possessing child pornography in a case that began with an undercover investigation by Australian law enforcement.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
Following a six-day trial, a jury convicted Trepanier on April 16, 2013 of one count of receipt of child pornography and one count of possession of child pornography.
Trepanier, using the name “Wingman66”, contacted an Australian Federal Police undercover officer patrolling the internet in February 2008 and offered him images of child pornography. The Australian authorities tracked the user name to Trepanier and sent the information to the FBI’s office in Cincinnati.
FBI agents interviewed Trepanier who consented to a search of his computer by the Miami Valley Regional Computer Forensics Laboratory. Their analysis identified approximately 56 images of child pornography and evidence that Trepanier was trading child pornography.
“This case demonstrates the international cooperation that is necessary to protect children from exploitation,” U.S. Attorney Stewart said.
“These series [of images] were created not only within the United States (Washington, North Carolina, Florida, and Georgia), but they were also created abroad (France, England, Denmark, Germany, Paraguay, and Belgium),” Dayton Branch Chief Laura Clemmens and Assistant U.S. Attorney Christy Muncy wrote in a memorandum filed with the court prior to sentencing. “This simple fact highlights the heartbreaking reality of the child pornography industry: it knows no borders.”
Trepanier was also sentenced to serve ten years under court supervision after completing his prison sentence. While under court supervision, he must register as a sex offender anywhere he lives, works or goes to school.
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 Stewart commended the cooperative investigation by the agencies involved, as well as Clemmens and Muncy, who prosecuted the case.
Whitehall Woman Receives Four-year Sentence for Using Stolen Identities to Commit Benefits FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Audrey Costar, 46, of Whitehall, Ohio was sentenced in U.S. District Court to 48 months in prison for using 50 stolen identities to file for unemployment benefits in eight states over three years. She was also ordered to repay $78,674 she received illegally.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations, Mark Porter, Special Agent in Charge, U.S. Secret Service and Elias Papoulias, Resident Agent in Charge, Social Security Administration Office of Inspector General announced the sentence handed down today by Senior U.S. District Judge James L. Graham.
According to court documents, Costar used 50 stolen identities, including some she stole over the internet, to electronically file false unemployment insurance claims in Alaska, Arizona, Colorado, Minnesota, Montana, Ohio, Pennsylvania and Utah between February 2009 and December 2012.
Costar also used some of the identities to open bank accounts or cash value cards over the internet to which the unlawful unemployment benefits would be deposited. After the payments were made, Costar would withdraw the payments using an automated teller machine and used the money for her own benefit. Costar was able to defraud the UI system while residing in both Ohio and New York. She collected approximately $78,674 using the scheme.
Costar was also collecting Social Security benefits in her own name at the time. Earnings made through the identity theft scheme were not reported to the Social Security Administration.
Costar pleaded guilty on April 5, 2013 to two counts of theft of government funds and two counts of aggravated identity theft.
U.S. Attorney Stewart commended the investigation by U.S. Department of Labor Office of Inspector General, Secret Service agents and Social Security Administration inspectors general, and Financial Crimes Chief Brenda S. Shoemaker, who is representing the United States in this case.
###Fairborn Man Pleads Guilty to Interstate Transportion for Purpose of Illegal Sexual ActivityRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Thuron L. Hammersley, 44, of Fairborn, Ohio pleaded guilty in U.S. District Court today to one count of transporting an individual from Ohio to Kentucky for purposes of engaging in prostitution. He also admitted enticing a woman to travel from Kentucky to Ohio also to engage in prostitution and obstructing the investigation into his activities.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI), Dayton Police Chief Richard Biehl and Miamisburg Police Chief John Sedlak announced the plea entered today before U.S. District Judge Timothy S. Black.
According to court documents, Hammersley met the women on the website www.plentyoffish.com and placed ads for them on the internet site www.backpage.com offering the women as “escorts.” He directed the men who responded to the ads to motels in Kentucky and Ohio, where they engaged in sexual activity for money. He also enticed another woman to travel from Kentucky to the Dayton area to engage in prostitution. Hammersley enticed her by offering her employment, by paying for her bus ticket, and by paying for condoms. Hammersley collected the money paid by the men.
The plea agreement includes a recommended sentence of 78 months in prison followed by five years of supervised release. Under the terms of the plea agreement, the Court will review a pre-sentence investigation report before determining whether or not to accept the recommended sentence.
The case was investigated by the FBI and the Dayton and Miamisburg police departments. Assistant U.S. Attorneys Vipal Patel and Alex R. Sistla and Department of Justice Trial Attorney Betsy Biffl prosecuted the case.
Demolition Company Owner Pleads Guilty to Violating Clean Air ActRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Lamont P. Pryor, 47, of Lima, Ohio pleaded guilty in U.S. District Court to violating the Clean Air Act in connection with his company’s handling of asbestos during the demolition of the former Piqua Medical Center in 2008.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Randall K. Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA), Ohio Attorney General Mike DeWine and Scott J. Nally, Director of the Ohio Environmental Protection Agency (Ohio EPA) announced the pleas entered today before U.S. District Judge Timothy S. Black.
“The dangers of improperly handled asbestos are well-known and well documented,” U.S. Attorney Stewart said. “Knowingly failing to handle the material properly is a crime and must be punished.”
According to court documents, Pryor and his company, Avalon Commonwealth Inc., removed scrap metal from the hospital as part of the demolition process. The scrap metal was removed and sold, but the rest of the demolition debris, including friable asbestos, was piled in areas around the hospital, exposed to the wind and elements. Pryor knew that he was not supposed to leave the friable asbestos outside the hospital, exposed to the elements, but instead was supposed to properly deposit the asbestos that was generated as result of his renovation and demolition activities at the hospital at a licensed asbestos waste disposal facility. Pryor knowingly failed to do so.
A representative of the Regional Air Pollution Control Agency (RAPCA), the local air pollution control agency serving Miami County and the city of Piqua, inspected the site in December 2008, saw the damaged asbestos outside the hospital, and asked that demolition be halted while the investigation took place.
“This defendant put his workers and the residents of a Piqua neighborhood at risk of asbestos exposure just to cut corners,” Attorney General DeWine said. “We cannot tolerate a knowing choice to violate the law and risk the health of Ohio families, and our Environmental Enforcement Unit will continue to investigate criminal environmental activity within the state.”
“There is no safe level of exposure to asbestos,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “Despite knowing that the Piqua Hospital contained friable asbestos, the defendant failed to notify authorities before demolition as required by law nor did he employ qualified workers to remove it legally and safely. As a result, asbestos was broken up and piled in areas around the hospital, threatening the environment and jeopardizing the safety of the general public. Today’s plea clearly shows that anyone who tries to make money by breaking the law will ultimately pay the price.”Pryor pleaded guilty to three counts of violating the asbestos removal provisions of the Clean Air Act. The plea agreement includes an agreed-to sentence of 13 months in prison. The court will review the terms of the agreement before determining whether or not to accept all the terms, including the sentence.
The case was investigated by the U.S. EPA's Criminal Investigation Division, Bureau of Criminal Investigation’s Environmental Enforcement Unit in Ohio Attorney General DeWine’s Office, the Ohio EPA Office of Special Investigations and RAPCA. It was prosecuted by Assistant U.S. Attorney Alex Sistla and Special Assistant U.S. Attorney Brad Beeson with the U.S. EPA.
# # #25-year Sentence for Miami County Man Who Producted Sexually Explicit Videos of Children He BabysatRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Kevin Dwayne Todd, 42, of Ludlow Falls, Ohio was sentenced in U.S. District Court to 300 months in prison for producing sexually explicit videos of pre-pubescent children he babysat and offering online to trade the videos. Todd will be under court supervision for the rest of his life.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), William Hayes, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan, Franklin County Sheriff Zach Scott, Miami County Sheriff Charles A. Cox, and Darke County Sheriff Toby L. Spencer announced the sentence handed down today by U.S. District Judge Timothy S. Black.
“Sexual exploitation of children by someone who has the responsibility of caring for them is a devastating crime,” U.S. Attorney Stewart said. “As a sex offender, he must now register with law enforcement anywhere he lives, works or goes to school once he gets out of prison.”
According to court documents, an undercover investigator with the Franklin County Internet Crimes Against Children Task Force (ICAC) responded to an ad Todd posted on the internet in November 2012 seeking people looking for “taboo.” Through a series of emails, Todd asked the undercover investigator to meet and trade videos and pictures of child pornography. They arranged a meeting and officers arrested Todd on November 24, 2012 when he showed up for the meeting. Investigators found DVDs and other storage media containing pornographic videos and photos in Todd’s car.
Forensic examination found that Todd had produced the videos of the females between August 2010 and November 2012 in the bathroom of his residence.
Todd has been held without bond since his arrest. He pleaded guilty on March 7, 2013 to one count of sexual exploitation of children.
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 Stewart commended the cooperative investigation by the agencies involved, as well as Assistant U.S. Attorney Sheila Lafferty, who is representing the United States in this case.
Grand Jury Returns 10-count Indictment Against Spine Surgeon Alleging Health Care FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
A federal grand jury returned a ten-count indictment against Abubakar Atiq Durrani, 44, Mason, Ohio alleging that, beginning in 2009, he convinced patients to undergo medically unnecessary spinal surgeries then billed private and public healthcare benefit programs millions of dollars for the fraudulent services.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Field Office (FBI), Robert Corso, Special Agent in Charge, Drug Enforcement Administration (DEA) and Bret Flinn, Resident Agent in Charge, Defense Criminal Investigation Service (DCIS) announced the indictment returned today.
Durrani owns a private practice called the Center for Advanced Spine Technologies (CAST) with offices in Evendale and Florence, Kentucky.
The indictment alleges that, in some instances, the scheme to defraud resulted in serious bodily injury. As part of this scheme to defraud, Durrani performed unnecessary procedures and made false statements in relation to lumbar, thoracic, and cervical surgeries.
The indictment alleges that Durrani would tell the patient the medical situation was urgent and that back surgery was needed right away. He would also falsely tell the patient that he/she was at risk of grave injuries without the surgery. For cervical spine patients, Durrani would often tell a patient that there was a risk of paralysis or the head would fall off if the patient was in a car accident because there was almost nothing attaching the head to the patient’s body.
The indictment also alleges that Durrani made false statements to patients, colleagues and hospitals in order to further his scheme.
The indictment charges Durrani with five counts of health care fraud and five counts of making false statements in health care matters. Health care fraud is punishable by up to 20 years in prison. The crime of making false statements in health care matters is punishable by up to five years in prison. The indictment also seeks forfeiture of any proceeds Durrani received as a result of the scheme.
Stewart commended the cooperative investigation by agents and officers of the agencies named above, along with the Ohio Medical Board and Kentucky Medical Board, and Assistant U.S. Attorneys Timothy Mangan and Emily Glatfelter, who are representing the United States in the case.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov. Ohioans can report suspected instances of health care fraud to Attorney General DeWine’s office by calling 1-800-282-0515.
An indictment contains allegations and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Union County Man Sentenced to Four Years in Prison for Possession of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
Todd R. German, 51, of Richwood, Ohio was sentenced in U.S. District Court to 48 months in prison for possessing more than 10,000 images and 200 videos of child pornography. German was a fire service instructor at the Delaware Career Center.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI) and Delaware County Sheriff Russell L. Martin announced the sentence imposed today by Senior U.S. District Judge Peter C. Economus.
According to court documents, German left his job at the Delaware Career Center in March 2012. The day after he left, another employee found a thumb drive in German’s desk, placed it in a computer and found hundreds of images of child pornography. The employee contacted school officials who called the Delaware County Sheriff’s Office.
In April 2012, investigators executed a search warrant at German’s residence and found an external drive connected to his computer. A forensic examination of the external drive yielded more than 10,000 images and 222 videos of suspected child pornography. The investigation determined that the victims were from at least 17 different states and 7 different countries. German pleaded guilty in March, 2013 to one count of possession of child pornography.
