Eastern District of Tennessee
Press releases recorded for this federal judicial district.
Sweetwater Resident Sentenced to Serve Thirty Months in Prison for Extortion via SnapChatRead the Press Release
KNOXVILLE, Tenn. – On October 24, 2017, Brandon Douglas Shanahan, 23, of Sweetwater, Tennessee, was sentenced by the Honorable Pamela L. Reeves, U.S. District Court Judge, to serve 30 months in federal prison for extortion using the computer application SnapChat.
Shanahan pleaded guilty in November 2016 to one count of a federal indictment charging him with using interstate communications with the intent to extort contained in a federal indictment. Shanahan used Snapchat to extort women into sending nude photographs of themselves to him. After entering his guilty plea, it was discovered that Shanahan engaged in new conduct which could have been charged in a subsequent indictment. However, the U.S. Attorney’s Office agreed to allow Shanahan to plead guilty to an additional count in the indictment prior to his sentencing today. Details of this are outlined in the plea agreement on file with the U.S. District Court and available to the public.
Agencies involved in this investigation include the Federal Bureau of Investigation and Knoxville Cyber Task Force, which includes the University of Tennessee Police Department, Tennessee Highway Patrol, Knoxville Police Department and Knox County Sheriff Office, assisted by the Sweetwater Police Department. Assistant U.S. Attorney Cynthia F. Davidson represented the United States.
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Owner and Employee of Metal Plating Government Contractor Plead Guilty to Hazardous Waste CrimesRead the Press Release
Phillip Michael Huddleston, 61, pleaded guilty today to violating the federal Resource Conservation and Recovery Act (“RCRA”) by illegally storing hazardous waste without a permit at Protech Metal Finishing, LLC, a metal plating facility he owned and operated in Vonore, Tennessee.
John Thomas Hatfield, 43, Protech’s production manager, pleaded guilty on October 2, 2017, to being an accessory after-the-fact to Protech’s illegal storage of hazardous waste. In order to hinder an investigation of Protech’s compliance with the RCRA, Hatfield represented that containers of hazardous waste were accurately labeled when he knew that they were not.
“These guilty pleas are the result of notable efforts undertaken by multiple law enforcement agencies to enforce provisions in government contracts and the RCRA that protect human health and the environment,” said Acting Assistant Attorney General Jeffrey H. Wood. “In this case, what was at stake was the health and safety of Protech employees and the community of Vonore, Tennessee.”
When Congress passed the RCRA, it determined that the disposal of, and inadequate controls over hazardous waste “will result in substantial risks to human health and the environment.” To that end, the RCRA imposes “cradle-to-grave” tracking, handling, and reporting controls to ensure that companies like Protech properly manage the generation, storage, transport, and disposal of hazardous wastes. The maximum penalty for each felony RCRA count is five years in prison and a fine of $250,000. The maximum penalty for this accessory-after-the-fact count is one year in prison and a fine of $25,000.
Defendants Hatfield and Huddleston are scheduled to be sentenced by Senior District Court Judge Leon Jordan on January 10 and January 8, 2018, respectively.
This case is being prosecuted by Assistant United States Attorney Matt Morris of the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorneys Cassandra Barnum and Senior Trial Attorney Todd W. Gleason of the Environment and Natural Resources Division. The prosecution is the result of an investigation by the IRS, EPA-CID, TVA-OIG, Department of Defense, and Department of Energy.
Johnson City Resident Sentenced to Serve 150 Months in Prison for Firearm and Drug ChargesRead the Press Release
GREENEVILLE, Tenn. – On October 11, 2017, Christopher Horton, a.k.a. “Slim,” 30, of Johnson City, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 150 months in federal prison for possession with the intent to distribute a quantity of cocaine base “crack,” possession of a firearm in furtherance of a drug trafficking offense, and being a felon in possession of a firearm. Upon his release from prison, he will be supervised by U.S. Probation for five years. There is no parole in the federal system.
In June 2017, a jury convicted Horton of these charges, which arose from his early morning arrest by Johnson City Police Officers, on January 4, 2015, near the WJHL office on State of Franklin Street. Horton brandished a firearm outside the Old South bar, which resulted in a brief pursuit by officers. During the pursuit, an officer saw him duck down beside a car in a parking lot. After his arrest, a firearm and quantity of crack cocaine were found under the vehicle where he was earlier seen. Officers recognized that fibers on the firearm appeared similar to that of a torn pocket on Horton’s jacket. Forensics experts from the Tennessee Bureau of Investigation found that the fibers on the firearm did match the type of fibers in Horton’s jacket. Additionally, DNA matching Horton was also found on the firearm.
Agencies involved in this investigation included the Johnson City Police Department and Bureau of Alcohol Tobacco Firearms and Explosives. J. Gregory Bowman, Assistant U.S. Attorney represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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Gregg Paul Smith Sentenced to Serve 151 Months in Prison for Receiving Child Pornography and Possession of Stolen FirearmsRead the Press Release
GREENEVILLE, Tenn. – On October 11, 2017, Gregg Paul Smith, 48, of Kingsport, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 151 months in federal prison as a result of his July 2017 guilty plea to receipt of child pornography and possession of stolen firearms. Upon his release from prison, he will be supervised by U.S. Probation for 15 years. There is no parole in the federal system.
The investigation of Smith was initiated when investigators with the Knoxville Police Department’s Internet Crimes Against Children Task Force (ICAC) obtained child pornography images and videos uploaded through an internet file sharing service from an IP address associated with his address. A search warrant was executed at the residence and officers from the Kingsport Police Department and Sullivan County Sheriff’s Office seized computer equipment, which was found to contain thousands of images and videos containing child pornography. During the search, officers also found multiple firearms that were stolen from a firearms dealership where Smith was employed.
Agencies involved in this investigation included the Sullivan County Sheriff Department, Kingsport Police Department, Knoxville Police Department ICAC Task Force, and Bureau of Alcohol Tobacco Firearms and Explosives. J. Gregory Bowman, Assistant U.S. Attorney represented the United States.
This case was brought as part of Project Safe Childhood (PSC), a Department initiative launched in 2006 that aims to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division’s Child Exploitation and Obscenity Section, PSC Marshals federal, state, tribal and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information visit ProjectSafeChildhood.gov.
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Attorney General Jeff Sessions Announces Reinvigoration of Project Safe Neighborhoods and Other Actions to Reduce Rising Tide of Violent CrimeRead the Press Release
KNOXVILLE, Tenn. – On October 5, 2017, Attorney General Jeff Sessions announced several Department of Justice (Department) actions to reduce the rising tide of violent crime in America. Foremost of those actions is the reinvigoration of “Project Safe Neighborhoods,” a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
In announcing this recommitment to Project Safe Neighborhoods, the Attorney General issued a memo directing U.S. Attorneys to implement an enhanced violent crime reduction program that incorporates the lessons learned since Project Safe Neighborhoods launched in 2001.
In a statement on the program, the Attorney General said:
"According to the FBI, the violent crime rate has risen by nearly seven percent over the past two years, and the homicide rate has risen by more than 20 percent. We cannot be complacent or hope that this is just an anomaly: we have a duty to take action.
“Fortunately, we have a President who understands that and has directed his administration to reduce crime. The Department of Justice today announces the foundation of our plan to reduce crime: prioritizing Project Safe Neighborhoods, a program that has been proven to work.
“Let me be clear – Project Safe Neighborhoods is not just one policy idea among many. This is the centerpiece of our crime reduction strategy.
“Taking what we have learned since the program began in 2001, we have updated it and enhanced it, emphasizing the role of our U.S. Attorneys, the promise of new technologies, and above all, partnership with local communities. With these changes, I believe that this program will be more effective than ever and help us fulfill our mission to make America safer."
Nancy Stallard Harr, U.S. Attorney for the Eastern District of Tennessee said, “Since the Department announced Project Safe Neighborhoods in May 2001, the U.S. Attorney’s Office for the Eastern District of Tennessee has actively participated in this gun violence reduction program by partnering with local, state and federal law enforcement across the district to help remove these violent offenders from our communities. In addition to our many successful prosecutions associated with this program, we have also coordinated and provided training to our state and local partners on federal gun laws and gang violence. The entire district has seen the benefits of these efforts through a reduction in violent crime, thus making it a safer place for our law-abiding citizens to live and raise their families. Although, as referenced by the Attorney General, the national program waned in recent years, resulting in an overall rise in violent crime across the country, the Eastern District of Tennessee sustained its vigorous efforts to prosecute these violent offenders. With our staff of experienced prosecutors, we intend to continue and expand our efforts even further under these updated, enhanced and emphasized efforts announced today by the Attorney General.”
The Attorney General also announced the following Department initiatives to help reduce violent crime:
-Additional Assistant U.S. Attorney Positions to Focus on Violent Crime – The Department is allocating 40 prosecutors to approximately 20 U.S. Attorney’s Offices to focus on violent crime reduction.
-More Cops on the Streets (COPS Hiring Grants) – As part of our continuing commitment to crime prevention efforts, increased community policing, and the preservation of vital law enforcement jobs, the Department will be awarding approximately $98 million in FY 2017 COPS Hiring Grants to state, local, and tribal law enforcement agencies.
-Organized Crime and Drug Enforcement Task Force’s (OCDETF) National Gang Strategic Initiative –The National Gang Strategic Initiative promotes creative enforcement strategies and best practices that will assist in developing investigations of violent criminal groups and gangs into enterprise-level OCDETF prosecutions. Under this initiative, OCDETF provides “seed money” to locally-focused gang investigations, giving state, local, and tribal investigators and prosecutors the resources and tools needed to identify connections between lower-level gangs and national-level drug trafficking organizations.
-Critical Training and Technical Assistance to State and Local Partners –The Department has a vast array of training and technical assistance resources available to state, local and tribal law enforcement, victims groups, and others. To ensure that agencies in need of assistance are able to find the training and materials they need, Office of Justice Programs (OJP) will make available a Violence Reduction Response Center to serve as a “hot line” to connect people to these resources.
-Crime Gun Intelligence Centers (CGIC) – The Department has provided grant funding to support a comprehensive approach to identifying the most violent offenders in a jurisdiction, using new technologies such as gunshot detection systems combined with gun crime intelligence from NIBIN, eTrace, and investigative efforts. These FY 2017 grants were awarded to Phoenix, Arizona, and Kansas City, Missouri.
-Expand ATF’s National Integrated Ballistic Network (NIBIN) Urgent Trace Program – The Department will expand ATF’s NIBIN Urgent Trace Program nationwide by the end of the year. Through this program, any firearm submitted for tracing that is associated with a NIBIN “hit” (which means it can be linked to a shooting incident) will be designated an “urgent” trace and the requestor will get information back about the firearm’s first retail purchaser within 24 hours, instead of 5 to 6 business days.
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Two Chattanooga Residents Sentenced to Prison for Participating in a Conspiracy to Commit Wire Fraud and for Tax EvasionRead the Press Release
CHATTANOOGA, Tenn. – On September 29, 2017, James H. Brennan, 68, and Douglas A. Dyer, 58, both of Chattanooga, Tennessee, were sentenced by the Honorable Travis R. McDonough, U.S. District Court Judge, to respectively serve 48 months and 60 months in federal prison for their roles in a wire fraud and tax evasion conspiracy. Upon their release, U.S. Probation will supervise them for three years. Brennan and Dyer were also ordered to pay over $4.9 million in restitution to over 200 victims in this case. Additionally, Brennan was ordered to pay restitution to the IRS in the amount of $184,022.84. Dyer was ordered to pay restitution to the IRS in the amount of $354,251.58.
