Eastern District of Tennessee
Press releases recorded for this federal judicial district.
Kevin Scott Thibault Pleads Guilty to Forgery of Signature of A U.S. District Court JudgeRead the Press Release
KNOXVILLE, Tenn. – On Aug. 6, Kevin Scott Thibault, 49, Maryville, Tenn., pleaded guilty to a grand jury indictment charging him with two counts of forgery of the signatures of a district court judge and an officer of the U.S. District Court.
Sentencing is set for 1:30 p.m., on Dec. 1, 2014, in U.S. District Court, Knoxville, before the Honorable Pamela L. Reeves, U.S. District Court Judge. Thibault faces up to five years in prison, a fine of up to $250,000, up to three year of supervised release and a $100 special assessment.
Additionally, Thibault has agreed to plead guilty to a one-count information charging him with use of the mail for the purpose of executing a scheme to defraud. This offense carries a punishment of up to 20 years in prison, a fine of up to $250,000, three years of supervised release, and a $100 special assessment.
The plea agreement on file with the U.S. District Court in Knoxville describes in detail Thibault’s forgery scheme, which began when he falsely represented himself as an attorney and agreed to assist two individuals with the adoption of foster children in their custody. In May 2012, Thibault presented the individuals with fake adoption papers that he claimed had been filed in U.S. District Court, signed by U.S. District Judge Thomas A. Varlan, and certified by U.S. District Court Officer Kathy Keeton. An investigation revealed that neither Judge Varlan nor Keeton signed the documents and the signatures were forged.
In October 2012, Thibault demanded that the individuals sign a power of attorney permitting him to represent their interest in the alleged adoption proceedings. However, the power of attorney actually allowed him to conduct certain financial transactions on their behalf. According to the plea agreement, through the course of this scheme, Thibault obtained at least $400,000 from the victims to further his scheme to defraud and obtain money.
These charges are the result of an investigation by the Blount County Sheriff’s Office and Federal Bureau of Investigation. Assistant U.S. Attorney Brooklyn Sawyers represented the United States.
Dusty Clevenger and Casey Pratt Each Sentenced to 72 Months in Prison for Trafficking Marijuana and Possession of A Firearm in Furtherance of Drug TraffickingRead the Press Release
GREENEVILLE, Tenn. – On Aug. 4, 2014, Dusty Clevenger, 27, of Dandridge, Tenn., and Casey Pratt, 30, of Whitesburg, Tenn., were each sentenced to serve 72 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon release from prison, each will be subject to supervised release under the supervision of the U.S. Probation Office for three years. There is no parole in the federal system.
Both Clevenger and Pratt pleaded guilty to possession of marijuana with the intent to distribute and possession of firearms in furtherance of drug trafficking. Possession of a firearm in furtherance of a drug trafficking offense carries a minimum mandatory 60 month sentence. Clevenger was arrested in May 2012 on an unrelated offense. Later that day, Pratt was observed removing approximately 20 pounds of marijuana from Clevenger’s residence, along with four pistols. Officers apprehended Pratt and seized the marijuana, a quantity of oxycodone pills, and over $4,000 in cash.
The Morristown, Tennessee Police Department was responsible for the investigation. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Six Arrested During Identity Theft InvestigationRead the Press Release
GREENEVILLE, Tenn. - Elias Reyes, Mario L. Lopez, Bobbie Arvizu, Jose Diaz Ortiz (a.k.a. Chepe), William Perez-Perez, and Jesus Orduna-Valencia, were all arrested in Morristown, Tenn., on charges involving the production of false documents which appeared to be issued by the United States.
On Aug. 4, 2014, these individuals had initial appearances before U.S. Magistrate Judge Dennis H. Inman, who scheduled preliminary hearings for Aug. 18, 2014.
Additionally, Perez-Perez and Orduna-Valencia were arrested for illegal reentry into the United States after a prior deportation. They are scheduled to appear in U.S. District Court at 9:30 a.m., Aug. 7, 2014.
In August 2014, Bureau of Immigrations and Customs Enforcement (ICE) officers executed federal search warrants at two businesses and one residence in Morristown, Tenn. The search warrants were part of an ongoing investigation into identity theft, employment fraud and other federal crimes in the Morristown area.
Details of the charges are outlined in the arrest warrant and supporting affidavit on file with U.S. District Court in Greeneville. The affidavit alleges that Reyes, Lopez, Arvizu, and Ortiz (a.k.a. Chepe) were involved in the production or transfer of false documents, including social security cards, driver’s licenses, immigration documents, and birth certificates. Ortiz ran a market and was selling false documents from the business. Arvizu worked at Q.S.I., a business in Morristown, and was arrested for selling identifiers of victims to be used to produce fraudulent documents for employment, or other fraudulent purposes.
The investigation and arrests were conducted by agents of the Tennessee Highway Patrol- Identity Crimes Unit, Morristown Police Department, Homeland Security Investigations, Enforcement and Removal Operations Unit of ICE, Tennessee Bureau of Investigation, and Internal Revenue Service. Assistant U.S. Attorney Robert Reeves represented the United States.
Members of the public are reminded that these are only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Mexican Citizen Sentenced to 70 Months in Federal Prison for Reentry After Prior DeportationRead the Press Release
GREENEVILLE, Tenn. – On Aug. 4, 2014, Jorge Gutierrez Ramirez, 39, a Mexican citizen, was sentenced to serve 70 months in federal prison by the Honorable J. Ronnie Greer, U.S. District Judge. Gutierrez pleaded guilty in May 2014, to a federal grand jury indictment charging him with illegal reentry into the United States after being deported.
Gutierrez was previously deported after a conviction for residential burglary in California. In September 2013, he was arrested by the Morristown Police Department and subsequently convicted of sexual battery in state court. In February 2014, he was released to federal custody to face an indictment for reentry after deportation returned by the federal grand jury. In May 2014, he pleaded guilty to the charge in U.S. District Court.
The indictment and subsequent conviction of Gutierrez was the result of an investigation conducted by Homeland Security Investigation and Morristown Police Department. Assistant U.S. Attorney Robert Reeves represented the United States.
Mexican Citizen Enters Plea in Greeneville to Reentry into the United States After Prior DeportationRead the Press Release
GREENEVILLE, Tenn. – On Aug. 4, 2014, Virgen Mendoza Perez, 36, a citizen of Mexico, pleaded guilty in U.S. District Court for the Eastern District of Tennessee, to illegal reentry into the United States after being deported. Sentencing has been set for Nov. 17, 2014, in U.S. District Court in Greeneville.
Mendoza faces a term of 20 years in prison, a $250,000 fine, and three years of supervised release.
Mendoza was previously deported from the United States in 2009, after a conviction in Florida for the felony offense of Child Abuse: Intentional Act.
In May 2014, a federal grand jury indicted Mendoza. Details of the charge are outlined in the plea agreement on file with the U.S. District Court, Greeneville.
The investigation was conducted by the Enforcement and Removal Operations unit of the Bureau of Immigration and Customs Enforcement and Morristown Police Department. Assistant U.S. Attorney Robert Reeves represented the United States.
Eighteen Individuals Indicted for Conspiracy to Manufacture MethamphetamineRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville returned two separate indictments on July 16, 2014. In one, 17 individuals were charged in a conspiracy to manufacture 50 grams or more of methamphetamine. Those indicted in that case include:
Timothy Chesser, 34, Harriman, Tenn.; Raymond Racey, 33, Rockwood, Tenn.; Eddie Powers, 40, Harriman, Tenn.; Christopher Ryan Jenkins, 27, Rockwood, Tenn.; Linda Barron, 38, Rockwood, Tenn.; Brie Chandler, 25, Harriman, Tenn.; Jack Chesser, 43, Harriman, Tenn.; Bobbie Jo Forrester, 20, Harriman, Tenn.; Regina Green, 35, Kingston, Tenn.; Jessica Jenkins, 25, Rockwood, Tenn.; Roy Jenkins, 27, Rockwood, Tenn.; Jeff McFalls, 34, Kingston, Tenn.; Amber Murphy, 21, Harriman, Tenn.; Wanda Phillips, 44, Oakdale, Tenn.; Rebecca Sandifer, 35, Harriman, Tenn.; James E. Roberts, 25, Harriman, Tenn.; and David Trentham, 38, Harriman, Tenn.
In addition, Timothy Chesser, Racey, Powers, and Christopher Ryan Jenkins were indicted for conspiring to distribute methamphetamine.
In a separate case, David Neal, 33, of Kingston, Tenn., was indicted for conspiracy to manufacture five grams or more of methamphetamine.
Fifteen of these individuals were arrested and appeared in court between July 29, 2014, and July 31, 2014, before U.S. Magistrate Judge H. Bruce Guyton and pleaded not guilty to the charges in the indictment.
The investigation has shown that the individuals involved were purchasing pseudoephedrine at local pharmacies and using that pseudoephedrine to manufacture methamphetamine at various locations in Roane County.
If convicted, all 17 charged in the first indictment face a minimum mandatory term of 10 years in prison and a maximum of life, a maximum fine of $10 million, and at least five years of supervised release. Neal, if convicted, will face a minimum mandatory prison term of five years and a maximum of 40 years, a $5 million fine, and at least four years of supervised release. All also face mandatory court assessments.
This indictment is the result of a multi-agency investigation including the Roane County Sheriff’s Office, Federal Bureau of Investigation, Harriman Police Department, Kingston Police Department, Rockwood Police Department, Tennessee Bureau of Investigation, 9th Judicial Drug Task Force, Knox County Sheriff’s Office, Blount County Sheriff’s Office, and Tennessee Methamphetamine and Pharmaceutical Task Force. Assistant U.S. Attorney Brooklyn Sawyers 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 their guilt has been proven beyond a reasonable doubt.
Loan Officer Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
KNOXVILLE, Tenn. – On July 29, 2014, Paulynn Wright, 42, of Knoxville, Tenn., pleaded guilty in U.S. District Court for the Eastern District of Tennessee at Knoxville, to conspiracy to commit wire fraud. Sentencing has been set for 2:00 p.m., on Dec. 3, 2014, before the Honorable Thomas A. Varlan, Chief U.S. District Judge.
Wright faces a potential term of up to 20 years in prison, along with the forfeiture of any proceeds of the offense and the obligation to pay restitution.
In a plea agreement on file with the U.S. District Court, Wright admitted to conspiring with co-defendants Joyce Allen, Kay Thomas and Dona Rector to obtain a mortgage loan by providing false information to a lender. This information consisted of an asset verification letter from Allen that falsely stated that Wright had an investment with Benchmark Capital.
The indictment against Wright was the result of an investigation by the Internal Revenue Service, U.S. Postal Inspection Service, and Federal Bureau of Investigation. Assistant United States Attorney Frank M. Dale, Jr. represents the United States.
Jonathan Thornton Sentenced to 121 Months for Distribution of Crack Cocaine and Possession of A Firearm by A Convicted FelonRead the Press Release
GREENEVILLE, Tenn. – On July 28, 2014, Jonathan Thornton, 32, of Dandridge, Tenn., was sentenced to serve 121 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison, Thornton will be subject to supervised release under the supervision of the U.S. Probation Office for three years. There is no parole in the federal system.