“He basically had the American dream in every aspect of his life -- a long marriage, children, grandchildren, health, a meaningful career, respect of community, home ownership, and material possessions,” Assistant U.S. Attorney Deborah A. Solove wrote in a memorandum filed with the court prior to sentencing. “Although he has lost much of that through his actions that led to this case, he appears to be working on the child pornography issues and says he is grateful to have the opportunity to try address these issues that have troubled him throughout his life.”
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 Stewart commended the investigation by FBI agents and Sheriff’s detectives, as well as Assistant U.S. Attorney Deborah Solove, who prosecuted the case.
Columbus Man Convicted of Gun and Drug CrimesRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
A U.S. District Court jury in Columbus, Ohio convicted Jack A. Morris, 37, of Columbus of gun and drug trafficking crimes. Morris faces a mandatory minimum sentence of 30 years.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robin Shoemaker, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Columbus Field Division (ATF), and Gahanna Police Chief Dennis Murphy announced the verdict returned today following a trial that began July 29 before U.S. District Judge Gregory L. Frost.Trial testimony showed that Morris and others supplied street level distributors of marijuana, cocaine and oxycodone with firearms and body armor as a way of protecting themselves from potential robberies. Morris also placed firearms in strategic locations throughout his house in order to intimidate potential robbers and protect the narcotics and proceeds kept at the house.
The jury convicted Morris of one count of conspiracy to distribute oxycodone, two gun counts, and nine counts of illegally trafficking marijuana and oxycodone.
Two others indicted with Morris in April 2013, Jeremy S. Baker, 25, of Blacklick, and Judy L. Kindle, 45, of Columbus, pleaded guilty to charges of conspiracy and possession with intent to distribute oxycodone. Christopher Wilcox, 30, of Reynoldsburg, pleaded guilty to supplying firearms including an AK-47 and an AR-15, knowing that the weapons were to be used in the drug trafficking.
Judge Frost will schedule a date for sentencing. Morris has been in custody since his arrest in May 2013.
U.S. Attorney Stewart commended the investigation conducted by ATF and the Gahanna Police officers, and Assistant U.S. Attorney David DeVillers and Special Assistant U.S. Attorney Steve Dunbar with Columbus City Attorney Rick Pfeiffer’s Office, who are representing the United States in the case.
Arizona Man Pleads Guilty to Moving Money and Marijuana Between Ohio, Arizona and MexicoRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Mohamed Keisar, 36, of Phoenix, Arizona, pleaded guilty in U.S. District Court to one count of conspiracy to possess with the intent to distribute and to distribute 100 kilograms or more of marijuana and to one count of unlawfully operating an unlicensed money transmitting business. Keisar faces a minimum mandatory sentence of five years in prison and up to 40 years in prison and a fine of up to $5 million.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS), Robin Shoemaker, Special Agent in Charge, Bureau of Alcohol, Tobacco and Firearms, William Hayes, Acting Special Agent in Charge, Homeland Security Investigations, Columbus Division of Police Chief Kim Jacobs announced the guilty plea entered before U.S. District Judge Edmund A. Sargus, Jr.
According to court documents, a joint investigation determined that between January 2009 and December 2012, Keisar was involved in the transportation, sale, and distribution of marijuana in the Southern District of Ohio. Specifically, the investigation found that Keisar, a truck driver, transported marijuana from California and Arizona, to Columbus, Ohio via semi-tractor trailer. The marijuana, which would be co-mingled with legitimate loads, would then be off-loaded to Keisar’s co-conspirators.
Keisar knowingly operated an unlicensed money transmitting business by physically transporting the money that was derived from the sale of marijuana in Columbus, Ohio back to California and Arizona.
On November 27, 2012 investigators, while conducting surveillance, observed a subject provide Keisar with $939,220 in U.S. Currency that had been derived from the sale of marijuana in Columbus, Ohio. Keisar was to transport the U.S. currency in his semi-tractor trailer from Columbus, Ohio to San Diego, CA and to deliver the funds to the source of supply. IRS agents determined that Keisar has never registered and/or been licensed to operate a money transmitting business by the Department of Treasury.
As part of the plea agreement, Keisar agreed to forfeit $1,070,513.83 in U.S. currency either seized from Keisar’s vehicle or from a co-conspirator on several dates between February 2012 and November 2012
Stewart commended the cooperative investigation conducted by the agents and officers of IRS, ATF, HSI, and the Columbus Division of Police. Stewart also commended Assistant U.S. Attorney David DeVillers who is representing the United States.
# # #Spine Surgeon Arrested on Charges He Performed Unnecessary Surgeries and Billed Health Insurance ProgramsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Federal and state health care fraud investigators arrested Abubakar Atiq Durrani, 44, Mason, Ohio today based on a federal complaint alleging that he convinced patients to undergo medically unnecessary spinal surgeries then billed private and public healthcare benefit programs millions of dollars for the fraudulent services.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Field Office (FBI), Robert Corso, Special Agent in Charge, Drug Enforcement Administration (DEA) and Bret Flinn, Resident Agent in Charge, Defense Criminal Investigation Service (DCIS) announced the arrest.
Durrani owns a private practice called the Center for Advanced Spine Technologies (CAST) with offices in Evendale and Florence, Kentucky.
The complaint charges Durrani with one count of health care fraud and one count of making false statements in health care matters. Health care fraud is punishable by up to 20 years in prison. The crime of making false statements in health care matters is punishable by up to five years in prison.
Durrani will appear before U.S. Magistrate Judge Stephanie Bowman in Cincinnati at 1:30 today.
Stewart commended the cooperative investigation by agents and officers of the agencies named above, along with the Ohio Medical Board and Kentucky Medical Board, and Assistant U.S. Attorneys Timothy Mangan and Emily Glatfelter, who are representing the United States in the case.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov. Ohioans can report suspected instances of health care fraud to Attorney General DeWine’s office by calling 1-800-282-0515.
A criminal complaint is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Pediatric Oncologist Charged with Receiving Child PornRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO -- Christopher E. Pelloski, MD, 39, of Upper Arlington, Ohio, turned himself in to law enforcement authorities today after a federal complaint was filed charging him with downloading child pornography.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Franklin County Sheriff Zach Scott and Upper Arlington Police Chief Brian Quinn announced the federal charges today.
Pelloski was a radiation oncologist at the James Cancer Hospital of the Ohio State University Comprehensive Cancer Center in Columbus, where he also held the title as the Director of the Pediatric Radiation Oncology Program.
The Franklin County Internet Crimes Against Children Task Force (ICAC) executed a search warrant at Pelloski's residence on July 16, 2013 and found evidence indicating that Pelloski had downloaded sexually explicit videos of children. Investigators will conduct additional forensic analysis on Pelloski's computers.
"A criminal complaint is only a charge and is not evidence of guilt," U.S. Attorney Stewart said. "The defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt."
The complaint charges Pelloski with one count of receipt of child pornography which is punishable by a sentence ranging from five to 20 years in prison. Pelloski will appear before U.S. Magistrate Judge Norah McCann King at 3:30p.m. today at the Kinneary Federal Courthouse, 85 Marconi Boulevard.
"Our ICAC investigators are highly trained and have technology at their disposal to fully go after these destroyers of innocence," said Sheriff Zach Scott. "This suspect's actions are reprehensible and make no mistake that going after predators like these is a priority. Congratulations to the ICAC unit and to all involved in finding justice for the victims."
Chief Brian Quinn of the Upper Arlington Police Department said, "This type of criminal activity can impact any community, it's especially difficult when it involves someone we all have confidence and trust in. This investigation reinforces the importance of pooling our resources to better address the problem of computer facilitated crimes against children as well as highlight the importance of internet safety education for parents and children."
The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer facilitated crimes against children. Since the task force began in 2009, over 400 arrests have been made and dozens of child victims of sex abuse and exploitation have been identified and rescued.
The following agencies are members:
Franklin County Sheriff’s Office
Upper Arlington Police Department
Grove City Police Department
Columbus Police Department
Grandview Heights Police Department
Whitehall Police Department
Hilliard Police Department
Westerville Police Department
Homeland Security Investigations
U.S. Secret Service
Ohio ICAC
U.S. Attorney's Office, Southern District of Ohio
Franklin County Prosecutor's OfficeThis case is being brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's Offices and the Criminal Division's Child Exploitation and Obsencity Section (DEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims.
Marysville Man Receives 25-year Sentence for Coercing A Minor to Engage in Unlawful Sexual ActivityRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Justin Stewart Mote, 33, of Marysville was sentenced in U.S. District Court to 300 months in prison for coercing or enticing a minor to engage in illegal sexual activity. Mote will also be under court supervision for the rest of his life.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Franklin County Sheriff Zach Scott and members of the Franklin County Internet Crimes Against Children Task Force (ICAC) and William Hayes, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan, announced the sentence imposed today by U.S. District Judge Edmund A. Sargus, Jr.
Mote pleaded guilty on February 21, 2013 to one count of using the internet to coerce or entice a minor to engage in unlawful sexual activity. According to testimony presented during the plea hearing, Mote met a 12-year old online and went to Connecticut and Pennsylvania to visit the minor in 2012. Franklin County ICAC investigators received information from a Newtown, Connecticut police officer on October 16, 2012 after the child’s father found letters, text messages and gifts from Mote. Investigators executed a search warrant at Mote’s residence on October 19 and found fully nude photographs of the victim on various media devices including a tablet computer belonging to Mote.
“Sexual predators present a grave danger to the community,” U.S. Attorney Stewart said. “Few crimes damage our society more than crimes of child exploitation.”
Mote, who was under indictment on state charges of attempted unlawful sexual contact with a minor and importuning in connection with a separate incident, that occurred in August 2011, was arrested. He has been in custody since his arrest.
“A substantial prison sentence like the one handed down today should serve as a stark reminder of what awaits those who sexually exploit children,” said William Hayes, acting special agent in charge of HSI Detroit, which covers Michigan and Ohio. HSI will continue to aggressively target those who prey upon and sexually exploit our children.”
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/.
Judge Sargus also ordered Mote to undergo a sexual offender treatment program offered by the U.S. Bureau of Prisons. Mote will also be required to register as a sex offender for the rest of his life anywhere that he lives, works or goes to school.
U.S. Attorney Stewart commended the investigation by HSI agents and ICAC task force officers, as well as Assistant U.S. Attorney Heather Hill, who is prosecuting the case.
Logan County Man Sentenced to 25 Years in Prison for Secretly Video Recording Young Children in His House and Swapping Images for Child PornRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Mickell E. Close, 32, of Quincy, Ohio was sentenced in U.S. District Court to 300 months in prison for recording nude images of three young children in his house and exchanging them on the Internet for images of child pornography.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, William Hayes, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan, Franklin County Sheriff Zach Scott who heads the Franklin County Internet Crimes Against Children (ICAC) Task Force, and Logan County Sheriff Andrew J. Smith announced the sentence imposed today by U.S. District Judge Edmund A. Sargus Jr.
Close pleaded guilty on January 17, 2013 to one count of using minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct. According to a statement read by an HSI agent during the plea hearing, law enforcement officials patrolling the internet in June 2012 identified an email account connected to sharing child pornography. Investigators traced the account to Close.
Further investigation found that Close had placed cameras in his house to surreptitiously record video of three minor females as young as three years old as they were nude in the bathroom. He created hundreds of videos and thousands of still images of the victims and posted and traded the photos and videos by email and the internet in exchange for images and videos of child pornography.
“Once images of exploitation are on the internet, they never go away,” U.S. Attorney Stewart said. “This adds to the indignity and humiliation the victims are already facing.”
“The defendant’s actions in this case involve his ongoing abuse of the trust that was placed in him by three pre-pubescent girls and their families,” Assistant U.S. Attorney Heather Hill wrote in a memorandum filed with the court prior to sentencing. “This devastating invasion of the privacy of young girls was further exacerbated by the defendant’s trading of the images and videos he had created to others who shared his perverted interests.”