In May 2017, both Dyer and Brennan pleaded guilty to conspiring to steal approximately $4.9 million from investors and evading the assessment and payment of their true taxes due and owing by mischaracterizing the stolen money as capital gains instead of income, thus paying at a fraudulently derived lower tax rate. Dyer also pleaded guilty to criminal contempt for dispersing funds contrary to an order in a civil case filed by the Securities and Exchange Commission for securities fraud.
According to documents on file with the U.S. District Court, between 2008 and 2016, Brennan and Dyer sought and received funds from numerous investors by promising them that their money would be used to capitalize limited liability corporations which would merge with companies seeking to transition to public ownership on a public stock exchange. Instead, they diverted the funds to their personal use. Although the general practice is to report stolen funds as income, Brennan and Dyer mischaracterized the funds they stole as capital gains and paid taxes at the lower capital gains rate, effectively evading paying taxes at the correct rate.
The case was investigated by the Federal Bureau of Investigation (FBI) and Internal Revenue Service (IRS) Criminal Investigation. Assistant U.S. Attorneys James T. Brooks and Anne-Marie Svolto represented the United States.
U.S. Attorney Nancy Stallard Harr said, “The U.S. Attorney’s Office will continue to pursue prosecution of fraudulent offenders, such as Brennan and Dyer, who effectively steal money from both innocent individuals and the United States by failing to pay taxes.”
“Fraudulent investment schemes continue to bring financial ruin to many Americans,” stated Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation. “We are proud of the work of our special agents who utilize their specialized forensic accounting skills to unravel complex financial schemes. The prosecution of individuals who intentionally conceal their income and evade taxes is a key priority for IRS Criminal Investigation. Mr. Dyer and Mr. Brennan stole investors’ hard-earned money, used it for their own personal benefit, and evaded the federal tax owed on the stolen funds. This case should serve as a reminder, no matter the source of income, all income is taxable.”
“The public's faith in the integrity of investment markets, particularly those involving capital for new companies, is essential for the continued success of our country's economic stability and growth,” stated Renae McDermott Special Agent in Charge of the Knoxville FBI. “The sentencing today demonstrates the commitment of the FBI and our investigative partners to bring to justice those who prey upon unsuspecting investors.”
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Newport Family Members Sentenced in Illegal Steroid ConspiracyRead the Press Release
GREENEVILLE, Tenn. – Five members of the Pasternak family of Newport, Tennessee, have been sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, for their roles in a large illegal steroid conspiracy in east Tennessee. In May 2017, these individuals pleaded guilty to a federal indictment charging them with conspiring to manufacture and distribute anabolic steroids, a Schedule III controlled substance, and conspiring to launder money.
Joel Logan Pasternak, 28, was sentenced to serve 108 months in federal prison and pay a $2.8 million monetary judgement. Edward Stanley Pasternak, 59, was sentenced to serve 36 months in federal prison. Lori Pasternak, 52, was sentenced to serve 12 months and one day in federal prison. Edward Pasternak and Lori Pasternak were also ordered to jointly pay a monetary judgement of $100,000. Upon their release from prison, all three of these individuals will be supervised by U.S. Probation for three years. Two other family members Joshua Pasternak, 32, and Jared Pasternak, 23, were both sentenced to serve four days of intermittent confinement, followed by five years of probation. Additionally, Joshua and Jared were each ordered to pay a $10,000 monetary judgement.
In addition to the prison sentences and fines outlined above, the United States forfeited real estate, cars, and boats which were derived from the criminal organization or were used to commit the crimes.
The Pasternak criminal organization included 17 additional individuals who have pleaded guilty and are awaiting sentencing. Their scheme involved importing raw steroid powders shipped in misbranded packaging from China and other countries, which were converted to liquid, pill, and tablet form and marketed via the internet using the Incredible Hulk image and the name Hulkbody. Customers purchased the steroid products by sending money to Western Union, MoneyGram, and Walmart-to-Walmart Money Transfer using false identities. Over a three-year period, the Pasternak drug organization operated five different clandestine steroids labs in the Johnson City area, derived more than $2.8 million in criminal proceeds, engaged in thousands of sales transactions, and involved a total of 22 co-conspirators. Law enforcement officers found what is described as one of the largest clandestine steroids lab in the United States as part of the investigation.
Agencies involved in this investigation included the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, U.S. Postal Inspection Service, U.S. Department of Homeland Security Investigations and the Washington County Sheriff’s Office. Helen C.T. Smith, Assistant U.S. Attorney represented the United States in court proceedings.
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Powell Resident Sentenced to Serve Eight Years in Federal Prison for Tax Evasion, Mail Fraud and Wire FraudRead the Press Release
KNOXVILLE, Tenn. – On September 20, 2017, Andrea Rudd, 38, of Powell, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to consecutively serve 60 months for tax evasion and 36 months for mail and wire fraud, for a total of 96 months in federal prison. Upon her release from prison, she will be supervised by U.S. Probation for three years. Rudd was also ordered to pay $15,766,417.32 in restitution to the victims of her offenses, $10,377,785.04 of which will go to the Internal Revenue Service (IRS).
In April 2017, Rudd, pleaded guilty to a two-count information charging her with the above-referenced offenses. This information, on file with U.S. District Court, contains a detailed account of her scheme in committing these crimes.
Rudd was the owner of HR Comp, LLC (HR Comp) in Powell, Tennessee. HR Comp, conducted business through several subsidiaries collectively known as the Professional Employer Organization (PEO) Entities. Operating both independently and in the name of the PEO Entities, HR Comp entered into contracts with client companies to process their payroll. In conjunction with handling the payroll, HR Comp was responsible for collecting and remitting money owed by the companies and their employees for payroll taxes to the IRS. Additionally, HR Comp, both independently and through the PEO Entities, entered into contracts with the client companies to provide worker’s compensation insurance.
Between 2011 and 2015, instead of remitting the money collected from her client companies for payroll taxes to the IRS, Rudd converted the funds for her own personal use. Additionally, client agencies sent money to HR Comp, in exchange for what Rudd and her co-conspirators represented to be worker’s compensation insurance. However, false certificates of insurance were provided to the client companies and the insurance was never purchased.
Investigative agencies involved in this case included IRS-Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorney Frank Dale represented the United States through court proceedings.
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Justin Redmon Sentenced to 10 Years in Prison for Participating in a Roane County Methamphetamine Trafficking ConspiracyRead the Press Release
KNOXVILLE, Tenn. – On September 21, 2017, Justin Redmon, 33, of Harriman, Tennessee, was sentenced to serve 10 years in prison by the Honorable Pamela L. Reeves, U.S. District Court Judge, for his role in a large-scale methamphetamine trafficking conspiracy. Upon his release from prison, he will be supervised by the U.S. Probation Office for five years.
In May 2017, Redmon pleaded guilty to the offense described above. According to documents on file with U.S. District Court, between August 2015 and August 2016, he conspired with others to travel between Roane County, Tennessee and Rome, Georgia, to buy large quantities of methamphetamine that were then resold in east Tennessee. Individuals also charged for their roles in this conspiracy who were previously sentenced include: Demetrius Hodges, 46 of Rome, Georgia; Gerald Musson, 54 of Ten Mile, Tennessee; Lamar England, 49 of Rockwood, Tennessee; Amanda Wells, 29 of Harriman, Tennessee; William Colyer, 57 of Rockwood, Tennessee; Anthony Jones, 46 of Rockwood, Tennessee; and, Clarence Laymance, 45 of Wartburg, Tennessee.
The case was referred for federal prosecution by Roane County Sheriff Jack Stockton and was investigated by the Federal Bureau of Investigation and Roane County Sheriff’s Office. Assisting in the investigation were law enforcement personnel from the Harriman, Rockwood and Kingston Police Departments and the Meigs County Sheriff’s Office. Assistant U.S. Attorney Brooklyn Sawyers Belk represented the United States.
U.S. Attorney Nancy Stallard Harr said, “The U.S. Attorney’s Office encourages state and local law enforcement officials to refer cases for federal prosecution in appropriate cases such as this one. Federal law enforcement agencies in the Eastern District of Tennessee are very proud of these partnerships.”
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Roger Arthur Beu, Jr. Sentenced to 41 Months in Prison for Conspiring to Submit Fraudulent Tax Returns and Failing to Register as a Convicted Sex OffenderRead the Press Release
KNOXVILLE, Tenn.- On September 20, 2017, Roger Arthur Beu, Jr., 57, of Harriman, Tennessee, was sentenced by the Honorable Thomas W. Phillips, Senior U.S. District Judge, to serve 41 months in prison for his role in preparing and submitting fraudulent federal tax returns to the Internal Revenue Service (IRS) and for failing to register on the Tennessee Sex Offender Registry. Following his release from prison, Beu will be supervised by U.S. Probation for three years. He was also ordered to pay restitution to the IRS.
Beu pleaded guilty to two indictments in April 2017. The first indictment charged that as a paid tax preparer, he assisted in the preparation of several fraudulent federal income tax forms submitted to the IRS between 2009 and 2013 in a scheme to defraud the IRS. The fraudulent tax forms pertained to several businesses owned by Morgan County businessman Joseph Armes, Jr. Armes previously pleaded guilty and is awaiting sentencing. The tax fraud scheme defrauded the IRS of more than $1.4 million in tax revenue.
The second indictment charged that, having previously been convicted of sexual battery by an authority figure in 2009, Beu failed to register with the Tennessee Sex Offender Registry after he moved from Indiana to Roane County, Tennessee in August 2016.
U.S. Attorney Nancy Stallard Harr praised the cooperative efforts of the investigators in this case and said, “In addition to pursuing tax fraud offenders, the U.S. Attorney’s Office is committed to aggressively enforcing federal laws enacted to ensure that our citizens are aware of the whereabouts of convicted sex offenders living in our communities.
"Our core mission is the enforcement of our nation’s tax laws," stated Tracey D. Montaño, Special Agent in Charge (SAC) of the IRS-Criminal Investigation Nashville Field Office. “To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share. IRS-Criminal Investigation, together with the Department of Justice, will continue to investigate and prosecute those who defraud our tax system by aiding in the filing of false returns,” added SAC Montaño.
These investigations were conducted by IRS-Criminal Investigation, Federal Bureau of Investigation, U.S. Department of Energy’s Office of Inspector General, and U.S. Marshals Service. Assistant U.S. Attorney Matthew Morris represented the United States in the court proceedings.
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Madisonville Resident Sentenced to over Twelve Years in Prison for Distributing and Possessing Child PornographyRead the Press Release
KNOXVILLE, Tenn.- On September 19, 2017, Neal Allen Holland, 28, of Madisonville, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 151 months in federal prison for distributing child pornography. Following his release from prison, Holland will be supervised by the U.S. Probation Office for 15 years and required to register with the sex offender registry in any state in which he resides, works, or attends school.
Holland pleaded guilty in October 2016 to federal charges stemming from his use of an Internet chatroom and an online cloud storage account to make child pornography available for downloading by others via the Internet. A search of his residence resulted in the seizure of evidence confirming that he had been distributing child pornography that he had accessed, downloaded, and stored on his computer.
This investigation was conducted by the U.S. Department of Homeland Security with substantial assistance from the Monroe County Sheriff’s Office and Madisonville Police Department. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Joshua Alan Belcher Sentenced to 151 Months in Prison for Distributing and Possessing Child PornographyRead the Press Release
KNOXVILLE, Tenn.- On September 14, 2017, Joshua Alan Belcher, 23, of Madisonville, Tenn., was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 151 months in prison for distributing and possessing child pornography. Following his release from prison, Belcher will be supervised by the U.S. Probation Office for 20 years and required to register with the sex offender registry in any state in which he resides, works, or attends school.
Belcher pleaded guilty in January 2017 to federal charges stemming from his use of a peer-to-peer file sharing software to make child pornography available for downloading by others via the Internet. A search of his residence resulted in the seizure of evidence confirming that he had been distributing child pornography that he had accessed, downloaded, and stored on his computer.