Thornton pleaded guilty in February 2014 to distributing a quantity of crack cocaine and to being a convicted felon in possession of a firearm. During an undercover investigation, Thornton, along with co-defendant Roger France, sold firearms which had been stolen earlier that day in a burglary in Cosby, Tenn. At the time that he sold the stolen firearms, Thornton was a convicted felon. On another occasion, he also traded a firearm for prescription drugs and distributed crack cocaine.
Law enforcement agencies participating in the joint investigation included the Fourth Judicial District Drug Task Force, Tennessee Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Cocke County Sheriff’s Department. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Carter County Mother Pleads Guilty to Performing and Photographing Sex Acts with Her DaughtersRead the Press Release
The Three Victims Were Between the Ages of Two and Eight
GREENEVILLE, Tenn. – On Monday, July 28, 2014, Crystal Renee Dawn Poore, 32, of Elizabethton, Tenn., pleaded guilty in U.S. District Court for the Eastern District of Tennessee at Greeneville, to three counts of production of child pornography. Sentencing has been set for 1:30 p.m., on Oct. 20, 2014.
Poore faces a minimum term of 15 years and not more than 30 years in prison on each count. Federal sentences are not subject to parole.
In July 2013 a three-count indictment, outlining these charges, was returned against Poore by a federal grand jury sitting in Greeneville, Tenn. A factual basis filed in U. S. District Court in Greeneville lays out the details of the abuse which ended with the rescue of the girls from the home by the Knoxville Police Department Internet Crimes again Children (ICAC) Task Force with assistance from Carter County Sheriff’s Department and Tennessee Department of Children Services.
U.S. Attorney Bill Killian stated “While we are saddened about the abuse these children endured, we are very grateful that the dedication of the Knoxville Police Department Internet Crimes Against Children Task Force resulted in the crimes being detected and the children quickly rescued.”
This indictment was the result of an investigation by the Knoxville Police Department ICAC. Robert M. Reeves, Assistant U.S. Attorney 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 (CEOS), 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.
Forty-Two Individuals Arrested for Conspiracy to Manufacture MethamphetamineRead the Press Release
KNOXVILLE, Tenn.-- A federal grand jury in Knoxville returned five separate indictments on July 16, 2014, against 59 individuals involved in a conspiracy to manufacture methamphetamine. Those indicted include:
Randy N. Smith, 48, Caryville, Tenn.; Jeffrey S. Meadows, 34, LaFollette, Tenn.; Rebecca J. Burress, 31, Lake City, Tenn.; Robert W. Brumitt, 40, LaFollette, Tenn.; Carla D. Boshears, 21, LaFollette, Tenn.; Jason R. McKamey, 31, Lake City, Tenn.; Jill L. Higdon, 34, Lake City, Tenn.; Michael D. Leach, 44, Jacksboro, Tenn.; Sherri A. Elliot, 52, Caryville, Tenn.; Danny R. Phillips, 57, Caryville, Tenn.; Roger L. Moser, 34, Lake City, Tenn.; Joseph D. Harmon, 30, LaFollette, Tenn.; James Tyler Tomblin, 20, LaFollette, Tenn.; Michael J. Gill, 39, Lake City, Tenn.; Tiffany D. Bean, 24, Clinton, Tenn.; Samuel D. Miracle, 31, Briceville, Tenn.; Dustin A. Martin, 32, Clinton, Tenn.; Jonita L. Moore, 30, Briceville, Tenn.; Joseph L. O’Dell, 35, Jacksboro, Tenn.; David W. O’Dell, 36, Caryville, Tenn.; Kristen N. Vanover, 26, Briceville, Tenn.; James R. Golden, Jr., 37, Briceville, Tenn.; Starla Vella-Rae Boshears, 42, LaFollette, Tenn.; Amber B. Boshears, 24, LaFollette, Tenn.; Gina A. Austin, 36, Clinton, Tenn.; Danny R. Elliot, 30, Lake City, Tenn.; Dennis W. Leinart, 40, Briceville, Tenn.; Robert N. Hicks, 44, Oak Ridge, Tenn.; Amy M. Lowe, 35, LaFollette, Tenn.; Angela N. Bond, 22, Clinton, Tenn.; Virgie D. Hall, 30, Caryville, Tenn.; Katherine G. Wright, 39, Jackboro, Tenn.; Kassondra D. Lumley, 42, Jacksboro, Tenn.; Scott K. Duncan, 45, Clinton, Tenn.; Mary M. Coker, 46, Oak Ridge, Tenn.; Marsha L. Hill, 40, Jacksboro, Tenn.; Sheila D. Rice, 41, Jackboro, Tenn.; Wanda A. Hurst, 41, LaFollette, Tenn.; Rhonda D. Bailey, 28, Andersonville, Tenn.; Stewart H. Ridenour, 34, Andersonville, Tenn.; and, Penny L. Lane, 44, LaFollette, Tenn.
In addition, Smith, Meadows, Burress, Brumitt, Carla Boshears, McKamey, Higdon, Leach, Sherri Elliot, Phillips, Moser, Joseph Harmon, Bean, Joseph O’Dell, David O’Dell, Golden, Jr., Starla Boshears, Danny Elliot, Leinart, Lowe, and Bailey, were indicted for conspiring to distribute methamphetamine.
All of these individuals appeared in court between July 21, 2014, and July 24, 2014, before U.S. Magistrate Judge C. Clifford Shirley and pleaded not guilty to the charges in the indictment.
The investigation has shown that individuals involved were purchasing pseudoephedrine at local pharmacies and using that pseudoephedrine to manufacture methamphetamine at various locations in Anderson and Campbell counties.
If convicted, all face a minimum and mandatory term of 10 years in prison and a maximum term of life, a maximum fine of $10,000,000.00, and a term of supervised release of at least five years. All also face mandatory court assessments.
This indictment is the result of a multi-agency investigation including Anderson County Sheriff’s Office, Campbell County Sheriff’s Office, LaFollette Police Department, Lake City Police Department, Oak Ridge Police Department, 7th Judicial Drug Task Force, 8th Judicial Drug Task Force, TBI, 7th Judicial District Attorney General; 8th Judicial District Attorney General, U.S. Marshals Service, Tennessee Methamphetamine and Pharmaceutical Task Force, Tennessee Alcoholic Beverage Commission, and Drug Enforcement Administration. Assistant U.S. Attorney Caryn L. Hebets 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 their guilt has been proven beyond a reasonable doubt.
Newport Police Detective Captain Arrested for Distributing Controlled Substances and Possession of Firearm in Furtherance of Drug TraffickingRead the Press Release
GREENEVILLE, Tenn. -- James Finley Holt, 59, of Cosby, Tenn., a detective captain with the Newport Police Department, was arrested on July 23, 2014, in Newport by agents of the Tennessee Bureau of Investigation (TBI) and FBI. Holt is charged with illegal distribution of drugs and the possession of a firearm in furtherance of drug trafficking.
An initial appearance is scheduled for 10:00 a.m., Thursday, July 24, 2014, in U.S. District Court in Greeneville, before U.S. Magistrate Judge Dennis Inman.
Details of these charges are outlined in the criminal complaint and supporting affidavit on file as public records in the U.S. District Court for the Eastern District of Tennessee at Greeneville.
In summary, the affidavit alleges that Holt was selling drugs (hydrocodone and Xanax) or exchanging drugs for what had been represented to him as stolen property. On occasions he was distributing drugs from his official Newport Police Department vehicle. On one occasion, he told an individual working on behalf of law enforcement that he was going to pick up the drugs. Agents of the TBI followed him directly to the Newport Police Department and straight back to the location where Holt delivered the drugs.
Members of the public are reminded that these are only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Chattanooga Man Sentenced to Serve 150 Months for Crack Cocaine Conspiracy Spanning from Chattanooga to Johnson CityRead the Press Release
GREENEVILLE, Tenn. – On July 21, 2014, Garry Lee Brown, 25, of Chattanooga, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 150 months in federal prison, for his conviction of conspiracy to distribute crack cocaine.
Beginning in 2011, law enforcement began investigating a large-scale crack cocaine conspiracy originating out of Chattanooga. As part of the conspiracy, they discovered that numerous individuals, including Brown, were trafficking multi-ounce quantities of crack cocaine to Johnson City for resale. Private vehicles, taxi cabs, and public transportation were commonly used to transport the drugs. Many of the co-conspirators, including Brown, had ties to street gangs based in Chattanooga, including the Rollin’ 60’s Crips and Woodlawn Crips. Upon arrival in Johnson City, Brown and others would distribute their drugs, return to Chattanooga with their drug sale proceeds, purchase additional drugs, and repeat the cycle.
As part of the investigation, law enforcement agents conducted a series of controlled drug transactions with Brown and other co-conspirators. On three separate occasions, Brown sold crack cocaine to confidential informants acting under the supervision of agents and officers. In total, the conspiracy involved kilogram quantities of crack cocaine. Three of Brown’s co-conspirators remain to be sentenced in Greeneville. Numerous others are being prosecuted in Chattanooga.
This long term investigation was the product of a partnership between the Johnson City, Tennessee Police Department; Chattanooga, Tennessee Police Department; Federal Bureau of Investigation; and Drug Enforcement Administration. Special Assistant U.S. Attorney Nick Regalia 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.
This case was also 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.
Piney Flats Man Sentenced to Serve 14 Months in Prison for Counterfeit Postage SchemeRead the Press Release
GREENEVILLE, Tenn. – On July 21, 2014, Jason Matthew Smalling, 34, of Piney Flats, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 14 months in federal prison.
Upon his release from prison, Smalling was ordered to serve three years of supervised release. He was also ordered to pay $330,000 in restitution to the U.S. Postal Service and pay a fine of $5,000.
Smalling pleaded guilty in October 2013 to an information charging him with devising a scheme to defraud the U.S. Postal Service through the creation of counterfeit postage mailing labels. Smalling operated a business from his residence in Piney Flats, Tenn., called Value Decals. Value Decals created and sold vinyl decals, some being generic graphics and images and others being unlicensed reproductions of trademarked logos of professional sports teams including Major League Baseball, National Football League, National Basketball League, and National Hockey League teams. Value Decals obtained orders for vinyl decals through its website, valuedecals.com, as well as Amazon.com. In addition to paying for the decals, customers were also charged for the costs of shipping the orders through the U.S. Mail. The orders were shipped to the customers by U.S. Postal Service Priority Mail.
Beginning in approximately August 2011, Smalling created counterfeit postage labeling for parcels being mailed by Value Decals. Using computer software, he reproduced information-based indicia from postage obtained through Stamps.com, manipulating the addressee information but using the same bar-coded information from the original postage. This allowed him to mail the packages without paying for postage.
In addition to using the counterfeit postage to mail the parcels to Value Decal’s customers, Smalling continued to collect money from his customers for the costs of mailing as well as reproducing unlicensed trademarked team logos. As a result of the scheme, he defrauded both the U.S. Postal Service for payments of postage and customers of Value Decals for payments for postage.
The case was investigated by the U.S. Postal Inspection Service. Assistant U.S. Attorney Neil Smith represented the United States.
Lacey Weld Sentenced to More Than 12 Years in Prison for Conspiracy to Manufacture MethamphetamineRead the Press Release
Manufacturing and Smoking Methamphetamine while Pregnant Results in Enhanced Sentence
KNOXVILLE, Tenn. - Lacey Weld, 27, of Dandridge, Tenn., was sentenced today to serve 151 months in prison followed by five years of supervised release by the Honorable Thomas Varlan, Chief U.S. District Judge. The sentence was the result of a guilty plea by Weld in November 2013 to a federal grand jury indictment charging her with conspiracy to manufacture methamphetamine (meth).
