Southern District of Ohio

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS – Donald Christopher Dailey, 37, of Delaware, Ohio pleaded guilty in U.S. District Court today to extortion for demanding money from the company where he was the information technology administrator in exchange for not disclosing internal financial and other information. Dailey also admitted to “hacking” into an ex-girlfriend’s email account.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the guilty pleas entered today before U.S. District Judge Michael Watson.

According to court documents, Dailey abruptly resigned from the engineering company where he worked on October 1, 2012. Employees found a laptop connected to the company network and streaming live email of the company’s CEO. It was hidden in Dailey’s private and secure workroom. In a resignation letter he sent to the CEO, Dailey claimed he had knowledge of what he alleged was damaging financial and other information regarding internal company communications that he would disclose to authorities and certain customers unless the CEO and his business partner sat down and talked with him.

On October 13, Dailey called the CEO and made an opening demand of 75 percent of the $92,500 expected salary if he had stayed with the company. FBI agents arrested Dailey on October 16 and searched his residence. An analysis of Dailey’s computer revealed that he had gathered personal information about the company’s employees including everyone’s name and salary, and had stored the data on his personal computer. The alleged documents or information referenced by Dailey as part of the extortion were not found.

Dailey also admitted illegally accessing an ex-girlfriend’s email and bank accounts from a computer at the engineering company where he worked before he resigned.

Dailey remains on house arrest pending sentencing on a date to be set by Judge Watson. Extortion is punishable by up to two years in prison and a fine of $250,000. Intentionally accessing a computer without authorization is punishable by up to one year in prison.

U.S. Attorney Stewart commended the FBI agents who investigated the case and Assistant U.S. Attorney Deborah A. Solove, who represented the United States in the case.

CONTACT: Fred Alverson
Public Affairs Officer

DAYTON –Charles D. Warren, 38, of Dayton was sentenced today to 156 months in prison for crimes including assaulting an officer by running his car into a car driven by a federal task force officer, illegal possession of a firearm, possession of a firearm with an obliterated serial number, conspiracy to distribute marijuana, conspiracy to launder money, illegally structuring financial transactions, and interstate travel in furtherance of a drug conspiracy.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Division (FBI), Stephanie R. Shoemaker, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) and Dayton Police Chief Richard Biehl announced the sentences handed down by U.S. District Judge Timothy S. Black.

According to court documents, Warren was wanted on an outstanding illegal gun possession warrant when DPD officers stopped him for a traffic violation on July 7, 2011. Warren fled in his car as members of the FBI Safe Streets Task Force approached the scene. Warren stopped several blocks away. As a task force officer was beginning to exit his vehicle, Warren put his car in reverse and rammed the officer’s vehicle.

Court documents also state that Warren and others trafficked more than 100 kilograms of marijuana from suppliers in California to the Dayton area between 2009 and 2011. IRS investigators determined that the conspirators used several different methods of laundering approximately $1,100,000 of drug proceeds including depositing the cash using other people’s names in order to avoid currency reporting requirements.

Warren pleaded guilty on February 23, 2012. Stewart commended the cooperative investigation by the federal and local agencies, along with Assistant U.S. Attorney Sheila Lafferty, who is prosecuting the case.

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS – Deborah L. Kistner, 50, and her husband, Mark A. Kistner, 52, both of Hilliard, pleaded guilty three days after their trial started on a $7 million mortgage fraud scheme they carried out between June 2006 and July 2010.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI) and other agencies participating in the mortgage fraud task force announced the guilty pleas entered before U.S. District Judge Gregory L. Frost.

Deborah Kistner pleaded guilty to three counts of conspiracy to commit bank fraud, three counts of conspiracy to commit money laundering, and one count of bank fraud. Mark Kistner pleaded guilty to one count of conspiracy to commit money laundering.

Deborah Kistner operated Premiere Title Company in Hilliard. She deceived lenders in connection with the purchases of real estate in Ohio and Florida. Evidence presented during the first three days of the trial showed that she conspired with others to secure inflated loans for real estate and kept the excess proceeds or used them to pay others involved in the conspiracy. Deborah Kistner intentionally failed to provide lenders with critical purchase contract language and accurate settlement statements.

