Eastern District of Tennessee
Press releases recorded for this federal judicial district.
Mountain City Residents Sentenced for Conspiring to Manufacture MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – Two individuals involved in a methamphetamine conspiracy were sentenced on Apr. 23, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge. Stacy T. Snyder, 44, of Mountain City, Tenn., was sentenced to serve 108 months in federal prison, to be followed by four years of supervised release. Billy E. Hartness, 35, of Mountain City, Tenn., was sentenced to serve 211 months in federal prison, to be followed by four years of supervised release. There is no parole in the federal system.
These individuals, along with 18 others, 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. All have been adjudicated guilty and have either been sentenced or will be sentenced later this year. The charges stem from a lengthy investigation spanning from August 2006 to May 2013 involving a conspiracy to obtain pseudoephedrine and other products needed to manufacture methamphetamine from various sources 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.
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 the DEA. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represent the United States.
Darien Houston Sentenced as Armed Career CriminalRead the Press Release
CHATTANOOGA, Tenn. - On Apr. 24, 2014, Darien Houston, 43, of Chattanooga, Tenn., was sentenced as an armed career criminal to serve 15 years in prison, by U.S. District Court Judge Curtis L. Collier. Houston's criminal history includes 23 felony convictions which include second degree burglary, possession of cocaine for resale, possession of marijuana for resale, felony escape, forgery, theft of property and concealing stolen property, among others. Houston is an admitted member of the Vice Lords street gang.
In January 2014, Houston pleaded guilty to being a felon in possession of a firearm. The federal case arose after the Chattanooga Police Department served a search warrant on Houston’s residence in May 2012. The search of the residence revealed a Smith & Wesson .38 Special caliber revolver. Houston initially denied having any knowledge of the revolver, but later consented to an interview. He waived his Miranda rights and admitted to knowing the revolver was in the apartment and handling it.
U.S. Attorney William C. Killian praised the efforts of the law enforcement agencies involved in this investigation. “Thanks to their dedication and cooperation, a career criminal will serve a lengthy sentence in federal prison,” said Killian
“The success of this investigation is a result of the collaborative efforts of ATF and our local partners," said ATF Special Agent in Charge Jeff Fulton. "This investigation is more evidence that ATF's commitment to combating violent crime is unwavering. ATF's Frontline strategy utilizes every available resource to make our communities a safer place to live."
Agencies involved in the investigation which led to the indictment and conviction of Houston included the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Chattanooga Police Department. Assistant U.S. Attorney Chris Poole represented the United States.
Former Lafollette Attorney Sentenced for Federal Tax OffenseRead the Press Release
KNOXVILLE, Tenn. – Johnny V. Dunaway, 66, of Lafollette, Tenn., was sentenced on Apr. 23, 2014, by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 12 months in prison. Dunaway was also ordered to pay restitution to the Internal Revenue Service (IRS) for unpaid taxes and interest.
In December 2013, Dunaway pleaded guilty to a one-count information charging him with filing a false tax return for the 2008 tax year. In conjunction with his guilty plea, Dunaway admitted that his 2008 return failed to declare truthfully the business income that he had received from his law practice. In the course of its investigation, the IRS determined that Dunaway had also falsely reported his income taxes for the 2006, 2007 and 2009 tax years.
For most of his career as an attorney, Dunaway practiced law in Lafollette, Tenn. As a result of his federal tax offense, Dunaway consented to disbarment in October 2013.
This conviction is the result of an investigation by IRS-Criminal Investigation. Assistant U.S. Attorney Frank M. Dale, Jr. represented the United States.
Sevierville Residents Charged with Oxycodone Distribution Conspiracy and Firearms OffensesRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville returned a six-count indictment on Apr.15, 2014, against Esther Franklin, 53, Nicole Hughes, 26, and Christopher Matthew Hughes, 31, all of Sevierville, Tenn., charging them with a conspiracy to distribute oxycodone and firearms offenses.
Franklin and Nicole Hughes appeared in court on Apr. 22, 2014, before U.S. Magistrate Judge C. Clifford Shirley, Jr., and pleaded not guilty to the charges in the indictment. Nichole Hughes was placed on pretrial release and Franklin was held pending trial, which has been set for July 1, 2014, in U.S. District Court in Knoxville. Christopher Hughes will be scheduled for an initial appearance in the near future.
