Western District of Oklahoma
Press releases recorded for this federal judicial district.
Former Bookkeeper for Oil Field Pipeline Supplier Sentenced to Serve 48 Months in Federal Prison for Embezzling over $7 MillionRead the Press Release
Oklahoma City, Oklahoma –RODNEY ALAN HAGER, 38, of Norman, Oklahoma, was sentenced today by United States District Judge David L. Russell to serve 48 months in federal prison for embezzlement over $7 million from his employer, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records, from 2007 through March of 2014 Hager worked as the bookkeeper of J&B Pipe Supply Co. ("J&B"), an Oklahoma City based oil field pipeline supply company. Included in his responsibilities was the making of wire transfers drawn on J&B’s corporate bank account to pay bills for the company and recording those payments in the company’s accounting software. From December of 2009 to November of 2013, during some of the same time frame that he served as J&B’s bookkeeper, Hager owned Mall Concepts of Oklahoma, Inc. ("Mall Concepts"), which operated mall kiosks in Oklahoma, Texas, Florida, Georgia, and elsewhere.
It was alleged that Hager embezzled from J&B and used three primary methods to defraud the company: (1) Hager wired funds from J&B’s bank account to accounts under his control, including Mall Concepts’ account, and disguised the transfers in J&B’s books as legitimate business expenses; (2) Hagar opened credit cards in the name of a J&B principal, used those cards for personal use, and paid the credit card bills by wiring funds from J&B’s account and disguising them in J&B’s books as legitimate business expenses; and (3) Hagar took blank checks signed by J&B principals given to him to purchase supplies or pay business expenses and used them for his personal benefit.
Hagar was charged by Information on June 3, 2016, with wire fraud and money laundering. He pled guilty on October 11, 2016, to committing wire fraud and money laundering. As part of his plea, he admitted that he would pay restitution to J&B in the amount of $7,138,804.58.
At today’s sentencing, Judge Russell sentenced Hager to serve 48 months in federal prison, followed by three years of supervised release. Hagar was also ordered to pay $7,138,804.58 in restitution to J&B.
This case is a result of an investigation conducted by the Internal Revenue Service and was prosecuted by Assistant U.S. Attorney Jessica L. Perry.
Mustang Woman Pleads Guilty to Making False Statement in Connection with the Bank of Union FailureRead the Press Release
Oklahoma City, Oklahoma – GWENDOLYN VAN HORN, 44, of Mustang, Oklahoma, pleaded guilty this week for submitting a falsified document to The Bank of Union, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
On November 1, 2016, a federal grand jury returned a two-count indictment charging Van Horn with making false statements to a federally-insured bank. At the change of plea hearing yesterday, Van Horn admitted that she submitted a fabricated letter to J.S., her loan officer at The Bank of Union, which falsely represented that Van Horn was to receive an inheritance distribution of approximately $3,000,000.00, in order to ensure her ongoing relationship with The Bank of Union.
At sentencing, Van Horn faces up to 30 years in prison, a $1,000,000 fine, and up to five years of supervised release. Per the terms of her plea agreements, Van Horn will also be ordered to pay restitution to the victim of her conduct in an amount to be determined by the court at the time of sentencing.
This case is the result of an investigation by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Julia E. Barry.
Former Jail Administrator Pleads Guilty to Civil Rights Violation for Depriving Inmate of Medical CareRead the Press Release
Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division and U.S. Attorney Mark A. Yancey of the Western District of Oklahoma jointly announced that a former McClain County, Oklahoma, Jail Administrator, Wayne Barnes, pleaded guilty today in federal court to a civil rights violation that resulted in the death of an inmate in his custody.
On October 4, 2016, a federal grand jury in the Western District of Oklahoma returned a one-count indictment charging Barnes with a civil rights violation arising out of the death of a detainee, K.W., who was housed at the Jail in June 2013. The indictment alleged that K.W. suffered from diabetes that he needed insulin to control, that K.W. did not have insulin at the Jail from the time of his arrival on June 16, 2013, and that K.W. was not evaluated or treated by a doctor, or taken to a hospital for evaluation or treatment until the afternoon of June 19, 2013. On that day, according to the indictment, Barnes observed K.W. lying on the floor of his cell, unresponsive. Only then did Barnes direct a corrections officer to call emergency medical services, who arrived to find K.W.’s pupils fixed and dilated. K.W. died on June 21, 2013, never having regained consciousness. The indictment alleged that Barnes knew that K.W. had a serious medical condition and willfully failed to provide him with necessary medical care, and that his failure to do so resulted in K.W.’s death.
At the change of plea hearing held today before U.S. District Judge Stephen P. Friot, Barnes admitted that he was made aware between June 16, 2013 and June 19, 2013 that K.W. had been booked into the McClain County Jail, and that K. W. represented that he was a Type-1 diabetic who required insulin. Barnes further admitted that Barnes failed to obtain medical care for K.W. and that, in so doing, he willfully denied K.W.’s Constitutional right to medical care. Barnes also admitted that his failure to obtain the required medical care resulted in K.W.’s death.
“Every person in this country, including inmates in our jails, is protected by the U.S. Constitution, which requires jailers to provide necessary medical care to all persons in their custody,” said Acting Assistant Attorney General Wheeler. “The Civil Rights Division will hold corrections officers like this defendant accountable for failing to uphold their oaths to enforce and defend our Constitution.”
“Inmates deserve and the law requires that adequate medical care be provided by penal institutions,” said U.S. Attorney Yancey. “Denying needed medical treatment to cut costs is inhuman and unconstitutional.”
At sentencing, Barnes faces a maximum sentence of life in prison. Sentencing for Barnes will be set by the court on a future date.
This case was investigated by the Oklahoma City Division of the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Julia Barry of the Western District of Oklahoma and Deputy Chief Kristy Parker of the Criminal Section of the Civil Rights Division of the Department of Justice.
Former Altus Bank President Sentenced to Four Years in Federal Prison for Bank Fraud and Ordered to Pay $10 Million in Restitution to FDICRead the Press Release
Oklahoma City, Oklahoma –PAUL HAROLD DOUGHTY, 67, of Edmond, Oklahoma, the former president and chairman of First State Bank of Altus ("FSB"), was sentenced today to 48 months in federal prison after a jury convicted him in July of 2016 of bank fraud, conspiracy to commit bank fraud, misapplication of bank funds, making a false bank entry, and unauthorized issuance of a bank loan in connection with FSB and various loan schemes, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. At today’s sentencing, United States District Judge David L. Russell also ordered Doughty to pay $10,120,166.58 in restitution to the Federal Deposit Insurance Corporation ("FDIC"). On December 2, 2016, FRED DON ANDERSON, 67, of Eagle Point, Oregon, was sentenced to 18 months in federal prison after pleading guilty to conspiring with Doughty to commit bank fraud. Anderson partnered with Doughty in several businesses headquartered in Altus. In July 2009, state banking regulators closed FSB due to the bank’s loan losses, and the FDIC was appointed as the bank’s receiver.
In April 2015, a federal grand jury charged Doughty and Anderson with fraud related to three alleged loan schemes: (1) a series of FSB loans to finance a real estate development in Routt County, Colorado; (2) a series of "senior life settlement loans" from FSB to support an Altus aerospace company; and (3) a $2 million unauthorized loan from FSB to a company under Doughty and Anderson’s control.
On July 1, 2016, after hearing seven days of trial evidence, a federal jury returned a guilty verdict against Doughty on ten counts relating to the three loan schemes. The jury acquitted Doughty on three charges. The jury heard that in 2006 and 2007, Doughty and Anderson recruited buyers for 19 Colorado real estate lots priced at approximately $700,000 each. Doughty approved and issued 14 lot loans to buyers, totaling more than $10,000,000 in loan proceeds for the seller, Mountain Adventure Property Investments, LLC ("MAPI"). MAPI was a Colorado company that Anderson had an indirect ownership interest in and where he served as president and manager. Evidence at trial showed that each loan exceeded Doughty’s individual lending authority at FSB, and most of the loans were issued without approval of FSB’s loan committee, including a $580,000 loan to Anderson’s personal company. The jury heard that Doughty and Anderson presented lots to borrowers as “zero money down” investments, and that the down payments for the purchases were often advanced or refunded to the buyers by Anderson on behalf of MAPI. Doughty and Anderson also assured the buyers that MAPI would make all payments on the loans to the bank. The jury heard that on the few occasions when Doughty presented a Colorado loan to FSB’s loan committee, he misrepresented the source and amount of borrowers’ down payments and the borrowers’ responsibility for making payment on the loans. In connection with these Colorado lot loans, the jury convicted Doughty of one count of bank fraud conspiracy, four counts of bank fraud relating to separate lot loans, and one count of unauthorized issuance of a loan to Anderson’s personal company.
Trial evidence also showed that Doughty funded five so-called "senior life settlement" loans through FSB in 2008. Each loan was $2.5 million, and one of the loans went to Anderson’s personal company. Doughty and Anderson recruited borrowers to take out these "self-paying" loans to provide money for investments in Altus-based Quartz Mountain Aerospace, Inc. ("QMA"). Evidence at trial showed that a portion of the loan proceeds was invested in QMA, and another portion would pay the loan’s interest. The remaining proceeds on the loans would buy and maintain third-party life insurance policies, where the death benefits on the third parties were intended to repay the loan’s principal. The jury heard that each loan exceeded Doughty’s lending authority, and that he issued at least $10,000,000 in senior life settlement loans without FSB’s loan committee or board approval. With each loan, Doughty and Anderson directed $125,000.00 in "service fees" to Altus Ventures, a company under their control. The jury heard evidence that at the time the loans were issued, the fees to Altus Ventures were not disclosed to FSB or to the borrowers taking out those loans. In connection with the senior life settlement loans, the jury convicted Doughty of one count of misapplication of bank funds and one count of a false entry in bank records related to the concealment of the fees to Altus Ventures.
Finally, the jury heard evidence that in January 2008, Doughty arranged a $2 million loan from FSB to Ethanol Products Group, LLC (“EPG”), a startup company in which both Anderson and Doughty had ownership interests. Evidence showed that Doughty advanced the $2 million from FSB, above his individual lending authority, without approval by FSB’s loan committee or board. Soon before issuing the loan, Doughty e-mailed Anderson his "cash strategy" for two other companies they controlled; the "strategy" showed all the EPG loan proceeds would be directed to companies controlled by Anderson and Doughty, ultimately diverting $100,000.00 in "officer bonuses" to Anderson and Doughty. The jury found Doughty guilty of one count of unauthorized issuance of a loan and one count of misapplication of bank funds related to the EPG loan.
At today’s sentencing, United States District Judge Russell sentenced Doughty to 48 months in federal prison, followed by three years of supervised release. Judge Russell also ordered Doughty to pay $10,120,166.58 in restitution to the FDIC. Doughty must report to federal prison on Monday, April 3, 2017.
On December 2, 2016, Judge Russell sentenced Anderson to 18 months in federal prison, followed by three years of supervised release. Anderson was also ordered to pay $3,250,409.12 in restitution to the FDIC. On April 14, 2016, Anderson pleaded guilty to a one-count Information charging him with conspiring with Doughty to commit bank fraud. As part of the plea agreement, the government agreed to dismiss at sentencing the charges against him from the indictment. Anderson testified as a witness for the government at Doughty’s trial.
These convictions are the result of an investigation conducted by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation - Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson.
Oklahoma City Woman to Serve 27 Months in Prison for Committing Health Care Fraud and Food Stamp FraudRead the Press Release
Oklahoma City, Oklahoma – Mark A. Yancey, United States Attorney for the Western District of Oklahoma, and Scott Pruitt, Attorney General for the State of Oklahoma, jointly announce that SHALONDA SUGGS, 36, of Oklahoma City, was sentenced by Chief United States District Judge Joe Heaton to serve 27 months in federal prison for submitting false claims to Medicaid for behavioral health counseling services and for stealing Supplemental Nutrition Assistance Program benefits (SNAP benefits, formerly known as food stamps). Suggs was also ordered to pay restitution to Medicaid in the amount of $204,334.24 and to the Supplemental Nutrition Assistance Program in the amount of $4,959.00.
On April 5, 2016, Suggs was indicted on sixteen counts of health care fraud and one count of theft of government funds. The Indictment alleged that in July 2013, Suggs opened a behavioral health counseling agency called Focus Pointe Counseling, LLC. It was alleged Suggs obtained a contract with the Oklahoma Health Care Authority (OHCA), which allowed Focus Pointe to receive reimbursement from Medicaid for providing behavioral health counseling services to Medicaid-eligible children. It was alleged that Suggs then submitted Medicaid claims for behavioral health counseling services that were purportedly provided by four counselors supposedly employed by Focus Pointe. It was alleged that the counselors were never actually employed by Focus Pointe and never provided any of the counseling services claimed by Focus Pointe. It was alleged that the OHCA paid Focus Pointe for the false claims and that Suggs used the proceeds for her personal benefit. It was further alleged that during the time period Suggs was fraudulently receiving funds from the OHCA, she was receiving SNAP benefits by making false statements to the Oklahoma Department of Human Services that she was unemployed and had a negligible source of income.
