Western District of Oklahoma
Press releases recorded for this federal judicial district.
Shawnee Man to Serve Five Years Probation and Pay over $181,000 in Restitution for Receiving Kickbacks in Scheme to Embezzle from Citizen Potawatomi NationRead the Press Release
Oklahoma City, Oklahoma – Yesterday, THOMAS BIERD, 35 from Shawnee, Oklahoma, was sentenced by United States District Judge Vicki Miles-LaGrange to serve probation for five years and pay $181,763 in restitution to the Citizen Potawatomi Nation for embezzlement from the tribe, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
Bierd was indicted on April 21, 2015, for his role in the embezzlement scheme that involved a related case against KRISTI BIAS, 42, also of Shawnee. According to court records and information at court hearings, Bias was employed as the Executive Director of the Citizen Potawatomi Nation’s Community Development Corporation (CDC), which promoted economic development in the Native American community by providing loans and grants to companies owned by or which primarily employed members of federally-recognized Indian tribes. From December of 2010 and September of 2011, Bias was alleged to have caused grants to be issued to false or ineligible entities, falsified supporting documents, and received kickbacks for doing so. Bierd controlled an entity that received checks issued from CDC by Bias who, in turn, kicked back a portion of the proceeds to Bias.
On October 8, 2015, Bias was sentenced to serve 24 months in federal prison for embezzlement from the Citizen Potawatomi Nation, and pay $251,018.35 in restitution to the tribe. Following her 24-month prison term, Bias is ordered to served 3 years of supervised release and pay $251,018.35 in restitution to the tribe.
On September 3, 2015, Bierd pled guilty to embezzlement from the tribe. Yesterday, he was ordered to serve probation for five years and pay $181,763 in restitution to the tribe for his role in the embezzlement.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Tim Ogilvie.
Reference is made to court filings for further information.
Former Bethany-Warr Acres Public Works Authority Official is Sentenced to Serve 37 Months in Prison for Wire Fraud and Tax FraudRead the Press Release
Oklahoma City, Oklahoma – Yesterday, HELEN ROSE DEWEY, 61, of Oklahoma City, was sentenced by United States District Judge Vicki Miles-LaGrange to serve 37 months in federal prison for wire fraud and tax fraud, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
The Bethany-Warr Acres Public Works Authority (Authority) owned and operated the Bluff Creek Wastewater Treatment Plant to furnish public and municipal services for the cities of Bethany and Warr Acres. Dewey began her employment as a secretary at the treatment plant in 1988. Throughout her career, Dewey gained more responsibilities and eventually became the Executive Assistant to the Director of the treatment plant in 2010. Her primary duties included purchasing and accounts payable where she purchased supplies and other items for the treatment plant. As part of her duties, Dewey was authorized to use Authority credit cards to make purchases for the wastewater treatment plant.
According to court records, beginning in January 2008 and continuing to August 2013, Dewey embezzled from the Authority by using the Authority’s credit cards to make unauthorized purchases. The majority of the purchases involved gift cards ranging from $25 to $200 in value. Dewey also used the credit cards to buy personal items. In addition, during 2012 and 2013, Dewey embezzled money from the petty cash fund. To conceal her activity, Dewey altered purchase orders and blocked out itemized purchases listed on receipts and falsified claims for approval and payment by the Authority. It was also alleged that Dewey falsified her federal tax return for 2012 by grossly under-reporting her income.
Dewey was charged by Information on October 28, 2015. She pled guilty on November 12, 2015, to committing wire fraud and tax fraud.
Yesterday, Dewey was ordered to serve 37 months in prison, followed by three years of supervised release, and pay $974,034 in restitution to the Bethany-Warr Acres Public Works Authority and $233,674 in restitution to the IRS.
Reference is made to the court record for further information.
This case is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Kerry Kelly.
Newalla Man Sentenced to 10 Years in Prison for Possession of Child PornographyRead the Press Release
Oklahoma City, Oklahoma – CHRISTOPHER MINOR, 32, of Newalla, Oklahoma, was sentenced by United States District Judge David L. Russell to serve 120 months in federal prison for possession of child pornography, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
On September 1, 2015, a federal grand jury indicted Mr. Minor for distribution of child pornography. On October 19, 2015, Mr. Minor pleaded guilty to a one-count Superseding Information charging him with possession of child pornography, the production of which involved the use of a prepubescent minor under the age of 12.
At his sentencing hearing today, Judge Russell sentenced Mr. Minor to serve 120 months in federal prison, followed by eight years of supervised release.
This case is the result of an investigation by Homeland Security Investigations and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Four El Reno Residents Sentenced in Fraudulent Vehicle Cash-Back SchemeRead the Press Release
Oklahoma City, Oklahoma – Today, RICHARD M. ARNOLD SR. (a/k/a/ "Rick Arnold"), 62; RICHARD M. ARNOLD II, (a/k/a/ "Ricky Arnold"), 29; ROBERT W. ARNOLD, 26; and ROBYN R. ARNOLD, 57, all of El Reno, Oklahoma, were sentenced for conspiracy and wire fraud, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. All were charged with conspiring to defraud new car purchasers out of cash included in loan proceeds based on false representations that a charitable trust would make all of the victims’ monthly car payments. The first three defendants received sentences of 54, 29 and 27 months in prison respectively. Robyn Arnold was ordered to serve five years of supervised release.
Ricky Arnold pled guilty to conspiracy on March 24, 2015; Rick and Robyn Arnold pled guilty on May 11, 2015. Robert Arnold, however, pled not guilty and went to trial before the Honorable Timothy D. DeGiusti on May 26, 2015. The evidence at trial showed that from May of 2013 through April of 2014, the defendants informed their acquaintances, family members, and friends that they could become beneficiaries of a program operated by a charitable trust designed to help working people acquire new cars. The defendants claimed that "CECU Trust" financed the program, which was also called the "United Auto Buyers Co-op Association."
Rick Arnold, Ricky Arnold, and Robert Arnold met car purchasers interested in the program at various car dealerships and arranged for purchases on credit that would include cash paid back to the buyers of $4,000 to $12,000 per car. In some instances, defendants caused victims’ loan applications to include fraudulently inflated income. Defendants told the car buyers that the rebate money would have to be given to the defendants for deposit into CECU Trust, which would then pay the buyers’ car loans in their entirety.
After the car purchases were complete, one or more of the defendants met the car buyers in a public place, such as a coffee shop or a bank, to receive the proceeds of the cash-back finance transactions. That money was deposited into bank accounts controlled by Robyn Arnold. Much of the money was used for personal expenses. Defendants also asked buyers to sign powers of attorney as well as proposed agreements advising the buyers that the association’s success depended on the buyers referring new participants to the program.
When various lenders notified buyers of potential defaults, defendants either assured the buyers that the payments would be made or stated that the trust would be unable to make further payments unless the buyers recruited additional participants.
The jury convicted Robert Arnold of conspiracy and wire fraud after hearing more than two days of testimony.
Today Judge DeGiusti sentenced all four defendants. They received the following sentences:
-
Rick Arnold: 54 months in prison, plus 4 years of supervised release
-
Ricky Arnold: 29 months in prison, plus 2 years of supervised release
-
Robert Arnold: 27 months in prison, plus 2 years of supervised release
-
Robyn Arnold: ordered to serve 5 years of supervised release
Rick Arnold’s sentence included an upward adjustment for his leadership role. All four sentences were based on loss amounts of more than $250,000. The court will determine a precise restitution amount within 60 days.
Reference is made to court filings for further information.
This case is the result of an investigation by the Federal Bureau of Investigation and the Public Protection Unit of the Oklahoma Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Kate Holey.
-
Norman Man Sentenced to Serve 100 Months in Prison for Accessing and Viewing Child PornographyRead the Press Release
Oklahoma City, Oklahoma – DANIEL EUGENE HOWIE, 32, of Norman, Oklahoma, has been sentenced to serve 100 months in federal prison for having accessed, with intent to view, child pornography, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to a complaint filed on July 23, 2015, law enforcement officers determined that an internet user with an IP address linked to Mr. Howie’s home address in Norman was actively viewing images of child pornography and posting comments on website forums dedicated to the advertisement and distribution of child pornography. Upon obtaining and executing a search warrant at Mr. Howie’s home, agents recovered several laptops and media devices. Mr. Howie admitted to federal agents that he had searched for and viewed images of child pornography, and also admitted to molesting two girls under the age of twelve — one of whom was only four years old at the time.
On August 18, 2015, a federal grand jury returned a two-count indictment charging Mr. Howie with knowingly accessing, with intent to view, child pornography, the production of which involved the use of a prepubescent minor under the age of twelve. On September 24, 2015, Mr. Howie pleaded guilty to both counts.
At a hearing last Friday, Mr. Howie was sentenced to serve 100 months in prison, followed by 10 years of supervised release upon completion of his prison term. He will also be required to register as a sex offender for life.
This case is the result of an investigation by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Five Norman Residents Sentenced in Counterfeit Check Fraud SchemeRead the Press Release
Oklahoma City, Oklahoma –CHRISTOPHER GLENN MARTIN, 42, JOHNATHAN LEE MADDEN, 33, JENNY LYNN MADDEN, 33, DYLAN RAY FOUNTAIN, 22, and CODY TYLER MARTIN, 23, all from Norman, Oklahoma, have been sentenced for their roles in a counterfeit check fraud scheme, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to court records, from September 2013 through June 2014, the coconspirators stole mail from mailboxes to obtain private banking information, used the stolen information to manufacture counterfeit checks, and then used those checks to purchase merchandise and gift cards at retail stores throughout the Norman and Oklahoma City area. They also used counterfeit checks to obtain cash from retail stores and local banks.
The five defendants were indicted on January 20, 2015. Christopher Martin and Johnathan Madden pled guilty to bank fraud related to their scheme to defraud banks by presenting counterfeit checks in exchange for cash. Jenny Madden, Dylan Fountain, and Cody Martin pled guilty to conspiracy for their role in negotiating counterfeit checks at retail stores. The individual defendants were sentenced by United States District Judge David Russell as follows:
- On March 15, 2016, Christopher Martin was sentenced to serve 71 months in prison, followed by 5 years of supervised release, and ordered to pay $170,794.53 in restitution.
- On December 21, 2015, Johnathan Madden was sentenced to serve 70 months in prison, followed by 5 years of supervised release, and ordered to pay $52,603.36 in restitution.
- On December 15, 2015, Dylan Fountain was sentenced to serve 33 months in prison, followed by 3 years of supervised release, and ordered to pay $114,734.75 in restitution.
- On September 2, 2015, Jenny Madden was sentenced to serve 57 months in prison, followed by 3 years of supervised release, and ordered to pay $170,794.53 in restitution.
- On December 10, 2015, Cody Martin was sentenced to serve 36 months of probation and pay $97,861.67 in restitution.
This case was the result of an investigation conducted by the U.S. Postal Inspection Service and was prosecuted by Assistant U.S. Attorney Jessica L. Perry.