Deborah and Mark Kistner also schemed to defraud lenders and launder the money they received through simultaneous “short sale” closings where the lenders would agree to absorb losses on existing mortgage loans while Deborah Kistner actually sold those properties on the same day for a profit and laundered the profits through bank accounts controlled by Mark Kistner. The government was prepared to show that they secured as much as $7 million in fraudulent loans through their schemes.

Deborah Kistner faces a maximum penalty of up to 30 years in prison and a fine of $1 million on each of the three counts of conspiracy to commit bank fraud, and the one count of bank fraud; and up to ten years in prison and a fine of $250,000 on the three counts of conspiracy to commit money laundering. Mark Kistner faces a maximum penalty of up to ten years in prison and a fine of $250,000 on the one count of conspiracy to commit money laundering. Lenders suffered losses of at least $3.3 million. The plea agreements they signed include forfeiture of investment accounts and restitution to victims.

They were released on bond pending sentencing. Judge Frost will schedule a date for sentencing.

Stewart commended the cooperative investigation of this case by IRS and FBI agents, and Assistant U.S. Attorney’s Laura Fulton and Dan Brown, who are prosecuting the case.

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS – Jason L. Hutchinson, 42, of Athens, Ohio was sentenced in U.S. District Court to 300 months in prison and will be under court supervision for the rest of his life for using a webcam to create a video of himself engaged in various sex acts with a 13-year old and distributing the video out of state.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by U.S. District Judge Algenon L. Marbley.

“Recordings of child abuse are used as currency by those who exploit children,” U.S. Attorney Stewart said. “Law enforcement coordination between federal, state and local agencies is the only way to curtail such exploitation.”

Hutchinson pleaded guilty on August 24, 2012 to one count of using a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.

Hutchinson created the video at his residence in November 2010 then sent that video and another similar video to an individual in the greater Boston, Massachusetts area. Law enforcement officers in the Boston area discovered the video and alerted law enforcement officials in Ohio. Supported by deputies from the Athens County Sheriff’s Office, FBI agents executed a search warrant and arrested Hutchinson on a criminal complaint on March 16, 2012. He has been in custody since his arrest.

Hutchinson also admitted to sexually abusing another young boy in Athens County several years ago and discussing that abuse with the individual, a sex offender in Massachusetts, to whom he sent the videos. Judge Marbley cited the prior abuse as one of the bases for the sentence. Judge Marbley also ordered Hutchinson to be placed under court supervision for the rest of his life after he serves his time in prison. Hutchinson must register as a sex offender anywhere he lives, works or goes to school.

Stewart commended the investigation by the FBI and Assistant U.S. Attorney Heather Hill, who prosecuted the case.

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS – Mickell Close, 31, of Quincy, Ohio pleaded guilty in U.S. District Court to one count of using minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, William A. 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 plea entered today before U.S. District Judge Edmund A. Sargus Jr.

According to a statement read by an HSI agent during the hearing, law enforcement officials patrolling the internet in June 2012 identified an email account connected to sharing child pornography. The account was traced to Close.

Further investigation found that Close used his cell phone to secretly record videos of three prepubescent female victims at his residence while the victims were using the bathroom or bathing. Portions of the videos showed close-up depictions focused on the nude genitalia of each of the victims. After recording the videos he made still images from the videos and traded the videos and images with other individuals on the internet in exchange for images and videos of child pornography.

Forensic examination of computers and storage media at Close’s residence revealed at least 34 images of mainly prepubescent females engaged in sexually explicit activity or posed in a sexually explicit manner while in bondage.

“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 victim is already facing.”

Logan County Sheriff’s deputies working with HSI arrested Close on November 9. He has been in custody since his arrest.

“Today's conviction is the first 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 conviction 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 like Close are identified and brought to justice.”