This investigation was conducted by Knoxville Police Department’s Internet Crime Against Children Task Force and the U.S. Department of Homeland Security Department. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Federal Jury Convicts Chad Allen Dorton in Large-Scale Drug Trafficking ConspiracyRead the Press Release
GREENEVILLE, Tenn. – Following a three-day trial in U.S. District Court, on September 14, 2017, Chad Allen Dorton, 35, of Kingsport, Tennessee, was convicted of conspiracy to distribute, and to possess with the intent to distribute, 1000 kilograms or more of marijuana.
Sentencing is set for 1:30 p.m., December 4, 2017, before the Honorable Pamela L. Reeves, U.S. District Court Judge. Dorton faces a mandatory minimum of 10 year in prison up to life.
From July 2013 through November 2016, Dorton conspired with nine charged co-defendants and others, to distribute, and possess with the intent to distribute, 1000 kilograms or more of marijuana. During this period, Dorton transported over $1 million in cash to O’Brien and Cave Junction, Oregon to purchase high-grade marijuana. He then smuggled 700 – 800 lbs. of the marijuana, with a street value of over $3.3 million, back to east Tennessee, concealed in diesel tanks with false compartments, in tires, and in spare tires. Overall, the evidence presented at trial showed the conspirators purchased, transported, and distributed 2500 to 3700 lbs. of marijuana during the conspiracy period, with a street value of $12 - $18 million. All of the drugs were distributed in Kingsport, Tennessee, and the surrounding areas. Nine of Dorton’s co-conspirators pleaded guilty prior to his trial and have not yet been sentenced.
This long-term investigation was the product of a partnership between the Tennessee Bureau of Investigation, Second Judicial Drug Task Force, Sullivan County Sheriff’s Office, Internal Revenue Service-Criminal Investigation, Kingsport Police Department, Rogue Area Drug Enforcement (RADE) of Josephine County, Oregon, and the Drug Enforcement Administration, with the assistance of the Second Judicial District Attorney’s Office. Assistant U.S. Attorney Wayne Taylor led the prosecution team, while Assistant U.S. Attorneys David L. Gunn and T.J. Harker represented the United States at trial.
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East Tennessee-Based Home Health Providers Agree to Pay U.S. $1.8 Million to Settle False Claims Act LiabilityRead the Press Release
KNOXVILLE, Tenn. – Affiliated home health entities Home Health Care of East Tennessee, Inc.; Home Health Care of West Tennessee, Inc.; Home Health Care Services, Inc.; Home Health Care Services II, Inc.; Health Care Staffing of Tennessee, Inc.; and Home Health Care Support Services, Inc. (collectively “Home Health”) have agreed to pay the United States $1,800,000, to settle False Claims Act liability. Each of the Home Health entities is based in Chattanooga, Tennessee.
The United States contends that Home Health billed Medicare for home health services and, in some cases, hospice services that were not properly payable due to compensation or other financial arrangements with certain referring physicians which either violated or failed to meet the requirements of the Ethics in Patient Referrals Act (also known as the “Stark law”). The United States also contends that certain other billed services were not properly payable because they failed to meet Medicare coverage and payment requirements due to false or invalid certifications. The conduct giving rise to the allegations occurred over a period of time ranging from as early as 2002 to 2013.
Medicare home health providers and hospice providers are required to obtain written physician certifications of eligibility for each home health or hospice beneficiary upon the start of care and periodically throughout the beneficiary’s period of care. Medicare requires these certifications prior to billing in order to help ensure that home health or hospice care is medically necessary. Moreover, home health and hospice providers are required to comply with the Ethics in Patient Referrals Act, which requires that compensation and other financial arrangements with referring physicians meet requirements designed to ensure that physicians make patient referral decisions based on the patients’ best interests, without undue influence from payments or financial benefits received from healthcare providers competing for the physicians’ referrals. The law also serves to protect the integrity of government-funded healthcare programs.
In November 2010, Home Health initiated a voluntary disclosure to the U.S. Attorney’s Office, disclosing that it had uncovered potential violations of the Stark law during the course of an ongoing internal audit. Home Health supplemented its voluntary disclosure from time to time as its internal investigation continued, reporting additional violations. The settlement announced today resulted from the companies’ voluntary disclosures.
“This is an excellent example of how a health care provider can self-report Medicare compliance concerns and avoid costly litigation,” said Nancy Stallard Harr, U.S. Attorney for the Eastern District of Tennessee. “We encourage voluntary disclosures and welcome the opportunity to work with providers to resolve issues such as this and protect the Medicare Trust Fund.”
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U.S. Nuclear Engineer Sentenced to Serve Twenty-Four Months in Federal Prison for Violating the Atomic Energy ActRead the Press Release
KNOXVILLE, Tenn. – On August 31, 2017, Szuhsiung Ho, aka Allen Ho, 66, a naturalized U.S. citizen, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 24 months in prison and one year of supervised release. Upon his release, he will be supervised by U.S. Probation for one year. He was also order to pay a fine of $20,000.
Ho pleaded guilty in January 2017 to conspiracy to unlawfully engage or participate in the production or development of special nuclear material outside the United States, without the required authorization from the U.S. Department of Energy (DOE), in violation of the Atomic Energy Act.
An April 2016 indictment charged Ho; China General Nuclear Power Company (CGNPC), the largest nuclear power company in China, and Energy Technology International (ETI), a Delaware corporation with these offenses. At the time of his indictment, Ho was a nuclear engineer, employed as a consultant by CGNPC and was also the owner of ETI. CGNPC specialized in the development and manufacture of nuclear reactors and was controlled by China’s State-Owned Assets Supervision and Administration Commission.
According to documents filed in the case, beginning in 1997 and continuing through April 2016, Ho conspired with others to engage or participate in the development or production of special nuclear material in China, without specific authorization to do so from the U.S. Secretary of Energy, as required by law. He assisted CGNPC in procuring U.S.-based nuclear engineers to assist CGNPC and its subsidiaries with designing and manufacturing certain components for nuclear reactors more quickly by reducing the time and financial costs of research and development of nuclear technology. In particular, Ho sought technical assistance related to CGNPC’s Small Modular Reactor Program; CGNPC’s Advanced Fuel Assembly Program; CGNPC’s Fixed In-Core Detector System; and verification and validation of nuclear reactor-related computer codes.
Under the direction of CGNPC, Ho also identified, recruited, and executed contracts with U.S.-based experts from the civil nuclear industry who provided technical assistance related to the development and production of special nuclear material for CGNPC in China. Ho and CGNPC also facilitated the travel to China and payments to the U.S.-based experts in exchange for their services.
“The U.S. Attorney’s office is committed to working to ensure that sensitive and controlled technology is not illegally obtained and exported from the United States,” said U.S. Attorney Nancy Stallard Harr. “Violations of our export control laws will be aggressively prosecuted in the Eastern District of Tennessee.”
“Today, Allen Ho is being held accountable for enlisting U.S.-based nuclear experts to provide assistance in developing and producing special nuclear material in China for a Chinese state-owned nuclear power company. He did so without the required authorization from the U.S. Department of Energy,” said Acting Assistant Attorney General Boente. “Prosecuting those who unlawfully facilitate the acquisition of sensitive nuclear technology by foreign nations continues to be a top priority of the National Security Division.”
“Theft of our nuclear technology by foreign adversaries is of paramount concern to the FBI. Along with our local, state and, federal partners, we will aggressively investigate those who seek to steal our technology for the benefit of foreign governments,” said FBI Knoxville Special Agent in Charge, Renae McDermott.
This case was investigated by the FBI, Tennessee Valley Authority - Office of the Inspector General, DOE-National Nuclear Security Administration and U.S. Immigration and Customs Enforcement Homeland Security Investigations, with assistance from other agencies. Assistant U.S. Attorneys Charles E. Atchley Jr. and Bart Slabbekorn of the Eastern District of Tennessee, and Trial Attorney Casey T. Arrowood of the Counterintelligence and Export Control Section and Attorney Jeffrey M. Smith of the Appellate Unit in the National Security Division, represented the United States.
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U.S. Nuclear Engineer Sentenced to 24 Months in Prison for Violating the Atomic Energy ActRead the Press Release
Szuhsiung Ho, aka Allen Ho, 66, a naturalized U.S. citizen born in Taiwan, was sentenced today to 24 months in prison and one year of supervised release. Ho was also ordered to pay a $20,000 fine. The defendant pleaded guilty in January 2017 to conspiracy to unlawfully engage or participate in the production or development of special nuclear material outside the U.S., without the required authorization from the U.S. Department of Energy (DOE), in violation of the Atomic Energy Act.
Acting Assistant Attorney General for National Security Dana J. Boente, U.S. Attorney Nancy Stallard Harr of the Eastern District of Tennessee and Special Agent in Charge Renae McDermott of the FBI’s Knoxville Field Division made the announcement.
“Today, Allen Ho is being held accountable for enlisting U.S.-based nuclear experts to provide assistance in developing and producing special nuclear material in China for a Chinese state-owned nuclear power company. He did so without the required authorization from the U.S. Department of Energy,” said Acting Assistant Attorney General Boente. “Prosecuting those who unlawfully facilitate the acquisition of sensitive nuclear technology by foreign nations continues to be a top priority of the National Security Division.”
“The U.S. Attorney’s office is committed to working to ensure that sensitive and controlled technology is not illegally obtained and exported from the United States,” said U.S. Attorney Harr. “Violations of our export control laws will be aggressively prosecuted in the Eastern District of Tennessee.”
“Theft of our nuclear technology by foreign adversaries is of paramount concern to the FBI. Along with our local, state and federal partners, we will aggressively investigate those who seek to steal our technology for the benefit of foreign governments,” said Special Agent in Charge McDermott.
An April 2016 indictment charged Ho; China General Nuclear Power Company (CGNPC), the largest nuclear power company in China and Energy Technology International (ETI), a Delaware corporation with these offenses. At the time of his indictment, Ho was a nuclear engineer, employed as a consultant by CGNPC and was also the owner of ETI. CGNPC specialized in the development and manufacture of nuclear reactors and was controlled by China’s State-Owned Assets Supervision and Administration Commission.
According to documents filed in the case, beginning in 1997 and continuing through April 2016, Ho conspired with others to engage or participate in the development or production of special nuclear material in China, without specific authorization to do so from the U.S. Secretary of Energy, as required by law. He assisted CGNPC in procuring U.S.-based nuclear engineers to assist CGNPC and its subsidiaries with designing and manufacturing certain components for nuclear reactors more quickly by reducing the time and financial costs of research and development of nuclear technology. In particular, Ho sought technical assistance related to CGNPC’s Small Modular Reactor Program; CGNPC’s Advanced Fuel Assembly Program; CGNPC’s Fixed In-Core Detector System; and verification and validation of nuclear reactor-related computer codes.
Under the direction of CGNPC, Ho also identified, recruited and executed contracts with U.S.-based experts from the civil nuclear industry who provided technical assistance related to the development and production of special nuclear material for CGNPC in China. Ho and CGNPC also facilitated the travel to China and payments to the U.S.-based experts in exchange for their services.
This case was investigated by the FBI, Tennessee Valley Authority-Office of the Inspector General, DOE-National Nuclear Security Administration and U.S. Immigration and Customs Enforcement Homeland Security Investigations, with assistance from other agencies. Assistant U.S. Attorneys Charles E. Atchley Jr. and Bart Slabbekorn of the Eastern District of Tennessee, and Trial Attorney Casey T. Arrowood of the Counterintelligence and Export Control Section and Attorney Jeffrey M. Smith of the Appellate Unit in the National Security Division prosecuted this case.