Logan County Sheriff’s deputies working with HSI arrested Close on November 9. He has been in custody since his arrest.
“Today's sentencing is another step toward healing for the victims of the depraved acts perpetrated by the defendant in this case,” said William Hayes, acting special agent in charge of HSI Detroit, which covers Michigan and Ohio. “While we cannot restore the innocence stolen from the young victims in cases like these, we will continue to make the aggressive pursuit of their predators among our highest priorities.”
“Individuals who represent the worst of the worst are the reasons why we do what we do,” Franklin County Sheriff Scott said. “Close’s sentence can prevent other children from horrific and unimaginable abuse. It's because of the cooperative effort between all of the agencies that make up the Franklin County Internet Crimes Against Children Task Force and HSI, that predators are identified and brought to justice.”
Close was also ordered to forfeit all computer equipment and visual depictions of the child pornography that were seized from him at the time of the execution of the search warrant in this case. Close will be under court supervision for 20 years after he completes his prison term. U.S. Probation Office to install monitoring software on any computer he owns, uses or has access to during his period of supervised release. He will also be required to register as a sex offender anywhere he lives, works or goes to school.
This case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Jury Convicts Canal Winchester Man of Filing False Income Tax ReturnRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO – A U.S. District Court jury here has convicted William David Taylor, Sr., 50, of Canal Winchester, Ohio of two counts of filing false federal income tax returns with the Internal Revenue Service (IRS).
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office announced the verdict returned July 10 following a trial that began July 1 before U.S. District Judge Algenon L. Marbley.
Testimony presented during the trial showed that Taylor filed false federal income tax returns with the IRS for 2006 and 2007. The 2006 income tax return showed total income in the amount of $51,967, and the 2007 income tax return showed total income in the amount of $33,272. Evidence showed that the total income Taylor earned in 2006 and 2007 substantially exceeded the amounts he claimed.
During 2006 and 2007 Taylor operated a construction consulting business. An important part of his business involved convincing landowners to engage him in development projects that would involve both investors as well as individuals who would purchase plots and receive construction loans to build houses. Taylor served as the general contractor and, as such, established business bank accounts that he controlled in order to develop the properties and build the houses.
Additionally, Taylor contracted with others who wished to retain him to build individual homes separate from the development projects. Evidence presented during the trial showed that funds from those investors and other persons flowed into Taylor’s construction consulting business accounts and were frequently spent on personal items and activities such as vacations, private schools for Taylor’s children and significant renovations to his home. Taylor did not complete any of the projects or houses, and failed to pay the money back to the investors and those persons who had trusted him to follow through on their home-building plans. An IRS representative calculated that Taylor had failed to report on his federal income tax returns approximately $110,000 in income for 2006 and $189,000 for 2007.
Funds received and used personally as income must be reported as income on the tax returns of the recipients of that money. Filing a false federal income tax return with the IRS is punishable by up to three years in prison and a fine of up to $250,000. Judge Marbley will schedule a date for sentencing.
Stewart commended the investigation conducted by IRS Criminal Investigation, as well as Assistant U.S. Attorney Daniel Brown, who is representing the United States in the case.
###Ten-year Sentence for Dayton Man Who Viewed Child Pornography While A Patient at Va Medical CenterRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON –Charles Edward Suttles, 56, of Dayton has been sentenced to 120 months in prison for viewing sexually explicit images of minor children while he was a patient at the Veterans Affairs Medical Center in Dayton. Suttles was also sentenced to be under court supervision for the rest of his life.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Gavin McClaren, Resident Agent in Charge, Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division announced the sentence handed down today by U.S. District Judge Timothy S. Black.
According to court documents, Suttles was a resident of the VA Medical Center in Dayton in July 2010. VA Police, acting in response to a tip, found Suttles viewing child pornography on a computer in a computer lab set up for residents to use to search and apply for jobs. The officer seized a thumb drive that Suttles had plugged into the computer. A forensic analysis of the thumb drive revealed more than 500 images and more than a dozen videos of child pornography.
VA-OIG agents arrested Suttles in January 2013. He has been in custody since his arrest. Suttles pleaded guilty on March 28, 2013 to one count of possession of child pornography.
“Pursuing those who sexually exploit children is a top priority of all law enforcement particularly when it endangers our nation’s veterans and their families,” said Gavin McClaren, United States Department of Veterans Affairs – Office of Inspector General, Resident Agent in Charge, Cleveland.
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 Stewart commended the investigation by the VA Inspector General’s Criminal Investigation Division, the Dayton VA Medical Center Police who assisted with the investigation, and Assistant U.S. Attorney Benjamin Glassman, who represented the United States in the case.
Columbus Man Sentenced to 72 Months in Marijuana and Cocaine Distribution CaseRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO – James E. Johnston, a/k/a “Monk,” 50, of Columbus was sentenced to 72 months in prison, five years of supervised release, a $1,000 fine, and ordered to forfeit three real estate properties located in Columbus for his role in distributing marijuana and cocaine in the Columbus, Ohio area.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, Kevin McDermott, Assistant Special Agent in Charge, DEA, and Columbus Police Chief Kim Jacobs announced the sentence handed down July 1 by Senior U.S. District Judge Peter C. Economus.
In December 2012, Johnston pleaded guilty to one count of conspiracy to possess with the intent to distribute and to distribute 1,000 kilograms or more of marijuana and five kilograms or more of cocaine, and to one count of money laundering.
According to court documents, in November 2007, the DEA, IRS, and Columbus Police began investigating a marijuana trafficking organization operating in the Columbus area. Their investigation revealed that multi-thousand pounds of marijuana were being transported from Arizona to the Columbus area.
Between the mid 2000’s and October 2008, Johnston was directly involved with this marijuana trafficking organization that used recreational vehicles, trailers, tractors trailers, and rental vehicles to transport marijuana and bulk currency to and from Arizona and Ohio. The organization utilized stash houses and other locations in central Ohio to receive and distribute large shipments of marijuana. In addition, between late 2000 and 2001 Johnston received more than five kilograms of cocaine from Arizona for distribution in the Columbus, Ohio area.
Also, between 2000 and 2008 Johnston used the proceeds and profits from the narcotics conspiracies to conduct numerous financial transactions in excess of $10,000, in which he invested in real estate and real estate renovations, and obtained loans from financial institutions in an effort to launder his narcotics proceeds and profits.
Johnston will forfeit the following real estate properties located in Columbus, Ohio at 1334-1336 West Broad Street, 52 North Rogers Avenue, and 300 Cypress Avenue.
“By following the money trail Special Agents of IRS, Criminal Investigation help to disrupt and dismantle major drug trafficking organizations that attempt to conceal the true source of their money from the government,” said Kathy A. Enstrom, Acting Special Agent in Charge, IRS, Criminal Investigation. “This sentencing is a direct result of the excellent partnership IRS, the U.S. Attorney’s Office, the DEA, and the Columbus Division of Police has in combating major drug trafficking organizations, which have such a negative impact on our community."
U.S. Attorney Stewart acknowledged the investigation by special agents and officers of IRS-Criminal Investigation, DEA, and the Columbus Division of Police, as well as Assistant United States Attorneys David DeVillers and Michael Hunter who represented the United States in this case.
# # #Eight-year Sentence for Former Columbus Police Officer Guilty of Sexual Coercion of MinorsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS –Todd L. Smith, 50, of Columbus was sentenced in U.S. District Court today to eight years of imprisonment, consisting of seven years in federal prison followed by one year on house arrest, for having illicit sexual relationships with students at the school where he was assigned as a resource officer for the Columbus Division of Police.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the sentence imposed today by U.S. District Judge Algenon L. Marbley.
The FBI began investigating Smith in July 2012 and found that Smith had engaged in a “sexting” relationship with a 14-year old female student at the school. He told the student that he had a sex addiction and that she could help him by having sex with him. Between July 24, 2012 and the morning hours of July 25, 2012, Smith exchanged approximately 113 text messages with an undercover FBI agent posing as the victim.
“The juvenile told her parents about the relationship, and later, the juvenile expressed concerns to the FBI about what the police officer may do to her family as a result of the juvenile coming forward,” Assistant U.S. Attorneys Doug Squires and Michael Hunter wrote in a document filed with the court prior to sentencing.
On July 27, 2012, the FBI became aware of another 15-year old victim who had been coerced through similar text messages into having a sexual relationship with Smith. The FBI found that this relationship began in early 2012 and that they exchanged more than 6,000 text messages during the course of the relationship.
FBI agents arrested Smith on July 26, 2012 and he has been in custody since his arrest. Smith pleaded guilty on January 17, 2013 to one count of coercion and enticement of minors for sexual activity.
Smith must serve five years on supervised release following his prison term. He was also ordered to register for life as a sex offender with law enforcement agencies wherever he lives, works or is a student.
Stewart commended the FBI agents conducting the investigation, and Assistant U.S. Attorneys Doug Squires and Michael Hunter, who represented the United States in the case.Owners of Lawrence County Medical Clinics Charged with Health Care FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – A federal grand jury has charged four people with health care fraud, alleging that they improperly charged government insurance programs for medically unnecessary procedures in connection with two medical clinics they owned and operated in Coal Grove, Ohio.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General, Bret Flinn, Resident Agent in Charge, Defense Criminal Investigation Service, Antoinette V. Henry, Special Agent in Charge, U.S. Food and Drug Administration Office of Criminal Investigations, Lawrence County Sheriff Jeff Lawless and Coal Grove Police Chief Eric Spurlock announced the charges in a four-count indictment unsealed today after agents arrested three of the defendants.
The indictment alleges that Peter Tsai, 44, owner of Advanced Family Medical Center, his father and mother, Tahsiung Tsai, 72, and Ruey Tsai, 66, who owned Watkins-Tsai Imaging, and Peter Tsai’s cousin, Wei Lih Sheih, aka “Wendy”, 41, who worked for both clinics, conspired to defraud health care benefit programs including Medicaid, Medicare and Tri-Care.
Agents arrested Peter Tsai, Tahsiung Tsai and Ruey Tsai this morning. They were taken to Cincinnati for their initial appearance before U.S. Magistrate Judge Karen Litkovitz and were released on recognizance bond after they surrendered their passports. Wei Lih Sheih also had her initial appearance and was released on a recognizance bond.
“The grand jury has charged them with performing diagnostic CT scans that were medically unnecessary, including multiple scans of the same body part for the same patient weeks apart,” U.S. Attorney Stewart said. “They are also charged with performing and billing for CT scans for medically unnecessary injections of an osteoarthritis product, Synvisc, in knees, including injection into young adults without any proper diagnosis of osteoarthritis.”
The defendants are also accused of performing and billing for CT scans related to medically unnecessary injections for purported piriformis syndrome, a problem affecting muscles in the back, and ignored and/or stopped documenting statements and complaints from patients that the injections were not working or were not wanted. The indictment also accuses them of illegally importing misbranded Synvisc from other countries including Canada and Turkey and billing government insurance programs for the injections and transferring money into an account in a Canadian financial institution in order to buy the product.
“We take allegations of health care fraud very seriously,” said Ohio Attorney General Mike DeWine. “We will not tolerate those who seek to overbill and perform unnecessary tests on patients.”
All four defendants are charged with conspiracy, which is punishable by a sentence ranging from probation to ten years in prison. Peter Tsai, Tahsiung Tsai and Ruey Tsai are also charged with health care fraud, a crime also punishable by up to ten years in prison. Peter Tsai is also charged with smuggling, a crime punishable by up to 30 years in prison and money laundering which is punishable by up to 20 years in prison.The indictment seeks forfeiture of all proceeds they received as a result of the conspiracy.
Stewart commended the cooperative investigation by agents and officers of the agencies named above, as well as Assistant U.S. Attorney Timothy Mangan, who is representing the United States in the case.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov. Ohioans can report suspected instances of health care fraud to Attorney General DeWine’s office by calling 1-800-282-0515.
An indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Dublin Resident Indicted in $10 Million Real Estate ScamRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS -- A federal grand jury has indicted Haider Zafar, 35, formerly of Dublin, Ohio, in connection with a $10 million fraud scheme involving false representations about investments in Pakistani real estate.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office announced the indictment that was returned yesterday.
The indictment charges Zafar, who now lives in south Florida, with 118 counts of wire fraud, 13 counts of money laundering, one count of filing a false federal income tax return, and three counts of willfully failing to file a federal income tax return with the IRS.
The indictment alleges that Zafar made representations that his mother’s brother was a high ranking official in the Pakistani government, and that he and members of his family in Pakistan had knowledge of real estate that the government of Pakistan planned to acquire from private citizen-owners for purposes of building infrastructure and military facilities. Zafar stated he could purchase the real estate and sell it to the government of Pakistan for a significant profit. Individuals could invest money towards the purchase of the real estate, and would share the profits from such transactions.
Zafar allegedly instructed an individual to wire transfer money to an Ohio bank account in his name for the purchase real estate.
Zafar allegedly told that individual that he would receive the return of his money and a profit by wire transfer. Zafar subsequently then told this individual that the proceeds of the Pakistani real estate transaction totaled approximately $90,000,000, that this money was being held in Pakistan, and that the proceeds could not be transferred by wire to a bank account in the United States because Zafar was prohibited from transferring funds to the United States.
Between January 4, 2008 and February 25, 2010, Zafar allegedly caused this individual and two businesses owned by this individual and/or relatives and associates of this individual to wire transfer $10,115,000 to Zafar.
Instead of buying real estate in Pakistan, Zafar allegedly used the funds from the fraud scheme to buy multiple luxury automobiles, including a 2009 Mercedes-Benz roadster, three 2009 Mercedes-Benz sedans, a 2009 Aston-Martin DB9 convertible, a 2009 Maserati Gran Turismo, a 2009 Aston-Martin Vantage roadster, a 2010 Lamborghini LP560 Spyder, a 2009 Rolls Royce Phantom convertible, two Rolex watches, a Cartier watch, a Bulgari watch band, and several pieces of jewelry, including a loose diamond and two rings, among other items.
In addition, Zafar allegedly filed a fraudulent 2007 federal income tax return with the IRS which reported taxable income of zero, whereas Zafar allegedly omitted reporting approximately $221,500 in taxable income. Also, for each of the 2008 through 2010 income tax years, Zafar willfully failed to file a federal income tax return with the IRS. Zafar allegedly received $4,976,000 in gross income in 2008, $4,519,000 in gross income in 2009 and $620,000 in gross income in 2010.
IRS Special Agents arrested Zafar at Port Columbus Airport on May 25. He has been in custody since his arrest.
An indictment is merely an accusation. All defendants are presumed innocent until and unless proven guilty.
Wire fraud is punishable by up to 20 years in prison and a fine of $250,000. Money laundering is punishable by up to 10 years in prison and a fine of $250,000. Filing a false income tax return with the IRS is punishable by up to three years in prison and a fine of $250,000. Willfully failing to file an income tax return with the IRS is punishable by up to one year in prison and a fine of $25,000.
The indictment also contains a forfeiture allegation which calls for a money judgment in the amount of $10,115,000 and the forfeiture of numerous pieces of jewelry.
"Real estate investment fraud is like a 'house of cards.' The underlying structure can fall apart at any time and leave many investors in financial ruin," said Kathy A. Enstrom, Acting Special Agent in Charge, IRS, Criminal Investigation.
U.S. Attorney Stewart acknowledged the investigation by special agents of IRS-Criminal Investigation and the assistance of the FBI office in Miami, Florida as well as Assistant United States Attorney Dale Williams who is representing the United States in this case.
# # #Disbarred Canadian Attorney Pleads Guilty to Unclaimed Funds Fraud Scheme in CincinnatiRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – L. Gino Boggia, 63, of Quebec, Canada pleaded guilty in U.S. District Court to engaging in a scheme to defraud a local bank in connection with dormant bank account funds.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Field Office (FBI) announced the plea entered today before Chief U.S. District Judge Susan Dlott.
According to court documents, Boggia is a disbarred Canadian attorney who engaged in two related fraud schemes in the Southern District of Ohio to attempt to fraudulently acquire funds of dormant, unclaimed bank accounts that have been escheated (turned over) to the state of Ohio by financial institutions.
In the first scheme in May 2003, Boggiafalsely claimed to represent the account holder who was hospital-bound and in urgent need of surgery with life-threatening injuries. Further investigation found that the client Boggia claimed to represent had died 20 years earlier. In the second scheme Boggiafalsely claimed to represent a creditor of the account holder who was seeking to obtain a judgment against the account holder.
Like the first scheme, the attempted fraud was discovered before any funds were paid out. The amount of dormant account funds Boggia fraudulently attempted to obtain in this second scheme, which included the amount the dormant funds plus claimed accrued interest over several years, totaled $1,310, 670.06.
Boggia was indicted in Cincinnati in 2007. He was extradited from Canada earlier this year following completion of a sentence there on similar charges.
Boggia pleaded guilty to one count of bank fraud. The plea agreement includes an agreed-to sentence of 60 months incarceration. The agreed sentence also proposes to resolve a pending supervised release violation arising out of Boggia’s prior federal conviction in 2001 for a similar fraud in the Southern District of California. Boggia also agrees to pay restitution of $247,159.25 representing the loss caused by Boggia’s conduct in a similar scheme in Pennsylvania. The court will review the plea agreement before making a decision on whether or not to accept the terms.
U.S. Attorney Stewart commended the investigation by the FBI and Senior Litigation Counsel Anne Porter, who is representing the United States in the case.
Real Estate Broker Who Ran Mortgage Fraud Scheme Sentenced to PrisonRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Sylvia Odia Thomas, 40, formerly of West Chester, Ohio was sentenced to 30 months in prison, three years of supervised release, and ordered to pay $313,021 in restitution to lenders and $95,422.14 to the IRS for crimes she committed as part of a mortgage fraud scheme.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service, announced the sentence handed down today by Senior U.S. District Judge Herman J. Weber.
Thomas pleaded guilty on November 6, 2012 to one count of mail fraud and one count of filing false income tax returns. She committed both crimes in connection with her business as a mortgage broker. “She habitually falsified documentation for loan applications for her clients and failed to report her correct income to the IRS,” Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing.
Thomas willfully filed false federal income tax returns with the IRS for the 2006 through 2009 income tax years. These federal income tax returns did not include substantial amounts of additional income that was paid to Thomas in the form of broker closing and processing fees that were obtained from brokering and closing client loans. In total, Thomas underreported her gross receipts by $312,882 for the 2006 through 2009 income tax years, resulting in a tax loss of $95,422.14. The Court determined the amount of loss for her mortgage fraud was $313,021.
Thomas operated a home renovation company and later started her own mortgage brokerage business. Eventually, she began writing false income and employment information on loan applications in order to get her clients approved. This practice also involved fabricating false supporting documents that were sent to the lenders. She also engaged in creating false down payments for her clients by making cashier’s checks to look like earnest money from the clients. When agents executed a search warrant at her home, they found numerous cut-and-paste documents related to this fraudulent scheme.
Antonio Weathers, 41, of Cincinnati, Ohio has pleaded guilty to one count of mail fraud and to one count of money laundering in connection with the same mortgage fraud scheme. The guilty plea was entered before Chief U.S. District Judge Susan J. Dlott on April 8, 2013. Weathers faces a maximum prison sentence of 20 years and a fine of up to $250,000. A date for his sentencing has not been set.
According to court documents, Weathers formed a real estate business in which he arranged for the purchase and resale of mostly low income properties. Weathers transferred $42,532.43 in mail fraud proceeds from one bank account to another bank account in the name of Antonio Weathers, d/b/a, KI Enterprises.
“These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, and leave lenders burdened with bad loans,” said Kathy A. Enstrom, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Criminal Investigation remains committed to pursuing financial investigations into such crimes.”
U.S. Attorney Stewart commended Assistant United States Attorney Mangan who represented the U.S. in the case, and the cooperative investigation conducted by IRS Special Agents and Postal Inspectors.
Fifteen-year Sentence for Jefferson County Man Who Received Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Ryan D. Kasler, 31, of Mt. Pleasant, Ohio was sentenced to 15 years in prison for downloading images of child pornography from the internet.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Dugan T. Wong, Inspector in Charge, U.S. Postal Inspection Service and William A. Hayes, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan, announced the sentence imposed today by Senior U.S. District Judge James Graham.
Kasler pleaded guilty on March 14, 2013 to one count of illegal receipt of child pornography. According to testimony presented during the plea hearing, Kasler was identified during an investigation by Postal Inspectors into subjects who received child pornography through the U.S. Mail. Investigation of a company that was suspected of distributing child pornography indicated that Kasler had purchases 17 separate videos or photo collections of child pornography, which he had downloaded or received through the mail.
Investigators executed a search warrant at Kasler’s home in December 2012 and seized videos, a computer and storage media containing child pornography. Agents arrested Kasler, who has been in custody since his arrest.
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/.
Stewart commended the cooperative investigation by Postal Inspectors and HSI agents, as well as Assistant U.S. Attorney Heather Hill, who is representing the United States in this case.
Dayton Payroll Company Owner Sentenced to 78 Months in Prison for Conspiracy in $26.7 Million Dollar Tax SchemeRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI –Robert R. Sacco, 62, the owner and chairman of the board of Dayton-based Paysource, was sentenced to 78 months in prison in a conspiracy and financial crimes scheme involving withholding money to pay federal employment taxes from employees’ paychecks and keeping the money instead of paying it to the IRS. In addition, Sacco must pay a $26,729,098.79 money judgment.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS) announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
Sacco previously pleaded guilty on October 26, 2012 to one count each of conspiracy to defraud the United States by impeding the Internal Revenue Service, money laundering, and tax evasion.
According to court documents, Sacco and others conspired to avoid the payment of federal employment taxes owed by Paysource for 2007 through 2009 and concealed from the IRS the legitimate tax liabilities the company owed. Sacco directed co-conspirators to prepare fraudulent IRS forms claiming that the wages paid by the company and the resulting tax liabilities were significantly lower than the wages the company actually paid.Sacco, lived in Huber Heights prior to moving to Orlando in 2010.
Paysource was a Dayton-based professional employer organization. Paysource provided services that enabled business owners to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation and other strategic services. It did this by hiring a client company’s employees, thus becoming their employer of record for tax and insurance purposes. This practice is known as co-employment.
After serving his prison term, Sacco must serve three years of supervised release. He was also ordered to pay $26,729,098.79 in restitution, jointly and severally with Charles Painter who was also charged in the scheme, to the Internal Revenue Service.
Stewart commended the investigation by IRS Criminal Investigation agents, and Assistant U.S. Attorney Dwight Keller, who is prosecuting the case.
# # #Sixteen Arrested in Alleged Heroin Trafficking ConspiracyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – A yearlong investigation into an alleged heroin trafficking organization in central Ohio has resulted in the arrests of 16 people, the seizure of more than 11 kilograms of heroin, three firearms, and more than $115,000 in cash.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert Corso, Special Agent in Charge, Drug Enforcement Administration, Franklin County Sheriff Zach Scott and Columbus Police Chief Kim Jacobs announced the arrests today.
Investigators made the arrests between June 10 and today based on federal complaints. Each defendant has been charged with conspiracy to possess with intent to distribute heroin, a crime punishable by at least five and up to 40 years in prison. All defendants have appeared before a U.S. Magistrate Judge who ordered them held without bond until trial. Eight search warrants have also been executed since June 10 as part of the investigation.
U.S. Attorney Stewart said the investigation by DEA, the Franklin County Sheriff’s Office, Columbus Police and the DEA Southwest Border Task Force is continuing.