On June 30, 2016, Suggs pled guilty to two counts of the Indictment. Suggs admitted that she used Focus Pointe Counseling to submit a claim to the OHCA using the name and Medicaid provider number of a certain counselor for a behavioral counseling session. Suggs admitted that the counselor was not in fact employed by Focus Pointe and that the counseling session never actually occurred. She also admitted that from August 2014 through May 2015, she was receiving SNAP benefits that she obtained by making false statements about her lack of income.
Medicaid and SNAP are programs that are funded and administered jointly by the federal government and the State of Oklahoma. This case is the result of a cooperative federal and state investigation by the Federal Bureau of Investigation, the Oklahoma Attorney General’s Office, and the United States Department of Agriculture, Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Amanda Maxfield Green and Oklahoma Assistant Attorney General Lory Dewey.
Owner and Finance Manager of Norman Used Car Lot to Serve 41 Months and 31 Months in Prison for Bank Fraud SchemeRead the Press Release
Oklahoma City, Oklahoma – TIMOTHY JAY WILLIAMS, 54, of Edmond, Oklahoma, and STEPHEN L. BUTZ, 53, of Blanchard, Oklahoma, were both sentenced this week to serve 41 months and 31 months respectively for bank fraud that they committed against the Bank of Union and other financial institutions, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. The men were also ordered to pay restitution of $1,260,725.43 to their victims.
Williams was the owner of Lindsey Street Motors, a used car lot in Norman, Oklahoma, and Butz was his finance manager. According to court documents, Williams entered into a Commercial Security Agreement with The Bank of Union on behalf of Lindsey Street Motors that granted the bank a secured interest in all used motor vehicles, proceeds, and products of Lindsey Street Motors. In return, The Bank of Union extended to Williams and Butz a line of credit to purchase used vehicles and hold them as inventory until sold. After obtaining the loan proceeds, Williams and Butz sold collateralized vehicles out of trust, without the knowledge or permission of The Bank of Union, and did not use the sales proceeds to repay the Bank. In addition, after purchasing vehicles with The Bank of Union financing, Williams and Butz obtained duplicate vehicle titles from the Oklahoma Tax Commission, which they provided to buyers, without notifying the Bank of Union of the vehicle sales or repaying Lindsey Street Motors’ line of credit.
Both Williams and Butz pleaded guilty before United States District Judge Judge Miles La-Grange in August of 2016. Each admitted that their conduct caused a loss in an amount between $550,000.00 and $1,500,000.00.
At their sentencing hearings this week, Williams was sentenced to 41 months in prison, to be followed by 3 years of supervised release. Butz was sentenced to serve 31 months in prison, also to be followed by 3 years of supervised release. In addition, Judge Miles-LaGrange ordered both men to pay $1,260,725.43 in restitution to the victims of their conduct, for which they are jointly and severally liable.
This case is the result of an investigation by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Lawton Tax Return Preparer to Serve 18 Months in Prison for Earned Income Credit Tax Fraud SchemeRead the Press Release
Oklahoma City, Oklahoma – LAQUINTA Q. FISHER, a former tax return preparer from Lawton, Oklahoma, was sentenced to serve 18 months in federal prison for an earned income credit tax fraud scheme involving false reporting of income and dependents, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to an indictment on August 17, 2016, Fisher was a self-taught tax return preparer who prepared federal tax returns for individuals in the Lawton, Oklahoma, area for tax years 2010 through 2014. She recruited clients by word of mouth and by distribution of flyers. Fisher advised her clients that all they needed was a dependent child in order to receive a refund from the government. She then falsified returns for clients by adding fictitious income to increase the earned income credit (EIC) and by adding false dependents to maximize the EIC, which resulted in false refund claims. Fisher prepared and submitted the returns for her clients electronically to the IRS.
Fisher pled guilty on October 5, 2016. Today, she was sentenced by United States District Judge David Russell to serve 18 months in federal prison, followed by three years of supervised release. She was also ordered to pay $133,955 in restitution to the IRS. Reference is made to court filings for further information.
This case is the result of an investigation by IRS-Criminal Investigations and was prosecuted by Assistant U.S. Attorney Rozia McKinney-Foster.
Former Correctional Officer Pleads Guilty to Having Illegal Sexual Contact with an Inmate and is Sentenced to 60 Months of ProbationRead the Press Release
Oklahoma City, Oklahoma – AMANDA HOCK, 35, of Kingsland, Georgia, pled guilty today to having illegal sexual contact with an inmate at the Federal Correctional Institution in El Reno, Oklahoma ("FCI-El Reno"), announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. United States District Judge Stephen P. Friot also sentenced Hock to five years of probation.
Hock was a Correctional Officer at FCI-El Reno until her resignation in December 2015. She was charged on September 13, 2016, with knowingly engaging in sexual contact with B.C., an inmate at FCI-El Reno, in violation of 18 U.S.C. § 2244(a)(4). At the hearing before Judge Friot today, Hock admitted to engaging in the sexual contact with the inmate on December 23, 2015. Following her guilty plea, Judge Friot sentenced Hock to 60 months’ probation, with 180 days of that sentence to be served on home detention. She was also ordered to complete 104 hours of community service within her first year of probation.
Federal law criminalizes all sexual relations and sexual contact between prison staff and inmates. See 18 U.S.C. §§ 2241, 2243, and 2244. An incarcerated individual has the right to not be pressured by anyone to engage in sexual acts and does not have to tolerate sexually abusive behavior or pressure to engage in unwanted sexual behavior from another inmate or staff member. In addition to the harm it causes to inmates, staff sexual abuse of inmates can also threaten the safety and security of the prison.
This case is the result of an investigation conducted by the U.S. Department of Justice Office of the Inspector General and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Julia Barry.
Duncan Pharmacy to Pay $50,000 to Settle Claims Involving Violations of the Controlled Substances ActRead the Press Release
Oklahoma City, Oklahoma – R&S Drug Stores, Inc. ("R&S Drug"), an Oklahoma corporation which operates three retail pharmacies in Duncan, Oklahoma, has paid $50,000 in civil penalties to the United States to settle claims stemming from alleged violations of the Controlled Substances Act, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
The Controlled Substances Act, 21 U.S.C. Sections 801 et seq. ("CSA"), was passed by Congress to combat the illegal distribution and abuse of controlled substances, including prescription medications. The CSA is enforced by the Drug Enforcement Administration's (DEA) Office of Diversion Control, whose mission is to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs. Under the CSA, entities registered with the DEA who purchase, distribute, dispense, transfer, or sell controlled substances must comply with inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, including pharmacies, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant for two years. These requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances.
The United States alleged that between August 1, 2014, and August 31, 2016, R&S Drug violated federal law by transferring controlled substances between stores without the proper documentation, failed to conduct and maintain a biennial inventory, failed to execute powers of attorney authorizing pharmacists to issue orders for Schedule I and II controlled substances on behalf of R&S Drug (the registrant), and failed to dispense controlled substances under the correct practitioner’s name and DEA registration number.
In order to resolve the claims by the United States, R&S Drug paid $50,000 in civil penalties to the government. In reaching this settlement, R&S Drug did not admit liability and the government did not make any concession regarding the legitimacy of its claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration's Office of Diversion Control, Oklahoma City District Office Diversion Group, and was prosecuted by Assistant U.S. Attorney Ronald R. Gallegos.
Houston Trucking Dispatcher Pleads Guilty to Defrauding Oklahoma City Company and is Sentenced to Serve 15 Months in Federal PrisonRead the Press Release
Oklahoma City, Oklahoma – Today RICHARD V. KELLY, 44, of Houston, Texas, pleaded guilty to wire fraud and was sentenced by United States District Judge Robin J. Cauthron to 15 months in federal prison for using a wire fraud scheme to defraud Oklahoma City company of more than $1.2 million in false billings, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Kelly was indicted on December 8, 2015, and entered his plea of guilty today. According to court records and information from the plea hearing, Kelly admitted that from December 2007 through August 2012, while he worked as a trucking dispatcher for Freeway Delivery, Inc., in Houston, Texas, he defrauded customer Midwest Hose & Specialty, an Oklahoma City company. Kelly admitted that he created false waybills and invoices for fictitious deliveries purportedly made by his wife, a truck driver who was also employed by Freeway Delivery. Kelly admitted that the false waybills and invoices showed deliveries being made for Midwest Hose to Houma, Louisiana, but that he knew no such deliveries were made. Kelly also admitted that he knew Midwest Hose would pay those invoices and that his wife would then be paid 65 to 70 percent of the total fee charged by Freeway Delivery. Finally, Kelly admitted that he created those false documents to obtain money for deliveries that never happened.
Kelly was sentenced today by Judge Cauthron to serve 15 months in federal prison and ordered to pay restitution of $1,212,320.13 to Midwest Hose. The Court also entered a money judgment in the amount of $809,115.50, directing Kelly to forfeit that amount to the United States. Kelly must report to federal prison on February 13, 2017.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney K. McKenzie Anderson.
Owner of Oklahoma City Employer Organization Pleads Guilty to Tax EvasionRead the Press Release
Oklahoma City, Oklahoma – JANIS ANN EDWARDS, 67, of Oklahoma City, Oklahoma, pled guilty last Friday to tax evasion, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to an indictment returned by a grand jury on June 22, 2016, Ms. Edwards was the sole owner of Corporate Resource Management, Inc., and a number of related companies with their principal place of business in Oklahoma City. These companies operated as "professional employer organizations," or "PEOs." In essence, they served small businesses in the central United States by, among other things, taking on responsibilities for paying their employees’ payroll and collecting and paying payroll taxes to the IRS. The employees of small businesses became employees of one of Edwards’s entities, and their payroll taxes were to be paid under the tax identification number of one of those entities.
The 23-count indictment alleges that Edwards failed to pay substantial amounts of payroll taxes collected from small businesses that had contracted with one of the CRM-related entities. The 23 counts relate to quarterly payroll tax returns filed by Oklahoma Corporate Resource, Inc.; Missouri Corporate Resource, Inc.; and Texas Corporate Resource, Inc., for various quarters in 2010 and 2011. The indictment alleges that Edwards regularly and intentionally directed her own employees to alter these quarterly tax returns to reflect less payroll tax liability than what was actually owed. For the 23 quarters identified in the indictment, Edwards is alleged to be responsible for $6,387,399.09 in unreported payroll taxes.
Last Friday, Edwards pled guilty to evading approximately $1 million in taxes owed by Missouri Corporate Resource for the fourth quarter of 2010. U.S. District Judge David L. Russell accepted her guilty plea based on her admission in open court that she knew that the company’s quarterly payroll tax return falsely underreported federal income tax due when it was stamped with her signature and filed with the IRS.
Edwards faces a maximum penalty of five years in prison, three years of supervised release, a fine of $250,000, and the costs of prosecution. In a plea agreement, she has agreed to pay restitution to the Internal Revenue Service for related tax losses, which she agrees are between $3.5 and $25 million. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Jessica L. Perry.
Reference is made to court filings for further information.
Former Norman Attorney Ordered to Pay $525,000 in Restitution to Defrauded Clients and IRSRead the Press Release
Oklahoma City, Oklahoma – Today, DANE THOMAS WILSON, 61, of Oklahoma City, was ordered by United States District Judge Timothy D. DeGuisti to pay a combined total of $525,006.71 in restitution to former clients of his law practice, to the Oklahoma Bar Association, and to the Internal Revenue Service, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. Wilson was sentenced on December 16, 2016, by Judge DeGuisti to serve 30 months in federal prison for using a wire fraud scheme to embezzle from his clients and also for failing to file a tax return.
Wilson was charged by Information and pled guilty on February 24, 2016. Wilson admitted that from December 2010 through December 31, 2011, while he was a licensed attorney practicing in Norman, Oklahoma, he defrauded his clients by misappropriating funds that he received on their behalf from insurance companies and other payors. Wilson admitted that he deposited the funds he received for the benefit of his clients into a client trust account, and then wrote checks to himself, made cash withdrawals, or transferred money from the client trust account in amounts that exceeded the attorney’s fees that he was contractually entitled to receive from each client. He admitted that, as a result of his actions, some of his clients received no money or less money than they were due from the settlements or judgments he obtained on their behalf.
Wilson also admitted that he knowingly and willfully failed to file a federal income tax return with the IRS for the tax year of 2011.
Wilson was sentenced on December 16, 2016, by Judge DeGuisti to serve 30 months in federal prison for using a wire fraud scheme to embezzle from his clients and also for failing to file a tax return. Today, Wilson was ordered to pay restitution of $329,398.70 to the Oklahoma Bar Association. The OBA has paid out this amount over several years to Wilson's victims through the Client Security Fund, which was established by the Oklahoma Supreme Court to reimburse clients who suffer a loss of money or property because of the dishonest conduct of an attorney. Wilson was ordered to pay restitution of $141,772.01 to 19 other former clients, in various amounts ranging from approximately $200 to over $75,000. Wilson was also ordered to pay $53,836 in restitution to the IRS.