This case is unique because Weld used and manufactured meth while in her ninth month of pregnancy. Her baby was born severely drug-addicted and suffered from withdrawals for almost six weeks. Department of Children’s Services Case Manager Lynnie Vaughn testified that in the approximately 50 cases she has investigated involving drug-addicted babies, this case was by far the worst, with this baby suffering extreme harm.
Judge Varlan determined that the enhancement for creating a substantial risk of harm to a minor, which resulted in a six-offense level increase to Weld’s Guidelines range, was justified due to her using and manufacturing meth while pregnant. Video evidence from the investigation showed that Weld was in a meth lab for approximately 40 minutes, where she cooked and used meth. Tennessee Bureau of Investigation Special Agent Matt Thompson testified about the extremely hazardous conditions, including the toxic fumes and explosive environment, surrounding that meth lab.
“This nation has seen a tragic rise in the number of babies born addicted to drugs. Through this prosecution, the U.S. Attorney’s Office sends a message that, should a child, born or unborn, be exposed to a substantial risk of harm through the manufacture of methamphetamine, we will pursue any available enhancements at sentencing,” said U.S. Attorney William C. Killian.
The indictment and subsequent conviction of Weld was the result of an investigation conducted by Tennessee Bureau of Investigation, Fourth Judicial Drug Task Force, Dandridge Police Department, Jefferson County Sheriff’s Department, and Sevier County Sherriff’s Department. The United States was represented by Assistant U.S. Attorney Kelly Norris.
Pilot Flying J Enters into Criminal Enforcement AgreementRead the Press Release
Requires Full Restitution to Fraud Victims, Payment of $92 Million Monetary Penalty,and Complete Cooperation with Ongoing Federal Investigation
KNOXVILLE, Tenn. – Pilot Travel Centers LLC, d/b/a Pilot Flying J (Pilot), has entered into a Criminal Enforcement Agreement with the United States for the purpose of resolving the company’s criminal liability for its employees’ fraudulent conduct in deceptively withholding diesel fuel price discounts from hundreds of customers.
As stated in the attached agreement, Pilot has accepted legal responsibility for the criminal conduct of its employees, which caused more than $56 million in loss to its customers, and agreed to pay full restitution to every victim of the fraud. Pilot further acknowledged the gravity of its employees’ criminal wrongdoing by agreeing to pay the United States a $92 million monetary penalty – an amount within the fine range recommended by the U.S. Sentencing Guidelines. The agreement also expressly states that it provides no protection from prosecution to any individual, and moreover, imposes a continuing obligation on Pilot to provide complete cooperation with the ongoing federal investigation of current and former Pilot employees relating to fraudulent conduct involving the sale of diesel fuel. Pilot must also periodically report to the United States what it has done to ensure that a system of internal accounting controls and other compliance procedures have been established to prevent fraudulent conduct from occurring again in the sale of diesel fuel. In the event Pilot materially breaches its obligations under the agreement, Pilot has agreed that the United States may file the criminal information, attached to the agreement, and will not contest the allegations in that charging document.
“The terms of this agreement, including the significant monetary penalty and the very serious consequences if Pilot fails to comply, demonstrate quite clearly that no corporation, no matter how big, influential, or wealthy, is above the law,” said U.S. Attorney Bill Killian. “In addition, the company’s agreement to fully cooperate with the United States, including its obligation to identify its employees’ criminal conduct, will assist the ongoing federal investigation. The agreement ensures that Pilot’s extensive remediation efforts will continue until all trucking company victims have received full restitution and until Pilot has demonstrated to the United States that it has implemented sufficient internal controls to prevent this kind of fraudulent conduct from ever occurring again,” continued Killian.
Following a lengthy joint-investigation by the FBI and the IRS-Criminal Investigation into allegations of fraudulent conduct at Pilot, on April 15, 2013, search warrants were executed at multiple locations, including Pilot’s headquarters in Knoxville. Since that time, 10 Pilot employees, including those with supervisory responsibilities, agreed to cooperate with the ongoing federal investigation and entered guilty pleas to mail and wire fraud charges arising from their involvement in the fraudulent reduction of diesel fuel price discounts owed to Pilot customers.
In the agreement, Pilot confirmed that fraudulent conduct involving diesel fuel price discounts was prevalent within its Direct Sales group and carried out with the knowledge and participation of employees responsible for the operation and oversight of Direct Sales. Pilot further confirmed that supervisory employees encouraged participation in discount fraud for the company’s benefit. For example, during a November 19 and 20, 2012, annual sales training meeting at Pilot’s headquarters in Knoxville, a Pilot supervisor encouraged and taught Direct Sales employees how to deceptively reduce the rebates paid to some customers for the purpose of making targeted accounts more profitable for the company.
Pilot also confirmed that the discount fraud was executed generally in one of two ways: either by fraudulently reducing the amount of monthly rebate amounts to targeted customers or by deceptively reducing the off-invoice discounts of targeted customers. Pilot acknowledged that its employees emailed spreadsheets among each other that documented their fraudulent reductions, and that in some cases, its employees fabricated “back up” documentation sent to customers to justify fraudulently reduced rebate or discount amounts.
Additionally, Pilot confirmed that in February 2013 certain Pilot employees involved with Direct Sales expressed an intent to expand the scheme to defraud by having Direct Sales personnel identify and target Pilot’s off-invoice customers that were considered to be too unsophisticated to carefully monitor diesel pricing data in conjunction with their periodically received fuel invoices. As set forth in the agreement, certain Pilot employees involved with the operation and oversight of Direct Sales referred to this new aspect of the fraud as “cost plus B plan” – named after having two tiers of cost pricing for different types of customers: tier “A” and tier “B.” Pilot further acknowledged that certain employees involved with the operation and oversight of Direct Sales planned not to inform the targeted unsophisticated customers of their placement in the higher-priced tier, and these employees occasionally referred to these targeted customers as “Customer Bs.”
The FBI’s and IRS-Criminal Investigation’s joint investigation is ongoing. Assistant U.S. Attorneys F. M. (Trey) Hamilton III and David P. Lewen, Jr. are representing the United States.
(Download Agreement )
Tamra Vance Robinson Sentenced to 33 Months in Prison for Credit Union EmbezzlementRead the Press Release
GREENEVILLE, Tenn. – On July 9, 2014, Tamra Vance Robinson, 41, of Kingsport, was sentenced to serve 33 months in federal prison by the Honorable J. Ronnie Greer, U.S. District Judge. Robinson pleaded guilty in March 2014 to a federal grand jury indictment charging her with credit union embezzlement. Upon her release from prison, Robinson will serve three years of supervised release. She was also ordered to pay $420,000 in restitution and a $100 special assessment.
Materials placed in the public record established that Robinson worked at the credit union’s branch on Stone Drive in Kingsport, Tenn., from 1998 until her theft was discovered in September 2011. She was the vault teller, drive-through window teller, and a counter teller. From April 2008 through September 2011, Robinson embezzled $420,000 from the credit union by creating a fictitious teller drawer to conceal withdrawals of cash, manipulating the credit union’s records regarding its receipt and disbursement of coins and currency, and entering false entries in the books and records for the vault, teller ledgers, teller drawers, and the automated teller machine.
The indictment and subsequent conviction of Robinson was the result of an investigation conducted by the TVA Employees Credit Union corporate security staff and Federal Bureau of Investigation. Assistant U.S. Attorney Helen Smith represented the United States.
Adam Winters Enters Guilty Plea to Extortion of Babcock and Wilcox, Y-12, LLC.Read the Press Release
KNOXVILLE, Tenn. – On July 10, 2014, Adam Winters, 26, of Robins, Tenn., pleaded guilty to an information charging him with transmitting communications containing threats to injure the reputation of Babcock and Wilcox, Y-12, LLC., in interstate and foreign commerce with intent to extort money and other things of value from the corporation. Babcock and Wilcox, Y-12, LLC. (Babcock and Wilcox), is a corporation that manages and operates the Y-12 National Security Complex in Oak Ridge, Tenn.
Sentencing is set for 10:00 a.m., on Nov. 17, 2014, in U.S. District Court, Knoxville, before the Honorable Pamela L. Reeves, U.S. District Court Judge. Winters faces up to two years in prison, a fine of up to $250,000, up to one year of supervised release and a $100 special assessment.
According to the plea agreement on file with the U.S. District Court, Eastern District of Tennessee, on May 8, 2014, Winters emailed Babcock and Wilcox and attempted to email the Vice President of the United States, regarding copies of slides that the he possessed and that he alleged contained information he believed would injure the reputation of Babcock and Wilcox. Following the email, Winters used the internet and telephone, both of which are transmitted in interstate or foreign commerce, and communicated his threat to injure their reputation through the use of these slides.
On May 23, 2014, following his making these threats, Winters met with undercover law enforcement agents for the purpose of exchanging the slides for $2,500,000, that he had demanded from Babcock and Wilcox during his extortion attempt. During this exchange meeting, law enforcement officers revealed their identity and arrested Winters.
These charges are the result of an investigation by the U.S. Department of Energy, Office of Inspector General. Assistant U.S. Attorney Brooklyn Sawyers represents the United States.
Felon Who Shot at Tennessee Highway Patrol Trooper Sentenced to Serve 210 Months in PrisonRead the Press Release
GREENEVILLE, Tenn. – On Jul. 7, 2014, Derrick Dakota Kitzmiller, 22, of Gray, Tenn., was sentenced to serve 210 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Kitzmiller pleaded guilty in February 2014, to a federal grand jury indictment charging him with two counts of being a felon in possession of a firearm.
During the sentencing hearing Judge Greer found that Kitzmiller used firearms purchased in December 2012 to shoot at a Tennessee State Trooper in January 2013, in Washington County, Tenn. Jennifer Russell, who was also present at the shootout, pleaded guilty to buying the guns for Kitzmiller and is awaiting sentencing on August 4, 2014. Kitzmiller still faces related charges in the Criminal Court of Washington County, Tenn.
The indictment and subsequent conviction of Kitzmiller was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and Tennessee Highway Patrol Criminal Investigation Division (THP-CID). Assistant U.S. Attorney Robert M. Reeves represented the United States.
U.S. Attorney Bill Killian praised the investigative work of the ATF and THP-CID in this case. “This case highlights the dangers faced by law enforcement officers as a result of felons possessing firearms. The U.S. Attorney’s Office will continue to aggressively prosecute individuals who possess firearms illegally. We are all grateful that the state trooper involved in this incident was not killed or seriously injured,” stated Killian.
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.
Devin Ray Horne Sentenced to 282 Months for Oxycodone Trafficking, Money Laundering, Witness Intimidation and Income Tax Fraud ChargesRead the Press Release
GREENEVILLE, Tenn. – Devin Ray Horne, 24, of Kingsport, Tenn., was sentenced on June 30, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 282 months in federal prison for his leadership role in oxycodone, money laundering and income tax fraud conspiracies, as well as witness intimidation. Most of this illegal activity was centered in and around the Sullivan County area of East Tennessee.