Edmond Ministry Volunteer to Serve 40 Years in Prison for Engaging in Sexual Conduct with Multiple Children in KenyaRead the Press Release
Oklahoma City, Oklahoma – Today, MATTHEW LANE DURHAM, 21, from Edmond, Oklahoma, was sentenced by United States District Judge David Russell to serve 480 months in federal prison for engaging in illicit sexual conduct with multiple children in Kenya, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
"Mr. Durham took advantage of his position as a ministry volunteer to sexually assault multiple children in Kenya," said Acting U.S. Attorney Mark Yancey. "The significant sentence imposed today will remove the threat of any other children being exploited by him. However, the innocence of the child victims cannot be restored and their lives will never be the same. It is our hope and prayer that his conviction and lengthy sentence will someday bring them some comfort and peace."
Durham was convicted on June 19, 2015, following a trial that lasted six and a half days. According to evidence at trial, Durham was a volunteer at the Upendo Children’s Home, located in Juja, Kenya. Upendo specializes in assisting neglected Kenyan children by providing them with food, housing, clothes, school and religion. Evidence showed that between April 30, 2014, and June 17, 2014, Durham traveled from Oklahoma City to Nairobi, Kenya, and while in Kenya he engaged in sexual conduct with multiple children under 18 years of age. The jury deliberated for approximately nine hours before finding Durham guilty.
At the sentencing hearing today, Mr. Durham stood convicted of four counts. After finding that Durham lied under oath at trial, Judge Russell ordered him to serve 480 months in federal prison. After serving his prison term, he was also ordered to spend the rest of his life on supervised release and must register as a sex offender for life. He was also ordered to pay $15,863 in restitution.
Reference is made to the court record for further information.
This case was the result of an investigation by the Federal Bureau of Investigation, who was assisted by the United States Embassy in Kenya, the U.S. Department of State Diplomatic Security Service, and the Kenyan National Police Directorate of Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Robert Don Gifford II, Assistant U.S. Attorney David P. Petermann, and Assistant U.S. Attorney Steven W. Creager.
Oklahoma City Daycare Worker and Babysitter Pleads Guilty to Producing Child PornographyRead the Press Release
Oklahoma City, Oklahoma – Today, JASON MARC JANATSCH, 26, of Oklahoma City, pleaded guilty to producing child pornography depicting a female toddler whom he babysat, announced Mark A. Yancey, Acting 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. Authorities in New Zealand located the man and 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 worked as a freelance babysitter who advertised his services on www.sitter.com.
Janatsch was indicted by a federal grand jury on January 6, 2016. During the plea hearing today 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. 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.
At sentencing, Janatsch 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 is the result of an investigation by Homeland Security Investigations and the New Zealand Police Online Child Exploitation Across New Zealand team. The case is being prosecuted by Assistant U.S. Attorney Brandon Hale.
Man Pleads Guilty to Intentionally Crashing into an Oklahoma Highway Patrol Vehicle During an Interstate Drug RunRead the Press Release
Oklahoma City, Oklahoma – On February 23, 2016, PATRICK SAMIR ASFOUR, age 39, of Palm Coast, Florida, pled guilty to traveling interstate to commit violence in furtherance of a drug offense, possessing marijuana with intent to distribute, and carrying a gun during a drug trafficking crime, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. With respect to the first crime, Asfour admitted that he intentionally struck an Oklahoma Highway Patrol trooper’s vehicle while the trooper was conducting a traffic stop in connection with the drug trafficking.
According to a superseding indictment filed in January 2016, Asfour and a co-defendant transported marijuana from California to Florida in January 2015 by using two cars, a scheme called “tandem driving.” Asfour’s co-defendant drove a “load” car that carried approximately 136 pounds of hydroponic marijuana with an estimated value of $400,000 and a 9mm pistol. Asfour drove an “escort” vehicle. Asfour and his co-defendant agreed that the escort vehicle would strike a law enforcement cruiser if the load vehicle was pulled over. They hoped this would create a diversion that would allow the load vehicle to slip away.
On January 30, 2015, the load vehicle committed a traffic violation as it was traveling eastbound on Interstate 40 in Canadian County, Oklahoma. As an OHP trooper stopped the load car, Asfour crashed the escort vehicle into the OHP cruiser. Asfour and the co-defendant were arrested and charged with drug trafficking and weapons violations.
At sentencing, Asfour faces up to 20 years in prison on the interstate-travel count, plus three years of supervised release and a $250,000 fine. He also faces up to 30 years in prison on the possession-with-intent-to-distribute count, in addition to three years of supervised release and a $1,000,000 fine. Finally, he will be sentenced to at least five years in prison and possibly up to life imprisonment on the firearm count, a sentence which will run consecutive to the sentences for all other counts, in addition to five years of supervised release and a $250,000 fine.
Reference is made to the superseding indictment and other public filings for further information.
This case is the result of an investigation by the Oklahoma Highway Patrol; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorneys Edward J. Kumiega and Nicholas J. Patterson.
Bethany Man Charged with Manufacturing Counterfeit CurrencyRead the Press Release
Oklahoma City, Oklahoma – On February 23, 2016, DANIEL JOHNSON, of Bethany, Oklahoma, was charged by complaint in the Western District of Oklahoma with manufacturing counterfeit currency.
According to an affidavit in support of the complaint, U.S. Secret Service agents obtained a search warrant for a commercial office in west Oklahoma City on February 19, 2016. Among other things, agents had learned that nineteen discarded stainless steel plates with faded images of Federal Reserve notes had been discovered in a dumpster near the office. When they executed the search warrant, they found an industrial printing press, ink, and plates designed to stamp sheets of counterfeited currency together. They also found personal mail addressed to Johnson, who had been under investigation for counterfeiting for several months.
Johnson’s initial appearance took place today before United States Magistrate Judge Shon Erwin.
The crime of manufacturing counterfeit currency carries a maximum penalty of twenty years in prison, three years of supervised release, and a fine of $250,000.
"The Secret Service is committed to protecting our financial system and preserving the integrity of U.S. currency," said Joseph Slawinski, Assistant to the Oklahoma City Special Agent in Charge. “The Secret Service appreciates the support of the U.S. Attorney’s Office, U.S. Postal Inspection Service, IRS-Criminal Investigations, Homeland Security Investigations, FBI, Oklahoma Highway Patrol, the Oklahoma City Police Department, the Moore Police Department, the Norman Police Department, and the Oklahoma Bureau of Narcotics and Dangerous Drugs for their assistance, as well as numerous other law enforcement partners who work in cooperation with the Oklahoma City Economic and Identity Crimes Task Force throughout the state of Oklahoma.”
Reference is made to the complaint and other public filings for further information. The complaint is only an allegation and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial, at which the government must prove guilt beyond a reasonable doubt.
This case is the result of an investigation by the Oklahoma City Economic and Identity Crimes Task Force, which is hosted by the United States Secret Service. It is being prosecuted by Assistant U.S. Attorney Charles W. Brown.
Former Norman Attorney Pleads Guilty to Defrauding Clients and Failing to File a Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – Today, DANE THOMAS WILSON, of Oklahoma City, pled guilty to one count of wire fraud and one count of failing to file a tax return, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
Wilson was charged pursuant to an Information filed by the Government. Wilson admitted today to United States District Judge Timothy D. DeGuisti 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.
At sentencing, Wilson 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 IRS-Criminal Investigations and was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
Pair Indicted for Using Internet Dating Site for Wire Fraud SchemeRead the Press Release
Oklahoma City, Oklahoma – Today, a federal grand jury has indicted KEN EJIMOFOR EZEAH, 33, from Nigeria, and AKUNNA BAIYINA EJIOFOR, 31, a resident of Houston, Texas, for conspiracy to commit wire fraud and wire fraud, announced Mark Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to the indictment, defendants and their co-conspirators would use false profile information to open user accounts on online dating web sites and contact other users under the guise of forming an online relationship. Instead, it is alleged, the contact was actually for the purpose of attempting to scam money from other users by claiming to be successful financial advisors or affiliated with charitable causes.
It is alleged the defendants used telephone calls, cell phone text messages, and messages through the dating web site in order to further the illusion that a genuine relationship was developing. As the online relationship progressed, it is alleged, the defendants would make inquiries about their potential victim’s finances and investments and claim to have inside information, such as knowledge that the victim’s investment firm was under investigation by government authorities or was financially unsound. Ultimately, it is alleged, the defendants would use these false claims to persuade the victims that their money or investments were unsafe and cause the victims to wire money to the defendants. In reality, it is alleged, the defendants kept the victim’s money for themselves. Specifically, the indictment alleges that the defendants used this scheme to cause one victim from Oklahoma City to wire $500,000 on May 11, 2015, and another $501,000 on May 14, 2015, from her bank account to Barclays Bank in London.
Ezeah and Ejiofor were been charged by criminal complaint and were arrested in Houston, Texas, on January 27, 2016.
If convicted, Ezeah and Ejiofor each face up to 20 years in prison and a $250,000 fine. The public is reminded that the indictment is merely an accusation and that the defendants are presumed innocent unless and until proven guilty. Reference is made to court records for further information.
This case is the result of an investigation by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Tim Ogilvie.
Former Financial Officer at Local Oil and Gas Company Pleads Guilty to Forgery and Signing a False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – LARRY SANFORD WATERS, of Edmond, Oklahoma, pled guilty yesterday to check forgery and signing a false federal income tax return, in connection with a $1.5 million embezzlement from a local oil and gas company, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
On January 27, 2016, Waters was charged by information with one count of a forged security and one count of filing a false federal income tax return. From 1986 until early 2014, Waters handled accounting work and served as the financial officer at an Oklahoma City oil and gas company. As part of his job, Waters prepared checks for the company to pay operating expenses and to pay oil well owners for their profits. Yesterday, Waters pled guilty to preparing an unauthorized company check, in the amount of $65,541.32, to a separate business under his control. He admitted that he did not have his employer’s permission in August 2011 to issue the check with the oil and gas company owner’s digital signature. As part of his plea, Waters further admitted that he embezzled funds from his former employer from around 2004 through February of 2014 and stipulated that the total loss to the oil and gas company from his embezzlement scheme was $1,573,339.31. Waters has already made payment to the victim in full for the stipulated amount of restitution.
In addition to pleading guilty to forgery, Waters pled guilty to signing a false tax return. He admitted that on January 25, 2013, he signed a personal federal tax return for the 2011 calendar year that he knew was false because it reported only $379,373 in total income. At yesterday’s plea hearing, Waters admitted that he omitted on the 2011 return more than $420,000 of embezzled income for that year from his former employer.
At sentencing, Waters faces up to 10 years in prison on the forgery count, plus three years of supervised release, and a $250,000 fine. Waters also faces up to three years in prison on the tax count, in addition to one year of supervised release, a $250,000 fine, and restitution to the Internal Revenue Service for the tax loss. Waters will be sentenced on May 11, 2016. Reference is made to the information and other public filings for further information.