Stewart commended Assistant U.S. Attorneys Michael Hunter and Kevin Kelley who are representing the United States in this case.
Charges contained in a complaint are allegations. All defendants should be presumed innocent until and unless proven guilty in court.
A list of those charged is below.
DEFENDANTS ARRESTED IN JUNE 2013 HEROIN INVESTIGATION
Name AGE ADDRESS
Alonso Ernesto TORRES MONTANO 25 Grove City
Luis Alberto TORRES MONTANO 30 Grove City
Santiago Manuel AZDEITIA 21 Columbus
Ivon Itzel TRUJILLO CERVANTES 30 Grove City
Johana Yazmin DIAZ LOPEZ 25 Columbus
Jose Enrique ESPARZA CASTILLO 24 Columbus
Victor GARCIA, aka “EL NEGRO” 25 Columbus
Francisco Fuentes ESTRADA, aka “EL GALLO” 34 Columbus
Primitivo BUENROSTO, aka “JOAQUIN” 60 Columbus
Jose Luis DIAZ 39 Columbus
Janeth ARVIZU VALDERRAMA 26 Columbus
Andy Abel DIAZ LOPEZ 19 Columbus
Juan Carlos PEREZ LEON, aka “CARLOS” 24 Fairfield
Juan M. BERMUDEZ DELGADO 28 Columbus
Oscar JURADO 23 Columbus
Lonnie GARCIA GOMEZ 19 ColumbusMarietta Woman Sentenced to Prison for Social Security FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Patricia Hodges, 66, of Marietta, Ohio has been ordered to repay $141,962 in Social Security benefits she collected on behalf of her dead mother, serve 30 days in prison and six months of home confinement as part of a three-year period of court supervision.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, and Elias Papoulias, Resident Agent in Charge, Social Security Administration Office of Inspector General, announced the sentence imposed today by Senior U.S. District Judge George C. Smith.
Hodges pleaded guilty on February 27, 2013 to one count of theft of government money. According to testimony at the plea hearing by an agent with the Social Security Inspector General, a Social Security Administration official interviewed Hodges at her Marietta home in November 2011. Hodges’ mother would have been 103 at the time and the official wanted proof that Hodges’ mother was still alive. Hodges claimed her mother was on a cruise and planned to live with a niece in New York after the cruise.
Further investigation by the Social Security Administration and Marietta Police concluded that Hodges’ mother had died in 1997 and that Hodges had buried her mother’s body in the back yard of a house in Lake Worth, Florida where they had lived. Florida law enforcement investigators recovered the skeletal remains of Hodges’ mother.
Hodges admitted that she concealed her mother’s death in order to collect $141,962 in Social Security benefits she was not entitled to receive between 1997 and October 2011.
Individuals who want to report suspected cases of fraud can contact the Social Security Office of Inspector General’s Fraud Hotline, 1-800-269-0271, or complete an online fraud reporting form at http://oig.ssa.gov/report.
Stewart commended the investigation by the Social Security Administration’s Office of Inspector General and the Marietta Police, and Assistant U.S. Attorney Dale E. Williams Jr., who represented the United States in the case.
Fort Wayne, Indiana Man Sentenced to More Than 29 Years in Prison for Robbery of Springboro BankRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI –Anthony Marquette Phillips, 44, of Fort Wayne, Indiana was sentenced to 235 months in prison for his role in the armed robbery of a bank in Springboro on April 27, 2012 plus an additional 120 months for using and discharging a firearm during the course of the robbery.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigaiton, Cincinnati (FBI), and Springboro Police Chief Jeffrey Kruithoff announced the sentence handed down June 12 by U.S. District Judge Michael Barrett.
According to court documents, Phillips and Anton Jevon Alexander, 36, of Indianapolis, Indiana approached the bank manager as he was entering the building’s rear door at 8:30 in the morning and pushed him inside. Springboro police officers received a 911 call and arrived at the bank around 8:40. The would-be robbers attempted to flee when they heard police arriving. Phillips fired a shot at the manager. The manager escaped safely. The men remained in the bank until approximately 1:30 Friday afternoon when they emerged and were taken into custody.
Each defendant pleaded guilty on October 12, 2012. Alexander was sentenced on May 7, 2013 to 15 years in prison.
U.S. Attorney Stewart commended the prompt response and investigation by Springboro police and FBI agents, as well as District Criminal Chief Kenneth L. Parker and Special Assistant U.S. Attorney Greg Stephens with Butler County Prosecutor Mike Gmoser’s Office, who represented the United States in the case. Stewart also commended the cooperative response and investigation by the Warren County Sheriff’s Office -- Tactical Response Unit, Hostage Negotiation Team, the police departments in Miami Township, Franklin, Lebanon, Dayton and Clearcreek Township, the Clearcreek Township Fire Department, and the Ohio State Highway Patrol.
Former Computer Company Ceo Fined $5 Million and Sentenced to Two Years in Prison for Consipracy, Securities Fraud, Money LaunderingRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Michael E. Peppel, 46, former Chief Executive Officer of MCSi, Inc., a computer sales company formerly headquartered in Dayton, was sentenced in U.S. District Court here today to two years in prison followed by three years of court supervision for engaging in a deliberate scheme to defraud millions of dollars from company investors by improperly reporting company revenues. He was also fined $5 million.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division (FBI); Kathy Enstrom, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) and Christopher T. White, Assistant Inspector in Charge, Cincinnati Field Office, U.S. Postal Inspection Service announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.
Peppel pleaded guilty in August 2010 to one count each of conspiracy, securities fraud, and money laundering.
Peppel falsified company accounting records and financial statements to mislead investors about the company’s dire financial situation. “Through his calculated conduct, Mr. Peppel undermined the core principle upon which American equity markets and investors rely – the need for complete, accurate and truthful information,” Assistant U.S. Attorneys Dwight Keller and Brent Tabacchi wrote in a filing with the court prior to sentencing.
Peppel was ordered to forfeit three pieces of real property, the contents of bank and investment accounts, a$20,000 Italian oil painting and a $9,000 Italian bronze sculpture that represent the proceeds traceable to the crimes.
MCSi called itself North America’s premier reseller of advanced integrated computer technology and visual communications products for business, government and educational institutions. MCSi was formerly listed on the NASDAQ stock market, until it was delisted in April 2003. In 2001, the firm’s annual sales exceeded $810 million, it maintained offices at 160 locations, had 50,000 clients and had over 1,300 employees. In 2003 it filed for bankruptcy.
Stewart commended the efforts of the agents and investigators of the IRS, U.S. Postal Inspection Service and FBI for their in-depth investigation into this matter, and Assistant U.S. Attorneys Dwight Keller and Brent Tabacchi, who represented the United States in the case.
Former Hilliard Resident Pleads Guilty to $1.5 Million Investment FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Jeffrey G. Kelly, 45, formerly of Hilliard, Ohio, pleaded guilty in U.S. District Court to carrying out a $1.5 million investment fraud scheme between 2006 and 2011. The victims included family friends, relatives, fellow church members, parents of his children’s schoolmates, and a groomsman from his wedding. Kelly pleaded guilty to one count of wire fraud and one count of interstate transportation of a security taken by fraud.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the pleas entered today before U.S. District Judge Edmund A. Sargus Jr.
During the plea hearing, an FBI agent testified that Kelly owned and operated several businesses in the Columbus area and promised clients and potential clients that their money would be deposited in investment funds that included stocks, real estate investment trusts, bonds and other investments. Kelly never invested the clients’ money, but used the funds to pay his personal and business expenses as well as to repay earlier investors.
A federal grand jury indicted Kelly on December 11. FBI agents arrested Kelly at his workplace near his current home in Orlando, Florida. He was placed on bond and he returned to Ohio for court appearances.
Kelly operated businesses named Superior Financial Resources, LLC, J.G. Kelly Financial Group, LLC, J.G. Kelly Equities Group, LLC, and JGK Group, LLC.
Kelly received approximately $1,523,710 from investor clients. The plea agreement calls for Kelly to make restitution to the victims of the crimes.
U.S. Attorney Stewart commended the FBI agents who investigated the case with the assistance of the Ohio Department of Commerce Division of Securities, and Assistant U.S. Attorney Dale E. Williams Jr., who is representing the United States.
Wire fraud is punishable by a sentence ranging from probation to 20 years in prison. Interstate transportation of a security taken by fraud is punishable by a sentence ranging from probation to ten years in prison. Judge Sargus will set a date for sentencing.
Operators of Foreclosure Rescue Scam SentencedRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Adam P. Moellers, 35, of Mason, Ohio was sentenced to 36 months in prison and Gary P. Dailey, aka Gary Klump, 33, of Covington, Kentucky was sentenced to 21 months in prison in U.S. District Court today for engaging in a foreclosure rescue scheme through a company called American Equity Group (AEG). A third defendant, Perry Bensick, 37, of Monroe, Ohio was sentenced on May 21 for his role in the scheme to a year and a day in prison. Each will be placed under court supervision for three years after their prison terms end.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kevin Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division (FBI) announced the sentences imposed by U.S. District Judge Michael Barrett.
AEG approached homeowners in financial distress with promises to find a buyer for their property who would let them stay there as renters until they were ready to buy it back. AEG convinced individuals to become investors by promising them they could buy a property with no money down, collect rent for a year or two then sell it back to the renter for a profit. AEG inflated the sale price, put together fraudulent loan applications, and took out extra cash at closing. The renters never purchased the properties back and the investors couldn’t afford to keep them.
“As a result, the properties went into foreclosure with even larger loan balances and with investors/borrowers who did not appreciate the risk that they had undertaken,” Assistant U.S. Attorney Timothy Mangan wrote in a court filing before Dailey’s sentencing.
The FBI calculated that in 2006 and 2007, the scheme caused losses of $6,849,460 to lenders. The defendants will be ordered to pay restitution in an amount to be determined by the court.
“The lenders were not the only victims,” Assistant U.S. Attorney Mangan told the court. “For the investors, they typically ended in bankruptcy or with ruined credit in exchange for a rescue plan by AEG that was doomed to fail.”
Moellers pleaded guilty on August 9, 2012 to one count of conspiracy. Dailey pleaded guilty on June 4, 2012 to one count of wire fraud. Besnick pleaded guilty on August 6, 2012 to one count of conspiracy.
U.S. Attorney Stewart commended the investigation by the FBI and Assistant U.S. Attorney Mangan, who represented the United States in the case.Grand Jury Charges 18 in Dayton-Portsmouth Heroin Trafficking ConspiracyRead the Press Release
CONTACT: Fred Alverson
Public Affairs OfficerCINCINNATI – A federal grand jury has charged nine people from Portsmouth, Ohio and eight people from the Dayton, Ohio area with engaging in a two-year conspiracy to deliver heroin from Dayton to Portsmouth where they distributed it out of seven Portsmouth locations including two motels. The eighteenth defendant lives in Lancaster, Ohio.
All are charged with conspiracy to possess with intent to distribute more than one kilogram of heroin, a crime punishable by at least ten years and up to life in prison.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI), Ohio HIDTA Director Derek Siegel, Scioto County Sheriff Marty Donini, Montgomery County Sheriff Phil Plummer, Portsmouth Police Chief Robert Ware and Dayton Police Chief Richard Biehl announced the indictment which was unsealed today following arrests by federal and local law enforcement officers.
The 29-count indictment charges members of the conspiracy with other crimes including possession with intent to distribute heroin, distribution of heroin and maintaining a place for the purpose of distributing heroin. Each of those crimes is punishable by a sentence ranging from probation to 20 years in prison.
If convicted of any of the crimes alleged in the indictment, the defendants must also forfeit any proceeds or profits they received from the conspiracy, in addition to any prison sentence they may receive.
U.S. Attorney Stewart commended the cooperative investigation by members of the HIDTA Task Force, the Ohio State Highway Patrol and Scioto County Prosecutor Mark Kuhn.