Others charged in this conspiracy were also sentenced on June 30, 2014, in U.S. District Court. Melissa Ann Nowlin, 28, of Kingsport, Tenn., was sentenced to serve 41 months in prison for her conviction of the oxycodone conspiracy and income tax fraud. Penelope Sharp, 44, of Blountville, Tenn., was sentenced on the same date to serve 41 months in prison for her conviction of the oxycodone conspiracy.
Pursuant to the income tax fraud conviction, Devin Horne was ordered to pay restitution in the amount of $23,451.00. Nowlin was ordered to pay restitution in the amount of $18,160.00.
This conspiracy included 17 individuals who were indicted for their involvement in a large scale oxycodone distribution ring stretching back to approximately May 2008. Many of the pills obtained and sold within this conspiracy were obtained from Michigan, Florida and Georgia and transported back to the Eastern District of Tennessee for resale. Devin Horne stipulated that he conspired to distribute a conservative estimate of 10,000 (30 mg) oxycodone pills in the Eastern District of Tennessee.
In February 2013, Nowlin, who was the girlfriend of Devin Horne, was subpoenaed to testify before a federal grand jury. Days before her appearance Devin Horne told her, in jail recorded conversations, that he would take her life away if she testified against him. In another jail recorded conversation, Devin Horne also told his father and co-defendant Donnie Horne, 56, of Kingsport, that he would kill Nowlin if she testified against him. Devin Horne further asked his father to take Nowlin’s car away from her if she testified and to have someone present at the courthouse watching her.
Devin Horne also directed numerous others including Nowlin and Donnie Horne to send wire transfers to other co-conspirators in Detroit, Michigan to advance and promote his oxycodone trafficking.
In addition to the oxycodone trafficking, money laundering and witness intimidation, Devin Horne also devised and implemented a scheme to fraudulently obtain funds by filing false and fraudulent federal income tax returns using personal identifying information obtained from other individuals while he was housed inside the Sullivan County Jail. Devin Horne used Nowlin and others to assist him in preparing the fraudulent forms and converting the refund checks to their own use.
Other individuals involved in this conspiracy were previously sentenced in U.S. District Court. Dustin Wilcox a.k.a. “Weiner”, 32, of Kingsport, Tenn., who stipulated to conspiring to distribute approximately 14,000 oxycodone pills, was sentenced to serve 270 months in prison. Many of these pills were sold from Wilcox’s residence at in Kingsport, which was a well-known and commonly used location among other co-conspirators to sell, buy and use drugs in the Kingsport area. A final order of forfeiture was recently entered in which Wilcox forfeited his interest in this tract of real property as a result of the continued drug dealing that took place there.
Ricky Harvey, 30, of Kingsport, Tenn., was previously sentenced to serve 180 months in prison following his convictions on oxycodone and money laundering conspiracy charges. Michael Sharp, 50, of Blountville, Tenn., was previously sentenced to serve 72 months in prison following his conviction on oxycodone trafficking charges. Donnie Horne, Jason Jones, 36, of Elizabethton, Tenn., and Stephen Leon Williams, 62, of Kingsport, Tenn., were all previously sentenced to prison terms of 71 months, 78 months and 90 months, respectively. Williams was convicted for selling oxycodone pills and a firearm while on parole for a prior murder conviction.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Devin Horne and his co-conspirators include the Bureau of Alcohol, Tobacco and Firearms, Sullivan County Sheriff’s Office, IRS Criminal Investigations Division, Kingsport Police Department, and Bristol Tennessee Police Department, all of which provided invaluable assistance during the course of the investigation. Assistant U.S. Attorney Wayne Taylor represented the United States.
U.S. Attorney William C. Killian stated, “We are pleased not only with this significant sentence on Devin Ray Horne, but also with the overall sentences of all of the individuals involved in this extensive criminal activity. The witness intimidation conviction is important because these tactics simply cannot be tolerated in the criminal justice system.”
James Amos Parker Sentenced to 120 Months Years in Prison for Attempted Enticement of A Minor for SexRead the Press Release
KNOXVILLE, Tenn. – On June 26, 2014, James Amos Parker, 47, of Alcoa, Tenn., was sentenced to serve 120 months in prison by the Honorable Danny C. Reeves, U.S. District Judge. Parker pleaded guilty in February 2014 to a federal grand jury indictment charging him with attempting to entice a minor to engage in sexual activity using a computer in interstate commerce.
Parker engaged in online discussions via the internet with undercover law enforcement officers in which he expressed a desire to engage in sexual relations with someone he believed to be 12 years old. Parker was arrested by undercover law enforcement officers when he showed up at a pre-arranged meeting place to have sex with a person whom he believed to be a minor.
As part of the sentence imposed, Parker was also placed on supervised release for a period of 20 years and will be required to register as a sex offender wherever he lives, works, or attends school upon his release from prison.
The indictment and subsequent conviction of Amos were the result of an investigation conducted by the Federal Bureau of Investigation and the Knoxville Police Department - Internet Crimes Against Children Unit. Assistant U.S. Attorney Jennifer Kolman represented the United States.
This case was brought as part of Project Safe Childhood, 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, Project Safe Childhood 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 Project Safe Childhood, 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."
Nine Individuals Indicted for Conspiracy to Commit Mail Fraud, Wire Fraud, and Money LaunderingRead the Press Release
GREENEVILLE, Tenn. — On June 10, 2014, a federal grand jury in Greeneville returned a 49-count indictment against Brian C. Rose, a.k.a. John Hankins, 34, of Johnson City, Tenn.; Robert S. McGregor, a.k.a. Jim Robinson III, 36, of Bowling Green, Ky.; Dallas P. McRae, 44, of Orlando, Fla.; Hugh F. Sackett, 83, of Anderson, S.C.; James M. Robinson, 55, of Perkin, Ind.; Brent Loveall, 30, of Johnson City, Tenn.; Jason Smith, 39, of Bowling Green, Ky.; Ray C. Spears, a.k.a. Brock Hamilton, 44, of Johnson City, Tenn.; and Jennifer L. Key, 36, of Louisville, Ky., for a conspiracy to commit mail fraud and wire fraud and money laundering. In addition Rose, McGregor, McRae, Sackett, Robinson, Loveall, Spears, and Key were all charged with substantive mail and/or wire fraud charges.
Five of these individuals appeared in court for initial appearance and arraignment during June 16-19, 2014, before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty to the charges in the indictment. Three of these individuals will appear in Court on June 30, 2014, for initial appearance and arraignment before Magistrate Judge Inman.
Brian C. Rose appeared in court on June 23, 2014, for a detention hearing before U.S. Magistrate Judge C. Clifford Shirley. Rose was detained pending trial.
The details of the charges are outlined in the indictment, which is filed as public record in the U.S. District Court for the Eastern District of Tennessee at Greeneville. The investigation showed that Rose established an office for New Century Coal in Johnson City, Tenn., and staffed the office with McGregor, McCrae, Sackett, Robinson, Loveall, Smith, Spears, and Key who all targeted potential investor victims, using false and fraudulent representations to solicit sales of shares in New Century Coal and received funds exceeding $15 million from more than 160 investors who reside in multiple locations in the United States.
If convicted, all face a maximum term of 20 years in prison and a maximum fine of $250,000.00, a term of supervised release of at least three years. All also face mandatory court assessments and restitution as ordered by the court.
This indictment is the result of investigation by the United States Secret Service, Internal Revenue Service Criminal Investigations Division, and Federal Bureau of Investigation. Assistant U.S. Attorney Helen C.T. Smith will represent the United States.
Members of the public are reminded that these are only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
James Allen Hicks Sentenced to 97 Months in Prison for Receiving and Possessing Child PornographyRead the Press Release
KNOXVILLE, Tenn. -- James Allen Hicks, 37, of Knoxville, Tenn., was sentenced to serve 97 months in prison by the Honorable Harry S. Mattice, Jr., U.S. District Judge for the Eastern District of Tennessee. The sentence was the result of a guilty plea entered by Hicks in February 2014 to a federal indictment charging him with distributing and possessing child pornography. A forensic examination of Hicks’s computer revealed that he possessed approximately 576 images of child pornography.
As part of the sentence imposed, upon his release from prison Hicks will be on supervised release for a period of five years and for the rest of his life will be required to register as a sex offender wherever he lives, works, or attends school.
U.S. Attorney William C. Killian emphasized the importance of the prosecution of child pornographers. “People who trade child pornography fuel the further exploitation of children. This sentence sends a strong message to those who would prey upon the youngest and most vulnerable members of society that trafficking in images of the exploitation of children will not be tolerated,” said Killian.
This case was brought as part of Project Safe Childhood, 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, Project Safe Childhood 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 Project Safe Childhood, 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."
Jeffrey Scott Kendrick, Jr. Sentenced to 114 Months for Armed RobberyRead the Press Release
GREENEVILLE, Tenn. – On June 16, 2014, Jeffrey Scott Kendrick, Jr., 25, of Kingsport, Tenn., was sentenced to serve 114 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison Kendrick will be subject to supervised release under the supervision of the U.S. Probation Office for five years. There is no parole in the federal system.
Kendrick pleaded guilty in February 2014 to a Hobbs Act robbery and possession of a firearm in furtherance of the robbery. Kendrick robbed the Road Runner Market on Lynn Garden Drive in Kingsport, at gunpoint, in November 2012.
Law enforcement agencies participating in the joint investigation included the Kingsport Police Department and Federal Bureau of Investigation. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Southwest Virginia Coal Dealer Sentenced to Federal Prison for FraudRead the Press Release
GREENEVILLE, Tenn. – Dale Edward Stanley, 54, of Clintwood, Va., was sentenced on June 11, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 12 months and one day in federal prison. A fine of $10,000 was also imposed. Following release from prison, Stanley will be subject to three years of supervised release under the supervision of a federal probation officer and must complete 200 hours of community service. Stanley will also be required to pay restitution in an amount to be determined by a later order of the Court.
Stanley was indicted in November 2012 for 22 counts of wire fraud involving a scheme to defraud Eastman Chemical Company (Eastman), Kingsport, Tenn., on spot market purchases of coal. He later pleaded guilty to one count of wire fraud. According to his plea agreement on file with the U.S. District Court, Stanley, the owner of Mountain Energy Resources, Inc., Norton, Va., contracted with Eastman to provide steam coal, which was to have a high BTU rate and low ash rate. In his plea agreement, Stanley admitted that he devised a scheme to defraud Eastman on the coal sales by circumventing the testing of the coal he sold to Eastman. His contract with Eastman stipulated that he would provide a certain quality of coal to Eastman and the coal would be tested to ensure it met the contract specifications. Stanley circumvented the testing process by bribing an employee of a coal testing service to submit unrepresentative samples of coal for analysis. As a result, Eastman believed they were receiving the quality of coal specified in the contract with Stanley, although he had actually directed his employees to load lower quality coal for the shipments to Eastman. Stanley caused to be sent via interstate wire communications false and fraudulent invoices for payment to Eastman and was paid for higher quality coal than he actually provided. Stanley engaged in this scheme to defraud Eastman from approximately February 2010 through February 2012.
This case is the result of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Neil Smith and Suzanne Kerney-Quillen represent the United States.