This case is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigations, and it is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Former Cushing Resident Pleads Guilty to Making False Statements to the FAA and is Sentenced to Serve Five Years Probation and 180 Days Home ConfinementRead the Press Release
Oklahoma City, Oklahoma – At a combined change of plea and sentencing hearing Thursday, LARRY DALE MORGAN, 70, of Fort Worth, Texas, and formerly of Cushing, Oklahoma, pleaded guilty to knowingly making false statements to the Federal Aviation Administration ("FAA") and was sentenced to serve five years probation and 180 days of home confinement, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. In addition, Morgan was ordered to forfeit $42,000 to the United States and pay $43,000 in restitution to the victim of the offense.
As background, the FAA requires "traceability" of all aircraft and aircraft parts, requiring that any inspections, repairs, overhaul, maintenance, or changes in the physical condition of aircraft or aircraft parts be detailed in logbooks that accompany an aircraft throughout its use. The FAA and the aviation industry rely upon the accuracy of these records to determine the airworthiness, maintenance history, and value of an aircraft. In order to ensure aircraft safety, the FAA also requires that anyone wishing to perform a major aircraft or component modification receive FAA approval.
According to the Superseding Indictment filed on January 6, 2015, Morgan, formerly a pilot in Cushing, Oklahoma, responded to an advertisement in Fall of 2010 and traded his Beechcraft Bonanza aircraft for a Cessna aircraft owned by a person in upstate New York. As part of that transaction, it was alleged that Morgan made a series of false entries into the Beechcraft’s log books, submitted a fraudulent bill of sale falsely representing that he was the aircraft’s sole owner, and inflated the aircraft’s value. Following discovery of problems with the Beechcraft, making it inoperable, and falsified entries in its logbook entries, the FAA grounded the plane due to safety concerns. Morgan was charged with five counts of wire fraud, two counts of false statements involving aircraft parts, and making false statements to the FAA.
At the plea hearing, Morgan pleaded guilty to Count 8 and specifically admitted that he falsified an Aircraft Bill of Sale in which he listed himself as the sole owner of the Beechcraft Bonanza, well knowing that the aircraft was in fact co-owned by the Bank of Cushing.
This case is the result of an investigation by the United States Department of Transportation, Office of the Inspector General. It was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Jury Finds Los Angeles Gang Member and College Student Guilty of Trafficking PCPRead the Press Release
Oklahoma City, Oklahoma – Today, a federal jury found WESLEY TAVION GRANT (a/k/a "Olajawan Bush"), 23, a "Bloods" gang member from Los Angeles, California, and LARENZO MONTEL GABOUREL, 20, a community college student also from Los Angeles, guilty of conspiracy to distribute PCP and possession with intent to distribute PCP, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. The jury also found Grant guilty of distribution of PCP and Gabourel guilty of possessing a firearm in furtherance of drug trafficking
According to evidence at trial, on May 19, 2015, an undercover FBI agent purchased a large amount of PCP from Grant in the Walmart parking lot at Memorial and Penn Avenue. Law enforcement executed a search warrant at an abandoned apartment that was being used as a “stash house” in northwest Oklahoma City which resulted in the seizure of the nearly a gallon of PCP kept in water bottles and vanilla extract bottles. The drugs, representing nearly 3,200 individual doses of PCP, had a street value of well over $40,000. During the arrest and search, Gabourel was found in the apartment with a loaded .32 revolver in his pants. The jury also heard evidence of Grant’s prior Oklahoma City arrest for PCP distribution and from a Las Vegas Metro Police Officer who discussed a Las Vegas arrest in which PCP was found. Testimony was presented from a fellow Blood gang member who testified about driving Gabrouel from Los Angeles to Oklahoma City and the making of the PCP.
The trial lasted for three days and the jury deliberated for approximately seven hours before finding both defendant’s guilty on all counts. After the verdict was read, both Grant and Gabourel were remanded to the custody of the U.S. Marshals.
At sentencing, both defendants face up to life in prison. A sentencing date will be set by the court in approximately 90 days. Reference is made to the court record for further information.
This case was the result of an investigation by the Federal Bureau of Investigation and the Oklahoma City Police Department. The case was prosecuted by Assistant U.S. Attorneys Nicholas Patterson, Robert Don Gifford, II, and David McCrary.
Lawton Man Charged with Sex Trafficking and Kidnapping of a JuvenileRead the Press Release
Oklahoma City, Oklahoma – Today, CHARLES MICHAEL SEGALOFF (a/k/a "Michael Makai," "Mike Sage," "Daddy," "Poppa," and "Master"), age 59, of Lawton, Oklahoma, has been indicted by a federal grand jury and charged with traveling with intent to engage in illicit sexual conduct with a juvenile, kidnapping, sex trafficking, and enticement of a juvenile, announced Mark Yancey, Acting United States Attorney for the Western District of Oklahoma.
According to the indictment, from December 7, 2015, through December 15, 2015, Segaloff traveled from Lawton, Oklahoma, to Greenwich, New York, and returned to Lawton with a female juvenile under 18 years of age for the purpose of engaging in illicit sexual conduct and to hold the juvenile to form a polyamorous family. Segaloff had previously been charged by complaint in federal court in Oklahoma City and is currently being held in the Logan County Jail.
If convicted, Segaloff faces up to life in prison, a $250,000 fine, and lifetime registration as a sex offender. The public is reminded that the indictment is merely an accusation and that the defendant is presumed innocent unless and until proven guilty. Reference is made to court records for further information.
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. Attorney Robert Don Gifford, II, and Special Assistant U.S. Attorney Mark Stoneman.
Sanford C. Coats to Step Down After Serving Six Years as United States AttorneyRead the Press Release
Oklahoma City, Oklahoma -- United States Attorney Sanford C. Coats has announced his resignation effective on January 15, 2016. Coats plans on taking some time to determine his next professional endeavor.
"First, I would like to thank the President for giving me this incredible opportunity to serve as the U.S. Attorney," said U.S. Attorney Coats. "Second, I would like to thank the women and men of the US Attorney’s Office for the Western District of Oklahoma for your commitment to justice. You are true public servants and I was consistently in awe of your work and dedication. Finally, I would like to thank federal, state, tribal and local law enforcement for your partnership and friendship over the last twelve years."
Coats was nominated by President Barack Obama to become United States Attorney for the Western District of Oklahoma on September 30, 2009. The nomination was confirmed by the United States Senate on December 24, 2009, and Coats was sworn-in on December 30, 2009.
As United States Attorney, Coats also successfully prosecuted many civil and criminal cases. In addition, Coats served in many key positions in the Department of Justice, including on the Attorney General’s Advisory Committee (AGAC), Vice-Chair of the AGAC Native American Issues Subcommittee, Co-Chair of the Domestic Terrorism Executive Committee, Co-Chair the AGAC Terrorism and National Security Subcommittee, and Co-Chair of the AGAC Crimes Against Children Subcommittee.
Prior to serving as United States Attorney, Coats served as Assistant United States Attorney (AUSA) from 2004-2009. He worked in all areas of the Criminal Division where he prosecuted a variety of cases, including child prostitution, child pornography, banking fraud, tax evasion, crimes in Indian Country, illegal immigration, complex drug conspiracies, firearm crimes and violence associated with illegal street gangs. As an AUSA, has served as Team Leader of the Major Crimes Team and office Project Safe Childhood Coordinator.
In 2007, Coats volunteered for short-term assignment to the U.S. Attorney’s Office in New Orleans as part of a special initiative by the Department of Justice following the devastation of Hurricane Katrina to assist in the prosecution of violent, firearm and drug crime. Also in 2007, Coats received a national Director’s Award for Superior Performance as an Assistant United States Attorney for his work in the prosecution of multiple child prostitution cases.
Prior to joining the U.S. Attorney’s Office, Coats was in private practice in Oklahoma City representing corporations and individuals in litigation. Coats has been a practicing attorney since 1999, after receiving a Juris Doctorate from the University of Oklahoma College of Law in 1998. Prior to law school, Coats attended Tulane University of Louisiana where he received a Bachelor of Arts degree in 1994.
Oklahoma City Man to Serve 21 Months in Prison and Pay over $58,000 in Restitution to the IRS for Stolen Identity Tax FraudRead the Press Release
Oklahoma City, Oklahoma – JIMMY BOSTIC, of Oklahoma City, Oklahoma, has been sentenced for stealing identities to file false tax returns and deposit the tax refunds into his bank account, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
United States District Judge David L. Russell sentenced Bostic to serve 21 months in federal prison, followed by three years of supervised release. In addition, Judge Russell ordered Bostic to pay $58,021.55 in restitution to the IRS for tax refunds Bostic received as part of his scheme.
Bostic was charged on May 19, 2015, with filing false federal tax returns between February 2012 and March 2013 in the names of individuals, without their knowledge or permission, attaching false W-2s for employers that did not employ those individuals. Those false returns directed the Internal Revenue Service to deposit the claimed tax refunds into Bostic’s bank account. In total, the IRS deposited $58,021.55 into Bostic’s account as purported tax refunds for those individuals. Bostic pleaded guilty on October 1, 2015, to five counts of theft of public money, in violation of 18 U.S.C. § 641. In his plea, Bostic agreed that the intended loss amount was $145,736.00, which includes additional refunds that Bostic claimed, but the IRS did not pay.
This case is the result of an investigation by the IRS-Criminal Investigation and was prosecuted by Assistant U.S. Attorney K. McKenzie Anderson.
Enid Tax Preparer to Serve Five Years’ Probation, Weekend Confinement, and Home Detention for Filing a False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – CESAR E. LEON, owner and operator of Cesar’s Tax Service in Enid, Oklahoma, has been sentenced for filing a false tax return, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
United States District Judge Stephen P. Friot sentenced Leon to serve five years of probation, to include 21 days of weekend confinement followed by nine months of home detention. In addition, Judge Friot ordered Leon to pay $168,481.45 in restitution to the IRS for unpaid taxes.
Leon was charged on January 12, 2015, with falsely reporting that he had $0.00 of taxable income on his 2009 tax return. He pled guilty on January 22, 2015. As part of his plea, Leon agreed to pay restitution to the IRS for all unpaid taxes he owed for the 2008, 2009, 2010, 2011, and 2012 calendar years, which totaled $168,481.45.
This case is the result of an investigation by the IRS-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Former Bookkeeper Sentenced to a Year in Prison for Embezzlement and Signing a False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – BONNIE CHARLENE DORAN, of Newalla, Oklahoma, was sentenced today to a year and a day in prison for embezzlement and signing a false federal income tax return, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
From April 2012 until January 2015, Doran was employed as the bookkeeper for Cox Systems Technology, located in Oklahoma City. On August 26, 2015, she pled guilty to using interstate wire communications to defraud Cox Systems Technology. In particular, she directed BancFirst to wire extra payroll transfers to her personal account at Arvest Bank. She also made adjusting entries in company records to hide the extra payments. In a plea agreement, she agreed to pay restitution to the company in the amount of $120,197.04. At the August 2015 plea hearing, Doran also pled guilty to signing a false tax return. She admitted that in April 2014, she signed a personal federal tax return for the 2013 calendar year that she knew was false because it reported only $34,294 in total income, substantially less than the income she actually received.