In the plea agreement, the parties have agreed that a term of incarceration between 252 months and 318 months followed by 20 years under court supervision is the appropriate sentencing range. The court will conduct a pre-sentence investigation before deciding whether or not to accept the terms of the plea agreement.

Close also agreed 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. The plea agreement also allows the 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.

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS –Todd L. Smith, 50, of Columbus pleaded guilty in U.S. District Court today to one count of coercion and enticement of minors for sexual activity.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the plea entered today before U.S. District Judge Algenon L. Marbley.

“Today’s guilty plea underscores that inappropriate contact with minors using texts and the internet are federal crimes,” said U.S. Attorney Stewart. “Smith’s job as a police officer charged with safeguarding children highlights the seriousness of this offense.”

According to a statement read during the hearing, the FBI began investigating Smith on July 2, 2012. The investigation found that Smith,  a Columbus Police officer, who was assigned as a resource officer at a local high school was having an illicit relationship with a 15-year old female. 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.

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.  Coercion and enticement of minors is punishable by at least ten years and up to life in prison. Judge Marbley will determine the sentence and schedule a hearing following a pre-sentence investigation by the court.

“Police officers are the guardians of our community and to whom our children should be able to turn for safety,” said FBI Special Agent in Charge Hanko.  “The actions of one officer should not negatively reflect on the good work of other officers.  This investigation highlights the efforts of the U.S. Attorney’s Office, FBI, and Columbus Police Department to ensure those who sully their positions as police officers are held accountable.”

Stewart commended the FBI agents conducting the investigation, and Assistant U.S. Attorneys Doug Squires and Michael Hunter, who are prosecuting the case.

CONTACT: Fred Alverson
Public Affairs Officer

CINCINNATI – A federal grand jury has indicted Steven E. Hillman, 67, of Dublin, Ohio, alleging that he conspired with the owner of three pain clinics in Ohio to illegally divert prescription drugs outside the scope of legitimate medical practice and launder proceeds of the conspiracy.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration, Detroit Field Division; and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the charges contained in a superseding indictment on Wednesday, January 16, 2013.

The indictment alleges that Hillman conspired with Tracy Bias, 47, of West Portsmouth, Ohio in an attempt to open Physicians Pharmacy in Piketon, Ohio in order to service prescriptions for illegal distribution of controlled substances issued by the pain clinics owned and controlled by Bias and others. The indictment charges that Hillman helped Bias launder $132,920 in cash from the activities of the conspiracy in July 2010.

Bias and six doctors were initially indicted in April 2012 in a 12-count indictment alleging that they operated three pill mills in southern Ohio between January 2009 and June 2011, Southern Ohio Complete Pain Management and Portsmouth Medical Solutions in Portsmouth, and Trinity Medical Care in Columbus, Ohio.

Customers allegedly traveled hundreds of miles to the clinics in central and southern Ohio where, for a cash payment of approximately $200 per office visit and with little or no physical examination, clinic customers would receive excessive amounts of “cocktails” of controlled substances including diazepam, hydrocodone, oxycodone and alprazalam.

Hillman is scheduled to appear before U.S. Magistrate Judge Stephanie K. Bowman in Cincinnati on Thursday, January 24, 2013 at 1:30 p.m. for an initial appearance and arraignment on the charges.

Conspiracy to distribute drugs outside the scope of legitimate medical practice and money laundering are each punishable by up to 20 years in prison.

Stewart commended the cooperative investigation by agents and officers of the agencies named above, as well as Assistant U.S. Attorney Timothy Oakley, who is prosecuting the case.

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. 

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS – Gordon L. Yocom, 44, of Dublin, Ohio pleaded guilty to conspiracy to commit money laundering for fraudulently obtaining a mortgage loan to finance the purchase of a real estate property in Powell, Ohio.  Yocom agreed to forfeit $119,000, which represented the proceeds of this transaction.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced Yocom’s plea which was entered today before U.S. District Judge Michael Watson.