Greeneville Oncologist and Practice Manager Sentenced for Violating Food, Drug and Cosmetic ActRead the Press Release
Cancer Clinic Purchased Unapproved Drugs for Three Years
GREENEVILLE, Tenn. – Anindya Kumar Sen, M.D., 65, and Patricia Posey Sen, 66, of Greeneville, Tenn., were sentenced on June 10, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, after their convictions at trial in December 2013 on charges of causing the introduction of misbranded drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act (FDCA). Dr. Sen was sentenced to three years of probation and was ordered to pay a fine of $100,000. Patricia Sen, his wife and practice manager, was sentenced to four years of probation and ordered to pay a fine of $200,000.
According to evidence presented at trial, the Sens’ medical practice, East Tennessee Hematology Oncology and Internal Medicine (ETHOIM), a.k.a. East Tennessee Cancer and Blood Center, purchased over $3 million in misbranded and unapproved chemotherapy and chemotherapy supportive medications between April 2009 and March 2012. Patricia Sen purchased the drugs through a Canadian business which obtained the drugs through a United Kingdom distributor. The drugs were not approved by the Food and Drug Administration (FDA) for distribution and use in the United States, the drugs having been distributed in Turkey, India, and Europe. Many of the drugs had names different from the drugs approved for use in the United States, such as Altuzan, MabThera, and Bonviva. Patricia Sen told employees that she was purchasing drugs from Clinical Care because the drugs were cheaper, and records confirmed that the drugs from Clinical Care cost from 80 percent to more than half the cost of the FDA approved drugs. Because reimbursement by health care benefit programs such as Medicare is fixed at a percentage of the national average sale price of the drug (106 percent for Medicare), a provider can increase his profits by purchasing cheaper unapproved drugs. Evidence presented showed that the Sens received approximately $1.3 million in additional profit by purchasing the unapproved drugs.
The FDCA establishes a “closed” system to protect the safety and efficacy of drugs used in the United States, particularly prescription drugs. Domestic and foreign drug manufacturers must register with the FDA and must list with the FDA all drugs which the manufacturer intends to distribute in the United States. Drugs go through an extensive review process before being approved for distribution to assure that they are safe and effective for their intended use. Drug manufacturers are also subject to inspection of their facilities by the FDA to insure that the drugs are manufactured properly. The FDCA’s labeling requirements insure that users, particularly health care providers, have adequate information on the use of the drug, to include information on dangers and side effects. Foreign drugs not approved for use in the United States do not have on their labels and packaging the required information. The listing of FDA-approved drugs allows the FDA to quickly track drugs which may have been found to be contaminated or have some other safety risk. Purchasing unapproved drugs impedes the FDA’s ability to track the drugs being used in the United States and thwarts the approval process designed to insure that drugs used in the United States are safe and effective.
Genentech, the U.S. manufacturer of the FDA-approved bevacizumab drug product Avastin®, alerted health care providers in February 2012, that counterfeit versions of the drug had been found in the United States. A nurse at ETHOIM testified that the bevacizumab drug product at the practice, a foreign product labeled Altuzan®, bore the same lot numbers as the suspected counterfeit product. Rather than alert the FDA, Patricia Sen had the drugs mailed back to the United Kingdom on March 8, 2012, the day after news reports aired concerning the FDA’s execution of a search warrant at McLeod Cancer and Blood Center in Johnson City, Tenn.
District Judge Greer, in a written order, found that “overwhelming proof” established that Dr. Sen knew or should have known his practice was using misbranded and unapproved drugs in violation of the law and that “[t]here clearly was a risk of harm to patients from use of the unapproved drugs. Judge Greer went on to find that “Dr. Sen abandoned his duty and responsibility to assure that his patients received the drugs prescribed and in the dosage indicated to treat their life threatening conditions” and that “Dr. Sen’s conduct was reckless.”
In finding that Mrs. Sen acted with intent to defraud, Judge Greer, in the same order, found that Mrs. Sen knew that only FDA-approved drugs could be used in the practice and that there was nothing to indicate Mrs. Sen made any effort to determine whether the foreign drugs were approved. “Mrs. Sen submitted the claims to health care benefit programs with knowledge, or at least deliberate indifference, that the practice could not be reimbursed for use of unapproved drugs.”
Judge Greer also found that Mrs. Sen had obstructed justice by withholding email messages sought pursuant to a government subpoena in May 2012. Judge Greer stated “[a]n inference can easily be drawn from the e-mails that Mrs. Sen was aware of the fact that the practice had obtained counterfeit drugs, and they were returned to the United Kingdom to put them out of the reach of FDA investigators or other authorities.”
As conditions of probation, Dr. Sen must perform 100 hours of community service and Mrs. Sen must perform 200 hours of community service. Dr. Sen must also develop protocols to ensure regulatory compliance and provide those protocols to his probation officer as well as submit his practice for inspection by his probation officer to review records of drugs purchased. Mrs. Sen was prohibited from working in any medical practice without the permission of her probation officer and was prohibited from being involved in the ordering of any prescription drugs. Finally, Mrs. Sen was ordered to serve 48 hours in jail as a condition of probation.
Agencies involved in this investigation included the Federal Drug Administration Office of Criminal Investigation, Federal Bureau of Investigation, and Tennessee Bureau of Investigation. Assistant U.S. Attorney Neil Smith and Special Assistant U.S. Attorney Ben Cunningham represented the United States.
Tennessee, Virginia, and North Carolina Methamphetamine Cooks Sentenced to Federal PrisonRead the Press Release
GREENEVILLE, Tenn. – Three individuals were sentenced on June 4, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge, for their involvement in a conspiracy to manufacture methamphetamine. John G. Reece, II, 33, of Bristol, Va., was sentenced to serve 132 months in federal prison, to be followed by five years of supervised release. Benjamin T. Morefield, 33, of Mountain City, Tenn., was sentenced to serve 119 months in federal prison, to be followed by five years of supervised release. John D. Reece, 35, of Boone, N.C., was sentenced to serve 118 months in federal prison, to be followed by five years of supervised release. There is no parole in the federal system.
A total of 20 individuals, including the three sentenced yesterday, were indicted in May 2013 for conspiring to manufacture methamphetamine and possessing equipment, chemicals, materials, and products to be used in the manufacture of methamphetamine. Seven individuals named in the indictment were also charged with distributing methamphetamine. All others charged in this case have been adjudicated guilty and will be sentenced later this year. /p>
The charges stem from a lengthy investigation spanning from August 2006 to May 2013 involving a conspiracy by these individuals to obtain pseudoephedrine and other products needed to manufacture methamphetamine in the Eastern District of Tennessee, Western District of North Carolina, and Western District of Virginia. The pseudoephedrine and other products were then used to manufacture methamphetamine utilizing the “shake and bake” method. The methamphetamine was used and distributed in the Eastern District of Tennessee.
According to the information contained in their plea agreements on file in U.S. District Court, all three of the individuals sentenced yesterday were methamphetamine cooks and had manufactured substantial quantities of methamphetamine. In their plea agreements, John G. Reece, II, and Morefield each admitted that they had conservatively manufactured at least 50 but less than 150 grams of actual methamphetamine. John D. Reece admitted in his plea agreement that he had conservatively manufactured 76.3 grams of actual methamphetamine.
“This case is an example of the effectiveness of coordinated law enforcement investigations. These individuals conspired in three different jurisdictions to manufacture methamphetamine. We greatly appreciate the efforts of the law enforcement agencies involved in all three jurisdictions to ensure that this case was successfully prosecuted to protect our communities from the dangers associated with the manufacture of methamphetamine,” said U.S. Attorney William C. Killian.
This investigation was a result of the collaborative efforts of the Johnson County Sheriff’s Office, First Judicial District Drug Task Force, Tennessee Methamphetamine and Pharmaceutical Task Force, and Drug Enforcement Administration. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represent the United States.
This case was brought as a part of the Organized Crime and Drug Enforcement Task Force (OCDETF), the centerpiece of the Department of Justice=s drug supply reduction strategy that attacks major drug trafficking and money laundering organizations.
Kathy Winters Pleads Guilty to Embezzlement from Alcoa City SchoolsRead the Press Release
KNOXVILLE, Tenn. – On May 19, 2014, a one-count information was filed in U.S. District Court in Knoxville, charging Kathy Ann Winters, 58, of Harriman, Tenn., with wilfully and knowingly embezzling more than $1,000 from the U.S. Department of Education. On June 4, 2014, Winters appeared in U.S. District Court and pleaded guilty to the charges in the information. Sentencing has been set for 1:30 p.m., Oct. 7, 2014.
According to a plea agreement on file with the U.S. District Court, Winters was the federal projects administrative assistant for Alcoa City School District, and treasurer of both the East Tennessee Attendance Supervisors Association (ETASA) and Tennessee Attendance Supervisors Steering Committee (TASSC). While serving in these roles, investigators determined that Winters took funds belonging to the three entities by creating false invoices that demanded payment payable to TASSC or ETASA, forging an approving official’s signature to the false invoices, and forwarding the forged, false invoices to the City of Alcoa for payment. Once the City of Alcoa rendered check payments based on the false invoices, Winters endorsed the checks, and either deposited the funds into her personal account or into the TASSC or ETASA account and then withdrew the money through ATM withdraws and checks made payable to herself.
In addition to the invoice scheme, Winters misused Alcoa City School District credit cards by making unauthorized personal charges on the credit cards and falsified travel reimbursement requests for unauthorized travel. In both instances, Winters forged signatures of approving officials, and submitted the credit card billing statements and travel claims to the City of Alcoa for payment. Winters also caused various bank charges, including overdraft fees, ATM fees, and service charges to be assessed against TASSC and ETASA. The investigation revealed a total loss of $428,076.94, between the three entities. The investigation revealed further that the Alcoa City School District loss included federal government grant money paid to the school district for special education expenses.
On Apr. 4, 2013, during a consensual and voluntary interview, Winters admitted to the fraud and provided a written statement to investigators.
Investigative agencies involved in this investigation include the Tennessee Comptroller’s Office, Financial and Compliance Unit and Tennessee Bureau of Investigation. Assistant United States Attorneys Brooklyn Sawyers and Steve Cook are representing the United States.
Guilty Plea Entered in Department of Labor Fraud CaseRead the Press Release
KNOXVILLE, Tenn. – On June 4, 2014, Ronald T. Wolfenbarger, 46, of Knoxville, Tenn., pleaded guilty to a one-count information charging him with theft of government funds. Sentencing for is set for 10:00 a.m. Oct. 6, 2014. He faces up to 10 years in prison, a fine of $250,000, and up to three years of supervised release upon their release from prison.
According to the plea agreement on file with the U.S. District Court, Eastern District of Tennessee, Wolfenbarger received unemployment benefits from the State of Tennessee unemployment program. These unemployment benefits were supplemented with federal funds through the American Recovery and Reinvestment Act of 2009, which authorized 100 percent federal funding for unemployment benefits that he qualified for and received. An internal audit determined that he was overpaid unemployment benefits after failing to report employment and earnings from his employer, violating the policies and procedures for receiving unemployment benefits. In his plea agreement, Wolfenbarger admitted to obtaining unemployment insurance benefits to which he was unentitled.
Unemployment benefits are designed to assist those who qualify under specific policies and procedures. Unemployment benefits fraud is a serious offense. Individuals who take advantage of this benefit program through theft, fraud, and lies, effectuated by hiding earnings, may be prosecuted and face both terms in prison and fines.