At today’s sentencing, U.S. District Judge David L. Russell ordered that Doran be incarcerated for a year and a day. In addition to agreed restitution of $120,197.04 to Cox Systems Technology, the court ordered her to pay $26,115 in restitution to the IRS for the years 2012 through 2014. After completing her prison sentence, Doran will serve three years of supervised release.
This case was the result of an investigation by the Internal Revenue Service—Criminal Investigations and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Scott E. Williams.
Indictment Unsealed Charging Houston Man with Defrauding Oklahoma City Company with False Delivery InvoicesRead the Press Release
Oklahoma City, Oklahoma – A federal indictment was unsealed yesterday charging RICHARD V. KELLY, 43, from Houston, Texas, with 12 counts of mail and wire fraud in connection with a scheme that defrauded local company Midwest Hose and Specialties, Inc., by falsely billing for deliveries that were never made, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. The indictment also seeks forfeiture of $809,115.50 in proceeds traceable to the offense.
According to the indictment, Kelly was employed as a dispatcher for Freeway Delivery, Inc., a trucking company based in Houston, Texas. Kelly’s wife worked as a truck driver for Freeway Delivery. One of Freeway Delivery’s customers was Oklahoma City-based Midwest Hose, a company that makes hoses and fittings for the oil and natural gas industry. The indictment alleges that from December 2007 to August 2012, Kelly generated false waybills and invoices from Freeway Delivery to Midwest Hose, showing fictitious deliveries made by Kelly’s wife, purportedly on behalf of Midwest Hose. The false waybills showed deliveries made by Kelly’s wife to Nabors Drilling in Houma, Louisiana, and they were hidden by attaching them to legitimate waybills and invoices sent to Midwest Hose. It is alleged that Kelly’s wife was paid a rate of 65-70% of the delivery fees paid by Midwest Hose to Freeway Delivery, through third-party biller Amerisource Funding, Inc.
The indictment charges six specific counts of mail fraud for the mailing of false invoices and waybills to Midwest Hose in Oklahoma City. The indictment also charges six specific counts of wire fraud for the payments processed from Midwest Hose to Amerisource Funding, Inc., Freeway Delivery’s third-party billing company.
If convicted, Kelly faces up to 20 years in prison and a $250,000 fine for each of the 12 counts of wire and mail fraud.
These charges are the result of an investigation conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney K. McKenzie Anderson.
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 innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Oklahoma City Pimp Sentenced to 92 Months in Prison for Transporting a Juvenile Across State Lines for the Purpose of ProstitutionRead the Press Release
Oklahoma City, Oklahoma – Today, PHILIP GATSON, (aka "Young Selo") 24, of Oklahoma City, was sentenced by United States District Judge Robin J. Cauthron to serve 92 months in federal prison for transporting a child under age 18 across state lines for the purposes of engaging in prostitution, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Following his release from prison, Judge Cauthron ordered that Gatson serve five years of supervised release that includes conditions of registration as a sex offender, computer restrictions, and limitation on being around children under the age of 18 years of age.
Gatson was indicted on December 9, 2014, and pleaded guilty on August 5, 2015, to a Superseding Information alleging that from September 2013 to October 15, 2013 he transported a juvenile across state lines to engage in prostitution. Reference is made to the court record for further information.
This case is the result of an investigation by the Oklahoma City Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Robert Don Gifford, II.
Jury Finds Oklahoma City Man Guilty of 17 Counts of Theft of Mail by a Postal Service EmployeeRead the Press Release
Oklahoma City, Oklahoma – On Thursday, December 3, 2015, a federal jury found JEFFREY LEMON, JR., 30, from Oklahoma City, Oklahoma, guilty on 17 counts of theft of mail matter by a postal service employee, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to evidence 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, and cashed them for his benefit. The trial lasted for three days, and the jury deliberated for approximately 3 hours before finding Lemon guilty.
At sentencing, Lemon faces up to 5 years in prison for each of the guilty counts. A sentencing date will be set by the court. Reference is made to the court record for further information.
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.
United States Attorney for Western District of Oklahoma Involved in Collecting over $45.2 Million in Fiscal Year 2015Read 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 $45,210,641.42 in civil and criminal cases and through asset forfeiture in Fiscal Year 2015, announced Sanford C. Coats, United States Attorney.
The Western District of Oklahoma collected $12,277,349.50 in criminal and civil actions handled by the district. Of this amount, $3,374,634.80 was collected in criminal actions and $8,902,714.70 was collected in civil actions. Additionally, the Western District also worked with other U.S. Attorneys’ Offices and components of the Department of Justice to collect an additional $1,158,621.92 in civil cases pursued jointly with these offices.
Finally, the U.S. Attorney’s Office also worked with partner agencies and divisions to collect an additional $31,774,670 in asset forfeiture actions in FY 2015. 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 $23.1 billion in civil and criminal actions in the fiscal year ending September 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse," said Attorney General Loretta Lynch. "The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work."
"My office was involved in recovering over $45.2 million in fiscal year 2015 – a 24% increase over the prior year," said U.S. Attorney Coats. "This total includes the recovery of tax dollars taken via 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 Cases in the Western District of Oklahoma
In October of 2014, Ocean Dental, P.C, agreed to pay $5,050,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false Medicaid claims for dental services that were either never performed or billed at a higher rate than allowed.
In January of 2015, Computer Sciences Corporation agreed to pay $380,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false claims to the United States Air Force in connection with a contract to provide aircraft maintenance services on hydraulic actuators in Air Force aircraft at Vance Air Force Base, Oklahoma. Hydraulic actuators power various systems and functions in the aircraft such as the landing gear, vertical/horizontal stabilizers and flaps.
In April of 2015, Wes Yui Chew and his company, Icon Telecom, Inc., both of Edmond, Oklahoma, were sentenced for money laundering and making a false statement to the Federal Communications Commission in connection with the federal Lifeline Program that provides wireless service for qualifying low-income customers. In addition to being required to serve 48 months in federal prison, Chew and Icon agreed not to contest the forfeiture of more than $27 million seized during the investigation. Oscar Enrique Perez-Zumaeta, of Cancun, Mexico, who owned and managed PSPS Sales LLC, a California entity that recruited low-income individuals to apply for Lifeline service through Icon, also pled guilty to money laundering and was sentenced to serve 42 months in prison.
In August of 2015, East Central Family Health Center, located in Wetumka, Oklahoma, agreed to pay $825,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false Medicaid claims related to behavioral health services furnished to Medicaid patients of non-FQHC health care providers and who were not East Central patients.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Former Bricklayer’s Union Employee Pleads Guilty to Embezzling over $160,000 of Training FundsRead the Press Release
Oklahoma City, Oklahoma – Today, LAURA ANNE ROSS, 42, from Oklahoma City, pled guilty to embezzling over $160,000 from her employer, the Bricklayer’s International Union, Local 5, an Oklahoma City labor union that represents bricklayers and trowel trade workers from Oklahoma, Arkansas, and Texas, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Ross was indicted on September 15, 2015. Today, she changed her plea to guilty and admitted to Chief United States District Judge Vicki Miles-LaGrange that between April 17, 2012 and October 28, 2013, while employed by the Union, she improperly took $160,927.34 from a Joint Apprenticeship Trust Fund account that was used to train future Union members.
At sentencing, Ross faces up to five years in prison and a $250,000 fine. A sentencing hearing will be set by the court in approximately 90 days.
This case was investigated by the United States Department of Labor-Office of the Inspector General and was prosecuted by Assistant U.S. Attorneys Jessica Cardenas Jarvis and Mark A. Yancey.
Reference is made to court filings for further information.
Dallas Woman Sentenced to More Than Ten Years in Federal Prison for Payroll Fraud Against Local Payroll Company and Tax FraudRead the Press Release
Oklahoma City, Oklahoma – SANDRA SALDANA, of Dallas, Texas, was sentenced yesterday to serve 124 months in federal prison for defrauding several payroll companies, including a metro business, and for filing false federal income tax returns, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Saldana was also ordered to pay $526,667.19 in restitution to 11 payroll companies and the IRS.
On July 27, 2015, Saldana was charged in a one-count Information with wire fraud relating a scheme to defraud a metro payroll company. The information alleged that Saldana previously worked at accounting jobs in Dallas and stole bank account details and former co-workers’ personal information while at those businesses. The Information further alleged that, from around January 2013 through February 2015, Saldana contacted payroll companies around the country, falsely claiming that she was the office manager for one of her former employers and wanting to set up payroll services to pay her employees. At yesterday’s plea and sentencing hearing, Saldana admitted that she e-mailed an Oklahoma City payroll company using a fictitious name and e-mail address as an office manager for a Dallas company. Saldana falsely claimed that she wanted to set up payroll services for the Dallas business (where she no longer worked). Saldana admitted that she provided the Oklahoma City payroll company with fraudulent payroll information, including a list of bogus employees, and a victim’s bank account number from which payroll funds would be transferred. Based on the misrepresentations, the payroll company transferred money to bank accounts under Saldana’s control. Saldana later used these proceeds for her personal benefit.
On September 9, 2015, Saldana was also charged in a one-count Information with aggravated identity theft, for using a victim’s name, social security number, and date of birth without the victim’s permission while filing a false federal income tax return in the victim’s name. The information further alleged that Saldana directed the Internal Revenue Service to deposit the falsely claimed refund of $3,344 to an account that Saldana had set up in the victim’s name. At yesterday’s hearing, Saldana admitted that in February 2013 she filed the false federal income tax return without the victim’s permission and used the fraudulent IRS refund for her personal benefit. According to evidence at the hearing, Saldana had filed or attempted to file 136 false federal income tax returns for tax years 2012, 2013, and 2014.
Yesterday, United States District David L. Russell sentenced Saldana to 100 months in federal prison for the payroll fraud, and sentenced her to 24 additional months in prison for the tax fraud. Judge Russell ordered Saldana to pay $484,109.19 in restitution to 11 different payroll companies around the country for the payroll fraud. Saldana was also ordered to pay $42,558 in restitution to the IRS for refunds from false federal income tax returns. Following her imprisonment, Saldana must serve three years of supervised release. Saldana has been in federal custody since she was arrested in Dallas and charged with the payroll fraud in February of this year.
This case is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Reference is made to court filings for further information.