The defendants will appear before a U.S. Magistrate Judge in Cincinnati who will determine whether or not they will be released on bond and schedule dates for future court appearances.
An indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
A list of those charged is below.
United States v. Shawn Shank, et al.
PORTSMOUTH RESIDENTS CHARGED
Jackie Tupper, 20
Josh Walls, 33
Jerry Walls, 61
Conna Mounts, 55
Darryl Smith, aka “Slim”, “June”, 25
Brandon Jackson, 37
Robert Garmany, aka “Black Rob”, 35
Keith Goodwin, aka “Unc”, 58
Jeanette Jennings, 34DAYTON AREA RESIDENTS CHARGED
Shawn Shank, aka “Red,” 37, Dayton
Michael Shank, aka “P.J.” “No-No”, 42, Moraine
Stevie Parson, aka “Will”, 44, Dayton
Aaron Knolton, aka “Lil No No”, “Youngin”, 24, Dayton
Kendall Mabry, aka “Tweety Bird”, 29, Dayton
Porsha Smith, 24, Dayton
Vita Williams, 34, Dayton
Stephone McGhee, 36, DaytonOTHER
Tara Loehner, 24, LancasterColumbus Man Pleads Guilty to Tweeting Threats Against President of the United StatesRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Daniel L. Temple, 36, of Columbus pleaded guilty in United States District Court to one count of threatening the President of the United States.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio and Mark Porter, Special Agent in Charge, U.S. Secret Service, announced the plea entered today before U.S. Magistrate Judge Norah McCann King.
According to court documents, on March 24, 2013, the Columbus office of the U.S. Secret Service received a notification that an individual had posted messages on the internet site Twitter.com in which the individual had repeatedly indicated they intended to kill the President of the United States. The notification detailed that the threats were posted via two separate addresses.
Secret Service agents responded to one of the residential addresses which was in Westerville, Ohio and spoke with Temple’s parents. Secret Service agents also went to Temple’s residence in Columbus and spoke with him. Temple told them that he had posted all of the messages which threatened to kill the President out of a sense of frustration with the current political climate.
Temple’s crime is punishable by a sentence ranging from probation to five years in prison. The court will conduct a pre-sentence investigation before determining the sentence and schedule a date for sentencing. Temple will remain on bond until sentencing.
U.S. Attorney Stewart commended the investigation by Secret Service agents, and Assistant U.S. Attorney Michael Hunter, who is representing the United States in this case.
27-month Sentence for Promoter of Cincinnati Grand PrixRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI –Curtis Boggs, 54, formerly of Harrison, Ohio, was sentenced in U.S. District Court to 27 months in prison, ordered to pay $352,745.21 in restitution and forfeit any assets that he received as proceeds of the crimes he committed as part of a fraudulent scheme he promoted to bring a Grand Prix race to Cincinnati in 2009.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert E. Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), and Kathy Enstrom, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) announced the sentence handed down today by Chief U.S. District Court Judge Susan J. Dlott.
Boggs pleaded guilty on January 3, 2013 to one count each of wire fraud and money laundering. According to court documents Boggs was employed by an insurance company as an investment advisor from 2000 to 2009. Beginning in approximately October 2008 and continuing through approximately August 2009, Boggs solicited his customers and others to invest in silver and gold, or in a grand prix race, through a corporation called Cincinnati Grand Prix ("CGP"). Boggs admitted that, during that period, he fraudulently obtained investments of at least $352,745 for CGP in exchange for shares in the "stock" of CGP.
“Although some of the money was spent to developing the race, significant sums of money were also spent on the Defendant’s personal expenses,” Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing.”
On or about October 21,2008, Boggs laundered money derived from the fraud scheme by using $27,232.63 to buy a Lincoln MKX vehicle for his personal use.
A federal grand jury indicted Boggs in June. He was arrested on October 8, 2012 when he was stopped trying to enter the U.S. from Mexico.
Stewart commended the cooperative investigation by FBI and IRS agents, as well as Assistant U.S. Attorney Mangan, who represented the United States in this case.
20-year Sentence for Owner of Primary Health Care in Chillecothe, Ohio for Conpsiring to Distribute Oxycodone and Money LaunderingRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Kevin Huff, 36, of Portsmouth, Ohio was sentenced in U.S. District Court to serve 262 months in prison for his role in conspiring to distribute more than 200,000 dosage units (30mg tablets) of Oxycodone and money laundering. In addition, Huff was ordered to forfeit six properties in Lucasville and Sciotoville, Ohio; three vehicles, three ATV’s, a boat, $20,000 in currency, the contents of two bank accounts totaling approximately $118,875 and his latest income tax return as proceeds of the ill-gotten gains.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office (IRS); Kyle W. Parker, Executive Director of the Ohio Board of Pharmacy; and Kimberly C. Anderson, Interim Executive Director, State Medical Board of Ohio announced the sentence handed down by U.S. District Judge Michael R. Barrett.
“Between July 2009 and June 2011 Huff conspired to illegally distribute Oxycodone and concealed the proceeds gained from the clinic he owned by purchasing real property, vehicles, and boats, as well as concealing the proceeds in bank accounts,” U.S. Attorney Stewart said. “I want to commend the investigators in the agencies named above as well as special agents with the Ohio Bureau of Criminal Investigation in Attorney General DeWine’s Office, the Ohio Organized Crime Task Force, the Rt. 23 Pipeline Task Force, Ross County Sheriff George W. Lavender Jr., Ross County Prosecutor Matthew S. Schmidt, and Chillicothe Police Chief Roger Moore for their agencies’ role in the investigation.”
According to court documents, agencies began investigating Primary Health Care clinic owned by Huff early in 2011. Primary Health Care charged each “patient” $200 in cash in return for prescriptions for Oxycodone and other narcotics without the benefit of a legitimate medical examination by a physician. The physician on staff saw approximately 25 patients per day.
"This case should serve as an example of just how serious we are about stopping those who are involved in overprescribing prescription medication," said Attorney General DeWine. "People are regularly overdosing on prescriptions that they should never have access to in the first place, and if we have to put those responsible in prison for decades, that's what we'll do."
Huff received between $5,000 and $8,000 in U.S. currency three times a month for his share of the clinic's proceeds. In 2009, Huff received approximately $245,000 in U.S. currency from the operation of the pain clinic. Huff did not deposit this cash into a bank; instead he kept the currency at several locations including his basement and in the shed behind his mother-in-law's house. Huff used the money to pay day-to-day expenses, purchase assets, and take vacations.
The proceeds generated from the operation of Primary Health Care pain clinic represented the proceeds of illegal narcotics trafficking. Other drugs commonly prescribed also included Hydrocodone and Xanax.
Huff purchased a house in Lucasville, Ohio and concealed the purchase of the house by deeding the house in the name of another individual. Huff used $40,000 in drug proceeds to pay for the house.
Huff pleaded guilty on June 27, 2012 to one count of unlawfully conspiring to distribute oxycodone and one count of money laundering. He was sentenced to 240 months for the conspiracy followed by 22 months for the money laundering.“Kevin Huff not only fueled the prescription drug problem in Southern Ohio, he supported addiction in several parts of the country”, said Acting Special Agent in Charge Kathy A. Enstrom, IRS, Criminal Investigation, Cincinnati Field Office. “IRS Criminal Investigation is committed with taking the profit away from criminal enterprises and putting those individuals in jail.”
Stewart recognized District Criminal Chief Kenneth L. Parker and Special Assistant U.S. Attorney Aaron Haslam from Ohio Attorney General DeWine’s Office, who are representing the United States in this case.
Three Charged with Filing Fraudulent Claims for Federal Income Tax RefundsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON, OHIO -- A federal grand jury here has indicted Ebony F. Taste, 27, Trotwood, Saleen M. Nolan, 25, Dayton, and Jazmen Yates, 29, Galloway, with one count of conspiracy to file false claims for federal income tax refunds, totaling in excess of $150,000, with the Internal Revenue Service (IRS). In addition, each was charged individually with filing false claims for federal income tax refunds with the IRS; Taste was charged with five counts, Nolan with four counts, and Yates with four counts.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office and Gavin McClaren, Resident Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, Cleveland, Ohio announced the indictment filed today.
The indictment accuses Taste, Nolan, and Yates with participating in a conspiracy between late 2008 and April 2011. The indictment alleges that Taste, Nolan, and Yates obtained personal identifying information, including names, dates of birth, and Social Security numbers belonging to other individuals. Yates is also accused with recruiting purported taxpayers and directing them to Taste.
Taste and Nolan allegedly prepared and filed false income tax returns in the names of the purported taxpayers. Each of the false income tax returns falsely claimed substantial income tax refunds. It has been alleged that Taste and Nolan instructed the IRS to wire transfer the false income tax refunds to various bank accounts the two defendants controlled. Taste, Nolan, and Yates allegedly kept a portion of the fraudulently obtained income tax refunds for themselves and provided the remainder of the income tax refunds to the purported taxpayers.
"Law abiding citizens expect the government to hold accountable those who use deceit and fraud to line their pockets with money, especially when that money represents stolen federal taxes," said Kathy A. Enstrom, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.An indictment is merely an accusation. All defendants are presumed innocent until and unless proven guilty. Conspiracy to file false claims for federal income tax refunds with the IRS is punishable by up to ten years in prison and a fine of up to $250,000. Filing false claims for federal income tax refunds with the IRS is punishable by up to five years in prison and a fine of up to $250,000.
This case is being prosecuted by Assistant United States Attorney Brent Tabacchi and investigated by special agents of IRS-Criminal Investigation and the Veterans Administration Office of Inspector General.
Jury Convicts Darke County Man of Receipt and Possession of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – A U.S. District Court jury here convicted Richard Trepanier, 40, of Gettysburg, Ohio of one count of receipt of child pornography and one count of possession of child pornography.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Robert A. Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the verdict returned today following a trial that began April 10.
Testimony during the trial showed that Trepanier using the name “Wingman66” contacted an Australian Federal Police undercover officer patrolling the internet in February 2008 and offered him images of child pornography. The Australian authorities tracked the user name to Trepanier and sent the information to the FBI’s office in Cincinnati.
FBI agents interviewed Trepanier who consented to a search of his computer by the Miami Valley Regional Computer Forensics Laboratory. Their analysis identified approximately 56 images of child pornography and evidence that Trepanier was trading child pornography.
“This case demonstrates the international cooperation that is necessary to protect children from exploitation,” U.S. Attorney Stewart said.
The penalty for receipt of child pornography is a prison sentence of at least five and up to 20 years in prison. Possession of child pornography is punishable by up to ten years in prison. Judge Thomas M. Rose presided over the trial and remanded Trepanier to the custody of the U.S. Marshals Service immediately after the jury returned their verdict. Judge Rose will schedule a date for sentencing following an investigation by the court.
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 Stewart commended the cooperative investigation by the agencies involved, as well as Dayton Branch Chief Laura Clemmens and Assistant U.S. Attorney Christy Muncy, who are representing the United States in this case.
Grand Jury Charges Four with Gun and Drug CrimesRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – A federal grand jury here has returned a 24-count indictment charging three Columbus-area men and a woman with providing and using firearms in illegal drug trafficking crimes.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robin Shoemaker, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Columbus Field Division (ATF), and Gahanna Police Chief Dennis Murphy announced the indictment today.The indictment charges Jack A. Morris, 37, of Columbus, Jeremy S. Baker, 25, of Blacklick, fugitive and Judy L. Kindle, 45, of Columbus with conspiracy and possession with intent to distribute oxycodone, which are each punishable by up to 20 years in prison, and possession with intent to distribute marijuana, punishable by up to five years in prison.
Morris is also charged with seven counts of possession of one or more firearms during and in relation to a drug trafficking crime. The first count is punishable by at least five years and the other counts are punishable by at least 25 years in prison. Baker and Kindle are also charged with one count of possession of a firearm in relation to a drug crime.
If convicted on all counts, Morris faces a mandatory minimum sentence of 155 years.