This charge and subsequent guilty plea are the result of an investigation by DOL-Office of Inspector General and Tennessee Department of Labor. Assistant U.S. Attorney Brooklyn Sawyers represents the United States.
Members of the public are reminded that an information constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
Robert Wayne Locklear Pleads Guilty to Federal Crack Cocaine Conspiracy and Health Care Fraud ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On June 2, 2014, Robert Wayne Locklear, 45, of Greeneville, Tenn., pleaded guilty to one count of a conspiracy to distribute a quantity of cocaine base (“crack”) and one count of a conspiracy to commit health care fraud before the Honorable J. Ronnie Greer, U.S. District Court Judge. Sentencing was scheduled for 1:30 p.m., September 22, 2014.
According to a plea agreement signed and filed with U.S. District Court in Greeneville, Locklear was licensed to practice medicine in the State of Tennessee and operated two businesses, Trinity Internal Medicine and Sleep and Trinity Recovery Clinic, in Greeneville, Tennessee. The latter was an office based substance abuse treatment program where individuals with opioid addictions were treated with Suboxone or Subutex in an outpatient setting. While operating these businesses, Locklear developed addictions to alcohol and crack cocaine. He admitted to law enforcement agents that he had been smoking crack cocaine a few times a day (before, during and after work). Locklear also admitted to going back to the office at night to run the Suboxone clinic and seeing patients “with a buzz.” He further admitted in the plea agreement that he gave/distributed crack cocaine on occasions to others.
Over time, Locklear’s excessive drug usage resulted in his coming into the office to see patients only sparingly, according to the plea agreement. In order to maintain his Suboxone practice, Locklear told his office staff to continue to see patients, call in their prescriptions for Suboxone and order urine drug screens in his absence, all while knowing that no employee/medical assistant at his practice was properly licensed or trained to provide these requisite medical services. By having his staff continue to see patients in his absence, Locklear authorized prescriptions for medications, including Suboxone, to be distributed to patients that he had not seen, had not conducted physical examinations, and had not determined sufficient medical necessity for the prescriptions. On numerous occasions, drug screens came back positive for the presence of other illegal drugs, but the patients continued to get their Suboxone prescriptions anyway.
The investigation leading to the indictment and conviction was conducted by the Federal Bureau of Investigation, Tennessee Bureau of Investigation and Third District Judicial Drug Task Force. Assistant U.S. Attorney Wayne Taylor represents the United States.
Pigeon Forge Resident Sentenced to Serve 151 Months in Prison for Child Pornography OffensesRead the Press Release
KNOXVILLE, Tenn. - Kelly Louise Fitzmaurice, 34, of Pigeon Forge, Tenn., was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 151 months in prison for child pornography offenses. Fitzmaurice pleaded guilty in February 2014 to a federal indictment charging her with possession and distribution of child pornography.
According to a plea agreement on file with the U.S. District Court in Knoxville, 28 videos and 177 images of child pornography were found on Fitzmaurice’s computer. Some of the images depicted known child victims, sexually explicit images of prepubescent children, and portrayals of sadistic or masochistic conduct.
The indictment and subsequent conviction of Fitzmaurice were the result of an investigation conducted by the Federal Bureau of Investigation and the Internet Crimes Against Children Unit of the Harriman Police Department. Assistant U.S. Attorney Frank M. Dale, Jr. 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 (CEOS), 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.
Joe Usher Pleads Guilty to Federal Tax OffensesRead the Press Release
Former Owner of Knoxville Employee Leasing Company Faces Potential Prison Term and Obligation to Pay Restitution
KNOXVILLE, Tenn. – Zebbie Joe Usher, III, 46, of Knoxville, Tenn., pleaded guilty on June 2, 2014, in U.S. District Court for the Eastern District of Tennessee at Knoxville, to a two-count information charging him with tax evasion and conspiracy to commit tax evasion. The Honorable Pamela L. Reeves, U.S. District Judge, scheduled a status conference for Sept. 15, 2014, at which time a date for sentencing will be scheduled.
Usher faces a possible prison term of up to 10 years, along with up to $500,000 in fines and the requirement to pay more than $29 million in restitution to the Internal Revenue Service (IRS).
Usher was previously the chief executive officer of Service Provider Group and was involved in the management of a number of companies, known as professional employer organizations (PEOs), which were engaged in the employee leasing and payroll processing business. According to a plea agreement on file with the U.S. District Court in Knoxville, the PEOs collected federal payroll taxes from employees and were required to turn over those funds to the IRS in a timely manner. However, instead of doing so, Usher and his unnamed co-conspirators used the funds for other company expenses and personal expenditures. In an attempt to avoid discovery of their nonpayment of payroll taxes, Usher and his co-conspirators submitted false documents to the IRS.
Usher’s guilty plea is the result of an ongoing investigation by the IRS and Federal Bureau of Investigation. Assistant United States Attorney Frank M. Dale, Jr. represents the United States.
Joe Usher Pleads Guilty to Federal Tax OffensesRead the Press Release
Former Owner of Knoxville Employee Leasing Company Faces Potential Prison Term and Obligation to Pay Restitution
KNOXVILLE, Tenn. – Zebbie Joe Usher, III, 46, of Knoxville, Tenn., pleaded guilty on June 2, 2014, in U.S. District Court for the Eastern District of Tennessee at Knoxville, to a two-count information charging him with tax evasion and conspiracy to commit tax evasion. The Honorable Pamela L. Reeves, U.S. District Judge, scheduled a status conference for Sept. 15, 2014, at which time a date for sentencing will be scheduled.
Usher faces a possible prison term of up to 10 years, along with up to $500,000 in fines and the requirement to pay more than $29 million in restitution to the Internal Revenue Service (IRS).
Usher was previously the chief executive officer of Service Provider Group and was involved in the management of a number of companies, known as professional employer organizations (PEOs), which were engaged in the employee leasing and payroll processing business. According to a plea agreement on file with the U.S. District Court in Knoxville, the PEOs collected federal payroll taxes from employees and were required to turn over those funds to the IRS in a timely manner. However, instead of doing so, Usher and his unnamed co-conspirators used the funds for other company expenses and personal expenditures. In an attempt to avoid discovery of their nonpayment of payroll taxes, Usher and his co-conspirators submitted false documents to the IRS.
Usher’s guilty plea is the result of an ongoing investigation by the IRS and Federal Bureau of Investigation. Assistant United States Attorney Frank M. Dale, Jr. represents the United States.
Knoxville Hotel Owner Indicted for Bank FraudRead the Press Release
GREENEVILLE, Tenn. – A federal grand jury in Greeneville returned an indictment on May 13, 2014, against Jayesh Dahyabhai Patel, 48, of Knoxville, Tenn., charging him with five counts of bank fraud.
Patel appeared in court on May 29, 2014, before U.S. Magistrate Judge Dennis Inman and pleaded not guilty. He was released pending trial, which has been set for July 23, 2014, in U.S. District Court, in Greeneville, Tennessee.
According to the indictment on file with the U.S. District Court, from January 2009 through August 2011, Patel engaged in a scheme to defraud First Community Bank of East Tennessee, Kingsport, in connection with a $5.8 million loan to his business, QIS Knoxville, LLC, to purchase and renovate a Knoxville hotel. The indictment alleges that Patel provided false income tax returns for himself and his businesses to induce First Community Bank to issue the loan. Patel then further schemed to defraud First Community Bank by providing false invoices to induce the bank to disburse loan funds and by providing additional false tax returns to obtain an increase in the amount of the loan and to obtain a six-month interest only payment period. The indictment also alleges that Patel fraudulently induced First Community Bank to make a second loan to finance the sale of a motel by Patel to a relative by providing false information as to the down payment on the purchase.
If convicted, Patel faces a term of 30 years in prison, a $1,000,000 fine, and five years of supervised release as to each count.
This indictment is the result of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Neil Smith 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 their guilt has been proven beyond a reasonable doubt.
Two Individuals Plead Guilty to Conspiring to Launder Bribes Received in AfghanistanRead the Press Release
WASHINGTON – Two individuals have pleaded guilty for their roles in a scheme to launder approximately $250,000 in bribes received from Afghan contractors in Afghanistan.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney for the Western District of Tennessee Edward L. Stanton III and United States Attorney for the Eastern District of Tennessee William C. Killian made the announcement.
Jimmy W. Dennis, 44, formerly of Clarksville, Tennessee, and a former First Sergeant with the U.S. Army, pleaded guilty before U.S. District Court Judge Samuel H. May Jr. of the Western District of Tennessee to conspiracy to launder approximately $250,000 in bribe payments he received from Afghan contractors in Afghanistan. Sentencing is scheduled for Sept. 4, 2014.
James C. Pittman, 45, of Rossville, Georgia, pleaded guilty last Thursday before U.S. Magistrate Judge William B. Carter of the Eastern District of Tennessee for his role in this conspiracy. Sentencing is scheduled for Sept. 8, 2014.
According to pleadings filed at the time of the guilty pleas, from March 2008 through March 2009, Dennis was an Army Sergeant assigned as a paying agent in the Humanitarian Aid Yard (HA Yard) at Bagram Air Field, Afghanistan. Dennis was a member of the team in the HA Yard that purchased supplies from local Afghan vendors for distribution as part of the Commander’s Emergency Response Program for urgent humanitarian relief requirements in Afghanistan. Dennis and a partner entered into an agreement to steer contracts to certain Afghan vendors in return for approximately $250,000 in cash bribes.
Further according to court pleadings, Dennis smuggled the bribe money back to the United States hidden in packages addressed to his wife, his father and a former Army friend, Pittman. Dennis sent $80,000 to $100,000 to his father from Afghanistan in packages that contained toy “jingle trucks,” colorfully decorated trucks or buses in Afghanistan and Pakistan. Dennis hid the money in the rear compartment of the toy trucks. Dennis also shipped a hope chest to his father containing approximately $100,000 in cash in a concealed compartment.
Also according to court documents, while on leave, Dennis met with Pittman, advised him that he had obtained money through kickbacks, and asked him for help laundering the funds. Pittman, owner of a landscaping business, agreed to “run through his company” these bribery proceeds. After returning to Afghanistan, Dennis sent approximately $60,000 to Pittman contained in toy jingle trucks. Dennis also arranged for his father to send approximately $20,000 to Pittman, who returned it in the form of purported salary checks from Pittman’s company.
These matters are being investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, the Army Criminal Investigative Division, the Defense Criminal Investigative Service, and the Air Force Office of Special Investigation. The prosecution is being handled by Trial Attorney Daniel Butler of the Criminal Division and Assistant U.S. Attorneys Frederick Godwin of the Western District of Tennessee and James Brooks of the Eastern District of Tennessee.
Roger France Sentenced to 108 Months for Possession of A Firearm After Having Been Convicted of A Felony OffenseRead the Press Release
GREENEVILLE, Tenn. – Roger D. France, 28, of White Pine, Tenn., was sentenced to serve 108 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge, on May 28, 2014. Upon his release from prison, France will be subject to supervised release under the supervision of the U.S. Probation Office for three years. There is no parole in the federal system.
France pleaded guilty in February 2014 to being a convicted felon in possession of a firearm. During an undercover law enforcement investigation, France, along with co-defendant Roger Thornton, sold stolen firearms from a burglary earlier that day in Cosby, Tenn. At the time that he sold the stolen firearms, France was a convicted felon, having been previously convicted of aggravated burglary in Jefferson County. Thornton, who is also a convicted felon, also pleaded guilty in this case and is scheduled to be sentenced in U.S. District Court on July 28, 2014.