Carson Nathan Martin Sentenced to over Twenty-Eight Years in Federal Prison for Producing and Distributing Child PornographyRead the Press Release
KNOXVILLE, Tenn.- On August 29, 2017, Carson Nathan Martin, 38, of Knoxville, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 345 months in prison for producing child pornography. Following his release from prison, Martin will be supervised by the U.S. Probation Office for the rest of his life and required to register with the sex offender registry in any state in which he resides, works, or attends school.
Martin pleaded guilty in March 2017 to federal charges stemming from his use of a minor female to make pornographic videos and pictures and his distribution of those depictions to others via the Internet. Investigators with the Massachusetts State Police discovered depictions of the of the sexual abuse of the minor that Martin had made and alerted investigators with the Knoxville Police Department’s Internet Crimes Against Children Task Force (KPD-ICAC) that someone in the Knoxville area was circulating child pornography. A search of Martin’s residence resulted in the seizure of evidence confirming that he had been sexually abusing the minor and recording the abuse on his cellular telephone. He was arrested and has been in custody since the search of his residence.
This investigation was conducted by KPD-ICAC and the U.S. Department of Homeland Security. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Sullivan County Designated as Newest Member of Appalachia High Intensity Drug Trafficking AreaRead the Press Release
BLOUNTVILLE, Tenn. – Sullivan County was recognized today as the newest county in east Tennessee to become a member of the Appalachia High Intensity Drug Trafficking Area (HIDTA). U.S. Attorney Nancy Stallard Harr, along with Second Judicial District Attorney Barry Staubus and Appalachia HIDTA Tennessee State Coordinator Joel Reece, made this announcement at a press conference in Blountville.
The HIDTA Program began in 1988 when Congress authorized the Director of the Office of National Drug Control Policy (ONDCP) to designate areas within the United States which exhibited serious drug trafficking problems and harmfully impacted other areas of the country as HIDTAs. The HIDTA Program provides additional federal resources to those areas to help eliminate or reduce drug trafficking and its harmful consequences. Appalachia HIDTA, which consists of counties in Kentucky, Tennessee, Virginia and West Virginia, was created in 1998.
In the Eastern District of Tennessee, HIDTA funds DEA and FBI led drug task forces in Johnson City, Knoxville, and Chattanooga, as well other initiatives to reduce drug crime in the HIDTA. Most recently, to battle the overdose epidemic, the Knoxville Police Department teamed up with the Knox County District Attorney’s Office, Knox County Medical Examiner's Office, Sheriff's Office and Tennessee Bureau of Investigation to form the Overdose Death Investigation Task Force, which is funded by Appalachia HIDTA.
The Appalachia HIDTA mission is to use a multi-disciplinary approach to deal with the ongoing threats to public health and safety, particularly as it regards prescription drug diversion, the emerging threat of heroin, as well as the continued threats of marijuana, cocaine, methamphetamine and synthetic drugs. The Appalachia region is arguably the epicenter of this crisis, and requires unprecedented multi-disciplined cooperation to effectively address the many faceted health and public safety problems that result from this daunting threat. The Appalachia HIDTA will serve as the conduit for this cooperation.
In addition to Sullivan County, other previously designated Appalachia HIDTA counties in east Tennessee include Bledsoe, Blount, Bradley, Campbell, Claiborne, Cocke, Franklin, Grainger, Greene, Grundy, Hamblen, Hamilton, Hawkins, Jefferson, Knox, Marion, Rhea, Roane, Scott, Sequatchie, Sevier, Unicoi and Washington. An additional eight Tennessee counties in the middle district, including Cumberland, Fentress, Jackson, Macon, Overton, Pickett, Putnam, and White, are also designated as members.
U.S. Attorney Nancy Stallard Harr said, “Sullivan County’s designation as an Appalachia HIDTA county will allow resources for the critical fight against opioids, including heroin and fentanyl, as well as other illegal substances that drug dealers are bringing into our communities every day. Appalachia HIDTA and the Rocky Top Task Force are national award winning programs that are making an impact against the spread of illegal drugs in eastern Tennessee. The District Attorney’s Office and Sullivan County law enforcement agencies have shown the initiative and ability to use these HIDTA resources to stop the ravaging effects of opioid addiction in our Appalachian area. We salute their past efforts and look forward to their success in the future.”
“Having Sullivan County designated as a member of HIDTA has been an important goal of this office since my becoming the District Attorney General in 2011. HIDTA can assist my office, and local law enforcement agencies, in investigating and prosecuting serious drug trafficking by providing much needed federal resources to combat our methamphetamine and opioid epidemic as well as the sale and distribution of cocaine and marijuana,” said Barry P. Staubus, District Attorney General, Second Judicial District
“We are very excited to receive this designation. This will go a long way, in our fight against illegal drugs in Sullivan County!” said Wayne Anderson, Sullivan County Sheriff.
Please visit http://ahidta.org for more information about the Appalachian HIDTA.
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Mosheim Resident Sentenced to over Fifteen Years on Methamphetamine Conspiracy ChargeRead the Press Release
GREENEVILLE, Tenn. – On August 17, 2017, David Lee Sicilia, 32, of Mosheim, Tennessee, was sentenced by the Honorable R. Leon Jordan, Senior U.S. District Court Judge, to serve 188 months in federal prison following a conviction for his role in a conspiracy to distribute methamphetamine in east Tennessee.
According to the plea agreement on file with the U.S. District Court, Sicilia admitted that he was responsible for the distribution of at least 500 grams but less than 1.5 kilograms of actual methamphetamine.
Law enforcement agencies participating in the investigation included the Federal Bureau of Investigation, Hamblen County Sheriff’s Office, Morristown Police Department and Third and Fourth District Judicial Drug Task Forces. Assistant U.S. Attorney Wayne Taylor represented the United States.
This case was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Johnson City Resident Sentenced to Serve over Twenty-Two Years in Prison for Role in Conspiracy to Distribute Crack CocaineRead the Press Release
GREENEVILLE, Tenn. – On August 17, 2017, Lamont Darnell Fortune, 37, of Johnson City, Tennessee, was sentenced by the Honorable R. Leon Jordan, Senior U.S. District Judge, to serve 272 months in federal prison for his role in a conspiracy to distribute crack cocaine in east Tennessee. Fortune was convicted of conspiracy in April 2017, following a two-day jury trial.
The evidence presented at trial showed that, from January 2011 to November 2015, Fortune conspired with others to distribute, and possess with the intent to distribute, 280 grams or more of crack cocaine. During this period, he made regular trips from Johnson City to Winston-Salem, North Carolina, to obtain multi-ounce quantities of crack cocaine to supply his coconspirators, who then sold those drugs in Johnson City and Bristol, Tennessee. Fortune supplied crack cocaine to an individual working on behalf of law enforcement on two occasions. In May 2015, he led Virginia law enforcement on a high-speed chase on I-77, at speeds of over 120 mph, as he returned from picking up a shipment of crack cocaine. Three of Fortune’s coconspirators pleaded guilty prior to his trial and have been sentenced.
This long-term investigation was the product of a partnership between the Johnson City Police Department and Federal Bureau of Investigation. Assistant U.S. Attorneys David Gunn and Christian Lampe represented the United States at trial.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Morristown Resident Sentenced to 188 Months on Methamphetamine Conspiracy ChargeRead the Press Release
GREENEVILLE, Tenn. – On August 15, 2017, Andrew Harville, 29, of Morristown, Tennessee, was sentenced by the Honorable R. Leon Jordan, Senior U.S. District Court Judge, to serve 188 months in federal prison for his role in a conspiracy to distribute methamphetamine in east Tennessee.
According to Harville’s plea agreement on file with the U.S. District Court, he admitted to being responsible for the distribution of at least 500 grams but less than 1.5 kilograms of actual methamphetamine.
Law enforcement agencies participating in the investigation included the Federal Bureau of Investigation, Hamblen County Sheriff’s Office, Morristown Police Department and Third and Fourth District Judicial Drug Task Forces. Assistant U.S. Attorney Wayne Taylor represented the United States.
This case was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Del Rio Resident Receives Lengthy Prison Sentence for Methamphetamine ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On August 10, 2017, Ricky Dale Munsey, 48, of Del Rio, Tennessee, was sentenced by the Honorable R. Leon Jordan, Senior U.S. District Court Judge, to serve 262 months in federal prison following a conviction for his role in a conspiracy to distribute methamphetamine in the Eastern District of Tennessee.
According to the plea agreement on file with the U.S. District Court, Munsey admitted that he was responsible for at least 4.5 kilograms of actual methamphetamine.
Law enforcement agencies participating in the investigation included the Federal Bureau of Investigation, Hamblen County Sheriff’s Office, Morristown Police Department and Third and Fourth District Judicial Drug Task Forces. Assistant U.S. Attorney Wayne Taylor represented the United States.
This case was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Former Tennessee Alhambra Office Manager Sentenced to Serve Two Years in Federal Prison for Embezzlement from OrganizationRead the Press Release
CHATTANOOGA, Tenn. – On August 9, 2017, Belinda A. Phillips, 58, of Chattanooga, Tennessee, was sentenced by the Honorable Curtis L. Collier, Senior U.S. District Judge, to serve 24 months in federal prison for embezzlement from the Alhambra Shrine (Alhambra) in Chattanooga. Upon her release from prison, U.S. Probation will supervise her for three years. Phillips was also ordered to pay $120,000 in restitution.
Phillips previously pleaded guilty to one count of an indictment charging her with making, uttering and possessing a forged security of an organization. Detailed information regarding her actions is included in the plea agreement on file with U.S. District Court. According to the plea agreement, while employed as an office manager with Alhambra in Chattanooga, Tennessee, Phillips had control over their financial books and records, including checks and credit cards. During the time of her employment, Phillips devised a scheme to defraud and embezzle from the organization and obtain money and property for her personal use. She stole and converted checks drawn on Alhambra’s bank accounts, forged signatures and used credit cards to make unauthorized purchases and make payments for her own benefit, including the purchase of personal goods and payment of personal bills.
Alhambra, a charitable and social fraternal unincorporated association, was an affiliate of Shriner’s International. As part of its charitable activities, Alhambra supported the Shriner’s Hospitals for Children, which provide free medical care to children. They maintained a transportation fund that was to be used exclusively to transport children without charge from the Chattanooga area to the Shriner’s Hospitals for Children. Alhambra officials discovered that Phillips was siphoning funds from various accounts, including the charitable transportation account, for her own use when they were unable to pay for the transportation of a sick child who needed to fly from Chattanooga to Cincinnati for critical health care. As a result, they had to find funding elsewhere, and the treatment was delayed.
The Chattanooga Police Department and U.S. Secret Service investigated this case. Assistant U.S. Attorney Steven Neff represented the United States.
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Former Department of Energy Employee Sentenced to Serve Time in Federal PrisonRead the Press Release
KNOXVILLE, Tenn. – On August 8, 2017, Henry M. Love, II, 51, of Knoxville, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve seven months in federal prison followed by six months home detention for his convictions involving wire fraud, false claims and a false statement against his former employer, the Department of Energy (DOE). Love was also ordered to pay $40,111.95 in restitution to the DOE.
After an August 2016 jury trial, Love was convicted of 11 counts of wire fraud, 11 counts of false claims and one count of making a false statement. While employed as a program specialist with DOE, Love submitted falsified time sheets to his supervisor in New Mexico. Additionally, he falsified records and made a false statement about an on-the-job injury. Records submitted during the trial showed that Love was not even present in the office on the day his injury was alleged to have occurred.
This case was investigated this case. Assistant U.S. Attorneys Cynthia Davidson and Jennifer Kolman represented the United States.
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Eastern District of Tennessee Selected to Participate in Department of Justice Opioid Fraud and Abuse Detection UnitRead the Press Release
KNOXVILLE, Tenn. – On August 2, 2017, Attorney General Jeff Sessions announced the formation of the Opioid Fraud and Abuse Detection Unit, a new Department of Justice pilot program to utilize data to help combat the devastating opioid crisis that is ravaging families and communities across America. This new unit will focus specifically on opioid-related health care fraud using data to identify and prosecute individuals that are contributing to this prescription opioid epidemic.