According to court documents, Yocom owned and operated a mortgage brokerage business called Gordon Lending.  Yocom and an employee of his, Nancy Rayfus, worked to arrange for a buyer to purchase a property located at 10577 Durham Place in Powell, Ohio.  The buyer was from California, but it was Rayfus’ intent to reside at the property.  The purchase contract was negotiated so Rayfus could obtain substantial cash payments at closing through the submission of two false invoices.  Yocom knowingly provided funds to Rayfus in the amount of $123,500 for the purpose of funding the majority of the down payment for the purchase this property.  Yocom purchased two official checks out of accounts that he controlled.  The checks were made payable to Landsel Title.  Yocom disguised the fact that he was the one providing the funds by having the bank place a variation of purchaser’s name as the remitter on each of the checks.

Yocom and Rayfus agreed that she would pay back the money used for the down payment from the proceeds of the sale of this property.  Rayfus arranged for $350,000 to be paid to her from the seller’s proceeds by submitting false invoices to the lender for renovations supposedly performed at this property by companies under her custody and control.  These renovations were never performed, and Rayfus was issued two checks payable to My Home Specialists Network and Norvath Group from Landsel Title in the amounts of $187,500 and $162,500, respectively.  Rayfus deposited these funds into her bank accounts and then wrote a check payable to Yocom for $119,900, which Yocom deposited into his bank account.  At the time of this deposit, Yocom was aware that these funds were the proceeds of false statements made to the lender.

Conspiracy to commit money laundering is punishable by up to ten years in prison and a fine of up to $250,000, or twice the value of the property involved, whichever is greater.

Yocom was released on bond pending his sentencing, for which a date has not yet been set.

On December 29, 2011, Nancy Rayfus pleaded guilty to one count of money laundering and is scheduled to be sentenced on February 14, 2013.

Stewart commended the cooperative investigation conducted by IRS and FBI agents as part of the Southern Ohio Mortgage Fraud Task Force, along with Assistant U.S. Attorneys Laura Fulton and Dan Brown, who are prosecuting this case.

CONTACT: Fred Alverson
Public Affairs Officer

CINCINNATI – Glen Galemmo, 48, of Cincinnati, who owned Queen City Investments and other investment companies in the Cincinnati area, pleaded guilty in U.S. District Court to wire fraud and money laundering, admitting that he defrauded investors by soliciting millions of dollars from them between 2005 and July 2013 and spent the money rather than investing it.           

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) announced the pleas entered today before Senior U.S. District Judge Herman Weber.

According to court documents, Galemmo lured investors with promotional materials falsely claiming returns of more than 30 percent over seven years.

From 2006 to July 2013, Galemmo received approximately $87 million cumulatively from individual investors, trusts, charitable organizations, and retirement accounts. During this time, Galemmo also received approximately $29 million from some of these investors in the form of short-term loans. The vast majority of these funds were never invested in anything. Rather, the funds were paid to other investors in the form of principal and/or interest payments or spent by Galemmo to finance other businesses or pay for personal expenses.

To induce investors to continue to invest with him, Galemmo mailed or emailed fraudulent monthly statements to investors. To create the monthly statements, each client's principal investment balance was merely multiplied by a fictitious percentage of return, consistent with the returns that Galemmo had promised to his clients. The statements showed positive account balances and fictitious earnings, when in fact, the money had not been invested as promised. Galemmo issued account statements for approximately 260 different investment accounts for the month of April 2013 reporting that these accounts held a total of approximately $109 million. In fact, Queen City Investments held only a small fraction of that balance on behalf of clients.

Galemmo’s investment scheme involved approximately 200 investors.

Each crime is punishable by up to 20 years in prison, restitution and forfeiture but the court will determine the actual sentence after it conducts its own investigation. Judge Weber scheduled sentencing for May 28, 2014 at 10 a.m.

Galemmo agreed to forfeit three pieces of real estate, including a condo in Marco Island, Florida, the contents of bank and investment accounts and five vehicles. The plea agreement requires Galemmo to make restitution to the investors in an amount to be determined by the court prior to sentencing.