The indictment alleges that Morris and others supplied street level distributors of marijuana, cocaine and oxycodone with firearms and body armor as a way of protecting themselves from potential robberies. Morris also placed firearms in strategic locations throughout the house he shared with Kindle in order to intimidate potential robbers and protect the narcotics and proceeds kept at the house.
The indictment charges Christopher W. Wilcox, 30, of Reynoldsburg with two counts of supplying the others with firearms including an AK-47 and an AR-15, knowing that the weapons were to be used in the drug trafficking. Each count is punishable by up to ten years in prison.
"ATF will continue to work with our law enforcement partners to aggressively pursue those individuals who possess and use firearms in furtherance of their illicit activities", stated ATF Special Agent in Charge Shoemaker.
U.S. Attorney Stewart commended the investigation conducted by ATF and the Gahanna Police officers, and Assistant U.S. Attorney David DeVillers and Special Assistant U.S. Attorney Steve Dunbar with Columbus City Attorney Rick Pfeiffer’s Office, who are representing the United States in the case.
An indictment merely contains allegations, and defendants are presumed innocent unless proven guilty in a court of law.
Mail Processing Clerk Sentenced to 18 Months in Prison for Stealing Cash and Gift Cards Out of Mail, Assaulting AgentsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS -- Terrence R. McLean, 38, of Westerville was sentenced in U.S .District Court to 18 months in prison for stealing cash and gift cards from mail he was responsible for processing at the U.S. Postal Service’s Processing and Distribution Center in Columbus, and for assaulting the officers who arrested him..
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Robert LaPina, Special Agent in Charge, U.S. Postal Service Office of the Inspector General, (USPS OIG) announced the sentence handed down today by U.S. District Judge Algenon L. Marbley.
McLean operated a mail sorting machine at the distribution center. On June 29, 2012 USPS OIG special agents watched him separate, cut and tear open colored envelopes while he was at the machine. The USPS OIG special agents saw him remove the contents of the envelopes and place mail in his sock and down the front of his pants.
“McLean targeted greeting cards for his theft scheme since they often contained money or gift cards,” Assistant U.S. Attorney Doug Squires wrote in a memorandum filed with the court prior to sentencing.
USPS OIG special agents approached him as he was leaving the building, identified themselves and told McLean he was under arrest. McLean punched, bit and struck the agents with a coffee mug and cooler. The agents were taken to a nearby hospital and treated for their injuries.
Agents searched McLean and recovered 71 first class letters including 65 that he had stuffed down the front of his pants in his underwear. They found gift cards in his wallet and his work apron and $341 in cash.
“There are two sets of victims in this case,” U.S. Attorney Stewart said. “The USPS OIG Special Agents who were injured during the arrest and the people who mailed greeting cards and entrusted money and property to the U.S. Mail. The Postal Service Inspector General is to be commended for a quick response after detecting indicators of the theft and thorough investigation.”
McLean pleaded guilty on December 20, 2012 to 71 counts of mail theft by an employee, 12 counts of receipt of stolen mail and two counts of assault on a federal officer.
“The majority of postal employees are hard-working public servants dedicated to moving mail to its proper destination,” U.S. Postal Service Office of Inspector General Special Agent in Charge LaPina said. “Unfortunately, McLean decided to betray the public’s trust and steal from postal customers, and also violently assault USPS OIG special agents when they attempted to stop him. Today’s sentence demonstrates that USPS OIG special agents take these cases seriously, and that postal employees who steal mail are throwing away their careers and could end up in jail.”
McLean was also ordered to pay restitution of $2,640.02 to the victims including payback of worker compensation of $2,286.92 for medical bills.
U.S. Attorney Stewart commended the investigation by USPS OIG special agents, and Assistant U.S. Attorney Doug Squires, who represented the United States in the case.
Whitehall Woman Pleads Guilty to Using Stolen Identities to Commit Benefits FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Audrey Costar, 46, of Whitehall, Ohio pleaded guilty in U.S. District Court to using 50 stolen identities to file for unemployment benefits in eight states over three years, netting her almost $80,000.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations, Mark Porter, Special Agent in Charge, U.S. Secret Service and Elias Papoulias, Resident Agent in Charge, Social Security Administration Office of Inspector General announced the pleas entered today before U.S. Magistrate Judge Mark Abel.
According to court documents, Costar used 50 stolen identities to electronically file false unemployment insurance claims in Alaska, Minnesota, Montana, Arizona, Utah, Ohio, Colorado and Pennsylvania between February 2009 and December 2012. She collected approximately $78,674 using the scheme.
Costar was also collecting Social Security benefits in her own name at the time. Earnings made through the identity theft scheme were not reported to the Social Security Administration which resulted in her receiving approximately $7,906.78 in benefits to which she was not entitled.
Costar pleaded guilty to two counts of theft of government funds, each punishable by up to ten years in prison, and two counts of aggravated identity theft. Each count of aggravated identity theft is punishable by a mandatory two-year sentence to be served consecutive to any other time served.
The court will conduct a pre-sentence investigation before determining the sentence and schedule a date for sentencing.
U.S. Attorney Stewart commended the investigation by Department of Labor, Secret Service agents and Social Security Administration inspectors general, and Financial Crimes Chief Brenda S. Shoemaker, who is representing the United States in this case.
Kentucky Attorney Sentenced to Prison for Stealing More Than Half A Million Dollars from Disabled VeteranRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Brian P. Gilfedder, 65, of Lexington, Kentucky was sentenced in the Eastern District of Kentucky to serve 41 months in federal prison for stealing $639,618.43 in VA and Social Security benefits from a disabled veteran over a 20-year period.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, and Quentin G. Aucoin, Special Agent in Charge, Department of Veterans Affairs Office of Inspector General Southeast Field Office (VA-OIG), announced the sentence handed down yesterday by U.S. District Judge Danny C. Reeves in the Eastern District of Kentucky.
According to court documents, Gilfedder pleaded guilty to a one-count bill of information charging him with devising a scheme to defraud, embezzle, steal, and knowingly convert $639,618.43 in VA and Social Security benefits paid out to an incompetent veteran. Gilfedder, licensed to practice law at the time he was appointed fiduciary by the VA in 1990, was responsible for managing the disabled veteran’s financial affairs. Gilfedder admitted that he stole the veteran’s money between January 1991 and August 2011, putting it to his own use and taking it with the intent to deprive the owner of the use or benefit of the money. He was charged with submitting altered VA documents along with fraudulent accountings to VA in order to conceal the theft.
Gilfedder agreed to forfeit his license to practice law in the State of Kentucky as part of his plea agreement. He was also sentenced to serve 3 years of supervised release upon his release from prison and was ordered pay restitution to the VA and Social Security Administration totaling $639,618.43.
The VA fiduciary program was established to protect Veterans and other beneficiaries who, due to injury, disease, or age, are unable to manage their financial affairs. Upon determining a veteran is unable to manage his or her financial affairs, VA will appoint a fiduciary. The fiduciary, normally chosen by the veteran, must undergo an investigation of their suitability to serve. Only after a complete investigation is a fiduciary appointed to manage a veteran’s VA benefits. The fiduciary is responsible to the veteran and oversees the financial management of VA benefit payments. Generally, family members or friends serve as fiduciaries for beneficiaries; however, when friends and family are not able to serve, VA looks for other qualified individuals such as attorneys to serve as a veteran’s fiduciary.
Special Agent in Charge Quentin G. Aucoin stated, “The VA Office of Inspector General is dedicated to aggressively investigating individuals who misuse their fiduciary authority to embezzle VA funds from the incompetent veterans placed under their care.”
“Protecting our nation’s veterans must remain a high priority endeavor,” Stewart said. “Especially disturbing is the act of inflicting intentional harm of any kind upon a disabled or otherwise vulnerable veteran.”
Stewart commended the investigative efforts of the VA-OIG Nashville Resident Agency, along with the assistance of the Social Security Administration Office of Inspector General and the Louisville, Kentucky VA Fiduciary Hub, and Special Assistant U.S. Attorney Kenneth L. Parker, who prosecuted the case.
Licking County Man Pleads Guilty to Defrauding Project Hire, A Federally Funded Job Training ProgramRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Eric M. Rader, 36, of Johnstown, Ohio pleaded guilty in U.S. District Court to one count of conspiracy to commit fraud for submitting fraudulent bills in connection with a federally funded job training program.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Robert Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations announced the plea entered today before U.S. District Judge Michael H. Watson.
According to court documents, Rader was a recruiter and apprenticeship manager for Building Trades Institute (BTI) in Delaware, Ohio from February 2009 to December 2010. BTI receives funding through the American Recovery and Reinvestment Act for Project HIRE, an initiative to help connect and incentivize employers in targeted growth industries who had current job openings to hire dislocated workers who had or were close to having the necessary skills to fill those positions.
Rader forged the signature of an officer of a job leasing company official on a letter claiming jobs existed for people who were to receive solar panel installation training through BTI knowing that such jobs did not exist.
Rader sent an invoice for $66,000 to the program. The invoice had the names of students who had received training prior to Project HIRE starting, making them ineligible for Project HIRE funds. The students never received solar panel installation training which would have resulted in an Industry Recognized Certificate (IRC), which was a requirement of Project HIRE.
Rader pleaded guilty to one count of conspiracy to commit mail fraud, which is punishable by up to five years in prison, a fine of up to $250,000 and three years of supervised release. The plea agreement also calls for Rader to make restitution.
The court will conduct a pre-sentence investigation before determining the sentence and schedule a date for sentencing.
U.S. Attorney Stewart said the investigation is continuing and commended the investigation by Department of Labor and FBI agents, and Financial Crimes Chief Brenda S. Shoemaker, who is representing the United States in this case.
Final Defendant in Pot Trafficking Conspiracy Sentenced to Ten Years in PrisonRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO – Antwane J. Rhodes, aka “Rho”, 34, formerly of Springfield, Ohio was sentenced in U.S. District Court today to 120 months in prison, fined $5,000 and ordered to forfeit cash, vehicles and jewelry for his leadership role in a major marijuana trafficking organization in the Columbus area.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Denise Rocawich, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), Franklin County Sheriff Zach Scott and Columbus Police Chief Kimberley Jacobs announced the sentence imposed today by U.S. District Judge Michael H. Watson.
Rhodes pleaded guilty on September 25, 2012 to one count of conspiracy to possess with intent to distribute more than 1,000 kilograms of marijuana and one count of money laundering.
According to court documents, the investigation into the organization began in 2007. Sources identified Rhodes as one of the leaders of a drug trafficking organization that included Springfield. Loads of marijuana were received from a variety of sources, sometimes via shipment to a warehouse on the west side of Columbus. Rhodes also received shipments of 100 – 200 pounds of marijuana delivered on a motorcycle trailer to his house.
“At its peak, the organization was receiving between 1,200 and 1,800 pounds of marijuana in a month,” U.S. Attorney Stewart said. “The organization was generating hundreds of thousands of dollars a year through the sale of illegal drugs.”
Evidence shows Rhodes laundered the money he was receiving from the sale of the marijuana by buying vehicles and custom jewelry, making deposits into bank accounts of a small company called T & J Investments of Ohio LTD and other means. Rhodes made trips to Las Vegas with his co-conspirators and gave each of them just under $10,000 cash to carry with them.
Rhodes was ordered to forfeit his interests in three vehicles, more than $27,000 in cash seized during execution of a search warrant and ten pieces of jewelry.
Four Springfield men and one other defendant from Columbus have already been sentenced for their roles in the conspiracy.
Marc Clark, 32, was sentenced on January 7, 2013 to 100 months in prison. Steve Blackmon, 33, was sentenced November 29, 2012 to 15 months in prison. Jayson Reed, 31, was sentenced on February 27, 2013 to 12 months and a day, Shawnte M. Lynn, 35, was sentenced on January 25, 2013 to 15 months in prison. Erik Neely, 34, of Columbus, was sentenced on January 25, 2013 to 18 months in prison.