President of Local Defense Contractor Sentenced to One Year and a Day in Federal Prison for Bribery ConspiracyRead the Press Release
Oklahoma City, Oklahoma – CHRISTOPHER HOUSTON HENSLEY, 57, of Yukon, Oklahoma, was sentenced today to serve one year and one day in federal prison for his role in a conspiracy to bribe a public official at the Corpus Christi Army Depot, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Hensley is the founder and president of Aerochem, Inc., based in Oklahoma City. Aerochem manufactures paint remover ("depaint") products, and it sold these products to Tinker Air Force Base ("Tinker") and other military bases for several years. On June 9, 2015, Hensley was charged by information with conspiracy to bribe a public official at the Corpus Christi Army Depot ("CCAD") in Corpus Christi, Texas. The information alleged that Aerochem started selling paint remover products in 2010 to CCAD. According to the information, Hensley and Soney E. Beesley, a former Aerochem officer, developed a relationship at CCAD with Richard Balderas, Jr., a supervisor of a CCAD division that stripped paint off military helicopter parts. The information alleged that Hensley and Beesley provided entertainment, $5,000 in wire transfers, and more than $3,000 in cash to Balderas in exchange for his favorable treatment of Aerochem’s business interests at CCAD. At a plea hearing on June 23, 2015, Hensley admitted that he approved of Beesley taking Balderas out to gentlemen’s clubs in Corpus Christi and using Aerochem money to buy a $2,600 football helmet for the football team of Balderas’ son.
Today, United States District Judge Joe Heaton sentenced Hensley to one year and one day in federal prison. Judge Heaton ruled that Hensley was responsible for bribery payments by Aerochem to officials at Tinker and CCAD. Judge Heaton ordered Hensley to pay $24,316.06 in restitution to the U.S. Department of Defense, to forfeit an additional $24,316.06 to the federal government as criminal proceeds, and to pay a fine of $25,000. Following his term of imprisonment, Hensley must serve three years of supervised release. Judge Heaton ordered Hensley to report on January 4, 2016, to a facility designated by the Bureau of Prisons.
Hensley is the fourth defendant to plead guilty and to be sentenced for an Aerochem bribery scheme involving Tinker and CCAD. In October 2013, SHELVIE RAYMOND TABB, 51, of Canadian, Oklahoma, pled guilty to accepting cash from an Aerochem employee in exchange for Tabb’s favorable treatment of Aerochem’s business interests in federal contracting. Tabb is a former depaint section chief at Tinker. In February 2014, SONEY E. BEESLEY, 41, of Oklahoma City, plead guilty to offering a bribe to a public official. Beesley admitted at a plea hearing that he made cash payments to Tabb in exchange for Tabb’s favorable treatment of Aerochem’s interests in federal contracts at Tinker. In June 2014, RICHARD BALDERAS, JR., 47, of Ingleside, Texas, pled guilty to accepting a bribe as a public official. At a plea hearing, Balderas admitted that as a CCAD supervisor, he helped to decide when CCAD needed to replace its paint stripper. Balderas further admitted that in 2011 and 2012, he accepted cash from Beesley on behalf of Aerochem, and Beesley represented that the cash payments were based on how much paint stripper CCAD bought from Aerochem. In August 2015, Judge Heaton sentenced Tabb, Beesley, and Balderas each to a term of 36 months’ probation. Beesley was also ordered to serve 30 days of home confinement and to pay a fine of $30,000.
These cases are the result of an investigation by the U.S. Air Force Office of Special Investigations, Federal Bureau of Investigation, and U.S. Army Criminal Investigation Command. The case was prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Reference is made to court filings for further information.
Attorney Pleads Guilty to Traveling from Oklahoma City to Peru to Engage in Sex with Girl Under 18Read the Press Release
Oklahoma City, Oklahoma – Today, MICHAEL DEAN BILLINGS, 60, an attorney from Oklahoma City, pled guilty to traveling from Oklahoma City to Iquitos, Peru, between January 1, 2011 and February 21, 2013, to engage in illicit sexual conduct with a Peruvian girl under 18 years of age, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Billings was indicted on October 22, 2014. Today, 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.
At sentencing, Billings faces up to 30 years in prison, a $250,000 fine, and registration as a sex offender for life. He was immediately remanded into custody of the United States Marshal pending sentencing. A sentencing hearing will be set by the Court in approximately 90 days.
This case is the result of an investigation by the Federal Bureau of Investigation and the Peruvian National Police. The case is being prosecuted by Assistant U.S. Attorneys Robert Don Gifford, II, and David Petermann.
Tenth Circuit Court of Appeals Affirms Bribery Conviction of Michael Morgan, Former President Pro Tem of Oklahoma State SenateRead the Press Release
Oklahoma City, Oklahoma - The Tenth Circuit Court of Appeals today issued an order affirming the bribery conviction of former Oklahoma State Senate President Pro Tem Michael Steven Morgan, of Stillwater, Oklahoma, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, the appellate court remanded the case to the district court for resentencing.
"We are pleased with the Tenth Circuit’s detailed and thorough review of all appellate issues and their conclusions that Senator Morgan received a fair trial, that the jury’s guilty verdict was supported by the evidence, and that a new sentencing hearing is warranted," said U.S. Attorney Coats. "As I have said since the day this case was charged, the sale of political influence by an elected official is simply not acceptable and corruption betrays the public trust. We look forward to the re-sentencing of this case."
Reference is made to the attached Order and Judgment by the Tenth Circuit Court of Appeals.
10th_cir_opinion.11.6.15.pdf (267.56 KB)
Last of Three Defendants is Sentenced in Wire Fraud Scheme to Market Pharmaceutical OintmentRead the Press Release
Oklahoma City, Oklahoma – LAWRENCE GENE BOTHWELL, 35, of Oklahoma City, TOMMY LYNN RICHARDSON, 53, of Ninnekah, Oklahoma, and KENNETH BOYCE,55, of Pleasant View, Utah, have each been sentenced for their involvement in a fraudulent scheme to market a pharmaceutical ointment, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Bothwell was the founder of Bothwell Consulting, LLC, an Oklahoma limited liability company and investment firm whose principal place of business was in Oklahoma City. Bothwell, Richardson, and Boyce were executives at Bothwell Consulting. Prior to founding Bothwell Consulting, Bothwell worked for the Massachusetts-based developer and owner of a topical ointment called Menastil to develop a website to market Menastil to a wider consumer base. However, Bothwell never acquired any ownership interest or distribution rights in Menastil.
On June 17, 2014, a federal grand jury returned a 13-count indictment charging Bothwell, Richardson, and Boyce for their sale of fraudulent debentures. Specifically, the defendants falsely represented to investors that Bothwell Consulting would use their investments to market Menastil when, in reality, Bothwell Consulting owned no distribution rights to the drug. Instead, the defendants used the fraudulent proceeds for their own financial benefit. Investors were also told that these debentures were secured by a multi-million dollar trust, which did not actually exist.
On October 3, 2014, all three defendants pleaded guilty to their involvement in the scheme. The three men have now been sentenced by United States District Judge Joe Heaton as follows:
- On May 14, 2015, Bothwell was sentenced to serve 78 months in prison, followed by two years of supervised release, and ordered to pay $1,703,781.68 in restitution.
- On July 31, 2015, Boyce was sentenced to serve 30 months in prison, followed by three years of supervised release, and ordered to pay $1,475, 272.97 in restitution.
- On October 21, 2015, Richardson was sentenced to serve 68 months in prison, followed by two years of supervised release, and ordered to pay $1,698,117.50 in restitution.
This case is the result of an investigation by the Federal Bureau of Investigation and was prosecuted by U.S. Attorney Sanford C. Coats and Assistant U.S. Attorney Julia E. Barry.
Oklahoma City Convenience Store Owner Convicted of Defrauding Food Stamp ProgramRead the Press Release
Oklahoma City, Oklahoma –Last Friday, SRINADHA RAVI DIRISINA, 35, of Oklahoma City, was convicted by a jury of stealing money from the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, which is administered by the United States Department of Agriculture (USDA).
The SNAP program was established to provide food to low-income individuals through approved retail food stores. The Oklahoma Department of Human Services (ODHS) determines whether individuals are eligible to receive benefits. Retail stores apply for USDA authorization to accept SNAP benefits as payment for eligible food items, and the stores certify they understand that trading cash for food stamp benefits violates the program regulations. Since February of 2008, ODHS has given electronic benefit transfer cards (a debit-type card known as Access Oklahoma cards) to SNAP recipients instead of paper food stamps.
Dirisina was the owner/operator of Welcome Mart located at 1100 W. Reno Ave., in Oklahoma City, and was authorized by USDA on February 14, 2014, to be a qualified retail store to accept SNAP benefits. Evidence at trial showed that Dirisina and his employees, at his direction, exchanged SNAP benefits for cash on a discount basis of fifty cents on the dollar, meaning that for every dollar the store received from the USDA, the SNAP recipient received only 50 cents in cash. Evidence showed that Dirisina defrauded the SNAP program out of $147,603.31.
Dirisina was indicted by a federal grand jury on July 22, 2015, and was charged by a Superseding Indictment on September 1, 2015. A jury convicted Dirisina on Count 1 of the Superseding Indictment, alleging stealing from the SNAP Program. Dirisina was found not guilty of Counts 2, 3, and 4, which charged him with witness tampering. A sentencing hearing will be set in approximately 90 days.
This case was investigated by the United States Department of Agriculture Office of Inspector General and the Oklahoma Department of Human Services Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Matthew P. Anderson.
Oklahoma City Man Sentenced to 30 Years for Child Sex Trafficking of 14-Year-OldRead the Press Release
Oklahoma City, Oklahoma –WILLIAM VONTRAIL JOHNSON, 28, from Oklahoma City, was sentenced yesterday by United States District Judge Stephen Friot to serve 360 months in federal prison for child sex trafficking of a 14-year-old girl, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, in June 2014, an undercover agent responded to an internet posting advertising escort services with photographs of the 14-year-old victim. After communicating to schedule a "date," the undercover agent met the girl at a local hotel in Oklahoma City a little after midnight. After an initial greeting, the girl asked for the "donation" and pulled out a condom. The girl was then questioned by law enforcement. Johnson was discovered in the hotel walkway and, following questioning, found to have a key to the hotel room where the undercover agent had met the girl for the commercial sex act. Johnson was also found in possession of photographs and videos of the girl, and his internet history opened to his posting of the advertisement for the girl.
Johnson was arrested and initially charged by criminal complaint on November 4, 2014. He was indicted by a federal grand jury on December 3, 2014, and on March 9, 2015, Johnson entered a guilty plea to child sex trafficking. At his plea hearing, Johnson admitted that the victim was 14 years old when he pimped her out, and that he knew it. Johnson admitted that he had posted internet advertisements for the child to perform sex in exchange for money. He admitted that he received the money that was paid for those encounters. Johnson admitted that he used the internet and text messages to set up and arrange commercial sex transactions between the child and men. Johnson also admitted that he took the girl from Oklahoma City to Houston, Texas, to perform commercial sex acts.
Yesterday, Judge Friot sentenced Johnson to serve 360 months in prison. After his release from prison, Johnson will be required to serve 15 years of supervised release and will be required to register as a sex offender.
This sentence is the result of an investigation conducted by the U.S. Department of Homeland Security Investigations and the Oklahoma Bureau of Narcotics and Dangerous Drugs. The case was prosecuted by Assistant U.S. Attorneys McKenzie Anderson, Brandon Hale, and Julia Barry.
Reference is made to court filings for further information.