“A person who creates a web of financial lies will soon be caught up in it. Mr Galemmo offered rates of return of over 30% to his clients and unfortunately these were false promises, “ said Kathy A. Enstrom, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office.

U.S. Attorney Stewart commended the investigation by IRS special agents as well as Assistant U.S. Attorneys Emily Glatfelter and Tim Mangan, who are prosecuting the case.

DAYTON ARMED CAREER CRIMINAL SENTENCED TO MORE THAN 29 YEARS IN PRISON

CONTACT: Fred Alverson
Public Affairs Officer

DAYTON – Mickey Allen Fugate, Jr, 40, of Dayton, Ohio was sentenced in U.S. District Court to serve 25 years in prison for an armed robbery he committed in 2009 and an additional 50 months in prison for committing the robbery while on supervised release for earlier federal crimes.

Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, and Dayton Police Chief Richard Biehl announced the sentence handed down today by U.S. District Judge Walter H. Rice.

Fugate pleaded guilty on August 28, 2013 to one count of interference with interstate commerce by threats or violence (Hobbs Act) and one count of possession of a firearm following three or more violent felony convictions, (Armed Career Criminal Act).

According to a sentencing memorandum filed by Assistant U.S. Attorney Mary Beth Young prior to today’s hearing, Fugate robbed the Kwik-N-Kold convenience store on Wyoming St. in Dayton, Ohio at gunpoint in November 2009. During the robbery, Fugate shot a male store clerk. The bullet fired at the male clerk struck the victim in the right arm, traveled through his chest cavity, and punctured his right lung, resulting in permanent loss of a portion of the lung. Fugate stole a cash register tray and plastic tip jar and approximately $465 in cash.  Fugate led two citizens who followed him as he fled the robbery in a chase throughout the surrounding area, during which he brandished and discharged a firearm.

Dayton Police officers recovered the cash register tray, tip jar, $168 cash, and the Smith and Wesson handgun used during the robbery from the residence to which Fugate fled. At the time of the robbery, Fugate was on supervised release after serving time in federal prison for armed bank robbery and use of a firearm in a crime of violence and a separate federal charge of attempted escape. He also had two prior Ohio burglary convictions, for which he also served prison terms.

“The offense conduct is all the more disturbing in light of Fugate’s history, which places this offense as only the most recent in a string of violent offenses committed by Fugate,” Assistant U.S. Attorney Young wrote.

U.S. Attorney Stewart commended the cooperative investigation by special agents of the FBI and Dayton Police, as well as Assistant U.S. Attorneys Vipal Patel and Mary Beth Young, who prosecuted the case.
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CONTACT: Fred Alverson
Public Affairs Officer

DAYTON – Edward “Ed” Claude Jones, 55, of West Carrollton was sentenced to 24 months in prison, 3 years of supervised release, and agreed to a $300,000 money judgment relative to committing conspiracy, food stamp fraud and tax crimes in connection with two businesses in which he was involved, the InBetween Quick Mart in Moraine and Arrow Battery in West Carrollton.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, and Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) announced the sentence handed down by U.S. District Judge Thomas M. Rose.

The Dayton Major Crimes Task Force, which is part of the Ohio Organized Crime Investigations Commission in Attorney General DeWine’s Office, investigated the case.

According to court documents, Jones and others conspired between February 2009 and February 2011 to hide money received from the sale of counterfeit goods or the illegal purchase of Electronic Benefit Transfer “food stamp” cards by cashing 12 checks of more than $10,000 each and failing to file reports required by the Bank Secrecy Act involving large cash transactions.

Jones also filed an income tax return with the IRS using the name “Randy Banker”, a deceased individual, and a Social Security number belonging to an individual in Westerville, Ohio in an effort to conceal income he received.

Stewart commended the cooperative investigation by the task force agencies which include the Internal Revenue Service Criminal Investigation (IRS), the U.S. Department of Agriculture Office of Inspector General – Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Ohio Bureau of Criminal Investigation (BCI), the Ohio Investigative Unit, and the police departments in Centerville, Kettering, West Carrollton, Moraine and Oakwood, and the Tactical Crime Suppression Unit. He also commended Assistant U.S. Attorney Dwight Keller, who prosecuted the case.