This case was investigated by the Norman Police Department, the Oklahoma State Bureau of Investigation, the Oklahoma Bar Association, the Federal Bureau of Investigation, and IRS-Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
Shawnee Woman Sentenced to Serve 14 Months in Prison for Covering up Manslaughter on Indian LandRead the Press Release
Oklahoma City, Oklahoma – Anne Marie Johnson, 38, of Shawnee, Oklahoma, was sentenced yesterday by United States District Court Judge Vicki Miles-LaGrange to serve 14 months in federal prison for misprision of a felony for her role in the manslaughter of Marshall Scott Dent committed on Indian land, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and information from court proceedings, George Edmond Walker, 39, of Shawnee, and Marshall Scott Dent met on December 23, 2013. During an altercation between the two men, Walker killed Dent on Sac and Fox Nation land near Shawnee, Oklahoma. Dent was reported missing on December 24, 2013. Investigators later determined that Walker buried Dent’s body on Sac and Fox land, where Johnson lived, near Shawnee in an attempt to hide the crime. Later, Walker dug up the body and moved it to another parcel of Sac and Fox land near Meeker, Oklahoma, where he buried Dent’s body again. During the investigation, law enforcement obtained information on the location of the body, where it was later recovered by the FBI’s evidence response team.
On September 13, 2016, Johnson pled guilty to misprision of a felony because she had knowledge about the killing but failed to report it to law enforcement. Yesterday, Johnson was sentenced to serve 14 months in federal prison, to be followed by 12 months of supervised release.
On August 22, 2016, Walker pled guilty to voluntary manslaughter and unlawful removal of a dead body. Last month, Judge Miles-LaGrange sentenced Walker to serve 240 months in federal prison to be followed by three years of supervised release. That sentence was ordered to be served consecutive to a 40-year sentence Walker is currently serving for his conviction of assault and battery with a dangerous weapon in Pottawatomie County.
This case was investigated by the Sac and Fox Nation Police Department, Shawnee Police Department, Pottawatomie County Sheriff’s Office, Pottawatomie County District Attorney’s Office, and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Arvo Q. Mikkanen, Ashley Altshuler, and Lori Hines.
Oklahoma City Mother and Son Plead Guilty to Defrauding Medicaid Out of Nearly $770,000Read the Press Release
Oklahoma City, Oklahoma – DEBORAH A. GRAY, 60, and KEITH B. GRAY, II, 26, both of Oklahoma City, each pled guilty yesterday to three counts of health care fraud in connection with submitting false claims to Medicaid for behavioral health counseling services, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma, and Scott Pruitt, Attorney General for the State of Oklahoma.
On July 6, 2016, Deborah Gray and Keith Gray were indicted on 151 counts of health care fraud. The Indictment alleged that from October 2011 through May 2014, Deborah Gray owned and operated a business called DAG Counseling Services, PLLC. DAG Counseling held itself out as providing behavioral health counseling services to Medicaid-eligible children. It is alleged that Keith Gray was employed by DAG Counseling. It was alleged that the Grays devised and executed three schemes to defraud Medicaid through DAG Counseling. First, it is alleged that the Grays submitted or caused to be submitted to Medicaid claims for "targeted case management services" for periods of time when the children were actually being transported between home or school and the DAG Counseling offices, in violation of Medicaid regulations. Second, it was alleged that the Grays submitted or caused to be submitted to Medicaid claims for one-on-one "psychosocial rehabilitation services" that exceeded the billing maximum of 90 minutes per child per day, in violation of Medicaid regulations. Finally, it was alleged that the Grays submitted or caused to be submitted to Medicaid claims for one-on-one "psychosocial rehabilitation services" that (a) were not actually provided, or (b) were actually provided in groups of two or more children, or (c) were provided for less time than was billed to Medicaid.
Deborah Gray and Keith Gray each admitted to one count of executing each of the three schemes. As part of their plea, the Grays agreed to pay restitution to Medicaid in the amount of $769,578.38.
At sentencing, the Grays face up to 10 years in prison, three years of supervised release, and a $250,000 fine on each count. A sentencing date will be set by the court in approximately 90 days. Reference is made to the Indictment and other public filings for further information.
Medicaid is funded jointly by the federal government and the State of Oklahoma, and administered by the Oklahoma Health Care Authority. This case is the result of a cooperative federal and state investigation by the Federal Bureau of Investigation and the Oklahoma Attorney General’s Office Medicaid Fraud Control Unit. It is being prosecuted by Assistant U.S. Attorney Amanda Maxfield Green and Oklahoma Assistant Attorney General Lory Dewey.
Oklahoma Medical Clinics Agree to Pay $315,000 to Settle Allegations of False Claims for Medical Services Provided to Federal EmployeesRead the Press Release
Oklahoma City, Oklahoma – Mark A. Yancey, United States Attorney for the Western District of Oklahoma, announces that REHABILITATION MEDICINE OF OKLAHOMA, PLLC and BCOT, PLLC dba REHABILITATION MEDICINE OF OKLAHOMA – TULSA have paid $315,000 to settle civil claims stemming from allegations that the clinics violated the False Claims Act by submitting false claims to the Office of Workers Compensation Programs of the United States Department of Labor ("DOL-OWCP").
Rehabilitation Medicine of Oklahoma, PLLC and BCOT, PLLC dba Rehabilitation Medicine of Oklahoma – Tulsa ("RMO") are Oklahoma professional limited liability companies that operate medical clinics in Oklahoma City and Tulsa. RMO provided medical services to federal employees under the Federal Employees’ Compensation Act (FECA). FECA provides compensation benefits to civilian employees of the United States for disability due to personal injury sustained while in the performance of duty, and for employment-related disease. Benefits include rehabilitation, medical, surgical and necessary expenses. Claims for services provided under FECA are submitted to DOL-OWCP.
The United States contends that from December 8, 2010, through December 31, 2012, RMO submitted false claims for payment to DOL-OWCP. Specifically, it is alleged that RMO submitted claims to DOL-OWCP for medical services furnished to federal employees of nine federal agencies that were false because they were either (1) billed at a higher rate than allowed or (2) not performed at all.
In order to resolve the allegations brought by the United States, RMO has paid $315,000.
In reaching this settlement, RMO did not admit liability and the government did not make any concessions regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the United States Postal Service, Office of Inspector General. The case was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Tax Preparer Sentenced to 33 Months in Prison and Ordered to Pay $263,665 in Restitution to the IRSRead the Press Release
Oklahoma City, Oklahoma – At a combined plea and sentencing hearing yesterday, BURUNDI NACHELLE LOLLES, of Smyrna, Georgia, pleaded guilty to submitting a false income tax return to the IRS and was sentenced by United States District Judge Timothy DeGiusti to serve 33 months in prison, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
At her change of plea hearing, Lolles, a former resident of Oklahoma City, admitted to filing a false income tax return for the 2009 calendar year that contained a fabricated W-2 listing $12,000 in wages and $2,000 in withholding, as well as a false Form 1040 Schedule C that claimed $165 in expenses for a cleaning business, where no such business actually existed. Pursuant to a written plea agreement, Lolles further agreed to pay restitution to all victims of her relevant conduct, including restitution to the IRS for all taxes due and owing for the tax years 2009, 2010, 2011, and 2012.
At the sentencing hearing which immediately followed the guilty plea, Lolles was ordered to serve 33 months in prison followed by one year of supervised release. She was further ordered to pay $263,665 in restitution to the IRS.
This case is the result of an investigation by the Internal Revenue Service Criminal Investigation and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Shawnee Man Sentenced to Serve 20 Years in Prison for Voluntary Manslaughter on Indian LandRead the Press Release
Oklahoma City, Oklahoma – GEORGE EDMOND WALKER, 39, of Shawnee, Oklahoma, was sentenced yesterday by United States District Court Judge Vicki Miles-LaGrange to serve 240 months in federal prison for voluntary manslaughter committed on Indian land, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and information from court proceedings, Walker and Marshall Scott Dent met on December 23, 2013. During an altercation between the two men, Walker killed Dent on Sac and Fox Nation land near Shawnee, Oklahoma. Dent was reported missing on December 24, 2013. Investigators later determined that Walker buried Dent’s body on Sac and Fox land near Shawnee in an attempt to hide his crime. Later, Walker dug up the body and moved it to another parcel of Sac and Fox land near Meeker, Oklahoma, where he buried Dent’s body again. During the investigation, law enforcement obtained information on the location of the body, where it was later recovered by the FBI’s evidence response team.
On September 15, 2015, Walker was indicted by a federal grand jury along with Anne Marie Johnson. On August 22, 2016, Walker pled guilty to voluntary manslaughter and unlawful removal of a dead body. This afternoon, Judge Miles-LaGrange sentenced Walker to serve 240 months in federal prison to be followed by three years of supervised release. This sentence was ordered to be served consecutive to a 40-year sentence Walker is currently serving for his conviction of assault and battery with a dangerous weapon in Pottawatomie County.
"This crime was extremely violent and consistent with this defendant’s long history of assaultive behavior," said U.S. Attorney Yancey. "We are satisfied that the combined federal and state sentences will ensure that Walker remains behind bars for decades."
On September 13, 2016, Johnson pled guilty to misprision of a felony and is awaiting sentencing currently set for January 4, 2017.
This case was investigated by the Sac and Fox Nation Police Department, Shawnee Police Department, Pottawatomie County Sheriff’s Office, Pottawatomie County District Attorney’s Office, and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Arvo Q. Mikkanen, Ashley Altshuler, and Lori Hines.
Attorney Sentenced to Serve 14 Years in Prison for Traveling from Oklahoma City to Peru to Engage in Sex with Girls Under 18Read the Press Release
Oklahoma City, Oklahoma – Today, MICHAEL DEAN BILLINGS, 61, a former attorney from Oklahoma City, was sentenced by United States District Judge Vicki Miles-LaGrange to serve 168 months (14 years) in federal prison for traveling from Oklahoma City to Iquitos, Peru, to engage in illicit sexual conduct with Peruvian girls under 18 years of age, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Billings was indicted on October 22, 2014. On November 12, 2015, he pled guilty to traveling internationally from Oklahoma City to Iquitos, Peru, from January 1, 2011 through February 21, 2013, to engage in illicit sexual conduct with a Peruvian girl under 18 years of age. Reference is made to the court record for further information.
Today, Billings was sentenced to serve 168 months in federal prison. Following his release from prison, Billings will serve five years of supervised release and be required to register as a sex offender for life. He was immediately remanded into custody of the United States Marshal to begin serving his sentence.
This case is the result of an investigation by the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, and the Peruvian National Police. The case is being prosecuted by Assistant U.S. Attorney David Petermann.
Cushing Man Sentenced to 135 Months in Prison for Obtaining Child Pornography via Facebook and Then Distributing ItRead the Press Release
Oklahoma City, Oklahoma – CARLOS OZZ FRITINGER, 24, of Cushing, was sentenced today by United States District Court Judge Robin Cauthron to serve 135 months in federal prison for distributing child pornography that he acquired from minors on Facebook, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and information from court proceedings, in 2014 and 2015, Fritinger, using a fake name, persuaded a 13-year-old girl and a 14-year-old girl to produce and send him pornographic photographs via private Facebook messages. Using explicit anatomical detail, Fritinger directed the minors, telling them how he wanted them to produce the images of their genitalia. Fritinger later distributed a pornographic image of the 13-year-old to a third party. A search of Fritinger’s cell phone revealed numerous images of child pornography.
A federal grand jury returned an Indictment against Fritinger on July 20, 2016, charging him with producing, possessing, and distributing child pornography. He pled guilty to distributing child pornography on September 13, 2016.
After completing his 135-month prison term, Fritinger will have to register as a sex offender and will be placed on supervised release by the United States Probation Office for five years.
This case was investigated by the Oklahoma Internet Crimes Against Children Task Force, including the Oklahoma State Bureau of Investigation, the Payne County Sheriff’s Department, and the Cushing Police Department. The case was prosecuted by Assistant U.S. Attorney Brandon Hale.
United States Attorney for Western District of Oklahoma Involved in Collecting Nearly $33 Million in Fiscal Year 2016Read the Press Release
Oklahoma City, Oklahoma -- The United States Attorney’s Office for the Western District of Oklahoma was involved in collecting a total of $32,930,718.06 in civil and criminal cases and through asset forfeiture in Fiscal Year 2016, announced Mark A. Yancey, United States Attorney.
The Western District of Oklahoma collected $25,579,014.06 in criminal and civil actions handled by the district. Of this amount, $19,944,021.01 was collected in criminal actions and $5,634,993.05 was collected in civil actions. The U.S. Attorney’s Office also worked with partner agencies and divisions to collect an additional $7,351,704 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Attorney General Loretta E. Lynch announced today that the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
"Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse," said Attorney General Lynch. "Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation."