Rhodes has been in custody since June 2012.
U.S. Attorney Stewart commended the cooperative long-term investigation by Columbus Police officers, Franklin County deputies and IRS agents, as well as Assistant U.S. Attorney Kevin Kelley, who represented the United States in this case.
Cincinnati Construction Contractor Sentenced for Role in Bribery and Embezzlement SchemeRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – The owner and president of Sigma Capital, Inc. in Cincinnati, Samuel P. Mays, 62, was sentenced in U.S. District Court today to 51 months in prison followed by three years of supervised release for bribing a government official and stealing from his employees’ 401k funds.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI), Elton Malone, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Special Investigations Branch, and L. Joe Rivers, Regional Director, U.S. Department of Labor, Employee Benefits Security Administration announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.
A jury convicted Mays in September 2012 of one count each of bribery of a public official, conspiracy, theft or embezzlement from an employee pension plan, and making false statements.
The scheme involved Mays and another construction contractor, Paul McDonald, 70, of Pleasant Hill, California, and David Mersch, 61, the former Operations Officer for the Cincinnati offices of the U.S. Centers for Disease Control in Cincinnati.
According to trial testimony, Mersch, who lived in Florence, Kentucky accepted bribes from Mays and McDonald in the form of cash and home improvements with a value of at least $175,000 between 2005 and 2011. The jury also convicted Mays of deducting approximately $125,000 from his employees’ paychecks for contribution to their 401k plans, but never depositing the money.
“The nature of a bribery offense is difficult to quantify, because the victim is the public at large and the damage extends beyond the dollars exchanged,” Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing. “This pattern of bribery undermines the government contracting process and destroys the presumed impartiality of federal contracting officers.”
McDonald pleaded guilty on November 9, 2011 to one count of bribery. He was sentenced on October 31, 2012 to serve five years of probation including 21 months of home confinement and pay a $5,000 fine. He was also disqualified from holding any office of honor, trust or profit and ordered to resign his employment with Entek Mechanical Corporation and to cooperate with the United States in seeking the surrender of Entek’s certification as a government contractor. Mersch pleaded guilty on July 19, 2011 to bribery and is serving 42 months in federal prison. Both testified against Mays during the trial.
“Mays victimized taxpayers and jeopardized his hard-working employees’ futures,” said Elton Malone, Special Agent in Charge of the Special Investigations Branch within the U.S. Department of Health and Human Services’ Office of Inspector General. “We will not tolerate conspiracy schemes and will continue to work tireless to punish such corruption.”
“Employer sponsored retirement plans serve a vital role in providing a financially secure retirement for America’s workers,” said L. Joe Rivers, Regional Director for the Cincinnati Regional Office of the Labor Department’s Employee Benefits Security Administration. “This case underscores EBSA’s commitment to protecting the assets of 401(k) and other employee benefit plans and punishing those who would divert these funds for their own enrichment.”
Stewart commended the cooperative investigation by FBI, HHS inspector general, and Department of Labor investigators, as well as Assistant U.S. Attorneys Timothy Mangan and Christy Muncy, who represented the United States in this case.
Mays will surrender to begin serving his prison sentence on a date to be set by the U.S. Marshals Service and the Bureau of Prisons.
Siblings Arrested for Reynoldsburg Jewelry Store Armed RobberyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Darnell J. Harris, 25 and his sister Mariah Harris, 19, both of Canal Winchester, Ohio have been arrested based on charges in a federal indictment alleging that they robbed a Reynoldsburg jewelry store in May 2012.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robin Shoemaker, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Reynoldsburg Police Chief Jim O’Neill announced the arrests which occurred yesterday.
The indictment charges each defendant with one count of obstructing interstate commerce (Hobbs Act) by robbing Heins Jewelers in Reynoldsburg on May 21, 2012. The crime is punishable by up to 20 years in prison and a fine of up to $250,000.
“The indictment alleges that they used actual and threatened physical violence in furtherance of the robbery,” U.S. Attorney Stewart said.
The indictment charges Darnell Harris with one count of brandishing a firearm during a crime of violence. That crime carries a sentence of seven years in prison to be served consecutive to any other sentence.
Reynoldsburg and Pickerington police officers arrested Darnell Harris following a traffic stop in Pickerington. Mariah Harris surrendered to the Reynoldsburg Police and was arrested there. Both have initial appearances before a U.S. Magistrate today.
“Pursuing offenders who commit firearms violence and disrupt the safety of our communities remains our top priority,” stated ATF Special Agent in Charge Shoemaker.
“Detective Mike Binder did an outstanding job on this case,” Reynoldsburg Chief O’Neill said. “I appreciate the partnership with Pickerington Police in making the arrest.”
U.S. Attorney Stewart commended the investigation conducted by the ATF and Reynoldsburg Police. Assistant U.S. Attorney David J. Bosley is representing the United States in the case.
An indictment merely contains allegations, and defendants are presumed innocent unless proven guilty in a court of law.
Operator of $8.9 Million Ponzi Scheme Receives 65-month SentenceRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Jerry Smith, 50, of Brookville, Indiana, was sentenced to 65 months in prison, ordered to pay $5,406,950.65 in restitution to victims and $72,412.70 in restitution to the IRS for his role in an investment scheme that ensnared approximately 72 investors in Ohio, Indiana and Kentucky.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Dugan Wong, Inspector in Charge, U.S. Postal Inspection Service, and Denise Rocawich, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office (IRS), announced the sentence imposed yesterday by Senior U.S. District Judge Herman J. Weber.
On June 12, 2012, Smith pleaded guilty to three counts of a four-count bill of information charging him and his co-conspirator, Jason Snelling, 48, Cincinnati, with crimes arising out of their operation of a multi-million dollar Ponzi scheme. Smith admitted that he engaged in a mail and wire fraud conspiracy in connection with a scheme to defraud investors in CityFund and Dunhill, two bogus “day trading” entities which were nothing more than bank accounts where investors’ funds were deposited and then spent by Snelling and Smith.
Smith also admitted that he engaged in obstruction by creating fictitious trading statements and providing them to federal agents to impede the investigation and cover up the fraud. Finally, Smith admitted that he committed tax evasion by failing to report the embezzled investor funds as income on his tax returns for the tax year 2008 and additional tax years.
“Consistent with a classic Ponzi scheme, early investors were paid interest or return of capital payments, which were not generated by investment earnings, but rather by monies solicited from later investors,” Stewart said. “These payments served to lull the victims into a false sense of security and to prevent or delay the discovery of the fraudulent investment scheme.”
During the course of this fraudulent scheme, Smith used investors’ money to pay for his expensive rural Indiana home, to buy a boat and jet skis, and to operate his insurance business.
Smith issued himself a monthly payment from CityFund Advisory, LLC. He made checks payable to his corporation, Smith’s Realty and Insurance. All of the monthly checks were, in fact, income to Smith and were not reported on his personal federal income tax returns. For the 2006 through 2009 income tax years, Smith willfully and knowingly omitted a total of $345,735.62 in income on his personal income tax returns, resulting in a total tax loss to the IRS of $72,412.70.
On October 23, 2012 Snelling was sentenced to 131 months in prison, ordered to pay $5,336,177.78 in restitution to the victims and $596,928.69 in restitution to the IRS. Smith was also ordered to pay $5,000,000 in a forfeiture money judgment.
“The Postal Inspection Service is committed to investigating investment schemes like the one run by Smith and Snelling that target Postal customers every day,” Inspector in Charge Wong said. “Postal Inspectors have a long history of investigating mail fraud dating back to Charles Ponzi himself. It is part of our mission to protect the customers of the Postal Service.”
“Investment fraud is like a 'house of cards.' Because Ponzi schemes have no legitimate business purpose, they can collapse when the money runs out, leaving many investors in financial ruin," said IRS Acting Special Agent in Charge Rocawich. “Investors should watch for red flags, such as guaranteed above-market interest earnings. Investors should thoroughly investigate the nature of any investment before investing their retirement savings.”
This case was prosecuted by Senior Litigation Counsel Anne L. Porter and was investigated by U.S. Postal Inspectors and special agents of IRS-Criminal Investigation.
Jefferson County Man Pleads Guilty to Receiving Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Ryan D. Kasler, 31, of Mt. Pleasant, Ohio pleaded guilty in U.S. District Court today to one count of illegal receipt of child pornography. The plea agreement provides for a sentence of 180 months in prison.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Dugan T. Wong, Inspector in Charge, U.S. Postal Inspection Service and William Hayes, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan, announced the plea entered today before U.S. Magistrate Judge Norah McCann King.
According to testimony presented during the plea hearing, Kasler was identified during an investigation by Postal Inspectors into subjects who received child pornography through the U.S. Mail. Records indicated Kasler bought 17 separate videos or photo collections through the mail.
Investigators executed a search warrant at Kasler’s home in December 2012 and seized videos, a computer and storage media containing child pornography. Agents arrested Kasler, who has been in custody since his arrest.
The court will conduct a pre-sentence investigation prior to deciding whether or not to accept the terms of the plea agreement. If, after viewing the presentence investigation report, the Court is unwilling to accept this plea agreement due to this binding recommendation on the appropriate sentence, either party may withdraw from the provisions of this plea agreement, the defendant may withdraw his plea of guilty, and the case will proceed to trial. If the court accepts the terms of the plea agreement, a date for sentencing will be set.
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/.
Stewart commended the cooperative investigation by Postal Inspectors and HSI agents, as well as Assistant U.S. Attorney Heather Hill, who is representing the United States in this case.
Columbus Man Charged with Fraud Involving Federally Funded Tutoring ProgramRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – A federal grand jury has indicted Ashkir Ali, 45, of Columbus alleging that he defrauded the U.S. Department of Education’s Supplemental Education Services Program by billing the program for tutoring sessions that were never provided.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Thomas D. Utz, Jr., Special Agent in Charge for the North Central Region of the U.S. Department of Education, Office of Inspector General and Ohio Auditor of State Dave Yost announced the indictment which was unsealed today following Ali’s arrest yesterday at his place of business by an agent with the U.S. Department of Education.
“We must protect the integrity of all federally funded programs, especially those established to provide low-income families with educational services that help improve their lives,” U.S. Attorney Stewart said.
“By stealing from the SES Program, these ‘phantom tutors’ are stealing opportunities from the children who need them most,” Auditor Yost said. “Once again, I’m proud of the work we’ve done with our partners on the federal side to ensure that these education dollars go to children.”
Ali owned WAISS Network Technologies and in 2007 signed the first of four annual contracts with Columbus City Schools to provide tutoring for eligible students through the Supplemental Education Services program funded by the U.S. Department of Education. The contract required WAISS to submit student attendance forms with the names of the students, the hours of tutoring services they received, the dates the services were provided and the names of the tutors providing services. Student attendance forms had to be signed by tutors and the student’s parents.
Allegations surfaced of possible misconduct by providers of the Supplemental Education Services Program in 2011. A special audit of the Columbus City School District began in June 2011 after a request was made by Superintendent Gene Harris. The Ali case is the first prosecution to result from the Auditor of State’s special audit, which is ongoing.
The indictment alleges that Ali submitted more than $50,000 in fraudulent claims. The indictment alleges that Ali submitted forms with forged tutor and parent signatures and submitted written claims for payments which falsely represented the number of tutoring hours WAISS provided.
Ali is charged with two counts of making false statements, each punishable by up to five years in prison, and two counts of aggravated identity theft, each of which is punishable by two years to be served consecutive to any other sentence.
Ali appeared before U.S. Magistrate Judge Norah McCann King on March 12 and was released on his own recognizance. Future court appearances will be scheduled by U.S. District Judge Edmund A. Sargus Jr., who is presiding over the case.
U.S. Attorney Stewart commended the investigation by the U.S. Department of Education Office of Inspector General and State Auditor Yost’s Office, as well as Assistant U.S. Attorney Kenneth Affeldt who is representing the United States in this case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.