CONTACT: Fred Alverson
Public Affairs Officer

DAYTON – Earl Clark, 40, of Franklin, Ohio, was ordered to forfeit two bank accounts containing $353,211.91 and $33,388.14, plus $21,524 in U.S. currency, nine automobiles, and a trailer, and to pay $80,000 in restitution to the Internal Revenue Service (IRS) for committing violations of money laundering, dealing in explosives without a license, and willfully filing a false federal income tax return with the IRS, relative to his ownership of Clark’s Auto Sales.  Clark was also sentenced to serve 12 months and one day in prison, 3 years of supervised release, and fined $10,000.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office; Robin Shoemaker, Special Agent in Charge, Bureau of Alcohol Tobacco, Firearms and Explosives (ATF); Robert Corso, Special Agent in Charge, Drug Enforcement Administration (DEA) and members of the Warren County Drug Task Force, announced the sentence handed down by U.S. District Judge Thomas M. Rose.

According to court documents, Earl Clark has owned and operated Clark’s Auto Sales since 2004.  Clark assisted several individuals in concealing their assets, which represented the proceeds of illegal drug sales.  Between 2007 and October 2010, Clark sold cars to individuals he knew as “dope boys,” a term to describe people engaged in the sale of illegal narcotics.  Clark titled these cars in the names of individuals other than the drug dealers in order to help conceal ownership of the vehicles, and he placed false liens of the vehicles, in efforts to prevent law enforcement from trying to seize the property as proceeds of drug trafficking.

Clark laundered the proceeds from the illegal auto sales by depositing cash, totaling between $120,000 and $200,000, into his bank account. 

Clark also sold illegal fireworks between June 2009 and June 2010 from his auto dealership, an activity which constitutes explosives dealing under Federal law.  Clark did not have a license to distribute, possess, or sell these explosive materials.

In addition, Clark earned significant income between 2004 and 2009 from the sale of fireworks and explosive materials but failed to report some of that income on his federal tax returns.  Clark willfully failed to report at least $80,000 in income per year during each of these tax periods, resulting in a tax loss to the IRS in excess of $80,000.

Darryl Williams, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office stated, “Not only was Earl Clark sentenced to significant jail time, but the government seized a significant portion of the illegal proceeds through asset forfeiture.  IRS, Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”

Stewart commended the cooperative investigation by agents of the IRS Criminal Investigation, ATF, DEA, and the Warren County Drug Task Force, along with Assistant U.S. Attorney Brent Tabacchi, who is prosecuting this case.

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS – David P. Crail, 35, of Dublin, Ohio was sentenced to 100 months in prison for being a convicted felon in possession of firearms, growing marijuana at a house in Dublin, Ohio and making a false statement in an application for a U.S. passport.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), Columbus Police Chief Kimberly Jacobs and Franklin County Sheriff Zach Scott announced the sentence handed down today by U.S. District Judge Algenon L. Marbley.

According to court documents, members of the FBI Columbus Metropolitan Violent Crimes Task Force tracked Crail to 3256 Rothschild Court in Dublin on April 27, 2010 after they received information from the FBI in Michigan that Crail was wanted there. Crail was living in Dublin at the time under the name of Raymond Howard Lyons. Crail had applied for a passport using fraudulent documents with that name.

When task force officers searched the house, they found an indoor marijuana growing operation and seized 130 marijuana plants. Investigators also found three handguns, five rifles and a shotgun located in Crail’s bedroom. Task force officers arrested Crail.

Crail pleaded guilty on October 19, 2012 to one count of manufacturing marijuana, one count of illegally transporting firearms, and one count of making a false application on a passport. He was sentenced to 100 months on each count with the sentences to run concurrently. He has been in custody since his arrest.

Crail was convicted in February 2000 on state charges of assault with a weapon in Michigan. Federal law prohibits convicted felons from owning or possessing firearms or ammunition.