The indictment alleges that from May 2011 to July 2013, Franklin, Nicole Hughes and Christopher Matthew Hughes were involved in a conspiracy to distribute oxycodone. Franklin was also charged with possession with intent to distribute oxycodone, possession of firearms in furtherance of a drug trafficking crime, and possession of firearms and ammunition by a convicted felon. Christopher Matthew Hughes was also charged with distribution of oxycodone and possession of ammunition by a convicted felon.
If convicted, all three face up to 20 years in prison, a fine of up to $1,000,000, and a term of supervised release of at least three years and up to life. In addition, if Franklin is convicted of possessing firearms in furtherance of a drug trafficking offense, she will face a minimum mandatory term of imprisonment of at least five years and up to life, to be served consecutively to any other term of imprisonment which may be imposed.
This indictment is the result of an investigation by the Tennessee Bureau of Investigation and Sevier County Sheriff’s Office. Assistant U.S. Attorney Cynthia F. Davidson will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
Bristol Man Pleads Guilty to Bath Salts ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On Apr. 22, 2014, Harry Joseph Cannon, 50, of Bristol, Tenn., pleaded guilty before the Honorable R. Leon Jordan, U.S. District Judge, to conspiring to distribute, and possess with the intent to distribute, assorted Schedule I controlled substances, and Schedule I controlled substance analogues, commonly known as “bath salts” or “spice”.
Sentencing is set for 10:30 a.m., Aug. 19, 2014, in U.S. District Court, Greeneville. He faces up to 20 years in prison. Federal sentences are not parolable.
From March 2011 to October 2013, Cannon conspired with various other persons to distribute, and possess with the intent to distribute “bath salts” and “spice”. Canon sold these substances from his store, 420 Emporium, in Bristol, Tenn. During the investigation, law enforcement conducted a series of undercover drug purchases from Cannon and 420 Emporium. Those purchases led to federal search warrants being executed on two separate occasions in March 2012 and October 2012. In both instances, agents recovered extensive amounts of Schedule I controlled substances, and Schedule I controlled substance analogues. Most of these drugs were already prepackaged for resale. Numerous firearms were also recovered.
This long term investigation was the product of a partnership between the Bristol Tennessee Police Department, Second Judicial District Drug Task Force, Sullivan County Sherriff’s Office, and the Drug Enforcement Administration. Special Assistant U.S. Attorney Nick Regalia represented the United States.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Seevers Pleads Guilty to Attempted Murder and Aggravated Sexual Abuse by ForceRead the Press Release
KNOXVILLE, Tenn. - William E. Seevers, 48, appeared in U.S. District Court on Apr. 21, 2014, and pleaded guilty to one count of attempted murder and one count of aggravated sexual abuse by force. Sentencing has been set for 2:00 p.m., Aug. 21, 2014, before the Honorable Thomas Varlan, U.S. District Court Judge.
A federal grand jury returned an indictment against Seevers in December 2013 alleging that in June 2012 Seevers attempted to kill an individual in the Great Smoky Mountains National Park by stabbing her in the neck with a knife. Additionally, Seevers engaged in sexual activity with the individual by use of force and placing her in fear of death by holding her at knife point and stabbing and punching her when she attempted to flee from him.
This investigation was conducted by the National Park Service and Federal Bureau of Investigation. Assistant U.S. Attorney Jennifer Kolman represents the United States.
Frank Zimmerman Pleads Guilty to Embezzlement from United States Department of LaborRead the Press Release
KNOXVILLE, Tenn. – On Apr. 17, 2014, Frank Zimmerman pleaded guilty in U.S. District Court to a one-count Information charging him with wilfully and knowingly embezzling over $1000 from the U.S. Department of Labor (“DOL”), in the form of overpayment of unemployment benefits.
Sentencing for Zimmerman has been set for Aug. 14, 2014, at 2:30 p.m., in U.S. District Court, Knoxville. He faces 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, he faces a state determined one year ban from receiving unemployment benefits.