The U.S. Attorney’s Office for the Eastern District of Tennessee was one of 12, out of 94 districts across the country, chosen to participate in this program. The district will receive funding for an Assistant U.S Attorney, for a three-year term, to focus solely on investigating and prosecuting healthcare fraud related to prescription opioids, including pill mill schemes and pharmacies that unlawfully divert or dispense prescription opioids for illegitimate purposes. The 12 districts selected represent areas with a significant prescription opioid problem, where the Department of Justice can effectively investigate and prosecute the medical providers that are contributing to this epidemic by unlawfully diverting or dispensing opioids outside the scope of professional practice and not for a legitimate medical purpose.
“Sadly, statistics show that Tennessee is one of the most highly opioid-addicted states in the country. While our current Assistant U.S. Attorneys have already made tremendous efforts toward combatting opioid-related healthcare fraud in the district, the U.S. Attorney’s Office is pleased to receive these additional resources, including funding for an aggressive prosecutor, to enhance these endeavors,” said U.S. Attorney Nancy Stallard Harr.
"Assistant U.S. Attorney David P. Lewen, Jr., has been selected to fill this position in the U.S. Attorney’s Office for the Eastern District of Tennessee. Working with the FBI, DEA and HHS, as well as our state and local law enforcement partners, Assistant U.S. Attorney Lewen will lead the district in the investigation and prosecution of opioid-related healthcare fraud cases involving doctors, pharmacies and medical providers who are furthering this epidemic in east Tennessee,” said U.S. Attorney Harr.
Assistant U.S. Attorney Lewen has served as a federal prosecutor in east Tennessee for nearly 10 years. Prior to that time, he served on active duty for five years in the U.S. Army JAG Corps, serving in Korea, Hawaii, and Fort Bragg, North Carolina. Assistant U.S. Attorney Lewen has experience in prosecuting a wide range of federal crimes, including large-scale drug trafficking and money laundering organizations, violent crimes, public corruption, and complex white-collar and corporate fraud crimes. Two of the higher profile defendants Lewen has prosecuted in U.S. District Court include former Knox County Criminal Court Judge Richard Baumgartner and bank extortionist Michael Benanti.
The Opioid Fraud and Abuse Unit was created to focus specifically on opioid-related healthcare fraud using data to identify and prosecute individuals that are contributing to this opioid epidemic. Data analytics will reveal important information about the prescription opioid problem, such as: which physicians are writing opioid prescriptions at a rate that far exceeds their peers, taking into account speciality and other factors; how many of a doctor’s patients died within 60 days of an opioid prescription; the average age of the patients receiving these prescriptions; pharmacies that are dispensing disproportionately large amounts of opioids; and regional hot spots for opioid issues.
In addition to the Eastern District of Tennessee, other districts selected to participate in the program include: Eastern District of Kentucky; Northern District of Alabama; Middle District of North Carolina; Southern District of West Virginia; Middle District of Florida; Eastern District of Michigan; District of Nevada; District of Maryland; Western District of Pennsylvania; Southern District of Ohio; and Eastern District of California.
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Federal Grand Jury Indicts 18 in Methamphetamine Distribution ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On July 11, 2017, a federal Grand Jury in Greeneville returned a 49-count indictment against the following individuals for their roles in the distribution of methamphetamine:
David Byron Jones, 60, of Chatsworth, Georgia;
Jonathan Delph, 50, of Rogersville, Tennessee;
Clay Seals, Jr., 50, of Surgoinsville, Tennessee;
Stephanie Bailey, 49, of Hawkins County, Tennessee;
Donna Strong, 53, a.k.a. Donna Dunbar, of Surgoinsville, Tennessee;
Curtis Carpenter, 42, of Whitesburg, Tennessee;
Jerry Robinette, 49, of Rogersville, Tennessee;
Edward Smith, 51, of Rogersville, Tennessee;
Tyler Delph, 24, of Rogersville, Tennessee;
Scottie Delph, 48, of Rogersville, Tennessee;
James Michael Whitaker, 54, of Rogersville, Tennessee;
Paul Bledsoe Jr., 43, of Morristown, Tennessee;
William West, 57, a.k.a. Bump, of Rogersville, Tennessee;
Frankie Benton, 33, of Hawkins County, Tennessee;
James Dwayne Byington, 49, of Rogersville, Tennessee;
Leonard Brad Eidson, 42, of Bull’s Gap, Tennessee;
Phillip Burton, 48, a.k.a. Burger, of Rogersville, Tennessee; and
Toby Jones, 39, of Chatsworth, Georgia.
Trial before the Honorable J. Ronnie Greer, U.S. District Court Judge, has not yet been set.
The indictment, on file with the U.S. District Court, alleges that each of these individuals was involved in a conspiracy to distribute 50 grams or more of methamphetamine in the Eastern District of Tennessee and elsewhere. Carpenter, Robinette, Smith, Burton, Tyler Delph, and Seals were also each charged with one count of possession of a firearm in furtherance of a drug trafficking crime. The indictment also alleges other charges related to the distribution and possession with the intent to distribute methamphetamine as well as the unlawful possession firearms.
If convicted of the methamphetamine conspiracy charge, each faces a minimum mandatory prison term of at least 10 years and up to life, at least five years of supervised release, a fine of up to $10,000,000, any applicable forfeiture, and a $100 special assessment. The punishment for the firearm charges returned against Carpenter, Robinette, Smith, Burton, Tyler Delph, and Seals is a minimum mandatory term of at least five years and up to life in prison, which must be served consecutively to any other prison term imposed, up to five years supervised release, a fine of up to $250,000, and a $100 special assessment.
The on-going investigation leading to the indictment was the product of a partnership between Hawkins County Sheriff’s Department, Third Judicial Drug Task Force, Hamblen County Sheriff’s Department, Tennessee Highway Patrol, Tennessee National Guard Counterdrug Task Force, Conasauga (Georgia) Safe Streets Task Force, U.S. Marshal Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Federal Bureau of Investigation. Assistant U.S. Attorney J. Christian Lampe will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Darries Leon Jackson Sentenced to Life in Prison for Being a Felon in Possession of AmmunitionRead the Press Release
GREENEVILLE, Tenn.– Darries Leon Jackson, a.k.a.“Darryl Jackson,” 58, of Morristown, Tennessee, was sentenced on July 31, 2017, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve life in federal prison for his conviction of possession of ammunition by a convicted felon. There is no parole in the federal system.
Jackson was convicted, following a three-day jury trial in April 2017. He was subject to the provisions of the Armed Career Criminal Act, whereby a person convicted of possessing a firearm or ammunition after a felony conviction is subject to a minimum mandatory 15-year sentence up to life in prison if that person has three or more prior violent felony or drug felony convictions.
Jackson is awaiting trial in state court for the murder of one individual in Hawkins County and attempted murder of another individual in Hamblen County in October 2014. The ammunition that was the subject of his federal charges is believed to be the same ammunition used in the commission of these crimes.
Agencies involved in this investigation included the Hawkins County Sheriff’s Office, Hamblen County Sheriff’s Office, and Bureau of Alcohol Tobacco Firearms and Explosives. Assistant U.S. Attorney J. Gregory Bowman and Special Assistant U.S. Attorney Lindsey W. Lane represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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Newport Woman Sentenced to 162 Months in Prison for Child Pornography OffensesRead the Press Release
KNOXVILLE, Tenn.- On July 27, 2017, Sierra Danielle Messer, 23, of Newport, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 162 months in prison as a result of her conviction for distribution and possession of child pornography. Following her release from prison, Messer will be supervised by the U.S. Probation Office for a term of 25 years and required to register with the sex offender registry in any state in which she resides, works, or attends school.
Messer pleaded guilty in December 2015 to federal charges stemming from an undercover investigation into trading child pornography on the Internet. A forensic examination of her cellular telephone revealed that she had collected 172 digital photos images and 12 videos of child pornography.
This investigation was conducted by U.S. Homeland Security Investigations and Knoxville Police Department’s Internet Crimes Against Children Task Force. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Three Additional Individuals Sentenced on Methamphetamine Conspiracy ChargesRead the Press Release
GREENEVILLE, Tenn. – On July 25, 2017, three additional individuals were sentenced by the Honorable R. Leon Jordan, U.S. District Judge, for their roles in a methamphetamine distribution conspiracy centered in and around the Morristown, Tennessee area. Misty Munsey- Killian, 38, of Whitesburg, Tennessee, who was also convicted of participating in a money laundering conspiracy, will serve 235 months. Larry Wayne Martin, 54, of Russellville, Tennessee, and Jeremy Kane Jones, 31, of Morristown, Tennessee, will serve 120 and 110 months respectively.
According to the plea agreements on file with the U.S. District Court, the combined total amount of actual methamphetamine attributed to Munsey-Killian, Martin and Jones was between 235 to 700 grams.
Law enforcement agencies participating in the investigation included the Federal Bureau of Investigation, Hamblen County Sheriff’s Office, Morristown, Tennessee Police Department and the Third and Fourth District Judicial Drug Task Forces. Assistant U.S. Attorneys Wayne Taylor and David Gunn represented the United States.
This case was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Christopher David Grippe Sentenced to Serve over Twenty-Three Years in Prison for Possessing and Distributing Child PornographyRead the Press Release
KNOXVILLE, Tenn. - On Tuesday, July 25, 2017, Christopher David Grippe, 29, of Wartburg, Tennessee, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 280 months in federal prison for possession and distribution of child pornography. Upon his release from prison, he will be under the supervision of the U.S Probation Office for life.
In January 2017, Grippe pleaded guilty to charges included in a federal indictment. His plea agreement, which is on file with U.S. District Court, contains detailed information regarding his offenses. According to that plea agreement, in August 2016, an investigator with the Knoxville Police Department Internet Crimes Against Children taskforce (ICAC) received two Cybertips from the National Center for Missing and Exploited Children (NCMEC) reporting that a Google account user attempted to upload files containing images of child sexual abuse. The ensuing investigation revealed that the email address associated with the Google account belonged to Grippe. Additional NCMEC Cybertips revealed that Grippe had distributed images of child pornography using his Facebook account since April 2016.
Further investigation revealed that during the time of his most recent offenses, Grippe was incarcerated in a state prison, serving an eight–year sentence for his 2012 conviction of possessing images depicting minors engaged in sexual activity. A search of his cell resulted in the confiscation of a phone, which he was actively using at the time of the search. A forensic search of the content of the phone revealed 161 images and 38 videos of child sexual abuse. Some of the material involved children as young as infants. Additionally, the forensic search revealed conversations regarding sexually abusing children that Grippe had with other individuals using a phone application called KIK messenger.
“Aggressive prosecution of individuals who victimize vulnerable, young children, will continue to be a top priority of the U.S. Attorney’s Office,” said Nancy Stallard Harr, U.S. Attorney.
This case was investigated by the Knoxville Police Department ICAC. Assistant U.S. Attorney LaToyia T. Carpenter represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Receiving and Distributing Child Pornography Nets Michael Lee Cole 168 Months in Federal PrisonRead the Press Release
KNOXVILLE, Tenn. - On Wednesday, July 19, 2017, Michael Lee Cole, 39, of Maryville, Tennessee, was sentenced by The Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 168 months in prison, for receiving and distributing child pornography. Upon his release from prison, he will be supervised by U.S. Probation for 25 years.
In November 2017, Cole pleaded guilty to these charges, which were included in a federal indictment. In his plea agreement on file with U.S. District Court, he admitted to using the Internet and cloud based storage to trade child pornography with other collectors. As a result of their investigation, law enforcement agents seized a cell phone and laptop computer belonging to Cole that contained thousands of images and videos of child pornography, including the sexual exploitation and abuse of children younger than 12 years old.