Edmond Man Pretending to be Employee of CIA and the Department of Homeland Security Arrested at Edmond High SchoolRead the Press Release
Oklahoma City, Oklahoma – Today, a federal complaint was filed charging RICHARD TODD CARSINS, 46, of Edmond, Oklahoma, with pretending to be an employee of the Central Intelligence Agency (CIA) and the Department of Homeland Security (DHS), in seeking to gain access to the property of Edmond North High School, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Earlier this morning, Carsins arrived on the campus of Edmond North High School and represented himself to school administrative personnel that he was an employee of the Central Intelligence Agency and the Department of Homeland Security and was tasked with patrolling the campus. After questioning, school personnel became suspicious about his claim, and contacted law enforcement. The Edmond Police Department and members of the Oklahoma City FBI Joint Terrorism Task Force (JTTF) responded. Following an investigation, Carsins was arrested for impersonating a federal officer.
Carsins appeared this afternoon in federal court and was ordered to remain in custody until his preliminary and detention hearing, which is set for 10:00a.m. on Wednesday, October 14, 2015.
If convicted, Carsins faces up to three years in prison. Reference is made to the court record for further information. The public is reminded this is simply a charge and the defendant is presumed innocent unless and until he is proven guilty beyond a reasonable doubt.
This case was investigated by the FBI Joint Terrorism Task Force and the Edmond Police Department. The case is being prosecuted by Assistant U.S. Attorney Nicholas J. Patterson.
Shawnee Woman to Serve 24 Months in Prison and Pay over $251,000 in Restitution for Embezzlement from Citizen Potawatomi NationRead the Press Release
Oklahoma City, Oklahoma –KRISTI BIAS, 42, of Shawnee, Oklahoma, was sentenced this week by Chief United States District Judge Vicki Miles-LaGrange to serve 24 months in federal prison for embezzlement from the Citizen Potawatomi Nation, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Chief Judge Miles-LaGrange ordered Bias to pay $251,018.35 in restitution to the tribe.
According to court records and information at court hearings, Bias was employed as the Executive Director of the Citizen Potawatomi Nation’s Community Development Corporation (CDC), which promoted economic development in the Native American community by providing loans and grants to companies owned by or which primarily employed members of federally-recognized Indian tribes. From December of 2010 and September of 2011, Bias was alleged to have caused grants to be issued to false or ineligible entities, falsified supporting documents, and received kickbacks for doing so.
In a related case, THOMAS BIERD, 35, also from Shawnee, was indicted on April 21, 2015, for his role in the embezzlement. Specifically, it was alleged that Bierd controlled an entity that received checks issued from CDC by Bias who, in turn, kicked back a portion of the proceeds to Bias. On September 3, 2015, Bierd pled guilty to embezzlement from the tribe and is currently awaiting sentencing.
Bias was charged by Information on November 7, 2014. Following her 24-month prison term, Bias is ordered to served 3 years of supervised release and pay $251,018.35 in restitution to the tribe.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Tim Ogilvie.
Reference is made to court filings for further information
U.S. Attorney Sanford C. Coats Named to Co-Chair Key CommitteesRead the Press Release
Oklahoma City —United States Attorney Sanford C. Coats has been recently named to serve as Co-Chair of several key advisory and policy committees within the Department of Justice.
U.S. Attorney Coats was named as Co-Chair of the Domestic Terrorism Executive Committee (DTEC) with Assistant Attorney General John Carlin and the FBI domestic terrorism section. The DTEC was created by Attorney General Reno after the Oklahoma City Bombing and was reconstituted in 2014 by Attorney General Holder. The DTEC is intended to bring together all government agencies that investigate and prosecute domestic terrorism. Participants include the United States Attorneys’ Offices, FBI, DOJ National Security Division, DOJ Civil Rights Division, DOJ Tax Division, IRS, Secret Service, ATF, DEA, and the Bureau of Land Management.
In addition, Mr. Coats was named to Co-Chair the Terrorism and National Security Subcommittee of the Attorney General’s Advisory Committee along with U.S. Attorney Barb McQuade from the Eastern District of Michigan in Detroit. Twenty-seven other United States Attorneys from across the country serve as members of the Terrorism and National Security Subcommittee.
"Protecting our country from terrorist attacks remains the top priority for the Department of Justice," said U.S. Attorney Coats. "I am honored to serve as co-chair of these committees which will work diligently to address issues and policy impacting the investigation, prevention, and prosecution of terrorism."
Justice Department Awards over $97 Million to Improve Public Safety and Victim Services for American Indians and Alaska NativesRead the Press Release
Washington DC. – The Department of Justice today announced 206 awards, totaling more than $97 million, to American Indian tribes, Alaska Native villages, tribal consortia and tribal designees. The announcement was made at the 2015 Tribal Leader Briefing, sponsored by the National Congress of American Indians, and included Tribal leaders, Members of Congress and Administration officials.
In Oklahoma, thirteen different tribes received a combined total of $12,554,801 in awards (see attached list).
The awards are made through the Department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs. The Department developed CTAS through its Office of Community Oriented Policing Services, Office of Justice Programs and Office on Violence Against Women, and administered the first round of consolidated grants in September 2010.
"These awards will greatly assist tribes in Oklahoma in their efforts to combat crime, strengthen community policing, serve victims of crime and protect their communities," said U.S. Attorney Sanford C. Coats. "We look forward to our continuing work with Oklahoma tribes to improve public safety and victim services for all tribal members."
"For the past five years, the CTAS program has helped tribes develop their own comprehensive approaches to making their communities safer and healthier," said Acting Associate Attorney General Stuart F. Delery. "CTAS grants have funded hundreds of programs to better serve crime victims, promote community policing, and strengthen justice systems. This year’s awards also support efforts to reduce domestic and dating violence, and promote wellness and healing for tribal youth, among many other programs."
The awards are made through the Department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs. The Department developed CTAS through its Office of Community Oriented Policing Services, Office of Justice Programs and Office on Violence Against Women, and administered the first round of consolidated grants in September 2010.
Since then, more than 1,400 grants totaling more than $620 million have been provided to enhance law enforcement practices, victim services, and sustain crime prevention and intervention efforts in nine purpose areas; public safety and community policing; justice systems planning: alcohol and substance abuse; corrections and correctional alternatives; children’s justice act partnerships; services for victims of crime; violence against women; juvenile justice; and tribal youth programs.
American Indians and Alaska Natives experience disproportionate rates of violence and victimization and often encounter significant obstacles to identifying and accessing culturally relevant services. CTAS funding helps tribes to develop and strengthen tribal justice systems’ response to crime, while significantly increasing programs and services available to them.
A complete listing of today’s awards is available at www.justice.gov/tribal/.
Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in American Indian and Alaska Native communities.
ATTACHMENT:
2015 Department of Justice Awards to Oklahoma Tribes
Absentee Shawnee Tribe of Oklahoma – $974,995
- Comprehensive Tribal Justice Systems Strategic Planning (BJA) - $74,995
- Violence Against Women Tribal Governments Program (OVW) - $900,000
Cherokee Nation - $936,872
- Public Safety and Community Policing (COPS)
Cheyenne and Arapaho Tribes - $852,590
- Violence Against Women Tribal Governments Program (OVW)
Choctaw Nation of Oklahoma – $664,709
- Public Safety and Community Policing (COPS)
Comanche Nation - $900,000
- Violence Against Women Tribal Governments Program (OVW)
Eastern Shawnee Tribe of Oklahoma – $784,000
- Violence Against Women Tribal Governments Program (OVW)
Iowa Tribe of Oklahoma - $449,948
- Comprehensive Tribal Victim Assistance Program (OVC)
Kaw Nation – Total $1,084,265
- Public Safety and Community Policing (COPS) $281,460
- Children’s Justice Act Partnerships for Indian Communities (OVC) $450,000
- Tribal Youth Program (OJJDP) $352,805
Muscogee (Creek) Nation - $1,634,412
- Public Safety and Community Policing (COPS) $894,468
- Justice Systems and Alcohol and Substance Abuse (BJA) $739,944
Osage Nation of Oklahoma - $877,882
- Violence Against Women Tribal Governments Program (OVW)
Quapaw Tribe of Oklahoma - $962,752
- Public Safety and Community Policing (COPS) $513,332
- Violence Against Women Tribal Governments Program (OVW) $449,420
The Chickasaw Nation - $1,898,685
- Public Safety and Community Policing (COPS) $1,000,000
- Violence Against Women Tribal Governments Program (OVW) $898,685
Wyandotte Nation - $533,691
- Public Safety and Community Policing (COPS) $299,746
- Violence Against Women Tribal Governments Program (OVW) $233,945
10th Annual National Prescription Drug Take-Back Day Saturday, September 26, 2015Read the Press Release
Oklahoma City – U.S. Attorney Sanford C. Coats wants to encourage the public to participate in the Drug Enforcement Administration’s 10th National Prescription Drug Take-Back Day set for Saturday, September 26, 2015, from 10:00 a.m. to 2:00 p.m.
"Prescription drug abuse constitutes one of the greatest public safety and public health epidemics of our time, inflicting devastating, long-term, harm to individuals as well as destroying families and communities throughout the country," said U.S. Attorney Sanford C. Coats. "We can all do our part to fight this epidemic by cleaning out our medicine cabinets of unwanted, unneeded, or expired prescription drugs for safe disposal at one of the many collection sites."
Last September, Americans turned in 309 tons (over 617,000 pounds) of prescription drugs at nearly 5,500 sites operated by the DEA and more than 4,000 of its state and local law enforcement partners. When those results are combined with what was collected in its previous Take Back events, DEA and its partners have taken in over 4.8 million pounds—more than 2,400 tons—of pills.
This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—both pose potential safety and health hazards.
Collection sites will be set up throughout communities nationwide.
Oklahoma Federally Qualified Health Center Agrees to Pay $825,000 to Settle Allegations of Submitting False Medicaid Claims for Medical ServicesRead the Press Release
Oklahoma City, Oklahoma – Sanford C. Coats, United States Attorney for the Western District of Oklahoma and E. Scott Pruitt, Attorney General for the State of Oklahoma ("Oklahoma"), jointly announce that EAST CENTRAL FAMILY HEALTH CENTER has agreed to pay $825,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false Medicaid claims.
East Central is a designated federally qualified health center (FQHC) located in Wetumka, Oklahoma. It receives grant funds from the U.S. Health and Human Services and provides primary health services to a specific medically underserved population. East Central also provides behavioral health and dental services. As an FQHC, East Central was certified to participate in the Oklahoma Medicaid Program. For each office encounter, it was paid a flat amount under a prospective payment system rather than a fee for service as determined by the condition being treated. The FQHC rate per encounter is generally higher than the rate received by non-FQHC providers.