"My office was involved in recovering over $25.5 million in criminal and civil cases alone in fiscal year 2016 – slightly more than double the amount collected last year," said U.S. Attorney Yancey. "This total includes the recovery of tax dollars taken by fraud and restitution for victims of crime. As always, I am extremely proud of these tremendous results and of the exceptional work of the talented women and men in the U.S. Attorney’s Office, particularly in our Asset Recovery Unit."
Significant Collection Cases in the Western District of Oklahoma
In December of 2015, property owned by Julie Ann Smith was forfeited and sold yielding $135,274 to be applied to her restitution debt. Smith was convicted by a jury of committing bank fraud, mail fraud, aggravated identity theft, forged securities, and filing a false tax return and was sentenced in March 2015 to serve 94 months in prison and pay $1,237,939 in restitution. Efforts to collection amounts remaining for restitution are on-going.
In May of 2016, Larry Sanford Waters, of Edmond, was sentenced to serve 12 months and a day for check forgery and signing a false federal income tax return. In addition, he was ordered to pay a $100,000 fine and $296,707 in restitution. He made a total payment of $396,707 at sentencing.
In June of 2016, Fedcare, LLC, and The Broadway Clinic of Tulsa, LLC, paid $2,500,000 to the United States to settle civil claims stemming from allegations that the clinics violated the False Claims Act by submitting false claims to the U.S. Department of Labor Office of Workers Compensation Programs (DOL-OWCP). Specifically, the government alleged that that the claims submitted to DOL-OWCP for medical services furnished to federal employees of fourteen federal agencies were false because they were either (1) billed at a higher rate than allowed or (2) not performed at all.
In June of 2016, property owned by Daniel Bowling was sold and $945,802.61 was applied to his restitution debt. Bowling was convicted by a jury of committing bank fraud in November of 2007 and was sentenced in August 2008 to serve eight months in prison and pay restitution.
In July of 2016, Bell Contracting, Inc., and Redlands Contracting, LLC paid $1,398,967.84 to settle civil claims stemming from allegations that the companies negligently caused a fire that damaged the Wichita Mountains Wildlife Refuge in Comanche County, Oklahoma.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Department of Agriculture, U.S. Department of Labor, Small Business Administration and Department of Education.
Former Norman Attorney to Serve 30 Months in Prison for Defrauding ClientsRead the Press Release
Oklahoma City, Oklahoma – Today, DANE THOMAS WILSON, 61, of Oklahoma City, was sentenced by United States District Judge Timothy D. DeGuisti to serve 30 months in federal prison for using a wire fraud scheme to embezzle from the clients of his law practice and also for failing to file a tax return, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Wilson was charged by Information and pled guilty on February 24, 2016. Wilson admitted that from December 2010 through December 31, 2011, while he was a licensed attorney practicing in Norman, Oklahoma, he defrauded his clients by misappropriating funds that he received on their behalf from insurance companies and other payors. Wilson admitted that he deposited the funds he received for the benefit of his clients into a client trust account, and then wrote checks to himself, made cash withdrawals, or transferred money from the client trust account in amounts that exceeded the attorney’s fees that he was contractually entitled to receive from each client. He admitted that, as a result of his actions, some of his clients received no money or less money than they were due from the settlements or judgments he obtained on their behalf. Specifically, Wilson admitted that he caused First American Bank in Oklahoma to use interstate wire communications with the bank’s processor in Texas to withdraw $40,000 from his client trust account. He admitted that this money was fraudulently misappropriated from insurance settlement funds that rightfully belonged to Wilson’s client, R.F.
Wilson also admitted that he knowingly and willfully failed to file a federal income tax return with the Internal Revenue Service for the tax year of 2011.
A hearing will take place in January 2017 to determine the total amount of restitution that Wilson will be required pay to his former clients and to the IRS.
This case was investigated by the Norman Police Department, the Oklahoma State Bureau of Investigation, the Oklahoma Bar Association, the Federal Bureau of Investigation, and IRS-Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
Former Bank President Indicted in Connection with $100,000,000 Bank FailureRead the Press Release
Oklahoma City, Oklahoma – Yesterday, a federal grand jury returned a 23-count indictment against JOHN ARNOLD SHELLEY, 66, of Oklahoma City, Oklahoma, in connection with the failure of the Bank of Union, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. The counts include conspiracy to commit bank fraud, bank fraud, money laundering, making false statements to a bank, misapplication of bank funds, false bank entries, wire fraud, and making false statements to the Federal Deposit Insurance Corporation (FDIC).
Shelley was the President, Chief Executive Officer, Chairman of the Board, and a loan officer at The Bank of Union (BOU) in El Reno, Oklahoma, from approximately 1997 until his resignation on November 30, 2013. In January 2014, state banking regulators closed BOU due to the bank’s loan losses, and the FDIC was appointed as the bank’s receiver. According to the indictment, the estimated loss amount stemming from BOU’s failure as of December 2016 was in excess of $100,000,000.
The 23-count indictment charges Shelley with defrauding BOU in several ways: (1) by issuing loans with under- or unsecured collateral and falsifying financial statements for several high-dollar bank borrowers; (2) by originating nominee loans to circumvent the bank’s legal lending limit; (3) by concealing the bank’s true financial condition from the Board of Directors (Board); (4) by soliciting a fraudulent investment; and (5) by falsely representing the bank’s true status to the FDIC.
According to the indictment, Shelley conspired with four BOU borrowers from approximately 2009 through November 2013 to defraud BOU by issuing them millions of dollars in BOU loan proceeds secured by collateral that they did not actually have, allowing Shelley to justify his unusually high annual earnings to the BOU Salary Committee. It is alleged that, though these borrowers had already accumulated significant debt that they could not repay, Shelley continued to issue them new loans to cover their outstanding loan balances, and "rolled" or capitalized the principal and accrued interest on their existing loans into the new loans that he authorized. At monthly meetings held by the BOU Board, it is alleged that Shelley failed to disclose the true status of these delinquent loan accounts; instead, he advised the Board that the borrowers were continuing to pay down their loans. The indictment further alleges that in October 2012 and again in 2013, Shelley directed three of the borrowers to prepare inflated cattle inventory reports falsely representing that they had sufficient collateral, in the form of cattle, to repay their loans to the bank. It also alleges that Shelley conspired with these three borrowers to issue loans in one of their names for transfer to the others, thereby avoiding the bank’s legal lending limit. The indictment includes 17 counts of conspiracy, bank fraud, money laundering, and false statements related to this scheme.
The indictment also alleges Shelley issued new loans to these borrowers in order to keep them off of BOU’s monthly overdraft reports. According to the indictment, BOU’s lending policy directed that overdrafts generally should not be granted, particularly where a borrower’s loans were 30 days or more past due. In June 2011 and again in August 2011, Shelley, knowing that two of these borrower accounts were more than 30 consecutive days overdrawn by hundreds of thousands and, at times, millions of dollars, allegedly caused BOU to issue new loans to cover these account overdrafts just before the Board’s monthly meetings at which the reports were reviewed. Shelley is charged with four counts of misapplication of bank funds and false bank entries for his fraudulent overdraft concealment.
Further, the indictment alleges Shelley executed a scheme to defraud a partial owner and investor in BOU in October 2012. According to the indictment, Shelley persuaded the investor to wire $40,000,000.00 to BOU by falsely representing that BOU was growing rapidly and performing well. The indictment alleges that, though Shelley knew that the bank was on the brink of failure and needed an immediate capital infusion to ensure its solvency, he advised the investor that there was "zero" risk that he would lose his $40,000,000.00 investment. The indictment charges Shelley with wire fraud for executing this scheme.
Finally, it is alleged that Shelley falsely represented the bank’s loan status to the FDIC. According to the indictment, between September 2012 and September 2013, Shelley continued to renew several unpaid borrower loans by issuing new loans to cover the outstanding loan balances, then capitalizing the unpaid interest on the previously unpaid loans into the balance of the new loans. Pursuant to an October 2013 FDIC safety and soundness examination, it is alleged that Shelley falsely represented that he had not renewed or extended any loans without full collection of the interest due between that September 2012 to September 2013 time period. He is charged with making a false statement to the FDIC for this conduct.
With regard to the bank fraud, bank fraud conspiracy, false statement, misapplication of funds, and false entry charges of the indictment, Shelley faces up to 30 years in prison and a fine of up to $1,000,000 on each count. He also faces up to 20 years of imprisonment and a $250,000 fine on the wire fraud count, along with up to 10 years in prison and a $250,000 fine as to money laundering. Furthermore, the indictment seeks forfeiture from Shelley in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.
This case is the result of an investigation by the Federal Deposit Insurance Corporation Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.
Reference is made to the indictment and other public filings for further information. An indictment is only a charge and is not evidence of guilt. A defendant is presumed innnocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Edmond Man Sentenced to 15 Years in Prison for Producing Child Pornography and Using it to Engage in Sextortion of 14-Year Old GirlRead the Press Release
Oklahoma City, Oklahoma – CARLOS ALEXANDER DAVILA, 23, of Edmond, was sentenced today by United States District Court Judge David L. Russell to serve 15 years in federal prison for producing child pornography in connection with a sextortion scheme, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and information from court proceedings, Davila sent a Facebook friend request to a 14-year-old Florida girl in March of 2016, after seeing her post a comment that her friend had committed suicide. Davila and the girl began communicating via Facebook and later texted and used the smartphone application Kik. Davila told the girl that he was studying to become a psychologist and he would help her deal with her friend’s suicide. Eventually, Davila asked the girl for nude photos in exchange for his assistance. The girl told Davila that she was only 14, but he said it did not matter. The girl eventually sent Davila nude pictures and videos. The girl reported that Davila became very possessive and threatened to post her nude images online when she tried to end their online relationship. According to text messages described in court records, the girl begged Davila to delete her images, but he said he would "keep every single pic and video" and would "leak everything" about her "to everyone," especially his "hungry friends in need of fresh meat." Davila texted her, saying, "The more you ignore me the more I’ll expose you without a care in the world." He texted that if she did not respond to him in five minutes he would post her nude images—alongside a request that listed her contact information and asked for pictures of men’s penises. Davila then used a spoofing app to send the girl text messages that appeared to be coming from unknown phone numbers, giving her the impression that her images had in fact been posted and that men were contacting her in response to them. The girl reported that Davila also threatened to physically harm her.
Davila’s actions came to light when the girl reported his conduct to a law enforcement officer assigned to her school. Davila was arrested and charged in May of 2016. He pled guilty to producing child pornography on June 19, 2016.
In a victim impact statement, the girl reported that Davila’s actions caused her to have a negative self-image and that she still cries sometimes about her experience with him. She said that Davila’s actions made "the phase of losing someone to suicide" much harder to cope with, and she still has concerns about him harming her.
According to court records, when Edmond Police Department officers examined Davila’s electronic devices, they found child pornography depicting not only the Florida girl, but also other images of child pornography, some depicting children as young as eight or nine years old.
After completion of his 15-year prison term, Davila will have to register as a sex offender and be placed on supervised release by the United States Probation Office for the rest of his life.
This case was being investigated by the Hillsborough County (Florida) Sheriff’s Department and the Edmond Police Department. The case was prosecuted by Assistant U.S. Attorney Brandon Hale.
Oklahoma City Woman to Serve 82 Months in Prison for Embezzling from Her Employer While Under Charges for Earlier EmbezzlementRead the Press Release
Oklahoma City, Oklahoma – Susie Jane Patton, 49, of Oklahoma City, was sentenced earlier this week by United States District Judge Robin Cauthron to serve 82 months in federal prison for using a wire fraud scheme to embezzle from her employer while under charges for a separate embezzlement. This sentence was ordered to be served consecutive to a 22-month sentence she received in the prior case.
In the earlier case, Patton was charged on June 19, 2015, with wire fraud for embezzling from a prior employer, Silverado Reconditioning. She pled guilty on July 7, 2015, and was sentenced on January 22, 2016, to serve 22 months in federal prison and to pay $66,125.41 in restitution.
Before and during her earlier embezzlement prosecution, Patton was employed by D&D Design and Manufacturing of Oklahoma City as their office manager. While the earlier case was pending and she was on pretrial release, an FBI investigation determined that Patton had embezzled more than $100,000 from her new employer, D&D Design, from September 2014 until February 2016. Patton was indicted by a federal grand jury for 15 counts of wire fraud on June 22, 2016, for embezzling from D&D Design. She pled guilty on August 16, 2016, to one count of wire fraud and one count of wire fraud while on conditions of release.
At the sentencing hearing earlier this week, Judge Cauthron imposed a total sentence of 82 months in prison (57 months and 25 months respectively on two separate counts to which she pled guilty, to run consecutively). This 82-month sentence was ordered to run consecutive to Patton’s earlier 22-month sentence in the prior case. In determining the sentence in the second case, Judge Cauthron varied above the United States Sentencing Guideline range of 46 - 57 months because of the nature and circumstances involved in the case, the need to deter Patton in her ongoing criminal conduct, and the need to protect the public. Finally, Patton was ordered to pay $107,452.08 in restitution to D&D Design.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Kerry Kelly.