“This case is a good example of how information sharing among local and federal agencies across geographic regions can bring dangerous criminals to justice. Every child deserves to grow up without the fear, humiliation, and trauma of being the victim of sexual exploitation. The U.S. Attorney’s Office will continue to aggressively pursue the predators in this world who seek to abuse the most innocent among us,” said Nancy Stallard Harr, U.S. Attorney.
The case was investigated by the U.S. Department of Homeland Security, and the Knoxville Police Department, Internet Crimes Against Children Task Force. Assistant U.S. Attorney Bart Slabbekorn represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
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Michael Anthony Benanti Sentenced to Serve Four Consecutive Life Sentences Plus 155 Years in Prison for Violent Bank Extortion and Robbery Spree Spanning Through Connecticut, Pennsylvania, North Carolina and TennesseeRead the Press Release
KNOXVILLE, Tenn. – On July 18, 2017, Michael Anthony Benanti, 45, of Lake Harmony, Pennsylvania, was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Court Judge, to serve four consecutive life sentences plus an additional 155 years to be served consecutively in federal prison for his convictions involving a violent bank extortion and robbery spree spanning four states.
After a trial in February 2017, a jury convicted Benanti of one count of conspiracy to commit robbery and armed bank extortion, two counts of attempted armed bank extortion, one count of armed bank extortion, three counts of carjacking, three counts of kidnapping, three counts of being a previously-convicted felon in possession of a firearm, and 10 counts of using, carrying and brandishing a firearm during and in relation to a crime of violence.
“Often, severe federal penalties, such as mandatory minimum sentences, are the most effective tool to protect the American public from a violent criminal like Benanti. The consecutive sentences received by Benanti for firearms violations ensure he will never again be able to victimize families in east Tennessee or elsewhere. The U.S. Attorney’s office is and remains committed to prosecuting these crimes and seeking the highest penalties possible to help keep the American people safe,” said Nancy Harr, U.S. Attorney.
Special Agent in Charge Renae McDermott of the Knoxville Division of the Federal Bureau of Investigation stated, “Today’s sentencing demonstrates that the FBI is committed to investigating and pursuing prosecution of those who engage in a pattern of illegal activity. It is also one example of the close working relationship the FBI has with our law enforcement partners.”
Brian Scott Witham, 47, of Waterville, Maine, also charged in the case, pleaded guilty in March 2016. He is scheduled to be sentenced on August 17, 2017, in U.S District Court in Knoxville.
Agencies involved in this investigation included the Federal Bureau of Investigation, and numerous federal, state, and local law enforcement agencies in Tennessee, North Carolina, Pennsylvania, Connecticut, Virginia, and South Carolina. Assistant U.S. Attorneys David P. Lewen, Jr., Kelly A. Norris, and Steven H. Cook represented the United States.
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Husband and Wife Sentenced for Wire and Mail Fraud ConspiracyRead the Press Release
KNOXVILLE, Tenn. – On July 14, 2017, Christy A. Greider, 40, and Jason A. Greider, 42, both of Huber Heights, Ohio, were sentenced by the Honorable Pamela L. Reeves, U.S. District Court Judge, for their roles in a conspiracy to commit mail and wire fraud. Christy Greider will serve 33 months in federal prison and Jason Greider will serve 27 months.
The Greiders both pleaded guilty in February 2017 to one count of conspiracy to commit mail and wire fraud. Christy Greider worked as the bookkeeper for M-3 Construction, Inc., located in Oak Ridge, Tennessee. She also helped the company’s elderly owners keep track of their personal finances. Christy and Jason Greider made unauthorized purchases totaling more than $350,000 using the company’s and its elderly owners’ personal credit cards. Some of these unauthorized purchases included a boat, pool, furniture, and a trip to Hawaii.
Agencies involved in this investigation included the Oak Ridge Police Department and Federal Bureau of Investigation. Assistant U.S. Attorney Kelly A. Norris represented the United States.
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Brandon Scott Woodley to Serve A Total of 138 Months in Prison Following Shooting in West Knoxville Hotel Parking LotRead the Press Release
KNOXVILLE, Tenn. – On July 12, 2017, Brandon Scott Woodley, 35, of Knoxville, Tennessee, was sentenced by the Honorable Leon R. Jordan, Senior U.S. District Judge, to serve 120 months in prison for knowingly possessing ammunition after having been previously convicted of a felony. Woodley was convicted in December 2016 after a jury trial in federal court.
Woodley has been in custody since his arrest in September 2015, following a shooting in a west Knoxville hotel parking lot in August 2015. Witnesses testified at trial that Woodley shot a co-worker during an argument and tried to shoot the victim a second time, but the gun jammed. Woodley fled the scene and the firearm was never recovered; however, some ammunition from the shooting was recovered in the parking lot. The victim was hospitalized after the shooting, but has fully recovered.
At the time of the offense, Woodley was serving a three-year term of supervised release after his release from prison for a 2009 conviction of being a convicted felon in possession of a cache of firearms. As a result of his more recent conviction and his illegal drug use and drug trafficking while on supervised release, Judge Jordan also revoked his supervised release and ordered him to serve an additional prison term of 18 months, to be run consecutively with the 120-month sentence for the more recent charge, for a total of 138 months.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Knoxville Police Department. Assistant U.S. Attorney Matthew T. Morris represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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Berthold USA Pleads Guilty to Misrepresenting That Packages Used to Ship Radioactive Materials Had Been Properly TestedRead the Press Release
KNOXVILLE, Tenn. - Berthold Technologies, USA (Berthold), of Oak Ridge, Tennessee, has entered into a plea agreement with the U.S. Attorney’s Office for the Eastern District of Tennessee in which Berthold admits that it falsely represented that devices shipped in interstate commerce had been tested to meet the requirements of the U.S. Department of Transportation for radioactive containers. The devices, used to measure density of fluids used in natural gas fracking operations, were shipped from Oak Ridge to Texas and Oklahoma in March and October 2014.
The plea agreement on file with the U.S. District Court recommends that Berthold be ordered to pay a fine of up to $500,000 at sentencing, with $50,000 to be paid upon entry of the company’s guilty plea in federal court. The plea agreement anticipates that the sentencing hearing be set 18 months after the entry of Berthold’s guilty plea. During the 18 months between guilty plea and sentencing, Berthold will work with the Pipeline and Hazardous Materials Safety Administration of the U.S. Department of Transportation to address any problems that may exist concerning the safety of the devices that have been shipped to Berthold’s customers. Under the terms of the plea agreement, costs associated with remedying any identified problems with the devices will reduce the ultimate fine amount to be paid by Berthold at sentencing.
This investigation was conducted by the U.S. Department of Transportation – Office of Inspector General. Assistant U.S. Attorney Matthew T. Morris is handling the prosecution of the case.
Drug Dealer Pleads Guilty to Conspiracy to Distribute Heroin Resulting in Death and Distribution of Heroin Resulting in DeathRead the Press Release
CHATTANOOGA, Tenn. – On June 28, 2017, Darius Jermaine Blakemore, a.k.a. Tank, 28, of Chattanooga, Tennessee, pleaded guilty to conspiracy to distribute heroin resulting in death, distribution of heroin resulting in death, possession with intent to distribute cocaine, possession with intent to distribute crack, and possession with intent to distribute heroin. He entered this guilty plea during the second day of his trial for the same offenses.
In his plea agreement on file with the U.S. District Court, Blakemore agreed to serve a prison sentence of 23 years. Federal law provides enhanced penalties for drug dealers who distribute controlled substances that lead to overdose deaths, including a 20-year mandatory minimum sentence.
The plea agreement, along with proof at trial, provided that in February 2016, Blakemore sold a gram of heroin to Jessica Rachels for $200.00 in the parking lot of a McDonald’s in Chattanooga. After Rachels arrived at the parking lot, Blakemore gave the heroin to one of his runners, Joshua Corbett, who delivered the heroin to Rachels. Rachels gave a portion of the heroin she received from Corbett to Logan Whiteaker, who drove her to the drug deal. Whiteaker’s stepfather found him dead the next morning on the floor in the bathroom of his residence in Red Bank, Tennessee, with a hypodermic needle clutched in his hand. A blue container with .64 grams of heroin inside was found on the bathroom counter. Whiteaker graduated from Hamilton County Drug Court less than 24 hours prior to his death. Like Blakemore, Rachels and Corbett both previously pleaded guilty to distribution of heroin resulting in death and are all awaiting sentencing.
"Heroin has proven to be a deadly poison that does not discriminate. Its victims include every gender, race, age, and economic background, and its debilitating effects are the same across all demographics. Statistics show that in 2016, heroin deaths surpassed gun homicides for the first time in more than 15 years. The U.S. Attorney’s Office for the Eastern District of Tennessee will not stand idle as the death toll continues to rise. We will use all available resources to hold drug dealers like Blakemore, who seek to profit from this epidemic, accountable for their actions,” said U.S. Attorney Nancy Stallard Harr.
John McGarry, Resident Agent in Charge of the DEA Chattanooga Office stated, "The U.S. Drug Enforcement Administration, and its task force partners from the Hamilton County Sheriff’s Office, the Tennessee Highway Patrol, the Red Bank Police Department, the Chattanooga Police Department, and the Tennessee Bureau of Investigation will investigate and pursue overdose deaths in southeast Tennessee to the fullest extent of the law. The prosecution of Darius Blakemore stands as an example of this coalition’s commitment to protecting the most vulnerable elements of our community from the persistent threat of heroin.”
Law enforcement agencies participating in this joint investigation include the Drug Enforcement Administration, Hamilton County Sheriff’s Office, Chattanooga Police Department, Tennessee Bureau of Investigation, Tennessee Highway Patrol, and Red Bank Police Department. Assistant U.S. Attorneys Michael D. Porter and Scott Winne represent the United States.
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Physician and Wife to Pay $1.2 Million to Settle False Claims Act Allegations that They Billed Medicare and Medicaid for Unapproved DrugsRead the Press Release
Dr. Anindya Sen and Patricia Posey Sen will pay $1.208 million to resolve state and federal False Claims Act allegations that their medical practice billed Medicare and Tennessee Medicaid (TennCare) for anticancer and infusion drugs that were produced for sale in foreign countries and not approved by the U.S. Food and Drug Administration (FDA) for marketing in the United States, the Department of Justice announced today. Dr. Sen owns and operates East Tennessee Cancer & Blood Center and East Tennessee Hematology Oncology and Internal Medicine located in Greeneville and Johnson City, Tennessee. Mrs. Sen managed Dr. Sen’s medical practice from 2009 through 2012.
“Billing for foreign drugs that are not approved by the FDA undermines federal health care programs and could potentially risk patient safety,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to maintaining the integrity of the health care system and ensuring that patient safety, not physician misconduct, determines health care decisions.”
“Medical providers and practitioners that distribute and disseminate unapproved and potentially unsafe drugs—especially those used in cancer treatment—put at risk the health and safety of the American consumer,” said U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee. “This settlement reflects our ongoing commitment to safeguard the federal health care programs and vital care that they provide.”
The United States alleged that the unapproved drugs that the Sens provided to patients and billed to Medicare and TennCare were not reimbursable under those programs. The United States further alleged that the Sens purchased unapproved drugs because they were less expensive than the drugs approved by FDA for marketing in the United States. The Sens thus allegedly profitted by administering the cheaper unapproved drugs.
The United States’ investigation was a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Eastern District of Tennessee, the Department of Health and Human Services Office of General Counsel, the Food and Drug Administration Office of Criminal Investigations and Office of Chief Counsel, the FBI’s Knoxville Division and the Tennessee Bureau of Investigation.
claims settled by this agreement are allegations only; there has been no determination of liability.