The United States and Oklahoma contend that East Central submitted or caused to be submitted false claims for payment to the Oklahoma Medicaid program for behavioral health services furnished to Medicaid beneficiaries during the period from January 1, 2010, through April 30, 2012. Specifically, it is alleged the false claims submitted to the Oklahoma Medicaid Program for reimbursement by East Central were for patients of non-FQHC health care providers and were not East Central patients. Medicaid paid a higher amount for these services under the FQHC payment rate when these services should have been submitted as non-FQHC claims. East Central received a share of the rate for each encounter improperly billed to the Medicaid Program to which it was not entitled.
In order to resolve the allegations brought by the United States and Oklahoma, East Central agreed to pay $825,000. As part of the settlement, East Central has also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General, which requires, among other things, additional record-keeping, reporting and compliance requirements. In reaching this settlement, East Central 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 Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of Inspector General, the Oklahoma Attorney General’s Office Medicaid Fraud Control Unit, and the Oklahoma Healthcare Authority. The case was prosecuted by Assistant United States Attorneys Ronald R. Gallegos and Scott Maule, and Oklahoma Assistant Attorney General Niki S. Batt.
Noble Man Sentenced to 22 Years in Federal Prison for Child PornographyRead the Press Release
Oklahoma City, Oklahoma –DONOVAN GENE MERCER, 45, of Noble, Oklahoma, was sentenced on Friday to serve 265 months in federal prison for viewing and attempting to view child pornography, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
On January 15, 2015, a federal jury found Mercer guilty of three counts of accessing, and attempting to access, with intent to view two hard drives and an SD card that contained child pornography. According to evidence presented at trial, Mercer used a peer-to-peer file sharing network on approximately 53 separate days in 2012 and 2013 to download and access child pornography on two hard drives and an SD card at his home. Trial evidence also showed that a federal agent downloaded child pornography from Mercer’s IP address, using the same peer-to-peer file sharing network, in August 2013. Federal agents executed a search warrant on Mercer’s home in December 2013 and seized his computer equipment. According to evidence presented at trial, child pornography had been deleted from Mercer’s hard drives and SD card, but it was identified and recovered by a computer forensic examiner. Finally, three adult witnesses testified at trial that Mercer sexually molested them years ago when they were children.
Last Friday, United States District Judge Vicki Miles-LaGrange sentenced Mercer to 265 months in federal prison. After his term of incarceration, Mercer must register as a sex offender and comply with conditions of supervised release for ten years. Mercer has been in federal custody since the jury’s guilty verdict on January 15, 2015.
This sentence is the result of an investigation conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Brandon Hale and Chris M. Stephens.
Reference is made to court filings for further information.
Oklahoma City Man to Serve 51 Months in Prison for Illegally Smuggling Firearm Shell Casings to Iran and Possession of Opium with Intent to DistributeRead the Press Release
Oklahoma City, Oklahoma – MAJID IRANPOUR MOBAREKEH, 45, from Oklahoma City, was sentenced by United States District Judge Joe Heaton to serve 51 months in prison for illegally smuggling firearm shell casings to Iran and possession of opium with intent to distribute, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, on July 2, 2014, Mobarekeh illegally sent and exported 450 firearm shell casings from the United States to the Republic of Iran. He was also charged with illegally possessing opium on October 2, 2014, with the intent to distribute. On February 26, 2015, Mobarekeh pled guilty to the charges. After serving his 51-month prison sentence, Mobarekeh was ordered to serve three years on supervised release.
This case is the result of an investigation by the U.S. Immigration and Customs Enforcement, Homeland Security Investigations, and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney David P. Petermann.
Hospice Company Owner Sentenced to Serve Three Years in Prison and Pay over $2.5 Million in Restitution for Medicare FraudRead the Press Release
Oklahoma City, Oklahoma – PAULA KLUDING, 39, from Chandler, Oklahoma, the owner of Prairie View Hospice, Inc., an Oklahoma corporation located in Chandler, was sentenced by United States District Judge Robin Cauthron to serve three years in prison for committing Medicare fraud, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. As part of her sentence, Kluding was also ordered to pay $2,519,813.33 in restitution to Medicare. Kluding will also spend three years on supervised release following her release from prison.
According to evidence presented at trial, Prairie View Hospice was in business to provide hospice care to Medicare beneficiaries. Hospice care consists of providing health care, medication, medical equipment, and other goods and services to terminally ill patients. From July of 2010 through July of 2013, Kluding conspired with others to conceal the true medical condition of Prairie View Hospice’s patients and the true quality and quantity of health care services they were receiving in order to "pass" a Medicare audit and to fraudulently obtain money from Medicare. Specifically, certain medical documents were falsified to make it appear that nurses had visited patients or conducted necessary assessments when such visits and assessments had not, in fact, been made. Nursing notes were also falsified to make it appear that patients were in worse health than they actually were in order to justify to Medicare the patient’s continued hospice care. In addition, Prairie View Hospice, acting through Kluding, sent the falsified documents to a Medicare subcontractor in response to requests to audit patient files and in support of claims for Medicare reimbursement.
The trial lasted for four and half days and the jury deliberated about six hours before returning a guilty verdict on 39 separate counts relating to Medicare fraud, conspiracy, obstruction of a federal audit, and making false statements in health care matter. Kluding was ordered to report on August 28, 2015, to the U.S. Bureau of Prisons to begin serving her sentence.
This case is the result of an investigation by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Jessica Perry.
Indictment Unsealed Charging Former Executive Director of Canadian County Charity for Children with EmbezzlementRead the Press Release
Oklahoma City, Oklahoma – A federal grand jury indictment was unsealed today charging TRACI LORRE OWENS, 46, of Edmond, Oklahoma, with embezzlement from a Canadian County charity for child crime victims, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to the indictment, 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 is alleged to have embezzled money from Canadian County CASA by making and depositing checks payable to herself and to cash for reimbursement of unauthorized expenses and duplicate payroll checks.
If convicted, 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 approximately $70,000 in forfeiture from Owens.
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.
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.
City Woman Sentenced to Serve Five Years Probation and Pay over $35,000 in Restitution for Social Security FraudRead the Press Release
Oklahoma City, Oklahoma –DELANE HENDERSON, 52, of Oklahoma City, was sentenced by United States District Judge Robin Cauthron to serve five years of probation for making a materially false and fraudulent representation to the Social Security Administration (“SSA”), announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. As part of her sentence, Henderson was also ordered to pay $35,240.00 in restitution. According to court documents, Henderson falsely represented that she was a deceased social security beneficiary, and used the beneficiary’s social security number and other identifiers to obtain funds from the SSA. Reference is made to court filings for further information.
This case was the result of an investigation conducted by the Social Security Administration Office of the Inspector General and was prosecuted by Assistant U.S. Attorney Julia E. Barry
Indictment Unsealed Charging Five with Child Sex Trafficking in Oklahoma CityRead the Press Release
Oklahoma City, Oklahoma – A federal indictment was unsealed today charging TONYA GUM, TRUNG DUONG, WILLIAM BAKER, RUSSELL EHRENS, and CURTIS ANTHONY with child sex trafficking and conspiracy to commit child sex trafficking, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Defendants were indicted by a federal grand jury on June 16, 2015. The indictment alleges that in October 2014, Ms. Gum, who goes by the name "Carmen," and others operated an escort service that provided females, including 14- and 15-year-old juveniles, to men for prostitution. Mr. Duong, Mr. Baker, Mr. Ehrens, and Mr. Anthony are men who are alleged to have obtained juvenile females for prostitution dates by contacting Ms. Gum.
The indictment alleges that Ms. Gum arranged "dates" for Mr. Duong and Mr. Baker with a 14-year-old girl at their respective residences in October 2014. After each date, the 14-year-old was driven to deliver personally a portion of the proceeds of the commercial sex act to Ms. Gum. The indictment alleges Ms. Gum provided Mr. Anthony with 14- and 15-year-old juveniles in late October 2014. Both girls took off their clothes for Mr. Anthony, and he completed a commercial sex act with the 15-year-old girl. According to court records, Ms. Gum arranged for a 14-year-old girl to go to the residence of Mr. Ehrens on October 15, 2014. After the commercial sex transaction was completed, the girl then delivered the proceeds of the commercial sex transaction with Mr. Ehrens to Ms. Gum.
The indictment was unsealed today after Ms. Gum, Mr. Duong, Mr. Baker, and Mr. Anthony were arrested at their homes yesterday. For child sex trafficking, each of the charged defendants faces a mandatory minimum of ten years and up to life in prison and a fine of $250,000. For conspiracy to commit child sex trafficking, each of the charged defendants faces up to life in prison and a fine of $250,000. Further, the indictment seeks forfeiture from each defendant, including the residences at which the “dates” took place.
This case is the result of an investigation by the Department of Homeland Security and the Oklahoma Bureau of Narcotics Human Trafficking Division. The case is being prosecuted by Assistant U.S. Attorneys K. McKenzie Anderson and 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 innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Three Oklahoma City Men Sentenced in Aggravated Identity Theft and Counterfeit Check Fraud SchemeRead the Press Release
Oklahoma City, Oklahoma –RICKY AURELL LINDSEY, 45, CHRISTOPHER TROY VICK, 44, and JUSTIN DANIEL ALSEPT, 24, all from Oklahoma City, have been sentenced for their roles in an aggravated identity theft and counterfeit check fraud scheme, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, from October 2013 through July 2014, the three men stole mail from mailboxes to obtain private banking information and also stole wallets to obtain drivers’ licenses and social security cards. Lindsey, Vick, and Alsept then used the stolen information to manufacture counterfeit checks, with which they purchased merchandise and gift cards at retail stores throughout the Oklahoma City area. They later returned some of the purchased merchandise for a cash refund.
On October 22, 2014, the three men were indicted. On January 7, 2014, all three pleaded guilty to conspiracy to commit access device fraud; Lindsey and Vick also pleaded guilty to aggravated identity theft.
On May 13, 2015, Alsept was sentenced to serve 30 months in prison. On June 25, 2015, Lindsey was sentenced to serve 75 months in prison. On July 14, 2015, Vick was ordered to serve 64 months in prison. All three men were ordered to serve three years of supervised release following their release from prison and pay $221,203.07 in restitution to victims.
This sentence is the result of an investigation conducted by the U.S. Postal Inspection Service and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Reference is made to court filings for further information.
Edmond Man to Serve 36 Months for Possession of Child PornRead the Press Release
Oklahoma City, Oklahoma –BRYAN ANDREW POWELL, 45, of Edmond, Oklahoma, was sentenced by United States District Judge Robin Cauthron to serve 36 months in prison for possession of child pornography, followed by five years of supervised release, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Powell was indicted on March 3, 2015, and pleaded guilty on April 13, 2015.
This sentence is the result of an investigation conducted by the Edmond Police Department, Stillwater Police Department, and Moore Police Department. It was prosecuted by Assistant U.S. Attorney Julia E. Barry.
Reference is made to court filings for further information.