Former Edmond Property Manager Pleads Guilty to Defrauding Clients and Failure to Pay TaxesRead the Press Release
Oklahoma City, Oklahoma – Today, ANGELA RENEE RENEAU, from Oklahoma City, pled guilty to one count of wire fraud and one count of failure to file an income tax return, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Between 2010 and 2014, Reneau provided real estate management services to owners of commercial office buildings in the Edmond, Oklahoma, area through her business, Reneau Properties, LLC. At her plea hearing today, Reneau admitted to United States District Judge Vicki Miles-LaGrange that during this time period she made unauthorized transfers of her clients’ rent income funds into her Reneau Properties bank account and used those funds for her personal expenses. Specifically, she admitted that she caused Citizens Bank of Edmond, in Oklahoma, to use interstate wire communications with the bank’s processor, which is located out-of-state, to transfer $11,000 from the bank account of her client, 750 West Covell, LLC, into her Reneau Properties bank account. Reneau admitted that this transfer was not authorized by her client and that she used the funds for her personal expenses. In addition, Reneau also admitted that she knowingly and willfully failed to file a federal income tax return with the Internal Revenue Service for the tax year of 2014.
At sentencing, Reneau faces up to 20 years in prison and a $250,000 fine for the wire fraud charge and up to one year in prison and a $100,000 fine on the tax charge. A sentencing hearing will be set by the court in approximately 90 days.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations Division. The case was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
Federal Inmate to Serve Additional 15 Years for Assaulting Correctional OfficerRead the Press Release
Oklahoma City, Oklahoma – Today, Anthony Kendall, 28, an inmate in custody of the Federal Bureau of Prisons (BOP), was sentenced by United States District Judge David L. Russell to serve an additional 15 years in a federal prison for assaulting a correctional officer, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and court proceedings, on May 8, 2015, Kendall was an inmate at BOP’s Federal Transfer Center (FTC) located in Oklahoma City. He was in BOP custody after being sentenced to serve a ten-year sentence following his conviction for armed aggravated assault out of the District of Columbia. While at the FTC, Kendall refused to accept an assigned cell, became disruptive and eventually head-butted an FTC Correctional Officer causing a laceration to the Officer’s face. The Correctional Officer also injured his hip while trying to subdue Kendall.
On February 2, 2015, a federal grand jury indicted Kendall assaulting a correctional officer. On June 8, 2016, he pled guilty.
At a sentencing hearing today, Judge Russell sentenced Kendall to serve 15 years consecutively to his current ten-year sentence, followed by three years of supervised release upon completion of his prison term.
This case was the result of an investigation by the Federal Bureau of Investigation with the assistance of the Federal Bureau of Prisons Special Investigative Service. The case was prosecuted by Assistant U.S. Attorney Ashley L. Altshuler.
Tax Preparer Sentenced to 30 Months in Prison for False Federal Tax ReturnsRead the Press Release
Oklahoma City, Oklahoma – RICKY COSTELLO WILLIAMS, of Lawton, Oklahoma, was sentenced today to serve 30 months in federal prison and ordered to pay $240,361 in restitution for tax fraud, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
For a number of years, Williams prepared tax returns for others under the business name W&B Financial. A criminal investigation by the IRS determined that in 2010 and 2011, he knowingly prepared returns with fraudulent deductions and falsified credits in order to illegally obtain refunds from the Internal Revenue Service. Williams had previously been convicted of preparing false tax returns in North Carolina and South Carolina.
On February 18, 2016, Williams pled guilty to assisting in the preparation of a fraudulent federal tax return. He has been in federal custody since May 26, 2016, based on a violation of his conditions of release. Yesterday, United States District Judge Vicki Miles-LaGrange sentenced Williams to 30 months in federal prison, to be followed by one year of supervised release.
This sentence is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigations. The case was prosecuted by Assistant United States Attorney Kerry A. Kelly with the assistance of IRS Agent Loy Smith.
Reference is made to court filings for further information.
Oklahoma City Daycare Worker and Babysitter Sentenced to 30 Years for Producing Child PornographyRead the Press Release
Oklahoma City, Oklahoma – JASON MARC JANATSCH, 26, of Oklahoma City, was sentenced today to 30 years’ imprisonment for producing child pornography depicting an approximately 18-month-old toddler whom he babysat, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records, in September 2015, undercover Homeland Security Investigations (HSI) agents downloaded child pornography via Kik, a smartphone instant messaging application, from a man in Christchurch, New Zealand. After New Zealand authorities located the man, forensic analysis of his Kik account revealed that he had exchanged child pornography with a Kik user with the screen name "TheLoverOfTheLittle." HSI agents in the United States traced this Kik screen name to Janatsch, who worked at an Oklahoma City daycare center. Janatsch also freelanced as a babysitter who advertised his services on www.sitter.com and www.care.com.
Janatsch was indicted by a federal grand jury on January 6, 2016. During the plea hearing on February 29, 2016, before United States District Judge Stephen P. Friot, Janatsch admitted that on June 11, 2015, he used a female toddler whom he was babysitting to engage in sexually explicit conduct and took photographs with his iPhone. Janatsch had used an online babysitting service to gain access to the child. Then Janatsch, using his iPhone, transmitted the photographs to the New Zealand man. According to court records, he also received child pornography from the New Zealand man in return. In sentencing Janatsch, Judge Friot took into consideration evidence that he had also molested a three-year-old girl on a previous occasion and had performed Google searches using queries such as "having sex with a special needs child" and "how do I adopt a baby."
After serving his sentence, Janatsch will be required to register as a sex offender and will be on supervised release for life. The court also ordered Janatsch to pay a $5,000 special assessment under the Justice For Victims of Trafficking Act of 2015.
This case is the result of an investigation by Homeland Security Investigations and the New Zealand Police Online Child Exploitation Across New Zealand team. The case was prosecuted by Assistant U.S. Attorney Brandon Hale, Project Safe Childhood Coordinator.
Former Oklahoma Jail Administrator Indicted for Violating Civil Rights of DetaineeRead the Press Release
A one-count indictment was returned today charging a former administrator of the McClain County Jail in Purcell, Oklahoma, with a civil rights violation arising out of the death of a detainee in June 2013. The indictment alleges that Wayne Barnes, then a lieutenant at the jail, exhibited deliberate indifference toward K.W. by denying him necessary medical care to treat his diabetes, resulting in K.W.’s death.
The indictment was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Mark Yancey of the Western District of Oklahoma.
According to the indictment, K.W. suffered from diabetes that he needed insulin to control. The indictment alleges that from the time that K.W. arrived at the jail on June 16, 2013, he did not have insulin, he was not evaluated or treated by a doctor and he was not taken to a hospital for evaluation or treatment until the afternoon of June 19, 2013. It was three days after K.W.’s arrival, according to the indictment, that Barnes observed K.W. lying on the floor of his cell, unresponsive. Only then did Barnes direct a corrections officer to call emergency medical services, who arrived to find K.W.’s pupils fixed and dilated. K.W. died on June 21, 2013, never having regained consciousness. The indictment further alleges that Barnes knew that K.W. had a serious medical condition and willfully failed to provide him with necessary medical care, and that his failure to do so resulted in K.W.’s death.
Barnes is charged with one count of a death-resulting deprivation of rights under color of law. If convicted, the defendant faces a maximum sentence of life in prison. The defendant also faces a potential $250,000 fine.
An indictment is merely an accusation and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the FBI’s Oklahoma City Division. It is being prosecuted by Assistant U.S. Attorney Julia Barry of the Western District of Oklahoma and Special Litigation Counsel Sheldon Beer of the Civil Rights Division’s Criminal Section.
Barnes IndictmentOwner and Finance Manager of Norman Used Car Lot Plead Guilty to Bank Fraud in Connection with Bank of Union FailureRead the Press Release
Oklahoma City, Oklahoma – TIMOTHY JAY WILLIAMS, 54, from Edmond, Oklahoma, and STEPHEN L. BUTZ, 53, from Blanchard, Oklahoma, both pleaded guilty to bank fraud this week, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Williams was the owner of Lindsey Street Motors, a used car lot in Norman, Oklahoma, and Butz was his finance manager. According to court documents, Williams entered into a Commercial Security Agreement with The Bank of Union on behalf of Lindsey Street Motors that granted the bank a secured interest in all used motor vehicles, proceeds, and products of Lindsey Street Motors. In return, The Bank of Union extended to Williams and Butz a line of credit to purchase used vehicles and hold them as inventory until sold. After obtaining the loan proceeds, Williams and Butz sold collateralized vehicles out of trust, without the knowledge or permission of The Bank of Union, and did not use the sales proceeds to repay the Bank. In addition, after purchasing vehicles with The Bank of Union financing, Williams and Butz obtained duplicate vehicle titles from the Oklahoma Tax Commission, which they provided to buyers, without notifying the Bank of Union of the vehicle sales or repaying Lindsey Street Motors’ line of credit.
At their plea hearings this week, Williams and Butz each admitted their conduct caused a loss in an amount between $550,000.00 and $1,500,000.00. At sentencing, each of the defendants face up to 30 years in prison, a $1,000,000 fine, and up to five years of supervised release. Per the terms of their plea agreements, they will also be ordered to pay restitution to the victims of their conduct in an amount to be determined by the court at the time of sentencing. A sentencing date will be set by the court in approximately 90 days.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.
President of Kansas Ladder Company Pleads Guilty to Bribery at Tinker Air Force BaseRead the Press Release
Oklahoma City, Oklahoma – JEFFREY A. GREEN, 46, of Bartlesville, Oklahoma, pled guilty today to offering a bribe to a public official at Tinker Air Force Base, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Green is the president and chief executive officer of LockNClimb, LLC ("LockNClimb"), with headquarters in Independence, Kansas. LockNClimb manufactures and sells specialty ladder systems. On July 7, 2016, Green was charged in a one-count Information with offering a bribe to a public official at Tinker Air Force Base ("Tinker"). The information alleged that, on May 10, 2016, Green provided United States currency to a public official at Tinker in exchange for that official’s purchase of ladders for the United States Air Force from LockNClimb.
At this morning’s plea hearing, Green admitted that he had contact from January through May of 2016 with a public official at Tinker and sold ladders to the official on three occasions. Green met with the official on May 10, 2016, at a restaurant in Oklahoma City, and gave the official approximately $280 in cash in exchange for the Air Force’s recent purchase of ladders from LockNClimb. Green further admitted that the cash payment was based on a percentage of LockNClimb’s recent ladder sale to Tinker, and that he had agreed with the Tinker official for LockNClimb to pay the official cash on the side for each ladder that the Air Force purchased from LockNClimb.
At sentencing, Green faces up to 15 years in prison and a fine of $250,000. United States District Judge Timothy D. DeGiusti will sentence Green in approximately 90 days. This charge is the result of an investigation conducted by the U.S. Air Force Office of Special Investigations, Federal Bureau of Investigation, and Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Reference is made to court filings for further information.
Lawton Man Sentenced to Two Years in Prison for Using Internet to Send Obscene Communications to a MinorRead the Press Release
Oklahoma City, Oklahoma – CHARLES MICHAEL SEGALOFF (a/k/a "Michael Makai,” "Mike Sage,” "Daddy,” "Papa," and "Master"), age 60, of Lawton, Oklahoma was sentenced yesterday to twenty-four months in federal prison (the statutory maximum prison term allowable for the offense) for sending offensive material to an individual under 18 years of age, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to a superseding information, filed on March 31, 2016, Segaloff knowingly used an interactive computer service (Facebook) from January 19, 2015, to December 15, 2015, to send obscene interstate communications to a person under 18 years of age. Specifically, Segaloff sent messages to the victim requesting, suggesting, and proposing that she engage in a sexual, polyamorous, and Bondage, Discipline/Domination, Sadism/Submission, and Masochism (BDSM) relationship in which she would be a submissive and he would be the dominant.
According to the original indictment filed on January 19, 2016, from December 7, 2015, through December 15, 2015, Segaloff traveled from Lawton, Oklahoma, to Greenwich, New York, and returned to Lawton with this female juvenile for the purpose of engaging in illicit sexual conduct and to form a polyamorous family.
On April 1, 2016, Segaloff pled guilty to the superseding information. He stipulated in a plea agreement that he will be required to register as a sex offender under the Sex Offender Registration and Notification Act (SORNA). Segaloff further stipulated that his conduct violated Oklahoma law in that he facilitated, encouraged, offered, and solicited sexual conduct with the minor by use of technology, a violation which subjects him to having to register as a sex offender in the State of Oklahoma.