Physician and Wife to Pay $1.2 Million to Settle False Claims Act Allegations for Billing Medicare and Medicaid for Unapproved DrugsRead the Press Release
GREENEVILLE, Tenn. – Dr. Anindya Sen and Patricia Posey Sen will pay $1.208 million to resolve state and federal False Claims Act allegations that their medical practice billed Medicare and Tennessee Medicaid (TennCare) for anticancer and infusion drugs that were produced for sale in foreign countries and not approved by the U.S. Food and Drug Administration (FDA) for marketing in the United States, the Department of Justice announced today. Dr. Sen owns and operates East Tennessee Cancer & Blood Center and East Tennessee Hematology Oncology and Internal Medicine located in Greeneville and Johnson City, Tennessee. Mrs. Sen managed Dr. Sen’s medical practice from 2009 through 2012.
“Billing for foreign drugs that are not approved by the FDA undermines federal health care programs and could potentially risk patient safety,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to maintaining the integrity of the health care system and ensuring that patient safety, not physician misconduct, determines health care decisions.”
“Medical providers and practitioners that distribute and disseminate unapproved and potentially unsafe drugs—especially those used in cancer treatment—put at risk the health and safety of the American consumer,” said U.S. Attorney Nancy Stallard Harr. “This settlement reflects our ongoing commitment to safeguard the federal health care programs and vital care that they provide.”
“When healthcare providers cut corners to make a profit, it is the patient that suffers,” Attorney General Herbert H. Slatery III said. “We will continue to work with the U.S. Attorney’s Office to hold individuals and companies accountable when they jeopardize the health of Tennesseans.”
The United States alleged that the unapproved drugs that the Sens provided to patients and billed to Medicare and TennCare were not reimbursable under those programs. The United States further alleged that the Sens purchased unapproved drugs because they were less expensive than the drugs approved by FDA for marketing in the United States. The Sens thus allegedly profited by administering the cheaper unapproved drugs.
This investigation was a coordinated effort by the Civil Division’s Commercial Litigation Branch, U.S. Attorney’s Office for the Eastern District of Tennessee, Department of Health and Human Services Office of General Counsel, Food and Drug Administration Office of Criminal Investigations and Office of Chief Counsel, FBI’s Knoxville Division and Tennessee Bureau of Investigation.
The claims settled by this agreement are allegations only; there has been no determination of liability.
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Former Clinical Pharmacy Manager Sentenced to Serve 16 Months in Prison for $4.4 Million TennCare Fraud SchemeRead the Press Release
GREENEVILLE, Tenn. – On June 26, 2017, Amber Reilly, 33, of Jonesborough, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 16 months in federal prison for healthcare fraud, which resulted in at least a $4.4 million loss to TennCare. Upon her release from prison, she will be supervised by U.S. Probation for three years.
Reilly, a former clinical pharmacy manager, pleaded guilty in October 2016 to one count of healthcare fraud. In her plea agreement, she admitted that between October 2014 and April 2016 she falsified prior authorizations, medical lab reports, and drug test results for at least 51 Hepatitis C patients who had prescriptions for expensive drugs used to treat Hepatitis C. These patients had health insurance through TennCare, which does not pay for Hepatitis C prescriptions for patients who abuse illicit substances or who have limited or no scarring of the liver. The patients’ authentic medical lab reports and drug tests showed that they failed to meet TennCare eligibility requirements. However, Reilly replaced disqualifying information regarding levels of liver scarring and illicit substance abuse on the authentic records with qualifying information, and then submitted the altered records to TennCare. She also fabricated allergies on the prior authorization forms of some of these patients so they could receive the most expensive Hepatitis C drug, Harvoni®.
As a result of Reilly’s conduct, at least $4.4 million was paid by TennCare to purchase prescriptions for these 51 patients, which would not have been paid if true and accurate prior authorizations, drug test results, and medical lab reports pertaining to these patients had been submitted.
This investigation was conducted by the Tennessee Bureau of Investigation and Department of Health and Human Services – Office of the Inspector General. Assistant U.S. Attorney T.J. Harker represented the United States.
Rutherford County Man Sentenced to Twenty Years in Prison for Crack and Firearms OffensesRead the Press Release
CHATTANOOGA, Tenn. – On June 19, 2017, Allen Carney, 30, of Murfreesboro, Tennessee, was sentenced to serve 240 months in prison by the Honorable Harry S. Mattice, Jr., U.S. District Judge. Following a March 2017 jury trial, Carney was convicted of possession with intent to distribute crack cocaine, possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm.
Upon his release from prison, Carney will be supervised by the U.S. Probation Office for six years. His sentence was enhanced based on four prior drug trafficking convictions.
According to evidence at Carney’s trial, 5.65 grams of crack cocaine, digital scales, and a loaded Glock, Model 27, .40 caliber semi-automatic pistol were seized from the master bedroom of a residence where he was arrested at in March 2016. Carney admitted the crack cocaine and firearm were his. Two young children were present at the residence when he was arrested.
U.S. Attorney Nancy Stallard Harr said, “Carney’s sentence reflects the danger and risk of harm his conduct posed to society. Drug trafficking is an inherently dangerous activity and the combination of drugs and guns substantially increases the risk of physical harm to others.”
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division commented on the investigation, “Today we have removed a dangerous criminal from the streets. This crack dealer will no longer be able to deliver deadly doses of poison to the community. This investigation was a success because of the great working relationship that DEA has with its federal, state and local counterparts.”
The indictment and subsequent conviction of Carney was the result of an investigation conducted by the 17th Judicial Drug Task Force and Drug Enforcement Administration. Assistant U.S. Attorney Michael D. Porter represented the United States.
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Deputy Attorney General Recognizes AUSA from East TennesseeRead the Press Release
WASHINGTON – Debra Breneman, Chief of the Appellate Section of the U.S. Attorney’s Office in the Eastern District of Tennessee, was one of 179 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 33rd Director’s Awards Ceremony today in Washington D.C.
The Eastern District of Tennessee was one of 35 districts represented at the ceremony, which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Deputy Attorney General Rosenstein told the awardees, “These 179 award recipients embody the best of the Department of Justice.… Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens — whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded. ”
Breneman is a graduate of Harvard Law School and has served in the Appellate Section of the U.S. Attorney’s Office for the Eastern District of Tennessee for eight years, three as Appellate Chief. Prior to that, she served four years as an appellate attorney in the Philadelphia District Attorney’s Office.
During her tenure with the U.S. Attorney’s Office, she has consistently served at a level that can only be described as extraordinary. As evidence of her work ethic, in fiscal year (FY) 2016 Appellate Chief Breneman worked over 1000 hours of uncompensated overtime and was exceptionally productive. Under her leadership, in FYs 2014, 2015, and 2016, the appellate section handled 146, 118, and 101 defendant appeals respectively. During these years, Breneman either wrote or edited practically every brief filed by the district. Despite this volume, she unfailingly maintained the highest standards.
“The extraordinary volume and quality of the work done by Appellate Chief Brenneman has earned her the great and uniform admiration of her fellow Assistant U.S. Attorneys. Last year, she was recognized by her coworkers as AUSA of the Year, an award that has only been given once in the district,” said U.S. Attorney Nancy Stallard Harr.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
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Chattanooga Man Sentenced for Solicitation to Burn Down A Mosque in Islamberg, New YorkRead the Press Release
CHATTANOOGA, Tenn. – On Wednesday, June 14, 2017, Robert Doggart, 65, of Signal Mountain, Tennessee, was sentenced by the Honorable Curtis L. Collier, Senior U.S. District Judge, to serve 235 months in prison for soliciting another person to violate federal civil rights laws by burning down a mosque in Islamberg, a hamlet outside Hancock, New York. Upon his release from prison, he will be supervised by the U.S. Probation Office for three years. Doggart was also found guilty of soliciting another person to commit arson.
Evidence presented at trial established that, in February 2015, the FBI learned through a confidential source that Doggart was recruiting people online to carry out an armed attack on Islamberg, a community that is home to a large Muslim population. Doggart arranged to meet with the confidential source in Nashville, where he discussed details of his plan to burn down a mosque, a school, and a cafeteria in Islamberg. He showed the confidential source maps of Islamberg, laid out the number of guns and types of ammunition they would need to destroy the community, and discussed different ways to burn down a mosque and other buildings. Through a court order, the FBI also began intercepting Doggart’s phone calls, during which he solicited and recruited people to join him in his attack on Islamberg.
Doggart specifically targeted the mosque because it was a religious building and he discussed burning it down or blowing it up with a Molotov cocktail or other explosive device. At trial, the jury heard recorded conversations in which Doggart repeatedly discussed killing people, including one in which Doggart said, “I don’t want to have to kill children, but there’s always collateral damage.”
“People of all faiths have the fundamental right to worship freely, and this administration will not tolerate attempts to violate that right,” said Attorney General Jeff Sessions. “The defendant solicited people to commit acts of violence in an effort to terrorize a community simply because of its Islamic faith. The Justice Department will continue to aggressively investigate and prosecute attacks against our faith-based communities.”
“The people of the Eastern District of Tennessee will not tolerate the type of threats and actions perpetrated by Doggart. The United States Attorney’s Office will aggressively prosecute those who seek to disrupt the safety of our community and others,” said U.S. Attorney Nancy Stallard Harr.
Special Agent in Charge Renae McDermott of the Knoxville Division of the Federal Bureau of Investigation states that, “We are committed to investigating violations of federal civil rights statues. We prioritize civil rights investigations which are designed to protect all persons.”
The case was investigated by the FBI, Knoxville Division. Trial Attorney Saeed A. Mody of the Civil Rights Division, Assistant U.S. Attorney Perry H. Piper of the Eastern District of Tennessee, and Trial Attorney Clement McGovern of the National Security Division’s Counterterrorism Section, represented the United States at trial.
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Jason Anthony Knight Sentenced to Serve Seven Years in Prison for Illegally Possessing a FirearmRead the Press Release
GREENEVILLE, Tenn. – On May 25, 2017, Jason Anthony Knight, 45, of Telford, Tennessee, was sentenced by the Honorable Leon Jordan, U.S. District Court Judge, to serve 84 months in federal prison. Knight pleaded guilty on June 21, 2016, to being a felon in possession of a firearm.
In his guilty plea on file with U.S. District Court, Knight admitted that in May 2016, he inspected two firearms and purchased one of them, while possessing and controlling both. Authorities later found and seized a Smith & Wesson .40 caliber semi-automatic firearm in the ceiling above Knight’s bed. Knight also admitted that he was a convicted felon and prohibited from possessing a firearm.
The Washington County Sheriff’s Office conducted the investigation leading to the charges, guilty plea and today’s sentence. Assistant U.S. Attorney Helen C.T. Smith represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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Thomas Allan Scarbrough Sentenced to 70 Months in Prison for Possessing Child PornographyRead the Press Release
KNOXVILLE, Tenn. - On May 17, 2017, Thomas Allan Scarbrough, 46, of Rockwood, Tennessee, was sentenced by the Honorable Leon Jordan, Senior U.S. District Judge, to serve 70 months in prison for possession of child pornography. Upon his release from prison, Scarbrough will serve 10 years under the supervision of the U.S. Probation Office. Additionally, pursuant to the federal Sex Offender Registration and Notification Act, he will be required to register as a sex offender anywhere he resides, is employed, or is a student.
Following an undercover investigation, a federal search warrant was obtained to seize computers in Scarbrough’s possession. A forensic examination of his computer revealed that he possessed a large cache of digital child pornography that he had downloaded from the Internet. In addition to his prison sentence and supervised release outlined above, Judge Jordan ordered Scarbrough to forfeit his computer and pay $4,500.00 to the victims whose images were found on the computer.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The Federal Bureau of Investigation, Knoxville Police Department’s Internet Crimes Against Children Task Force and U.S. Postal Inspection Service conducted this investigation. Assistant U.S. Attorney Matthew T. Morris represented the United States.