According to the plea agreement on file with the U.S. District Court, following an agency investigation, the Tennessee Department of Labor and Workforce Development (TDLWD) Division of Employment Security discovered and notified Zimmerman that he had been overpaid unemployment benefits of approximately $11,824.00, including approximately $2,399.00 in state benefits and approximately $9,425.00 in federal benefits. This overpayment was the result of Zimmerman’s failure to report earnings from approximately Apr. 25, 2010, to approximately Feb. 5, 2011. He received unemployment benefits for a total of 40 weeks before the fraud was uncovered. Zimmerman was required to report gross wages from working through a weekly certification process. He was required to follow certain policies and procedures, including becoming disqualified for benefits based on receiving earnings equal to or more than his weekly unemployment benefit amount.
In February 2010 Zimmerman filed an application and was approved for unemployment benefits from the TDLWD. Under TDLWD, he was entitled to receive 26 weeks of benefits based on funds that were paid to the state of Tennessee by his employer. After 26 weeks, if he continued to be eligible for unemployment benefits, extended benefits were available which were paid by the federal government to the state of Tennessee. Traditionally, these extended benefits were composed of only 50 percent federal funds; however, the American Recovery and Reinvestment Act of 2009 authorized 100 percent federal funding for extended employment benefits from Feb.17, 2009, through Dec. 31, 2013. Thus, 100 percent federal funds paid benefits authorized under that Act and during Zimmerman’s authorization period. Although administered by the TDLWD, a state agency, the funds remained federal property because the federal government retained control over the funds including the requirement that the beneficiary certify his or her continued eligibility for the benefits and report any income received during the period weekly.
Special Agents with the U.S. Department of Labor, Office of lnspector General interviewed Zimmerman in December 2012 where he voluntarily responded to their inquiries and signed a handwritten confession memorializing his unemployment fraud. Both special agents with DOL and TDLWD investigated this case. Assistant U.S. Attorney Brooklyn Sawyers is representing the United States.
Lucas Jordan Conerly Sentenced to Ten Years in Prison for Using Internet to Entice A Child for Illegal Sexual PurposesRead the Press Release
GREENEVILLE, Tenn. – On Apr. 17, 2014, Lucas Jordan Conerly, 31, of Blountville, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 10 years in prison. Conerly pleaded guilty in December 2013 to a federal indictment charging him with using a means of interstate commerce to entice a child for illegal sexual activity. Upon his release from prison, Conerly will be subject to a life term of supervised release with special conditions.
When the family of a 13-year-old child reported to local law enforcement that Conerly had solicited meetings with their child, the Knoxville Police Department Internet Crimes Against Children Unit (ICAC) and Federal Bureau of Investigation joined forces to assume the victim’s online identity and communicate with him. Conerly arranged to meet the victim at a business in Johnson City and promised the victim gifts if he met with him. In January 2013, Conerly was arrested when he appeared at the scheduled location for the purpose of engaging in illegal sexual activity. He maintained an online relationship with the victim for nearly four months and later admitted he selected the victim from the child’s social media photograph.
William C. Killian, U.S. Attorney for the Eastern District of Tennessee, praised the cooperative efforts of the investigative agencies in this case. “Through outstanding investigative work, the Federal Bureau of Investigation, Knoxville Police Department ICAC and the Johnson City Police Department disrupted Conerly’s plan to prey on a child. Those who commit these acts deserve to spend many years in prison and be supervised for the rest of their lives to ensure other children are not harmed,” stated Killian.
The indictment and subsequent conviction of Conerly was the result of an investigation conducted by the Federal Bureau of Investigation, Knoxville Police Department ICAC, and Johnson City Police Department. Assistant U.S. Attorney Helen Smith 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 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.
Mountain City and Boone Residents Sentenced for Conspiring to Manufacture MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – Two individuals involved in a methamphetamine conspiracy were sentenced on Apr. 9, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge. Amber R. Coffey, 31, of Boone, N.C., was sentenced to serve 148 months in federal prison, to be followed by four years of supervised release. Crystal E. Potter, 30, of Mountain City, Tenn., was sentenced to serve 46 months in federal prison, to be followed by four years of supervised release. There is no parole in the federal system.
A total of 20 individuals, including Coffey and Potter, 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. All individuals charged in this case have been adjudicated guilty and have either been sentenced or will be sentenced later this year.
The charges against these individuals stemmed from a lengthy investigation spanning from August 2006 to May 2013. The investigation revealed that they conspired to obtain pseudoephedrine and other products needed to manufacture methamphetamine from various sources 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.
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.