According to an affidavit accompanying a complaint, Segaloff was previously convicted in the State of Washington for second-degree assault with sexual motivation. The affidavit also stated that Segaloff has published a number of books on BDSM under the alias "Michael Makai" and according to a profile on Amazon.com is "a lifestyle Dominant for 37 years, a behind-the-scenes mentor and educator on BDSM and D/s for decades, and has been active in dozens of fetish lifestyle organizations in Europe and the U.S."
On August 4, 2016, Chief District Judge Joe Heaton sentenced Segaloff to the statutory maximum: 24 months in prison and one year of supervised release. He has been in federal custody since December 22, 2015.
This case is the result of an investigation by the Federal Bureau of Investigation, the Lawton Police Department, and the New York State Police. The case is being prosecuted by Assistant U.S. Attorneys Nicholas J. Patterson and Matthew B. Dillon and Special Assistant U.S. Attorney Mark Stoneman.
Reference is made to public filings for further information.
Former Executive Director of Canadian County Charity for Children Pleads Guilty to EmbezzlementRead the Press Release
Oklahoma City, Oklahoma –TRACI LORRE OWENS, 47, of Edmond, Oklahoma, today entered a guilty plea to embezzlement from a Canadian County charity for child crime victims, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to the superseding information, Owens was the Interim Executive Director and then the Executive Director of Canadian County Court Appointed Special Advocates ("CASA") from about November 2010 until July 2013. Canadian County CASA is an organization that received at least $10,000 in federal monetary assistance annually from the United States Department of Justice to support child victims of crime. Owens was charged with making and depositing checks payable to herself and to cash, including duplicate payroll checks. Owens pleaded guilty to embezzling and stealing money from Canadian County CASA.
At sentencing, Owens faces a maximum penalty of ten years in prison, a fine of up to $250,000, and mandatory restitution. The United States also seeks forfeiture from Owens. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by the Department of Justice, Office of Inspector General, with assistance from the Canadian County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorneys K. McKenzie Anderson and Scott E. Williams.
Reference is made to court filings for further information.
Del City Man Sentenced to Serve 327 Months in Prison for Producing Child PornographyRead the Press Release
Oklahoma City, Oklahoma – Today, DONNIE RAY SCHULTZ, 45, of Del City, Oklahoma, was sentenced to serve 327 months in federal prison for producing child pornography depicting of a 15-year-old girl with whom he engaged in sexually explicit conduct, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to court records, in July 2014, Schultz began engaging in sex acts with the then 14-year-old girl, whom he met through a religion class he taught at a Del City church. According to those records, the sex acts occurred between July 2014 and November 2015, and took place in various locations in the Oklahoma City metroplex, including the church’s parking lot, the child victim’s house, and Schultz’s own house. According to court records, Shultz produced over 173 images of sexual acts involving the child with his iPhone.
Schultz was indicted by a federal grand jury on February 16, 2016. During the plea hearing on April 26, 2016, before United States District Judge Robin Cauthron, Schultz admitted that on September 26, 2014, he engaged in sexually explicit conduct with the victim and took photographs with his iPhone.
Schultz faced a higher mandatory-minimum sentence due to his prior Cleveland County conviction for second degree rape, which also involved a 14-year-old girl. In addition to sentencing him today to 327 months in prison, Judge Cauthron also ordered Schultz to pay $4,266.13 in victim restitution.
This case is the result of an collaborative investigation by the Del City Police Department, Homeland Security Investigations and the United States Secret Service Electronic Crimes Task Force. The case was prosecuted by Assistant U.S. Attorney Brandon Hale.
United States and State of Oklahoma Obtain $4.7 Million Judgment Against Behavioral Health Counseling Company and Its Owner for Submitting False ClaimsRead the Press Release
Oklahoma City, Oklahoma – Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma, and E. Scott Pruitt, Attorney General for the State of Oklahoma, jointly announce that a judgment for $4,752,101.50 has been entered against LXE Counseling, LLC ("LXE") and Lexie Darlene George a/k/a Lexie Darlene Batchelor ("Batchelor") in a civil qui tam "whistleblower" lawsuit for submitting false claims related to behavioral health counseling to Medicaid patients in Oklahoma.
LXE is an Oklahoma limited liability corporation headquartered in Atoka, Oklahoma, that provides behavioral and mental health counseling in various offices throughout the state. Batchelor is the owner and CEO of LXE. LXE and Batchelor provided behavioral health psychotherapy and rehabilitation services to those who could not afford medical services under Oklahoma Medicaid ("SoonerCare"), which is a jointly funded program by the federal and state government administered by the Oklahoma Health Care Authority ("OHCA").
On November 5, 2015, the United States and State of Oklahoma intervened in the lawsuit styled United States and State of Oklahoma ex. rel. Pittman, et al., v. LXE Counseling, LLC, et al. (Case No. CIV-13-1129-R) and asserted claims for violations of the federal False Claims Act, the Oklahoma Medicaid False Claims Act, the Oklahoma Medicaid Program Integrity Act, and common law claims. The judgment entered today was on the government’s specific claims that LXE and Batchelor submitted or cause to be submitted the following false Medicaid claims to OHCA:
a. claims for services provided by persons not qualified to provide those services;
b. claims for services where the defendants altered dates or times of services or altered service codes to make otherwise ineligible claims eligible for reimbursement;
c. claims for face-to-face services that were double-billed for the same dates and times by the same person (i.e. using variations of Defendant Bachelor’s name);
d. claims for face-to-face services performed by Batchelor while she was instead attending a funeral, a wedding, or on trips;
e. claims for telemedicine services when LXE and its providers were not authorized or approved by OHCA to provide telemedicine services; and
f. claims for rehabilitation services provided to patients who never received any psychotherapy services, despite representations on LXE’s treatment plans that these services were necessary and OHCA regulations that only allows rehabilitation services to be provided as adjunct services to compliment psychotherapy.
United States District Judge David Russell entered a judgment today against LXE and Batchelor for a total of $4,752,101.50. Of that amount, $4,631,101.50 is for triple the amount of false claims and $121,000 is for penalties, as provided under the False Claims Act and the Oklahoma Medicaid False Claims Act. In addition to the monetary judgment, LXE and Batchelor entered into an agreement with United States Department of Health and Human Services Office of Inspector General whereby each of them will be excluded nationally from participation in the Medicaid and Medicare programs for five years.
This case is the result of a joint investigation by the Oklahoma Medicaid Fraud Control Unit and the United States Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Bob Troester and Amanda Johnson together with Assistant Attorneys General Niki Batt and Christopher Robinson.
Construction Companies Pay Nearly $1.4 Million for Damage Caused by a Fire on the Wichita Mountains Wildlife RefugeRead the Press Release
Oklahoma City, Oklahoma – Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma, announces that BELL CONTRACTING, INC. AND REDLANDS CONTRACTING, LLC paid $1,398,967.84 to settle civil claims stemming from allegations that the companies negligently caused a fire that damaged the Wichita Mountains Wildlife Refuge in Comanche County, Oklahoma ("Refuge").
Bell Contracting, Inc. ("Bell") is a Missouri corporation that was founded in 2003. In July 2011, Bell entered into a contract with the Department of Transportation for a road improvement project on the Refuge. The project involved widening 2.58 miles of Ferguson Road, including widening the berm and extending the box culverts. Bell subcontracted with Redlands Contracting, LLC ("Redlands"), an Oklahoma limited liability company, to work on the project.
On September 1, 2011, employees of Redlands were working on the project and were cutting rebar with a chop saw. The fire danger was extremely high and there was a burn ban in effect which included Comanche County where the Refuge is located. The burn ban prohibited certain activities without necessary precautions being taken. Sparks from the chop saw ignited a fire which quickly spread and burned approximately 28,000 acres on the Refuge. The United States suffered resource damages and incurred fire suppression costs.
The United States alleged Redlands’ employees were negligent in failing to take precautions in cutting the rebar to prevent a fire from igniting and did not have means available to extinguish the fire once it was started. The United States also alleged that Bell’s employees were negligent in failing to supervise and monitor the work done by Redlands, and failed to institute measures to prevent or extinguish a fire.
In order to resolve the allegations brought by the United States, Bell and Redlands paid the United States $1,398,967.84.
In reaching this settlement, Bell and Redlands did not admit liability and the government did not make any concessions regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Department of Interior. The case was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Edmond Man Pleads Guilty to Coercing a Child to Produce Child PornographyRead the Press Release
Oklahoma City, Oklahoma – Carlos Alexander Davila, 23, of Edmond, pleaded guilty today to production of child pornography, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to an affidavit in support of a criminal complaint, Davila contacted a 14-year-old Florida girl in March of 2016 through Facebook, after seeing her post a comment that her friend had committed suicide. They began communicating via Facebook and later by texting and the smartphone application, Kik. It is alleged that Davila told the girl that he was studying to become a psychologist, and he would help her deal with her friend’s suicide. Eventually, the defendant asked the girl for nude photos in exchange for his emotional support. The girl told Davila that she was only 14, but he said it did not matter. The girl eventually sent Davila nude images of herself.
According to court records, the girl reported that Davila became very possessive of her, and when she tried to end their online relationship, he threatened to post online the nude images she had sent him. According to text messages described in court records, the girl begged Davila to delete her images, but he said he would "keep every single pic and video" and would "leak everything" about her "to everyone," especially his "hungry friends in need of fresh meat." Davila allegedly texted her, saying, "The more you ignore me the more I’ll expose you without a care in the world." He allegedly texted her that if she did not respond to him in five minutes, he would post a picture she had sent him—alongside a request that listed her contact information and asked for pictures of men’s penises. Davila allegedly used a phone-number-spoofing app to send the girl text messages to give her the impression that her images had in fact been posted online and that people were contacting her.
On July 13, 2016, Davila was charged in an information with production of child pornography depicting the Florida girl. During the plea hearing today before United States District Judge David L. Russell, Davila admitted he persuaded, induced, and coerced the 14-year-old to produce pornographic images of herself and to text them to him. At sentencing, Davila faces a mandatory minimum of 15 years and up to 30 years in prison. A sentencing hearing will be set by the court in approximately 90 days.
This case was investigated by the Hillsborough County (Florida) Sheriff’s Department and the Edmond Police Department. The case is being prosecuted by Assistant U.S. Attorney Brandon Hale.
Complaint Unsealed Charging 19 Gang Members and Associates with Conspiracy to Possess with Intent to Distribute and Conspiracy to Distribute Methamphetamine and HeroinRead the Press Release
Oklahoma City, Oklahoma – A 16-month joint investigation has resulted in a criminal complaint unsealed yesterday afternoon charging 19 gang members and associates with conspiracy to possess and distribute methamphetamine and heroin, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
On Thursday, July 14, 2016, law enforcement officers from the Federal Bureau of Investigation (FBI), Drug Enforcement Administration (DEA), Bureau of Alcohol Tobacco Firearms and Explosives (ATF), Oklahoma City Police Department (OCPD), Oklahoma State Bureau of Narcotics and Dangerous Drugs (OBN), Internal Revenue Service Criminal Investigation (IRS), and the Oklahoma Department of Corrections (ODOC) executed multiple federal arrest warrants related to this investigation. The charged individuals are:
# Name Age Address1
Richard Joseph Coker
33
Oklahoma State Penitentiary
2
Richard Lee Potts
38
Oklahoma State Penitentiary
3
David Dean Cagle
34
Oklahoma State Penitentiary
4
Chad Nathen Hudson
36
Oklahoma State Penitentiary
5
Christopher Paul Brown
28
Oklahoma State Penitentiary
6
Gary Holden Schneider
29
OKC, OK
7
Angela Renee Harlan
38
Tulsa, OK
8
Robinson Rene Garcia-Aguirre
28
Oklahoma County Jail
9
Eyner Mora Esparza
23
Oklahoma County Jail
10
Tenesia Diane Rodriguez
36
OKC, OK
11
Aisha Bliss Donaldson
27
OKC, OK
12
Zane P. Yargee
22
Oklahoma County Jail
13
Daryl Lloyd Ivey
28
Oklahoma County Jail
14
Nika Deandre Davis
24
OKC, OK
15
Devon Alan Herron
23
OKC, OK
16
Margie Lee Barnhill
28
Newcastle, OK
17
Ricky Lynn Wolfe
37
Tulsa, OK
18
Amanda Heather Holland
43
Oklahoma County Jail
19
Jeremy Antowaine Taylor
34
Oklahoma County Jail
According to the criminal complaint affidavit, agents and task force officers conducted a joint investigation of the leadership of a gang that utilizes contraband cell phones within the prison and the cooperation of outside associates to operate a drug-trafficking operation. According to the complaint affidavit, a number of investigative techniques were used in this investigation, ranging from the use of cooperating defendants and sources, to controlled buys, consensually recorded telephone calls, court-authorized wire and electronic interceptions, and the execution of search warrants. It is alleged that these techniques consistently showed the existence of an extensive conspiracy to distribute large amounts of controlled substances across Oklahoma City and other parts of the state. It is alleged that more than 100 pounds of methamphetamine, firearms, and large amounts of U.S. currency have been seized during this investigation.