President of Local Defense Contractor Pleads Guilty to Bribery Conspiracy Involving Texas Army DepotRead the Press Release
Oklahoma City, Oklahoma – CHRISTOPHER HOUSTON HENSLEY, 57, of Yukon, Oklahoma, pled guilty today to conspiracy to bribe a public official at the Corpus Christi Army Depot, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Hensley is the founder and president of Aerochem, Inc., based in Oklahoma City. Aerochem manufactures paint remover ("depaint") products, and it sold these products to Tinker Air Force Base ("Tinker") and other military bases for several years. On June 9, 2015, Hensley was charged by information with conspiracy to bribe a public official at the Corpus Christi Army Depot ("CCAD") in Corpus Christi, Texas. The information alleged that Aerochem started selling paint remover products in 2010 to CCAD. According to the information, Hensley and Soney E. Beesley, a former Aerochem officer, developed a relationship at CCAD with Richard Balderas, Jr., a supervisor of a CCAD division that stripped paint off military helicopter parts. The information alleged that Hensley and Beesley provided entertainment, wire transfers, and more than $3,000 in cash to Balderas in exchange for his favorable treatment of Aerochem’s business interests at CCAD. At today’s plea hearing, Hensley admitted that he approved of Beesley taking Balderas out to gentlemen’s clubs in Corpus Christi and using Aerochem money to buy a $2,600 football helmet for the football team of Balderas’ son.
In December 2014, a grand jury returned a six-count indictment against Hensley, charging him with bribing a public official, conspiracy to commit bribery, and making false statements to the government about an Aerochem product’s conformance with government military specifications. Under a plea agreement, the government will dismiss the indictment. At sentencing, Hensley faces up to five years of prison and a $250,000 fine for the conspiracy count. Hensley will be sentenced in approximately 90 days.
Hensley is the fourth defendant to plead guilty to an Aerochem bribery scheme involving Tinker and CCAD. In October 2013, SHELVIE RAYMOND TABB, 50, of Canadian, Oklahoma, pled guilty to accepting cash from an Aerochem employee in exchange for Tabb’s favorable treatment of Aerochem’s business interests in federal contracting. Tabb is a former depaint section chief at Tinker.
In February 2014, SONEY E. BEESLEY, 41, of Oklahoma City, plead guilty to offering a bribe to a public official. Beesley admitted at a plea hearing that he made cash payments to Tabb in exchange for Tabb’s favorable treatment of Aerochem’s interests in federal contracts at Tinker.
In June 2014, RICHARD BALDERAS, JR., 47, of Ingleside, Texas, pled guilty to accepting a bribe as a public official. At the plea hearing, Balderas admitted that as a CCAD supervisor, he helped to decide when the Army Depot needed to replace its paint stripper. Balderas further admitted that in 2011 and 2012, he accepted cash from Beesley on behalf of Aerochem, and Beesley represented that the cash payments were based on how much paint stripper CCAD bought from Aerochem.
At sentencing, Tabb, Beesley, and Balderas each faces up to 15 years in prison and a fine of $250,000. United States District Judge Joe Heaton will sentence Tabb and Beesley on August 5, 2015. Judge Heaton will sentence Balderas on August 6, 2015.
These charges and guilty pleas are the result of an investigation conducted by the U.S. Air Force Office of Special Investigations, Federal Bureau of Investigation, and U.S. Army Criminal Investigation Command. The case is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Reference is made to court filings for further information.
Jury Finds Edmond Man Guilty of Seven Counts of Engaging in Illicit Sexual Conduct with Children in KenyaRead the Press Release
Oklahoma City, Oklahoma – Today, a federal jury found MATTHEW LANE DURHAM, 20, from Edmond, Oklahoma, guilty on seven counts of engaging in illicit sexual conduct with Kenyan children, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Comments from U.S. Attorney Sanford C. Coats on the verdict:
"I first want to recognize and commend the prosecution team, led by Assistant United States Attorneys Robert Don Gifford and David Petermann and Special Assistant United States Attorney Steven Creager. They and their team worked extraordinarily hard in this challenging case. The lawyers, paralegals, legal assistants, and victim witness professionals from my office, along with the exemplary Special Agents from the FBI, combined to present an excellent case to the jury. These public servants should be an example for all who investigate and prosecute criminal cases. I also want to recognize and thank the Kenyan government for their assistance and cooperation with us in seeking justice for these children."
"As for the result, this is not a verdict to celebrate. The only winner here is justice. Yes, justice was sought and obtained for the victims of this abominable crime. However, even a guilty verdict cannot bring back the innocence of the children that was taken by Mr. Durham. Their lives will never be the same, and we can all merely hope and pray that this verdict will someday give them some comfort and peace. The jury has determined that while in Kenya, Mr. Durham committed sexual acts with children. This is simply a sad situation for all involved. The bottom line is that Mr. Durham is a threat to children and it will be our position that he should be extricated from society for a significant period of time. We protect children, no matter where they are from."
According to evidence at trial, Durham was a volunteer at the Upendo Children’s Home, located in Juja, Kenya. Upendo specializes in assisting neglected Kenyan children by providing them with food, housing, clothes, school and religion. Evidence showed that between April 30, 2014, and June 17, 2014, Durham traveled from Oklahoma City to Nairobi, Kenya, and while in Kenya he engaged in illicit sexual conduct with seven children under 18 years of age.
The trial lasted for six and a half days and the jury deliberated for approximately nine hours before finding Durham guilty. Durham was found not guilty on 10 other counts. After the verdict was read, Durham was remanded to the custody of the U.S. Marshals.
At sentencing, Durham faces up to 30 years in prison for each of the guilty counts. A sentencing date will be set by the court. Reference is made to the court record for further information.
This case was the result of an investigation by the Federal Bureau of Investigation, who was assisted by the United States Embassy in Kenya, the U.S. Department of State Diplomatic Security Service, and the Kenyan National Police Directorate of Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Robert Don Gifford II, Assistant U.S. Attorney David P. Petermann, and Special Assistant U.S. Attorney Steven W. Creager.
Kay County Company and Individuals Pay $175,000 to Settle Claims of the United StatesRead the Press Release
Oklahoma City, Oklahoma – Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announces that CASE SALES COMPANY, INC., GARRY DAVIS, CAROL SAWYER, and THOMAS J. MORRIS, III, have agreed to pay $175,000 to settle claims related to a debt owed to the United States.
Case Sales Company, Inc. (“Case Sales”), is an Oklahoma corporation that held five Indian oil and gas leases for wells located in the Anadarko, Oklahoma area, and was required to comply with certain reporting requirements to the U.S. Department of Interior for each well it operated. The United States alleged that from 2004 through 2009, Case Sales failed to submit timely and accurate reports. As a result, the Department of Interior assessed a civil penalty against Case Sales.
In January 2012, Case Sales filed a Petition in Kay County seeking to dissolve the corporation.Thomas J. Morris, III, was appointed as a receiver for the company.While the dissolution proceeding was pending, Morris distributed proceeds from the assignment of Indian oil and gas leases to Garry Davis, owner and president of Case Sales.The United States alleged this was a fraudulent transfer under the Federal Debt Collections Procedures Act, and in violation of the Federal Priority Statute.The United States also alleged that during the dissolution proceeding Carol Sawyer, daughter of Garry Davis and Secretary/Treasurer of Case Sales, made payments to a third party creditor in violation of the Federal Priority Statute.
In order to resolve the allegations brought by the United States, Case Sales, Davis, Sawyer and Morris paid $175,000.
In reaching this settlement, Case Sales, Davis, Sawyer and Morris 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 Office of Inspector General. The case was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Indictment Unsealed Charging Former Altus Bank President and Altus Business Partner with Bank FraudRead the Press Release
Oklahoma City, Oklahoma – A federal indictment has been unsealed charging PAUL HAROLD DOUGHTY and FRED DON ANDERSON with bank fraud, conspiracy to commit bank fraud, false statements to banks, and misapplication of bank funds in connection with First State Bank of Altus (“FSB”) and various loan schemes, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Doughty, 66, of Edmond, Oklahoma, was the former president and chairman of FSB. Anderson, 66, of Eagle Point, Oregon, 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.
The counts against Doughty and Anderson charge 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.
According to the indictment, in 2006 and 2007 Doughty and Anderson recruited buyers for 19 Colorado real estate lots priced at approximately $700,000 each. The indictment alleges that Doughty approved and issued 14 loans to buyers, totaling more than $10,000,000.00 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. It is alleged that each loan exceeded Doughty’s individual lending authority, and most of the loans were issued without FSB loan committee or board approval, including a $580,000.00 loan to Anderson’s personal company. The indictment alleges that most lot sales were presented to buyers as “zero money down” investments, and that the earnest money for the purchases was either advanced or refunded to many of 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. It is alleged 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. The indictment includes eight counts for conspiracy, bank fraud, unauthorized issuance of a loan, and false statements related to the Colorado lot loans from FSB.
The indictment also alleges Doughty made false statements to Vectra Bank in Colorado in applying for his own loan to purchase a Colorado lot from MAPI. In his loan application, Doughty omitted his earlier $580,000.00 loan from a different bank and also represented to Vectra Bank that his down payment on the new lot was not borrowed. According to the indictment, Doughty planned to be reimbursed by Anderson from MAPI, the seller, for his entire down payment.
Second, the indictment charges Doughty and Anderson in connection with five $2.5 million individual loans taken out by FSB borrowers in 2008 in so-called “senior life settlement” loans. According to the indictment, 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”). It is alleged that a portion of the loan proceeds was invested in QMA, and another portion would pay the loan’s interest. It is also alleged that 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 indictment alleges that each loan exceeded Doughty’s lending authority, and he issued senior life settlement loans without FSB’s loan committee or board approval. According to the indictment, Doughty and Anderson funneled $125,000.00 in “service fees” to their shared company, Altus Ventures, from each loan. This service fee was not disclosed to FSB. The indictment charges Doughty and Anderson with false statements, unauthorized issuance of a loan, and misapplication of bank funds with the senior life settlement loans, including a $2.5 million loan issued to Anderson’s personal company.
Third, the indictment alleges that in January 2008, Doughty and Anderson arranged a $2 million loan from FSB to Ethanol Products Group, LLC (“EPG”), a startup company in which both Anderson and Doughty had an ownership interest. It is alleged that Doughty advanced the $2 million from FSB, above his individual lending authority, without approval by FSB’s loan committee or board. The indictment alleges that soon before issuing the loan, Doughty e-mailed Anderson his “cash strategy” for two of the other companies they controlled; the “strategy” showed all 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 indictment charges Doughty with unauthorized issuance of a loan and misapplication of bank funds, and Anderson is charged with participation in an unauthorized loan in relation to the EPG loan.
The indictment was unsealed after Anderson was recently arrested and had his initial appearance on the charges in Eugene, Oregon. Anderson’s arraignment in Oklahoma City federal court has been set for June 10, 2015. The arraignment for Doughty is set for June 5, 2015, in Oklahoma City federal court.
For each of the fifteen counts in the indictment, the charged defendant faces up to thirty years in prison and a fine of $1,000,000.00. Under federal law, each defendant would be required to pay restitution to victims. Furthermore, the indictment seeks forfeiture from each defendant in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.
These charges 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 is being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson.
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.