Law enforcement agencies participating in the joint investigation included the Fourth Judicial District Drug Task Force, Tennessee Bureau of Investigation and Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Methamphetamine Cooks Sentenced to Serve 208 Months & 228 Months in PrisonRead the Press Release
GREENEVILLE, Tenn. – Two individuals involved in a methamphetamine conspiracy were sentenced on May 28, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge. Randy J. Davis, 42, of Trade, Tenn., was sentenced to serve 228 months in federal prison, to be followed by eight years of supervised release, for conspiring to manufacture methamphetamine. Terrance L. Turnmire, 31, of Mountain City, Tenn., was sentenced to serve 208 months in federal prison, to be followed by five years of supervised release, for conspiring to manufacture and distribute methamphetamine. There is no parole in the federal system.
A total of 20 individuals, including the two sentenced today, were indicted in May 2013 for conspiring to manufacture methamphetamine and possessing equipment, chemicals, materials, and products to be used in the manufacture of methamphetamine. Seven others named in the indictment were also charged with distributing methamphetamine. All others in this case have been adjudicated guilty and will be sentenced later this year.
The charges came from a lengthy investigation spanning from August 2006 to May 2013 involving a conspiracy by these individuals to obtain pseudoephedrine and other products needed to manufacture methamphetamine in the Eastern District of Tennessee, Western District of North Carolina, and Western District of Virginia. The pseudoephedrine and other products were then used to manufacture methamphetamine utilizing the “shake and bake” method. The methamphetamine was used and distributed in the Eastern District of Tennessee.
Davis and Turnmire were both methamphetamine cooks. Davis admitted in his plea agreement that he had conservatively manufactured at least 35 but less than 50 grams of methamphetamine. Turnmire admitted in his plea agreement that he had conservatively manufactured at least 50 but less than 150 grams of methamphetamine and that he had distributed at least 35 but less than 50 grams of actual methamphetamine throughout the course of the conspiracy. Evidence presented during Turnmire’s sentencing hearing demonstrated that on several occasions, methamphetamine had been manufactured in Turnmire’s apartment, where he lived along with another co-defendant and their 18 month old child. The evidence presented also demonstrated that Turnmire’s apartment was within 1,000 feet of a public school.
“These significant sentences demonstrate that manufacturing methamphetamine is taken very seriously due to the inherent danger and risk involved in the process. Methamphetamine cooks have been and will continue to be aggressively prosecuted by this office to ensure that the public is protected by those who endanger the safety of our communities,” said U.S. Attorney William C. Killian.
This investigation was a result of the collaborative efforts of the Johnson County Sheriff’s Office, 1st Judicial District Drug Task Force, Tennessee Methamphetamine and Pharmaceutical Drug Task Force, and the Drug Enforcement Administration. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represented the United States.
Dustin C. Watson Sentenced to 115 Months for CarjackingRead the Press Release
GREENEVILLE, Tenn. – Dustin C. Watson, 31, of Knoxville, Tenn., was sentenced to serve 115 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge, on May 28, 2014. Upon his release from prison Watson will be subject to supervised release under the supervision of the U.S. Probation Office for three years. There is no parole in the federal system.
In February 2014 Watson pleaded guilty to carjacking an individual in Greeneville, Tenn. Watson had requested a ride from an individual at a business on Fairgrounds Road in Greeneville on Aug. 31, 2013. While riding in the passenger seat of the vehicle, Watson threatened the driver with a knife, and ordered the driver out of the car. He then took the driver’s cell phone and vehicle, leaving the victim stranded on Highway 93 in Greene County. Watson was later arrested in Knoxville, still driving the stolen vehicle, and in possession of illegal narcotics which he had been using.
Law enforcement agencies participating in the joint investigation included the Greeneville Police Department, Knoxville Police Department and Federal Bureau of Investigation. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Maryville Man Sentenced to 17 Years in Prison for Drug and Firearm OffensesRead the Press Release
KNOXVILLE, Tenn. - On May 23, 2014, Dustin Morgan, 36, of Maryville, Tenn., was sentenced to serve 204 months in federal prison by the Honorable Thomas A. Varlan, Chief U.S. District Judge for the Eastern District of Tennessee. The sentence was the result of a conviction at trial in October 2013 on an indictment charging him with drug and firearm offenses in conjunction with Breakthrough Pain Therapy Center in Maryville. Morgan’s step-father, Randy Kincaid and mother, Sandra Kincaid, co-owners of Breakthrough, and family member Wendi Henry were also convicted. Randy Kincaid was sentenced to 830 months and the other co-conspirators are awaiting sentencing.
The indictment and subsequent conviction of Morgan and his co-defendants resulted from a lengthy investigation by the Internal Revenue Service–Criminal Investigation Division, Fifth Judicial Drug Task Force, and Drug Enforcement Administration into illegal distribution of narcotics, structuring of monetary transactions and money laundering associated with Breakthrough Pain Therapy Center. Breakthrough ceased operation in December 2010 when federal and local law enforcement agents seized significant quantities of prescription narcotic pain pills, firearms, and nearly $700,000 in cash from the Center and the conspirators./p>
U.S. Attorney William C. Killian said, “The cooperation and diligence of these local, state and federal agencies resulted in an appropriately severe sentence for this individual who was illegally distributing large amounts of addictive pills in East Tennessee.”
Assistant U.S. Attorneys Jennifer Kolman and Frank M. Dale, Jr. represented the United States during the trial and sentencing.
Reda Overton Pleads Guilty to Embezzlement and Theft from A Labor UnionRead the Press Release
KNOXVILLE, Tenn. – On May 20, 2014, Reda Overton pleaded guilty in U.S. District Court to a one-count Information charging her with unlawfully and wilfully embezzling over $200,000 from Locomotive Engineers, a labor union.
Sentencing for Overton has been set for October 23, 2014, at 3:00 p.m., in U.S. District Court, Knoxville. She faces up to five years in prison, a fine of up to $10,000, a term of supervised release of up three years, and a $100 special assessment.
According to the plea agreement on file with the U.S. District Court, beginning on or about December 10, 2008, Overton was employed as the Executive Secretary to the General Chairman of a Locomotive Engineers’ committee. Locomotive Engineers is a labor organization which represents bargaining unit members who are employed by Norfolk Southern, a Virginia-based railway company that ships products across state lines throughout the United States. Overton was paid a bi-weekly salary in exchange for her secretarial and treasury duties that consisted of processing the payroll for herself and others. Acting unlawfully and willfully with the intent to defraud, in her official capacity as an employee, Overton transferred or overpaid herself over $200,000, which was union money taken from the organization’s bank accounts and deposited into Overton’s personal bank accounts, including at least one bank account that was held in Overton’s name. Overton confessed to United States Department of Labor (“DOL”) investigators that she embezzled over $200,000 from the union.
Special agents with Department of Labor investigated this case and it is being prosecuted by Assistant United States Attorney Brooklyn Sawyers.
Hector Galvan, Jr., Sentenced to Five Years in Prison for Being A Convicted Felon in Possession of Firearms, Wire Fraud Conspiracy, and Aggravated Identity TheftRead the Press Release
KNOXVILLE, Tenn. - On May 22, 2014, Hector Galvan, Jr., 34, of Jonesborough, Tenn., was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge for the Eastern District of Tennessee, to serve 60 months in prison. Galvan pleaded guilty in April 2013 to a federal indictment charging him with conspiracy to commit wire fraud, aggravated identity theft, and being a convicted felon in possession of firearms.
Galvan, his wife, and sister-in law conspired in a scheme to negotiate counterfeit checks at retailers in Tennessee, Arkansas, North Carolina, South Carolina, Georgia, Virginia, West Virginia, Kentucky, and Texas, resulting in losses in excess of $1 million. The conspirators were able to steal the identities of people who had indicated on social media that they “liked” certain retailers. The trio posed as the persons whose identities they stole to negotiate counterfeit checks to purchase electronics and other merchandise which they re-sold on an internet auction website, and prepaid credit cards.
During the execution of a federal search warrant at his home, Galvan, a convicted felon, was found to be in possession of 11 firearms, including a stolen 9 mm pistol, which led to the firearms charges in the indictment.
The indictment and subsequent conviction of Galvan was the result of an investigation conducted by the United States Secret Service and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Matthew T. Morris represented the United States.
David Wayne Grigsby Sentenced for Making False Declarations Before A Federal Grand JuryRead the Press Release
GREENEVILLE, Tenn. – David Wayne Grigsby, 48, of Wise, Va., was sentenced on May 12, 2014, by the Honorable J. Ronnie Greer, U. S. District Judge, after being convicted by a jury for three counts of making false declarations before a federal grand jury. Grigsby was sentenced to serve 12 months and one day in federal prison, to be followed by three years of supervised release under the supervision of a federal probation officer. A fine of $4,000 was also imposed. There is no parole in the federal system.
Evidence presented during the jury trial demonstrated that Grigsby falsely testified before a federal grand jury that he had no knowledge of a fraud scheme involving Eastman Chemical Company and denied any involvement in the collection of false samples of coal that were submitted to an independent testing service to defraud Eastman Chemical Company. However, audio recordings played during the jury trial demonstrated that Grigsby had in fact been directly involved in the fraud scheme by directing employees of the independent testing service to submit false samples of coal for testing. Employees of the testing service also testified that Grigsby had directed the collection of false samples of coal for testing for the purpose of defrauding Eastman Chemical Company.
This investigation was conducted by the FBI. Assistant U. S. Attorneys Neil Smith and Suzanne Kerney-Quillen represented the United States.
Mountain City and Shades Valley Residents Sentenced for Conspiring to Manufacture MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – Two defendants involved in a methamphetamine conspiracy were sentenced on May 14, 2014, by the Honorable J. Ronnie Greer, U. S. District Judge. Daniel W. Johnson, 33, of Mountain City, Tenn., was sentenced to serve 130 months in federal prison, to be followed by three years of supervised release. Gerald Dean Campbell, 45, of Shady Valley, Tenn., was sentenced to serve 116 months in federal prison, to be followed by eight years of supervised release. There is no parole in the federal system.
A total of 20 defendants were indicted in May 2013 for conspiring to manufacture methamphetamine and possessing equipment, chemicals, materials, and products to be used in the manufacture of methamphetamine. Seven other defendants named in the indictment were also charged with distributing methamphetamine. All other defendants in this case have been adjudicated guilty and will be sentenced later this year.
The charges against these defendants stemmed from a lengthy investigation, from August 2006 to May 2013. The investigation revealed that the defendants conspired to obtain pseudoephedrine and other products needed to manufacture methamphetamine, from various sources in the Eastern District of Tennessee, the Western District of North Carolina and the Western District of Virginia. The pseudoephedrine and other products were then used to manufacture methamphetamine utilizing the “shake and bake” method. The methamphetamine was used and distributed in the Eastern District of Tennessee.
This investigation was a result of the collaborative efforts of the Johnson County Sheriff’s Office, 1st Judicial District Drug Task Force, the Tennessee Methamphetamine Task Force, and the DEA. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represented the United States.