Melvin Taylor Indicted for Crack Cocaine DistributionRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville returned a one-count indictment on Mar. 4, 2014, against Melvin Taylor, 41, of Jefferson City, Tenn., for distribution of crack cocaine. Taylor appeared in court on Apr. 9, 2014, before U.S. Magistrate Judge C. Clifford Shirley, Jr., and pleaded not guilty. He was detained pending trial, which has been set for Jun. 17, 2014, in U.S. District Court in Knoxville.
The indictment alleges that in December 2013 Taylor distributed a quantity of crack cocaine to another individual. If convicted, Taylor faces up to 20 years in prison, a fine of up to $1,000,000, and a term of supervised release of at least three years and up to life.
This indictment is the result of an investigation by the Fourth Judicial District Drug Task Force and Jefferson County Sheriff’s Office. Assistant U.S. Attorney Kelly A. Norris will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every defendant is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
Federal Jury Convicts Kimberly Robinson on Cocaine Distribution and Money Laundering Conspiracy ChargesRead the Press Release
Conspiracy Involved the Distribution of At Least 480 Kilograms of Cocaine
KNOXVILLE, Tenn. - Following a three day trial in U.S. District Court, Knoxville, Tenn., a jury convicted Kimberly Robinson of Fayetteville, Ga., of conspiracy to distribute at least five kilograms of cocaine and conspiracy to commit money laundering.
Sentencing is set for 10:00 a.m., Aug. 13, 2014, in U.S. District Court in Knoxville, Tenn. Robinson faces a minimum mandatory sentence of 10 years to life in prison.
The evidence presented at trial showed that beginning in 2007 Robinson transported kilogram quantities of cocaine from Fayetteville, Ga., to a residence in Knoxville, Tenn., where it was subsequently distributed by other members of the conspiracy. Evidence further showed that after the cocaine was sold, the proceeds from the drug sales were secured in the same residence so that Robinson could travel from Fayetteville, Ga., to the Knoxville, Tenn., residence and pick up the proceeds. Robinson would then deliver the proceeds to another member of the conspiracy in Fayetteville, Ga., where the proceeds were used to obtain additional kilograms of cocaine to sell in Knoxville, Tenn. In all, the conspiracy was responsible for distributing at least 480 kilograms of cocaine in Knoxville since 2000. Evidence at trial showed that the total street value of the cocaine involved in the case was $48 million.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Kimberly Robinson included the Drug Enforcement Administration, Internal Revenue Service, Knoxville Police Department, Clayton County Georgia Police Department, and Fayette County Georgia Sheriff’s Office. Assistant U.S. Attorney David P. Lewen, Jr. represented the United States at trial.
Greeneville Man Sentenced for Participating in A Conspiracy to Manufacture MethmaphetamineRead the Press Release
GREENEVILLE, Tenn.- Darrel Von Scrogum, 50, of Greeneville, Tenn., was sentenced on Apr. 7, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 262 months in prison. Scrogum pleaded guilty to a July 2013 federal superseding indictment charging him with conspiracy to distribute methamphetamine.
The methamphetamine distribution conspiracy that Scrogum admitted to being a part of involved trafficking high purity methamphetamine brought from Mexico to drug traffickers in Georgia and then ultimately into northeast Tennessee.
The indictment and subsequent conviction of Scrogum and several conspirators was the result of an ongoing and collaborative investigation conducted by the Third Judicial Drug Task Force, Greeneville Police Department, Greene County Sheriff’s Department, Hawkins County Sheriff’s Department, Washington County Sheriff’s Department, Claiborne County Sheriff’s Department, Tennessee Bureau of Investigation, and Drug Enforcement Administration. Assistant U.S. Attorney J. Christian Lampe represented the United States.
Former U.S. Postal Employees Carol J. and Richard Pazder Plead Guilty to False Statement OffensesRead the Press Release
KNOXVILLE, Tenn. – On Apr. 4, 2014, Carol J Pazder, 61, and Richard Pazder, 67, of Maryville, Tenn., appeared in the U.S. District Court for the Eastern District of Tennessee at Knoxville. Carol J. Pazder pleaded guilty to providing false statements to obtain federal employees benefits. Her husband, Richard Pazder, pleaded guilty to aiding and abetting in the false statements.
Sentencing is set for 10:00 a.m., Jun. 20, 2014. Both face a term of five years in prison, followed by three years of supervised release, a fine of up to $250,000.00, and restitution.