“The defendant committed three separate offenses while on the run from felony charges in Michigan,” Assistant U.S. Attorney David Bosley wrote in a memorandum filed with the court prior to sentencing. “He also used this name to buy firearms and apply for a United States Passport. The defendant acquired the numerous firearms in his residence after being convicted of a felony and some of them while on the run for new felony charges.”

Stewart commended the cooperative investigation by members of the task force and Assistant U.S. Attorney Bosley, who prosecuted the case on behalf of the U.S. government.

CONTACT: Fred Alverson
Public Affairs Officer

CINCINNATI – Tawanda Marimbire, 23, of Cincinnati pleaded guilty in U.S. District Court to conspiring with others to use stolen identities and obtain fraudulent income tax refunds.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Mark Porter, Special Agent in Charge, U.S. Secret Service, and Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office (IRS), announced the plea entered today before Chief U.S. District Judge Susan Dlott.

Mirambire pleaded guilty to one count of conspiracy to commit wire fraud. According to court documents, Mirambire and others began the conspiracy in 2007 and continued through approximately April 2012.

Members of the conspiracy stole identities and used them to file fraudulent income tax returns, receiving refunds on debit cards. Once the false income tax refunds were deposited on the prepaid debit cards, the cash was removed from the debit cards at ATM machines or by purchasing money orders. Mirambire and other coconspirators then committed additional federal offenses through their attempts to transfer, conceal, and divert the proceeds of this criminal activity. The cash was sometimes used by the conspirators to purchase expensive vehicles for transport to Zimbabwe. Mirambire and other conspirators also transferred the fraud proceeds to Zimbabwe in various ways, including direct wires.

The plea agreement says there were more than 250 victims and the amount of loss is between $2.5 million and $7 million.

Mirambire was one of seven indicted in September 2012. Charges against others are pending. Five of those charged remain fugitives. They are:             Kudzaiishe C. Marimbire, 34
Hlomera Mabhande, 30
Johanes Tagarisa, 37
Andrew T. Bere, 22
Julius Marimbire, 32

The remaining defendant is on bond.

Conspiracy to commit wire fraud is punishable by up to 20 years in prison. Judge Dlott will schedule a sentencing hearing.

Assistant United States Attorney Timothy Mangan is representing the United States in this case. 

 

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS, OHIO -- A federal grand jury here has indicted Jose Luis Martinez, 46, of Columbus, Ohio, and Mercedes Emelinda-Silie, 40, of Grove City, Ohio charging them both with one count of conspiracy to defraud the United States government by obtaining and negotiating U.S. Treasury checks representing purported tax refunds; 39 counts of converting U.S. monies to their own use; one count of conspiracy to commit money laundering offenses; one count of operating an unlicensed money transmitting business; and eight counts of identity theft.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office; and Dugan T. Wong, Assistant Inspector in Charge, U.S. Postal Inspection Service announced the indictment that was returned today.

The indictment alleges that between February 2010 and December 2012, Martinez and Emelinda-Silie conspired together and with others primarily in New York state to illegally use their business checking accounts here in Columbus in order to cash fraudulently procured IRS income tax refund checks.  The indictment charges that fraudulent tax returns were filed with the IRS seeking refunds in the names of persons living in Puerto Rico whose identities had been stolen.  The IRS mailed the fraudulently obtained refund checks to addresses typically in the Bronx and other New York sites where they were stolen from the mail.  In addition, the endorsements on the false refund checks allegedly were forged.

Martinez and Emelinda-Silie allegedly cashed at least $638,730.81 in fraudulent income tax refund checks through their San Isidro Cargo business account, and another $125,506.88 in purported income tax refund checks through Grini’s Salon business checking account.

Martinez and Emelinda-Silie allegedly provided check-cashing services even though neither of them, nor their business, was licensed in Ohio to operate as a check-cashing facility.

In addition, the indictment charges that between June 2010 and February 2011 Martinez and Emelinda-Silie converted 39 specific IRS tax refund checks totaling approximately $245,661.80 that the IRS had mailed to addresses primarily in New York.