Former President of University of Tennessee Foundation Sentenced to Serve 121 Months in Prison for Receiving and Possessing Child PornographyRead the Press Release
KNOXVILLE, Tenn. - Bruce Owen Downsbrough, 61, of Knoxville, Tennessee, was sentenced to serve 121 months in federal prison by the Honorable Thomas A. Varlan, Chief U. S. District Judge for the Eastern District of Tennessee. Downsbrough pleaded guilty in October 2013 to a federal indictment charging him with receiving and possessing child pornography.
In addition to the prison sentence, Downsbrough was ordered to pay $25,000 in restitution to victims and a $75,000 fine. He was also placed on supervised release for a period of ten years and for the rest of his life will be required to register as a sex offender wherever he lives, works, or attends school.
Downsbrough ordered child pornography to be sent to him via United States mail. A federal search warrant was obtained for Downsbrough’s home and his computer was seized and searched for child pornography. Examination of the seized computer revealed that, in addition to ordering child pornography through the mail, he had been accessing and downloading child pornography via the internet.
U. S. Attorney William C. Killian emphasized the importance of the prosecution of child pornographers. “Those who seek out and collect child pornography fuel the further exploitation of children. This sentence sends a strong message to those who would prey upon the youngest and most vulnerable members of society that trafficking in images of the exploitation of children will not be tolerated,” said Killian.
Agencies involved in this investigation included Knoxville Police Department - Internet Crimes Against Children Unit and U. S. Postal Service, Office of Inspector General. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, 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, Project Safe Childhood 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 Project Safe Childhood, 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."
Tennessee Salvage Company Owner and Operator Pleads Guilty to Conspiring to Violate the Clean Air ActRead the Press Release
WASHINGTON – The owner and operator of a Tennessee salvage and demolition company, A&E Salvage Inc., pleaded guilty today in federal court in Greeneville, Tennessee, for conspiring to violate the Clean Air Act.
Mark Sawyer pleaded guilty before U.S. District Court Judge Greer for the Eastern District of Tennessee to one criminal felony count for conspiring to violate the Clean Air Act’s “work practice standards” salient to the proper wetting, stripping, bagging and disposal of asbestos. According to the charges, Sawyer, along with other co-conspirators, engaged in a multi-year scheme in which substantial amounts of regulated asbestos containing materials were improperly removed from components of the former Liberty Fibers Plant or were illegally left in place during demolition.
Sawyer faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to the victims. Sawyer is the last of five charged co-defendants to plead guilty. Sawyer, Eric Gruenberg, Nick Smith, Armida DiSanti and Milto DiSanti are due to be sentenced on Nov. 19, 2014.
Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease. The Environmental Protection Agency has determined that there is no safe level of exposure to asbestos.
This case was investigated by Special Agents of the Environmental Protection Agency’s Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Morris of the U.S. Attorney’s Office for the Eastern District of Tennessee and Senior Trial Attorney Todd W. Gleason of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Benjamin Dwayne Swiger Sentenced to Serve Twenty Years in Prison for Distributing Child PornographyRead the Press Release
GREENEVILLE, Tenn.- Benjamin Dwayne Swiger, 28, of Gray, Tenn., was sentenced to serve 20 years in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison, Swiger will serve a life term of supervised release with special conditions. Swiger pleaded guilty in January 2014 to a federal indictment charging him with distributing child pornography.
The indictment and subsequent conviction of Swiger was the result of an investigation conducted by the Federal Bureau of Investigation and Washington County Sheriff’s Office. Assistant U.S. Attorney Helen Smith represented the United States.
William C. Killian, U.S. Attorney for the Eastern District of Tennessee said, "This case represents the continuing commitment of the U.S. Attorney's Office to prosecute those who distribute images of children being sexually exploited."
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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Two Indicted and Two More Plead Guilty in Department of Labor Fraud CasesRead the Press Release
KNOXVILLE, Tenn. – On May 6, 2014, a federal grand jury returned two, one-count indictments against Kenneth A. Gianbolvo, of Knoxville, Tenn., and Shaun Hurst, of Sevierville, Tenn., charging both men with theft of government funds.
According to the indictment on file with the U.S. District Court, Eastern District of Tennessee, Gianbolvo is alleged to have embezzled more than $1000 from the U.S Department of Labor (DOL) from May 19, 2008, to May 16, 2009. The indictment against Hurst, also on file with the U.S. District Court, Eastern District of Tennessee, alleges that he embezzled more than $1000 from DOL, from Mar. 28, 2009, to Nov. 28, 2009.
Additionally, on May 6, 2014, John A. Savage and James Phillips waived indictment and each pleaded guilty to an information charging them both with theft of government funds. According to their plea agreements on file with the U.S. District Court, Eastern District of Tennessee, Savage and Phillips both received unemployment benefits from the state of Tennessee unemployment program. These unemployment benefits were supplemented with federal funds through the American Recovery and Reinvestment Act of 2009, which authorized 100 percent federal funding for unemployment benefits that they qualified for and received. An internal audit determined that each individual was overpaid unemployment benefits after failing to report his employment and earnings from his employer, violating the policies and procedures for receiving unemployment benefits. In his plea agreement Phillips admitted to obtaining unemployment insurance benefits to which he was unentitled. Savage also acknowledged in his plea agreement that he owed the overpayment.
If convicted, Gianbolvo, Hurst, Savage, and Phillips all face up to 10 years in prison, a fine of up to $250,000, a term of supervised release of up to three years, and a $100 special assessment. In addition to the criminal penalties, defendants faced a state-determined one-year ban from receiving unemployment benefits.
Unemployment benefits are designed to assist those who qualify under specific policies and procedures. Unemployment benefits fraud is a serious offense. Individuals who take advantage of this benefit program through theft, fraud, and lies, effectuated by hiding earnings, may be prosecuted and face both terms in prison and fines.
These charges are the result of an investigation by DOL- Office of Inspector General and Tennessee Department of Labor. Assistant U.S. Attorney Brooklyn Sawyers represents 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.
Ricky Dwayne Harvey Sentenced to 180 Months on Oxycodone Trafficking and Money Laundering ChargesRead the Press Release
GREENEVILLE, Tenn. – On May 5, 2014, Ricky Dwayne Harvey, 30, of Kingsport, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 180 months in federal prison for his leadership role in oxycodone and money laundering conspiracies centered around the Sullivan County, Tenn., area.
This conspiracy included 17 indicted individuals and involved large scale oxycodone dealing from approximately May 2008. Many of the pills obtained and sold within this conspiracy were obtained from Michigan, Florida and Georgia and transported back to the Eastern District of Tennessee for resale. Harvey stipulated that he conspired to distribute a conservative estimate of 10,000 (30 mg) oxycodone pills in the Eastern District of Tennessee. He also sent numerous wire transfers and directed other individuals to send wire transfers to other co-conspirators in Detroit, Michigan to further and advance his oxycodone trafficking.
Harvey was stopped by law enforcement in June 2013 where he produced a fake drivers’ license, supplied a false date of birth and social security number and had members of his family vouch for him. His true identity was soon verified and he was arrested on a federal indictment warrant. In explaining his actions, Harvey told the officers that he did his homework in the event he got stopped, just like an officer also does his homework.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Harvey include the Bureau of Alcohol, Tobacco and Firearms, Sullivan County Sheriff’s Office, Kingsport Police Department, and Bristol Tennessee Police Department, all of which provided invaluable assistance during the course of the investigation. Assistant U.S. Attorney Wayne Taylor represented the United States.
Harold Williams Sentenced to 92 Months for Distributing OxycodoneRead the Press Release
GREENEVILLE, Tenn. – On May 5, 2014, Harold Williams, of Philadelphia, Pa., was sentenced to serve 92 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison, Williams will be subject to supervised release for six years.
In September 2013 Williams pleaded guilty to conspiring to distribute oxycodone in Hamblen County, Tenn. Williams brought oxycodone from Philadelphia to East Tennessee. An undercover investigation culminated with the April 2013 arrest of Williams and another individual, who were traveling in a rented Ford Explorer. A search of the vehicle led to the seizure of over 1,600 oxycodone tablets. The sentencing of Williams brings to a close the prosecution of this drug conspiracy which included local residents Samuel Webb, Jason Hill, Diana Briggs Shultz and Wendy Jefferson. Together, Williams and these individuals distributed more than 10,000 oxycodone tablets in Hamblen County.
U.S. Attorney, William C. Killian noted, “abuse of oxycodone has reached epidemic proportions in East Tennessee. The U.S Attorney’s Office will continue to prosecute these cases in order to combat this influx of drug crime into our communities.”
Law enforcement agencies participating in the joint investigation included the Hamblen County Sheriff’s Office and Federal Bureau of Investigation. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Pill Mill Owner Sentenced to 69 Years in PrisonRead the Press Release
KNOXVILLE, Tenn. -- Randy Kincaid, 58, of Maryville, Tenn., was sentenced to serve 830 months in prison by the Honorable Thomas A. Varlan, Chief U.S. District Judge. The sentence was the result of a conviction at trial in October 2013 to a federal indictment charging him with drug, firearm, money laundering and structuring offenses in conjunction with Breakthrough Pain Therapy Center in Maryville. Kincaid’s wife and co-owner of Breakthrough, Sandee Kincaid, along with family members Wendi Henry and Dustin Morgan were also convicted and are presently in custody and awaiting sentencing.
The indictment and subsequent conviction of Kincaid and his co-defendants resulted from a lengthy investigation by the Internal Revenue Service – Criminal Investigation, Fifth Judicial Drug Task Force, and Drug Enforcement Administration. The pain clinic ceased operations when it was raided by federal and local law enforcement agents in December 2010. On that same date, agents seized significant quantities of prescription narcotic pain pills, firearms, and nearly $700,000 in cash.
U.S. Attorney William C. Killian said, “The cooperation and diligence of these local, state and federal agencies resulted in a severe sentence for this individual who was distributing huge amounts of addictive pills. This sentence is a deterrent for those considering the illegal distribution of prescription pills.”
Assistant U.S. Attorneys Jennifer Kolman and Frank M. Dale, Jr. represented the United States during the trial and sentencing.
Timothy Warren Mann Sentenced to Serve Six Months in Prison for Stealing Military Body ArmorRead the Press Release
KNOXVILLE, Tenn.- On Apr. 29, 2014, Timothy Warren Mann, 50, of Morristown, Tenn., was sentenced to serve six months in federal prison, by the Honorable Thomas A. Varlan, Chief U.S. District Judge. Upon his release from prison, Mann will be required to serve two years of supervised release, the first six months of which will be served under a condition of home detention.
Mann pleaded guilty in September 2013 to a federal indictment charging him with stealing body armor manufactured for the U.S. government. The body armor, consisting of approximately 500 protective vests, was manufactured by BAE Specialty Defense Group, Inc., (“BAE”) for the U.S. Department of Defense (DOD). The vests, which had not been delivered to DOD, were slated for destruction pursuant to the terms of the government contracts under which they were manufactured, in order to prevent the body armor from being used by civilians for improper purposes, including criminal activity. Over a period of several months in 2012, Mann stole the vests from BAE’s facility in Morristown, Tenn., and sold them to persons who were re-selling them, typically at gun shows, to members of the public.
A six-month long undercover investigation conducted by the Defense Criminal Investigative Service and the Army Criminal Investigative Command identified Mann as the source of the stolen vests. Assistant U.S. Attorney Matthew Morris represented the United States.