The Pazders were both previously employed by the U.S Postal Service. Carol J. Pazder claimed false injuries at work. She and her husband Richard Pazder claimed the injuries were so painful she could only walk stand or sit for a few minutes at a time and was therefore unable to work and collected unemployment compensation. The couple was video-taped taking a cruise, disembarking at three ports of call and walking for hours at a time, followed by a trip to Disneyland.
In December 2013 an indictment, which included the aforementioned charges, was returned against the Pazders by a federal grand jury sitting in Knoxville, Tenn. This indictment was the result of an ongoing investigation by U.S. Postal Service, Office of Inspector General. Jennifer Kolman, Assistant United States Attorney represented the United States.
Mark A. Billinglsley Sentenced to 10 Months in Prison for Making Fasle Statements During His Bankruptcy ProceedingsRead the Press Release
CHATTANOOGA, Tenn. – Mark A. Billingsley, 35, of Whitwell, Tenn., was sentenced on Apr. 3, 2014, by the Honorable Curtis L. Collier, U.S. District Court Judge, to serve 10 months in federal prison for knowingly and fraudulently making a false statement under oath in his bankruptcy case, by falsely testifying in a proceeding before the U.S. Trustee at a meeting of creditors. Upon his release from prison, Billingsley will be subject to two years of supervised release. There is no parole in the federal system.
Billingsley filed a bankruptcy case in June 2012, in the U.S. Bankruptcy Court for the Eastern District of Tennessee, Chattanooga Division. A meeting of creditors was held in February 2013, and Billingsley testified under penalty of perjury in relation to his bankruptcy proceeding that he was employed at SK Trucking and that SK Trucking had been making withdrawals from his paychecks to pay into his bankruptcy plan. An investigation by the U.S. Trustee along with the U.S. Secret Service revealed Billingsley’s statements were false and that SK Trucking did not exist. He pleaded guilty in December 2013 to a federal indictment charging him with making a false statement under oath.
Gary Eugene Teague Sentenced to Serve 200 Months in Prison for Conspiring to Distribute OxycodoneRead the Press Release
GREENEVILLE, Tenn. – Gary Eugene Teague, 45, of Newport, Tenn., was sentenced on Apr. 1, 2014, by the Honorable Leon Jordan, U.S. District Court Judge, to serve 200 months in federal prison for conspiring to distribute oxycodone. Upon his release from prison, Teague will be subject to supervised release under the supervision of the U.S. Probation Office for six years. There is no parole in the federal system.
Teague and nine others were named in an eight-count indictment in December 2012, charging them with drug trafficking of oxycodone. The charges initiated from a lengthy investigation of individuals who traveled to numerous pain clinics throughout Tennessee to obtain oxycodone to distribute in eastern Tennessee. The total conspiracy involved over 1 million milligrams of oxycodone, which is the equivalent of over 30,000 dose units of 30 milligram oxycodone tablets.
All 10 individuals charged in the indictment have now been convicted and Teague was the next to last to be sentenced. A sentencing hearing for Billy Webb is scheduled for June 24, 2014.
U.S. Attorney Bill Killian commended the law enforcement agencies involved in this investigation and stated, “We appreciate the collaborative efforts of the law enforcement agencies involved in this investigation. We will continue to work closely with law enforcement to investigate these types of offenses and aggressively prosecute those who traffic prescription drugs and the ‘pill mills’ that supply drug trafficking organizations,” stated Killian.
This investigation was the result of a joint investigation by the Cocke County Sheriff’s Office and Tennessee Bureau of Investigation. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Johnny Wayne Neeley Sentenced to Serve 96 Months in Prison for Conspiring to Distribute OxycodoneRead the Press Release
GREENEVILLE, Tenn. – Johnny Wayne Neeley, 39, of Sneedville, Tenn., was sentenced on Mar. 31, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 96 months in federal prison for conspiring to distribute oxycodone and possessing with intent to distribute oxycodone. Upon his release from prison, Neeley will be subject to three years of supervised release. There is no parole in the federal system.
In October 2012, Neeley and 11 other individuals were named in an 18-count indictment charging them with drug trafficking of oxycodone, oxymorphone, and methamphetamine, firearms violations, and money laundering. The charges were the result of a lengthy investigation of individuals who traveled to Florida, Tennessee, and Georgia to obtain oxycodone and other drugs to distribute throughout eastern Tennessee. The total conspiracy involved over 778,000 milligrams of oxycodone, which is the equivalent of nearly 26,000 dose units of 30 milligram oxycodone.