If convicted, the defendants each face a maximum penalty of life in federal prison.
This case is the result of a joint investigation by the FBI, DEA, ATF, OBN, OCPD, IRS, and the ODOC. The case is being prosecuted by Assistant U.S. Attorneys David McCrary and Kerry Blackburn.
The public is reminded that a criminal complaint is merely an accusation and that the defendants are presumed innocent unless proven guilty beyond a reasonable doubt. Reference is made to court filings for further information.
Oklahoma City Woman Pleads Guilty to Committing Health Care Fraud and Food Stamp FraudRead the Press Release
Oklahoma City, Oklahoma – SHALONDA SUGGS, 36, of Oklahoma City, pled guilty last Thursday to health care fraud in connection with submitting false claims to Medicaid for behavioral health counseling services, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma, and Scott Pruitt, Attorney General for the State of Oklahoma. Suggs also pled guilty to stealing Supplemental Nutrition Assistance Program benefits (SNAP benefits, formerly known as food stamps), which she wrongfully received based on her false statements regarding her income.
On April 5, 2016, Suggs was indicted on sixteen counts of health care fraud and one count of theft of government funds. The Indictment alleged that in July 2013, Suggs opened a behavioral health counseling agency called Focus Pointe Counseling, LLC. It is alleged Suggs obtained a contract with the Oklahoma Health Care Authority (OHCA), which allowed Focus Pointe to receive reimbursement from Medicaid for providing behavioral health counseling services to Medicaid-eligible children. It was alleged that Suggs then submitted Medicaid claims for behavioral health counseling services that were purportedly provided by four counselors supposedly employed by Focus Pointe. It was alleged that the counselors were never actually employed by Focus Pointe and never provided any of the counseling services claimed by Focus Pointe. It was alleged that the OHCA paid Focus Pointe for the false claims and that Suggs used the proceeds for her personal benefit. It is further alleged that during the time period Suggs was fraudulently receiving funds from the OHCA, she was receiving SNAP benefits by making false statements to the Oklahoma Department of Human Services that she was unemployed and had a negligible source of income.
Last Thursday, Suggs admitted that on February 4, 2015, she used Focus Pointe Counseling to submit a claim to the OHCA using the name and Medicaid provider number of certain counselor for a behavioral counseling session that was supposedly provided to a Medicaid beneficiary on August 16, 2014. Suggs admitted that the counselor was not in fact employed by Focus Pointe and that the counseling session was not actually provided. She also admitted that from August 2014 through May 2015, she was receiving SNAP benefits that she obtained by making false statements about her lack of income.
As part of her plea, Suggs agreed to pay restitution to Medicaid in the amount of $204,334.24 and to the Supplemental Nutrition Assistance Program in the amount of $4,959.00.
At sentencing, Suggs faces up to 10 years in prison, three years of supervised release, and a $250,000 fine on each count. A sentencing date will be set by the court in approximately 90 days. Reference is made to the Indictment and other public filings for further information.
Medicaid and SNAP are programs that are funded and administered jointly by the federal government and the State of Oklahoma. This case is the result of a cooperative federal and state investigation by the Federal Bureau of Investigation, the Oklahoma Attorney General’s Office, and the United States Department of Agriculture, Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Amanda Maxfield Green and Oklahoma Assistant Attorney General Lory Dewey.
Former Altus Bank President Convicted of Bank FraudRead the Press Release
Oklahoma City, Oklahoma –PAUL HAROLD DOUGHTY, 67, of Edmond, Oklahoma, the former president and chairman of First State Bank of Altus ("FSB"), was convicted today on ten charges of bank fraud, conspiracy to commit bank fraud, misapplication of bank funds, making a false bank entry, and unauthorized issuance of a bank loan in connection with FSB and various loan schemes, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. On April 14, 2016, FRED DON ANDERSON, 67, of Eagle Point, Oregon, pleaded guilty to one count of conspiring with Doughty to commit bank fraud. Anderson partnered with Doughty in several businesses headquartered in Altus. In July 2009, state banking regulators closed FSB due to the bank’s loan losses, and the Federal Deposit Insurance Corporation was appointed as the bank’s receiver.
In April 2015, a federal grand jury charged Doughty and Anderson with fraud related to three alleged loan schemes: (1) a series of FSB loans to finance a real estate development in Routt County, Colorado; (2) a series of "senior life settlement loans" from FSB to support an Altus aerospace company; and (3) a $2 million unauthorized loan from FSB to a company under Doughty and Anderson’s control.
The jury heard that in 2006 and 2007, Doughty and Anderson recruited buyers for 19 Colorado real estate lots priced at approximately $700,000 each. Doughty approved and issued 14 lot loans to buyers, totaling more than $10,000,000 in loan proceeds for the seller, Mountain Adventure Property Investments, LLC ("MAPI"). MAPI was a Colorado company that Anderson had an indirect ownership interest in and where he served as president and manager. Evidence at trial showed that each loan exceeded Doughty’s individual lending authority at FSB, and most of the loans were issued without approval of FSB’s loan committee, including a $580,000 loan to Anderson’s personal company. The jury heard that Doughty and Anderson presented lots to borrowers as "zero money down" investments, and that the down payments for the purchases were often advanced or refunded to the buyers by Anderson on behalf of MAPI. Doughty and Anderson also assured the buyers that MAPI would make all payments on the loans to the bank. The jury heard that on the few occasions when Doughty presented a Colorado loan to FSB’s loan committee, he misrepresented the source and amount of borrowers’ down payments and the borrowers’ responsibility for making payment on the loans. In connection with these Colorado lot loans, the jury convicted Doughty of one count of bank fraud conspiracy, four counts of bank fraud relating to separate lot loans, and one count of unauthorized issuance of a loan to Anderson’s personal company.
Second, trial evidence showed that Doughty funded five so-called "senior life settlement" loans through FSB in 2008. Each loan was $2.5 million, and one of the loans went to Anderson’s personal company. Doughty and Anderson recruited borrowers to take out these "self-paying" loans to provide money for investments in Altus-based Quartz Mountain Aerospace, Inc. ("QMA"). Evidence at trial showed that a portion of the loan proceeds was invested in QMA, and another portion would pay the loan’s interest. The remaining proceeds on the loans would buy and maintain third-party life insurance policies, where the death benefits on the third parties were intended to repay the loan’s principal. The jury heard that each loan exceeded Doughty’s lending authority, and that he issued at least $10,000,000 in senior life settlement loans without FSB’s loan committee or board approval. With each loan, Doughty and Anderson directed $125,000.00 in "service fee"” to Altus Ventures, a company under their control. The jury heard evidence that at the time the loans were issued, the fees to Altus Ventures were not disclosed to FSB or to the borrowers taking out those loans. In connection with the senior life settlement loans, the jury convicted Doughty of one count of misapplication of bank funds and one count of a false entry in bank records related to the concealment of the fees to Altus Ventures.
Third, the jury heard evidence that in January 2008, Doughty arranged a $2 million loan from FSB to Ethanol Products Group, LLC ("EPG"), a startup company in which both Anderson and Doughty had ownership interests. Evidence showed that Doughty advanced the $2 million from FSB, above his individual lending authority, without approval by FSB’s loan committee or board. Soon before issuing the loan, Doughty e-mailed Anderson his "cash strategy" for two other companies they controlled; the "strategy" showed all the EPG loan proceeds would be directed to companies controlled by Anderson and Doughty, ultimately diverting $100,000.00 in “officer bonuses” to Anderson and Doughty. The jury found Doughty guilty of one count of unauthorized issuance of a loan and one count of misapplication of bank funds related to the EPG loan.
The jury heard evidence over seven days, and deliberated approximately seven hours before reaching a verdict this afternoon. The jury acquitted Doughty on three charges.
On April 14, 2016, Anderson pleaded guilty to a one-count Information charging him with conspiring with Doughty to commit bank fraud. As part of the plea agreement, the government agreed to dismiss at sentencing the charges against him from the indictment. Anderson testified as a witness for the government at Doughty’s trial. At sentencing, Anderson faces up to five years in prison and a fine of $250,000.
Doughty faces up to 30 years in prison and a fine of $1,000,000.00 for each of the ten counts of conviction. Under federal law, each defendant will be required to pay restitution and to forfeit to the government the amount of the proceeds of the fraudulent schemes.
These convictions are the result of an investigation conducted by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation - Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson.
Former Postal Employee to Serve Year in Prison for Theft of MailRead the Press Release
Oklahoma City, Oklahoma – Today, JEFFREY LEMON, JR., 30, from Oklahoma City, was sentenced by United States District Judge David L. Russell to serve twelve months in a federal prison for theft of mail by a Postal Service employee, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
A federal grand jury indicted Lemon on September 1, 2015, alleging that he stole money orders deposited in the mail by Postal Service customers. Lemon pled not guilty and went to trial on December 1, 2015. According to evidence presented at trial, Lemon was an employee at the U.S. Post Office in Warr Acres, Oklahoma. Evidence showed that between March 2015 and June 2015, Lemon stole money orders deposited in the mail by Postal Service customers at the Warr Acres Post Office and cashed them for his benefit. The jury found him guilty on 17 counts of theft of mail by a postal service employee. Judge Russell dismissed one count during the course of trial.
At a sentencing hearing today, Judge Russell sentenced Lemon to serve twelve months in prison, followed by two years of supervised release upon completion of his prison term. He was also ordered to pay $11,803.65 in restitution to the United States Postal Service, which had previously reimbursed Lemon’s victims for their losses.
This case was the result of an investigation by the United States Postal Service Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Jessica L. Perry and Assistant U.S. Attorney Brandon Hale.
Owner of Oklahoma City Employer Organization Charged with More Than $6 Million in Tax EvasionRead the Press Release
Oklahoma City, Oklahoma – A federal grand jury has handed down a 23-count indictment against JANIS ANN EDWARDS, of Oklahoma City, Oklahoma, for tax evasion, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to the indictment, Ms. Edwards was the sole owner of Corporate Resource Management, Inc., and a number of related companies with their principal place of business in Oklahoma City. These companies operated as "professional employer organizations," or "PEOs." In essence, they served small businesses in several states in the central part of the United States by, among other things, taking on responsibilities for paying their employees’ payroll and collecting and paying payroll taxes to the IRS. The employees of small businesses became employees of one of Edwards’s entities, and their payroll taxes were to be paid under the tax identification number of one of those entities.
According to the indictment, Edwards failed to pay substantial amounts of payroll taxes collected from small businesses that had contracted with one of the CRM-related entities. The 23 counts relate to quarterly payroll tax returns filed by Oklahoma Corporate Resource, Inc.; Missouri Corporate Resource, Inc.; and Texas Corporate Resource, Inc., for various quarters in 2010 and 2011. The indictment alleges that Edwards regularly and intentionally directed her own employees to alter these quarterly tax returns to reflect less payroll tax liability than what was actually owed. For the 23 quarters identified in the indictment, Edwards is alleged to be responsible for $6,387,399.09 in unreported payroll taxes.
If convicted, Edwards faces on each count a maximum penalty of five years in prison, three years of supervised release, a fine of $250,000, and the costs of prosecution.
This case is the result of an investigation by IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Jessica L. Perry.
The public is reminded that an indictment is merely an accusation and that the defendant is presumed innocent unless proven guilty beyond a reasonable doubt. Reference is made to court filings for further information.
Former President Pro Tem of Oklahoma Senate Sentenced to Serve 18 Months for BriberyRead the Press Release
Oklahoma City, Oklahoma – This morning, United States District Judge Robin Cauthron sentenced MICHAEL STEVEN MORGAN, 61, of Stillwater, Oklahoma, to serve 18 months in federal prison following his conviction for bribery in 2012, announced Mark A. Yancey, Acting U.S. Attorney for the Western District of Oklahoma.
Morgan was convicted following a jury trial in March of 2012. According to evidence at trial, Morgan, an attorney, accepted payments from a business that owned assisted-living centers, disguised as legal fees, in exchange for favorable treatment in the legislature. Specifically, Morgan took twelve $1,000 bribe payments in 2006 and 2007, disguised as legal fees, from Silver Oak Senior Living Center. Evidence showed that Silver Oak had been at odds with the Oklahoma Department of Health, which was attempting to impose regulations on assisted-living facilities. In exchange for the bribe payments, evidence showed that Morgan authored Senate Bill 738, which became law after modification at the end of the 2007 session and helped Silver Oak by lifting some of its regulatory burdens.
The jury found Morgan not guilty of conspiracy and certain mail fraud counts. The jury could not reach a unanimous verdict on one count of extortion and other mail fraud counts against Morgan. Morgan was originally sentenced in 2013 and, following an appeal, was resentenced today to serve 18 months in federal prison.
This case is the result of an investigation by Federal Bureau of Investigation and was being prosecuted by Assistant U.S. Attorney Scott E. Williams.