The indictment further alleges that between June 2010 and November 2011 Martinez and Emelinda-Silie knowingly used stolen identities of eight individuals in relation to their conversions of government funds.

Conspiracy to cash bogus IRS refund checks refunds is punishable by up to 10 years in prison and a $250,000 fine.  Each conversion of government money as well as conspiracy to commit money laundering is punishable by up to 10 years in prison and a $250,000 fine.  Operating an unlicensed money transmitting business is punishable by up to five years in prison and a $250,000 fine.  Each identity theft is punishable by a two-year term of imprisonment in addition to any other prison terms that may be imposed in this case.

The defendants will be summoned to appear before Judge Gregory L. Frost for arraignment.

“Identity theft is a despicable crime that victimizes honest taxpayers and causes immense hardship,” said Darryl Williams, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.  “IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority.”

Assistant United States Attorney Daniel Brown is representing the United States in this case that is being investigated by special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service.

CONTACT: Fred Alverson
Public Affairs Officer

CINCINNATI – Paul G. Fox, 48, of Franklin, Ohio was sentenced in U.S. District Court today to 144 months in prison for possession of more than 600 images of child pornography, depicting children under 12 years old in sadistic and masochistic conduct.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Marlon Miller, Special Agent in Charge, Homeland Security Investigations (HSI), and members of the Greater Cincinnati Internet Crimes Against Children Task Force (ICAC) announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith. 

Fox pleaded guilty on April 24, 2013 to one count of receipt of child pornography. According to court documents, HSI received a child exploitation referral from the Queensland Police in Australia regarding images posted on a Russian image board indicating the exchange of images of child exploitation, with information pointing to Fox. 

HSI and Franklin Police obtained a search warrant for Fox’s house on January 9, 2013 where they seized computer storage media and a computer. A forensic analysis of the computer by the Secret Service showed that Fox knowingly received multiple images and videos depicting violence or sadistic conduct. Fox possessed more than 600 images. Fox was arrested January 11, 2013 and has been in custody since his arrest.

After he completes his prison term, Fox will be under court supervision for the rest of his life. Under federal law, 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 investigation by HSI and ICAC, as well as the Regional Electronics and Computer Investigations (RECI). Agencies participating in the Greater Cincinnati ICAC, in addition to the U.S. Attorney’s Office include the FBI, U.S. Marshals Service, U.S. Secret Service, Hamilton County Prosecutor Joe Deters, Hamilton County Sheriff Jim Neil and the police departments in Amberley Village, Blue Ash, Cincinnati, and West Chester.

U.S. Attorney Stewart also commended Assistant U.S. Attorney Christy Muncy, who prosecuted the case.

CONTACT: Fred Alverson
Public Affairs Officer

COLUMBUS, OHIO – Weston Henri Moquin, 28, of Athens, Ohio pleaded guilty in U.S. District Court to one count of interstate transportation of stolen property and one count of theft from a program receiving federal funds in connection with the theft and sale of human bones and plastinated human remains from Ohio University.

Carter Stewart, U.S. Attorney for the Southern District of Ohio and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the plea entered today before Senior U.S. District Judge Peter C. Economus.

According to court documents, Moquin worked at Ohio University’s Heritage College of Osteopathic Medicine and stole materials used as teaching aids between July 2011 and June 2012. The materials included loose human bones, skulls, skeletons, plastinated human remains, autopsy saws and other materials that had been purchased by the university. Moquin sold the items primarily through his eBay account. Most of the stolen goods were shipped to customers in California, Utah and Oregon. Moquin received a total of $84,683.85 for the items. 

Each crime carries a maximum penalty of ten years imprisonment, followed by three years of supervised release. Judge Economus will determine the sentence following a pre-sentence investigation by the court. The plea agreement also calls for Moquin to pay restitution to the university.

U.S. Attorney Stewart commended the investigation by the FBI as well as Assistant U.S. Attorney Deborah A. Solove who prosecuted the case.