Neeley was the only individual charged in the indictment who elected to proceed to trial. According to the evidence presented at trial, Neeley paid for, or “sponsored, individuals to travel on commercial airlines to pill mills in Tampa, Fla., to obtain oxycodone for distribution in the Eastern District of Tennessee. He also paid for, or “sponsored,” individuals to travel to pill mills in the Eastern District of Tennessee to obtain oxycodone for distribution. Evidence at trial also showed that Neeley himself distributed controlled substances, including oxycodone, Xanax, and Suboxone, in the Eastern District of Tennessee on numerous occasions. Several officers testified about the October 2012 arrest of Neeley and Greg Rhea, at Rhea’s Morristown residence, where the two were found barricaded inside a room in the house, which was found to contain controlled substances, including oxycodone and oxymorphone, and three firearms.
All 12 individuals charged in the indictment have now been convicted and Neeley was the next to last to be sentenced. A sentencing hearing for Gregory Allen Rhea is scheduled for April 14, 2014, in U.S. District Court, Greeneville, Tenn.
U.S. Attorney William C. Killian commended the law enforcement agencies involved in this investigation and stated, “The U.S. Attorney’s office will continue to work closely with all law enforcement agencies to cut off the illegal supply lines of oxycodone and other prescription narcotics. This sentence is an example of the punishment that awaits those who traffic prescription drugs and the ‘pill mills’ that supply criminal organizations.”
Agencies involved in this investigation included the Tennessee Bureau of Investigation, Morristown Police Department, and Hawkins County Sheriff’s Department. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Rockford Resident Sentenced for Federal Firearms ViolationsRead the Press Release
KNOXVILLE, Tenn. – On Mar. 25, 2014, Brandon Waldrip, 32, of Rockford, Tenn., was sentenced to serve 18 months in prison, by the Honorable Thomas W. Varlan, Chief U.S. District Judge, for possession of unregistered weapons and selling a firearm to a convicted felon. Upon his release from prison, Waldrip will be subject to two years of supervised release.
Waldrip pleaded guilty in September 2013, to knowingly possessing two silencers without serial numbers and not registered to him in the National Firearms Registration and Transfer Record. He also pleaded guilty to knowingly selling a firearm to a convicted felon.
Facts stipulated in the plea agreement on file with the U.S. District Court show that Waldrip began making and selling firearms silencers beginning in January 2013. In February 2013, he sold a silencer to an undercover agent of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Additionally, in February 2013, Waldrip sold a firearm to an individual working on behalf of law enforcement who asked if he could leave the gun at Waldrip’s house stating, “being a convicted felon, I’m not trying to have them pop up, you know, home inspection . . . .” Waldrip agreed to this request even after being informed by the individual that he was a convicted felon. The firearm was retrieved by the individual from Waldrip’s house in March 2013.
This conviction was the result of an investigation conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives and Knoxville Police Department.
Mountain City Residents Sentenced for Conspiring to Manufacture MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – Two individuals involved in a methamphetamine (meth) conspiracy in upper East Tennessee were sentenced this week by the Honorable J. Ronnie Greer, U.S. District Judge. On Mar. 24, 2014, Aaron A. Stout, 31, of Mountain City, Tenn., was sentenced to serve 168 months in federal prison, to be followed by five years of supervised release. On Mar. 26, 2014, Brittany L. Pennington, 24, of Mountain City, Tenn., was sentenced to serve 51 months in federal prison, to be followed by five years of supervised release. There is no parole in the federal system.
These two individuals, along with 18 others, were indicted in May 2013 for conspiring to manufacture meth and possessing equipment, chemicals, materials, and products to be used in the manufacture of meth. Stout was also charged with distributing meth. In his plea agreement, Stout admitted that he had manufactured a conservative estimate of 150 to 500 grams of meth. He further admitted that he had distributed between 50 to 150 grams of meth. All of the others associated with this case have been adjudicated guilty and have either been sentenced or will be sentenced later this year.
The charges against these individuals stemmed from a lengthy investigation spanning from August 2006 to May 2013. These individuals conspired to obtain pseudoephedrine and other products needed to manufacture meth from various sources 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 meth utilizing the “shake and bake” method. The meth 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, 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 represented the United States.