Oklahoma Medical Clinics Pays $2.5 Million to Settle Allegations of False Claims for Medical Services Provided to Federal EmployeesRead the Press Release
Oklahoma City, Oklahoma – FEDCARE, LLC, and THE BROADWAY CLINIC OF TULSA, LLC, has paid $2,500,000 to the United States to settle civil penalty claims stemming from allegations that the clinics violated the False Claims Act by submitting false claims to the Office of Workers Compensation Programs of the United States Department of Labor ("DOL-OWCP"), announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
FedCare, LLC ("FedCare") is an Oklahoma limited liability company that operates a medical clinic in Oklahoma City. A related entity, The Broadway Clinic of Tulsa, LLC ("Broadway"), is an Oklahoma limited liability company that operated a medical clinic in Tulsa. FedCare and Broadway provided medical services to federal employees under the Federal Employees’ Compensation Act (FECA). FECA provides workers compensation benefits to civilian employees of the United States for disability due to personal injury sustained while in the performance of duty, and for employment-related disease. Benefits include rehabilitation, medical, surgical and necessary expenses. Claims for services provided under FECA are submitted to DOL-OWCP.
The United States contends that from July 1, 2006, through December 31, 2012, FedCare and Broadway submitted false claims for payment to DOL-OWCP. Specifically, it is alleged that FedCare and Broadway submitted claims to DOL-OWCP for medical services furnished to federal employees of fourteen federal agencies that were false because they were either (1) billed at a higher rate than allowed or (2) not performed at all.
In order to resolve these allegations, FedCare and Broadway agreed to pay $2,500,000 to the United States. In reaching this settlement, FedCare and Broadway did not admit liability and the government did not make any concessions regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the United States Postal Service, Office of Inspector General. The case was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Oklahoma City Man Sentenced for Possession of Child Pornography of Child Under 12Read the Press Release
Oklahoma City, Oklahoma – Last week, Gregory Maurek, 60, of Oklahoma City, Oklahoma, was sentenced by United States District Judge Timothy Diguisti to serve 120 months in federal prison for possession of child pornography, announced Mark A. Yancey, Acting U.S. Attorney for the Western District of Oklahoma.
On June 16, 2015, a two-count Indictment was returned in the United States District Court for the Western District of Oklahoma charging receipt and distribution of child pornography, and possession of child pornography, the production of which involved a prepubescent minor under the age of 12. On September 30, 2015, Maurek pleaded guilty to possession of child pornography, the production of which involved a prepubescent minor under the age of 12.
At the sentencing hearing last Thursday, Maurek was sentenced to 120 months of imprisonment. In addition, Judge Diguisti ordered Maurek to serve ten years of supervised release upon completion of his prison term.
This case is the result of an investigation by Homeland Security Investigations and was prosecuted by Assistant U.S. Attorney Kerry Blackburn.
Edmond Man Charged with Inducing a Child to Produce Child Pornography—Then Using it to Engage in SextortionRead the Press Release
Oklahoma City, Oklahoma – Carlos Alexander Davila, 23, of Edmond, was charged yesterday with production and possession of child pornography, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to an affidavit in support of a criminal complaint, Davila contacted a 14-year-old Florida girl in March of 2016 through Facebook, after seeing her post a comment that her friend had committed suicide. They began communicating via Facebook and later by texting and the smartphone application, Kik. It is alleged that Davila told the girl that he was studying to become a psychologist, and he would help her deal with her friend’s suicide. Eventually, the defendant asked the girl for nude photos in exchange for his emotional support. The girl told Davila that she was only 14, but he said it did not matter. The girl eventually sent Davila nude images of herself.
According to court records, the girl reported that Davila became very possessive of her, and when she tried to end their online relationship, he threatened to post online the nude images she had sent him. According to text messages described in court records, the girl begged Davila to delete her images, but he said he would "keep every single pic and video" and would "leak everything" about her "to everyone," especially his "hungry friends in need of fresh meat." Davila allegedly texted her, saying, "The more you ignore me the more I’ll expose you without a care in the world." He allegedly texted her that if she did not respond to him in five minutes, he would post a picture she had sent him—alongside a request that listed her contact information and asked for pictures of men’s penises. Davila allegedly used a phone-number-spoofing app to send the girl text messages to give her the impression that her images had in fact been posted online and that people were contacting her.
According to court records, when Edmond Police Department officers examined Davila’s electronic devices, they found child pornography depicting the Florida girl, as well as other images of child pornography.
If convicted of producing child pornography, Davila faces a minimum of fifteen and a maximum of thirty years in prison, as well as supervised release of five years to life.
This case is being investigated by the Hillsborough County (Florida) Sheriff’s Department and the Edmond Police Department. The case is being prosecuted by Assistant U.S. Attorney Brandon Hale.
Please note that an indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Four El Reno Men Plead Guilty for Their Roles in the Failure of the Bank of UnionRead the Press Release
Oklahoma City, Oklahoma – CODY GENE BOMHAK, 34, TERRY GENE BOMHAK, 53, and GARY DEAN BOMHAK, 50, all of El Reno, Oklahoma, entered guilty pleas last week for their involvement in the failure of The Bank of Union, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
In April, 2015, each of the three defendants were separately charged with making a false statement for the purpose of influencing the action of The Bank of Union, in violation of 18 U.S.C. § 1014. At their change of plea hearings before U.S. District Judge Timothy D. DeGiusti, Cody and Terry Bomhak each admitted that their conduct resulted in a loss of between $25,000,000.00 and $50,000,000.00 to The Bank of Union. Gary Bomhak admitted to conduct causing between $3,500,000.00 and $9,500,000.00 in loss to the bank.
In a related case, JUSTON TECH, 39, also from El Reno, previously pleaded guilty to making false statements in order to influence The Bank of Union. At his plea hearing late last year, Tech admitted to causing a loss amount of between $2,500,000.00 and $7,000,000.00 to the bank.
At sentencing, each of the defendants face up to 30 years in prison, a $1,000,000 fine, and up to five years of supervised release. According to the terms of their plea agreements, they will also be ordered to pay restitution to the victims of their conduct in an amount to be determined by the court at the time of sentencing.
This case is the result of an investigation by the Federal Deposit Insurance Corporation and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Julia E. Barry.
Former Comptroller Sentenced to 18 Months in Prison for Embezzlement and Signing a False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – LeANN MARIE GOODE, of Edmond, Oklahoma, was sentenced today to 18 months in prison for embezzlement and signing a false federal income tax return, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
During 2012 and 2013, GOODE was employed as Accountant/Comptroller at Market Source, Inc., located in Oklahoma City. On October 14, 2015, she pled guilty to using interstate wire communications to defraud Market Source. In particular, she admitted that she paid personal expenses out of Market Source’s account at InterBank (formerly known as Union Bank) and disguised her embezzlement by treating those payments as business-related expenses. At the October 2015 hearing, GOODE also pled guilty to signing a false tax return. She admitted that on January 31, 2014, she signed a personal federal tax return for the 2013 calendar year that she knew was false because it reported only $65,774 in total income, substantially less than the income she actually received.
At today’s sentencing, U.S. District Judge Timothy D. DeGiusti ordered that GOODE be incarcerated for 18 months. She must also pay restitution in the total amount of $236,923.45, as follows:
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Market Source: $139,701.45
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Ohio Casualty: $50,000.00
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Internal Revenue Service: $47,222.00
After completing her sentence, GOODE will serve three years of supervised release. She must perform 104 hours of community service during the first year of supervised release.
This case was the result of an investigation by Internal Revenue Service—Criminal Investigations and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Kerry A. Kelly.
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Leadership of Local OKC Street Gang and Affiliates Convicted of Operating Million Dollar Crack Cocaine Distribution RingRead the Press Release
Oklahoma City, Oklahoma – Last Thursday, a federal jury convicted Daryl Lee Ingram, Michael Eugene Banks, and Michael Shandelon Brown, all from Oklahoma City, of conspiring to distribute cocaine base (crack) in a million-dollar drug distribution ring, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. In addition, all three were found guilty of conspiring to launder the proceeds of that drug-distribution ring.
The trial was a culmination of a long-term investigation into the senior leadership of a local street gang in Oklahoma City. According to evidence presented at trial and court records, Ingram and Banks were both high-ranking gang members and large-scale cocaine base distributors in Oklahoma City. Evidence showed that these two were assisted by a number of other individuals in the gang or affiliates, including Brown. As part of these conspiracies, Ingram, Banks, and Brown also involved family members and friends to hide the profits from illegal drug sales. Typical of the conspiracy, co-conspirators would purchase blank $1,000 money orders and mail them to California, where they were cashed by other co-conspirators for the benefit of the conspiracy. The drugs and money recovered during the investigation, as well as the money accounted for in seized drug ledgers, revealed that this group was responsible for distributing cocaine base with a street value well in excess of one million dollars.
Ten people have been charged and convicted as a result of this investigation. All pled guilty to offenses identified below, except for Ingram, Banks and Brown who went to trial. The trial lasted approximately 11 days. The jury deliberated approximately 5 hours before finding the three men guilty.
All defendants are awaiting sentencing. Both Ingram and Banks face mandatory life sentences as a result of their conviction. The following summarizes the charges associated with each of the defendants and the potential sentence they face:
#
Name
Age & Hometown
Conviction Offenses
Date of Conviction
Potential Sentence
1
Daryl Lee Ingram (aka “Black” “Clacc” “Ninety Black” “BJ”)
37, Oklahoma City
Conspiracy to distribute cocaine base; conspiracy to commit money laundering of drug proceeds; manufacturing cocaine base; money laundering
Convicted at trial on April 28, 2016
Mandatory Life in Prison
2
Michael Eugene Banks (aka “Bird” “Birdie” and “Tiny Bird”)
36, Oklahoma City
Conspiracy to distribute cocaine base; conspiracy to commit money laundering of drug proceeds; manufacturing cocaine base; possession of cocaine base with intent to distribute; illegally possessing firearms to further a drug trafficking crime; possession of a firearm by a felon; money laundering; and witness tampering by threatening a government witness
Convicted at trial on April 28, 2016
Mandatory Life in Prison
3
Michael Shandelon Brown (aka “Kaos” and “Ozz”)
36, Oklahoma City
Conspiracy to distribute cocaine base; and conspiracy to commit money laundering of drug proceeds
Convicted at trial on April 28, 2016
Up to Life in Prison
4
Anthony Ray Anderson
40, Oklahoma City
Maintaining a drug-involved premises
Guilty Plea on April 12, 2016
Up to 20 Years in Prison
5
Linda Donell Banks
56, Oklahoma City
Money laundering of drug proceeds
Guilty plea on August 6, 2015
Up to 20 Years in Prison
6
Raven Tanike Barnes
37, Oklahoma City
Money laundering of drug proceeds
Guilty plea on August 5, 2015
Up to 10 Years in Prison
7
Aundre T Cade
35, Oklahoma City
Possession of cocaine base with intent to distribute
Guilty plea on
October 19, 2015
Up to Life in Prison
8
Brittany Jamelia Frazier
26, Midwest City
Possession of cocaine base
Guilty plea on November 13, 2015
Up to 1 Year in Prison
9
Xavier Jorge Guerrero
43, Los Angeles, CA
Money laundering of drug proceeds
Guilty plea on April 11, 2016
Up to 20 Years in Prison
10
Satin Sierre Watley
24, Oklahoma City
Money laundering of drug proceeds
Guilty plea on June 18, 2015
Up to 20 Years in Prison
These convictions were the result of a joint investigation between the Oklahoma City Police Department, the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the United States Postal Inspection Service. This case was prosecuted by Assistant U.S. Attorneys David McCrary, Kate Holey, and Virginia L. Hines.
Del City Man Pleads Guilty to Producing Child PornographyRead the Press Release
Oklahoma City, Oklahoma – Today, DONNIE RAY SHULTZ, 45, of Del City, Oklahoma, entered a plea of guilty to producing child pornography depicting of a 15-year-old girl with whom he engaged in sexually explicit conduct, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to court records, in July 2014, Shultz began engaging in sex acts with the then 14-year-old girl, whom he met through a religion class that he taught at a Del City church. According to those records, the sex acts occurred between July 2014 and November 2015, and took place in various locations in the Oklahoma City metroplex, including the church’s parking lot, the child victim’s house, and Shultz’s own house. According to court documents, Shultz produced images of sexual acts involving the child with his iPhone.
Shultz was indicted by a federal grand jury on February 16, 2016. During the plea hearing today before United States District Judge Robin Cauthron, Shultz admitted that on September 26, 2014, he engaged in sexually explicit conduct with the 15-year-old and took photographs with his iPhone.
Due to a prior Cleveland County conviction for second degree rape, Shultz faces a mandatory minimum term of 25 years in prison and maximum of 50 years in prison as well as a $250,000 fine. A sentencing hearing will be set by the court in approximately 90 days.
This case is the result of an collaborative investigation by the Del City Police Department, Homeland Security Investigations and the United States Secret Service Electronic Crimes Task Force. The case is being prosecuted by Assistant U.S. Attorney Brandon Hale.