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Luis Javier Martinez-Melo Sentenced to 57 Months in Prison for Participating in Internet Auto Sales ScamRead the Press Release
KNOXVILLE, Tenn. - On May 15, 2017, Luis Javier Martinez-Melo, 26, of Atlanta, Georgia, was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge, to serve 57 months in federal prison for his role in a scheme to defraud victims involving an online automobile sales scam. Additionally, the court ordered him to pay restitution to the 66 identified victims of the scheme whose losses exceeded $674,000.
At the conclusion of his prison sentence, Martinez-Melo will be presented to U.S. Immigration and Customs Enforcement for deportation proceedings.
Martinez-Melo opened bank accounts in various bogus business names that were used to receive funds from victims who believed that they were buying cars advertised for sale on various Internet websites. After the victims wired funds into these bank accounts, Martinez-Melo and others withdrew and wire transferred the funds to members of the scheme operating from overseas.
Martinez-Melo pleaded guilty in January 2017 to federal wire fraud and aggravated identity theft charges stemming from his role in the scheme.
The Federal Bureau of Investigation conducted this investigation. Matthew T. Morris, Assistant U.S. Attorney, represented the United States.
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Armed Career Criminal Sentenced to Twenty Years in Federal PrisonRead the Press Release
CHATTANOOGA, Tenn. – On May 3, 2017, Angelo Goldston, 37, of Cleveland, Tennessee, was sentenced to serve 240 months in prison by the Honorable Harry S. Mattice, Jr., U.S. District Judge. Upon his release from prison, Goldston will be under the supervision of the U.S. Probation Office for five years.
After a January 2017 jury trial, Goldston was convicted of unlawfully possessing a firearm. His sentence was enhanced based on his seven prior convictions for serious drug offenses and because the firearm he possessed was a sawed-off shotgun. He was sentenced under the Armed Career Criminal Act (ACCA).
According to eyewitnesses who testified at his trial, Goldston displayed the sawed-off shotgun during a heated exchange with an unarmed man as children stood by and watched. The altercation took place in the middle of the day in a residential neighborhood in Cleveland.
U.S. Attorney Nancy Stallard Harr said, “Goldston’s sentence reflects the danger and risk of harm his conduct posed to society. The Sixth Circuit Court of Appeals previously recognized that sawed-off shotguns, by their very nature, are extremely dangerous and serve virtually no purpose other than furtherance of illegal activity. That danger is heightened when career criminals, such as Goldston, possess these types of weapons.”
"The sentencing illustrates the positive effect of the resources provided by ATF and our law enforcement partners to combat the violent crime. ATF’s priority is to provide the safe environment for the public," stated Steven Gerido, Special Agent in Charge, Alcohol, Tobacco, Firearms and Explosives.
The indictment and subsequent conviction of Goldston was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, 10th Judicial District Drug & Violent Crime Task Force, and Cleveland Police Department. Assistant U.S. Attorneys Michael D. Porter and Kyle J. Wilson represented the United States at trial.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
Seventeen Indicted on Federal Methamphetamine Conspiracy and Firearms ChargesRead the Press Release
KNOXVILLE, Tenn. – On April 4, 2017, a federal grand jury in Knoxville returned a seven-count indictment against the following individuals for their roles in the distribution of methamphetamine:
Keith L. Bird, a.k.a. “Dirty Bird,” 37, of Friendsville, Tennessee;
Daniel Hixon, 32, of Chattanooga, Tennessee;
James Haynes, a.k.a.“Haun,” 28, of Norcross, Georgia;
Christopher Mitchell, a.k.a. “Banjo,” 30, of Maryville, Tennessee;
Michael Smith, 32, of Norcross, Georgia;
Steve Bartholomew, a.k.a. “Trigger,” 50, of Louisville, Tennessee;
Samuel Higgins, a.k.a. “Sambo,” 25, of Maryville, Tennessee;
Jeremiah Higgins, 24, of Maryville, Tennessee;
Dennis Clark, a.k.a. “Big Brother,” 30, of Philadelphia, Tennessee;
Ashley Morris-Casebolt, 31, of Lenoir City, Tennessee;
Chadwick Condry, 44, of Maryville, Tennessee;
Thomas Freeman, 43, of Greenback, Tennessee;
William Norman, 42, of Rocky Top, Tennessee;
George Nicholas Bailey, 38, of Maryville, Tennessee;
John Shane Bailey, 44, of Knoxville, Tennessee;
Burt Cable, 46, of Maryville, Tennessee; and
Shannon Kirby, 49, of Friendsville, Tennessee
Trial has been set for August 1, 2017, before the Honorable Pamela Reeves, U.S. District Court Judge.
The indictment, on file with the U.S. District Court, alleges that each of these individuals was involved in a conspiracy to distribute 50 grams or more of methamphetamine in the Eastern District of Tennessee and elsewhere. Bird, Hixon, Haynes, and Smith were also each charged with one count of possession of a firearm in furtherance of a drug trafficking crime. Additionally, Bird was charged with two counts of distributing five grams or more of methamphetamine.
If convicted of the methamphetamine conspiracy charge, each faces a minimum mandatory term of imprisonment of at least 10 years and up to life, at least five years of supervised release, a fine of up to $10,000,000, any applicable forfeiture, and a $100 special assessment. The punishment for the firearm charges returned against Bird, Hixon, Haynes, and Smith is a minimum mandatory term of at least five years and up to life in prison, which must be served consecutively to any other prison term imposed, up to five years supervised release, a fine of up to $250,000, and a $100 special assessment. If convicted of the two methamphetamine distribution counts, Bird also faces a minimum mandatory sentence of at least five and up to 40 years in prison, at least four years of supervised release, a fine of up to $5,000,000, any applicable forfeiture, and a $100 special assessment.
This indictment is the result of an investigation by the Tennessee Bureau of Investigation, Fifth Judicial Drug Task Force, Blount County Sheriff’s Office, Ninth Judicial Drug Task Force, Loudon County Sheriff’s Office, Knox County Sheriff’s Office, and Federal Bureau of Investigation. Assistant U.S. Attorney Kelly A. Norris will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Limestone Couple Sentenced for Federal Tax EvasionRead the Press Release
GREENEVILLE, Tenn. –On May 1, 2017, David Lee Byrd, 58, and his wife, Paula Ruth Hall Byrd, 58, both of Limestone, Tennessee, were sentenced by the Honorable J. Ronnie Greer, U.S. District Judge. David Byrd was ordered to serve 10 months in federal prison followed by three years of supervised release. Paula Byrd was ordered to serve four years on probation. Both were ordered to pay restitution of $134,359 to the Internal Revenue Service (IRS), fines of $5,000 each, and $100 special assessments.
Both David and Paula Byrd pleaded guilty in December 2016 to an information charging them with income tax evasion for the year 2008. Information on file with the U.S. District Court shows that David and Paula Byrd were self-employed computer software consultants who worked in the airline industry, creating and updating computer programs. During 2006 through 2008, they lived in Frankfurt, Germany, and contracted with Practical Business Services LTD, a British entity, to provide services to Lufthansa Airlines. Paula Byrd directed Practical Business Services to send her compensation, totaling $428,185, to bank accounts in Switzerland titled in the name of David Byrd. David Byrd directed Practical Business Services to send his compensation, totaling $508,313, to an American bank account titled in the name of David Byrd. They completely omitted Paula Byrd’s income and failed to disclose David Byrd’s ownership of foreign bank accounts on their 2006, 2007, and 2008 federal income tax returns. The Byrds’ evasion was revealed as a result of treaties negotiated by the United States with Switzerland, which had previously declined to provide information to American law enforcement authorities.
U.S. Attorney Nancy Stallard Harr and IRS Special Agent in Charge Tracey D. Montano noted the importance of the treaties with Switzerland and other countries regarding the use of foreign bank accounts to thwart federal income tax collection and pledged to use all lawful means to identify and prosecute those who evade taxes by concealing income in offshore bank accounts.
This investigation was conducted by IRS – Criminal Investigation. Assistant U.S. Attorney Helen Smith represented the United States.
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Greeneville Resident Sentenced to Twenty Years in Federal Prison for Methamphetamine ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On April 27, 2017, Jeffery Brian Wills, a.k.a. “Fro”, 27, of Greeneville, Tennessee, was sentenced by the Honorable R. Leon Jordan, Senior U.S. District Court Judge, to serve 240 months in federal prison following a conviction for his role in a conspiracy to distribute methamphetamine in east Tennessee.
According to his plea agreement on file with U.S. District Court, Wills admitted that he was responsible for at least 1.5 kilograms but less than 4.5 kilograms of actual methamphetamine. He sold varying quantities of methamphetamine in June and December 2015 to an individual cooperating on behalf of law enforcement. In October 2015, law enforcement officers searched a motel room in Morristown, Tennessee, occupied by Wills and a co-conspirator, and found approximately 12 grams of methamphetamine, approximately $4,000 and miscellaneous narcotic pills. A bag containing a portion of the methamphetamine and Wills’ keys had “CHM” lettering on it. “CHM” stands for the Chicken Head Mafia. Wills and co-defendants Rick Munsey, 48, of Del Rio, Tennessee, and Joel Hosea Beasley, 37, of Mooresburg, Tennessee, were part of the “CHM” crew.
Wills further admitted that another individual began purchasing one ounce of methamphetamine per week from him in March 2015. By the end of May 2015, this individual was purchasing one to two ounces of methamphetamine from Wills per day.
In April 2016, co-defendant Christopher Williams, 47, of Hamblen County, Tennessee, was arrested in Knox County, Tennessee, carrying a suitcase with over 700 grams of methamphetamine inside. Wills and Munsey, among others, were awaiting Williams’ arrival to obtain their share of the methamphetamine obtained from Georgia when Williams was arrested making a delivery to another customer.
Law enforcement agencies participating in the investigation included the Federal Bureau of Investigation, Hamblen County Sheriff’s Office, Morristown Police Department and Third and Fourth District Judicial Drug Task Forces. Assistant U.S. Attorney Wayne Taylor represented the United States.
This case was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Federal Jury Convicts Lamont Fortune in Crack Cocaine ConspiracyRead the Press Release
GREENEVILLE, Tenn. – Following a two-day trial in U.S. District Court, on April 20, 2017, Lamont Darnell Fortune, 36, of Johnson City, Tennessee, was convicted of conspiracy to distribute, and possess with the intent to distribute, 280 grams or more of crack cocaine.
Sentencing is set for 10:00 a.m., August 8, 2017, before the Honorable Judge Leon Jordan, Senior U.S. District Court Judge. Fortune faces a mandatory minimum of 20 years in prison up to life.
From January 2011 to November 2015, Fortune conspired with others to distribute, and possess with the intent to distribute, 280 grams or more of crack cocaine. During this period, he made regular trips from Johnson City to Winston-Salem, North Carolina, to obtain multi-ounce quantities of crack cocaine to supply his coconspirators, who then sold those drugs in Johnson City and Bristol, Tennessee. Fortune supplied crack cocaine to an individual working on behalf of law enforcement on two occasions. In May 2015, he led Virginia law enforcement on a high-speed chase on I-77, at speeds of over 120 mph, as he returned from one of those drug supply trips. Three of Fortune’s coconspirators pleaded guilty prior to his trial and have not yet been sentenced.
This long-term investigation was the product of a partnership between the Johnson City Police Department and Federal Bureau of Investigation. Former Assistant U.S. Attorney Nick Regalia participated in the prosecution and Assistant U.S. Attorneys David Gunn and Christian Lampe represented the United States at trial.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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