Former Owner/President of Tennessee Guns International, Inc. Sentenced in U.S. District CourtRead the Press Release
KNOXVILLE, Tenn. – On Thursday, Mar. 27, 2014, Charles M. Jones III, former owner and president of Tennessee Guns International, Inc. (TGI), was sentenced in U.S. District Court to serve one year of probation and 100 hours of community service as a result of his felony conviction for importation of goods (firearms) by false statements.
Jones pleaded guilty to the offense pursuant to a plea agreement last December. The plea agreement also resulted in TGI forfeiting and relinquishing several thousand firearms and firearms parts that were seized from TGI. Significantly, Jones can no longer possess a firearm, since he is now a convicted felon.
“It is extremely important that firearms dealers abide by the law in conducting their business, in order to prevent those who are not authorized under law to possess firearms, from obtaining guns and weapons,” said U.S. Attorney William C. Killian.
Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Jeffrey Fulton stated, “This conviction and sentence is a reminder that smuggling firearms by a Federal Firearms Licensee into the U.S. is a serious matter and will be vigorously investigated and prosecuted.”
“Firearms regulations exist to ensure weapons crossing international borders are properly accounted for to preserve public safety,” said Special Agent in Charge of Homeland Security Investigations (HSI) New Orleans Raymond R. Parmer Jr. “This case shows the significant consequences awaiting individuals who attempt to illegally import weapons and who make false claims while attempting to do so.” Parmer oversees a five-state area of operations to include Tennessee, Alabama, Arkansas, Louisiana and Mississippi.
The conviction was the result of a long-term investigation conducted by ATF, and HSI. Special Assistant U.S. Attorney Todd Martin, as well as Assistant U.S. Attorneys Jeff Theodore and Frank Dale, represented the United States.
Knoxville Resident Sentenced to 100 Months in Prison for Possession of Child PornographyRead the Press Release
KNOXVILLE, Tenn.– On Mar. 26, 2014, James Dale Parker, Jr., 41, of Knoxville, Tenn., was sentenced to serve 100 months in prison for possession of child pornography. Upon his release from prison he will be subject to 15 years of supervised release.
Parker pleaded guilty in August 2013, to possession of child pornography. Through the execution of a search warrant by agents with the Federal Bureau of Investigation 92 images and 265 videos of child pornography were found on a personal computer belonging to Parker.
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."
William Birch “Bill Bill” Gudger Sentenced to Serve 125 Months in Prison for Crack Cocaine ConspiracyRead the Press Release
GREENEVILLE, Tenn. – William Birch Gudger, a.k.a. “Bill Bill”, 35, of Greeneville, Tenn., was sentenced on Mar. 24, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 125 months in federal prison for his involvement in a crack cocaine conspiracy.
In April 2013, Gudger was arrested on an unrelated charge and placed in the Greene County Detention Center. While incarcerated, Gudger contacted Misty Lee Millar, 34, of Greeneville, Tenn., and asked her to go to his houses and “secure everything,” meaning for her to move his drugs so the police and/or rival drug dealers would not find them. Law enforcement officers subsequently searched Millar’s residence and recovered over 113 grams of crack cocaine, which she had moved from Gudger’s residences.
Search warrants were executed at both of Gudger’s residences in Greeneville, during which officers located digital scales, ammunition, paraphernalia and other miscellaneous items. Gudger was interviewed by law enforcement officers and admitted that he had asked Millar to remove his crack cocaine from his residences for him. He also admitted to cooking and dealing crack cocaine. Gudger told officers he had received three ounces of cocaine the previous week and cooked it into crack cocaine at one of his residences.
In May 2013, Gudger sold approximately 2.3 grams of crack cocaine to an individual working on behalf of law enforcement at one of his residences. In August 2013, Gudger was arrested again with to two to three grams of crack cocaine on his person.
Millar was previously sentenced by U.S. District Court Judge J. Ronnie Greer to serve 60 months in federal prison for her role in the conspiracy.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Gudger include the Third District Judicial Drug Task Force, Greene County Sheriff’s Office, Greeneville Police Department, Tennessee Bureau of Investigation, and Drug Enforcement Administration. Assistant U.S. Attorney Wayne Taylor represented the United States.
Mountain City Residents Sentenced for Conspiring to Manufacture MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – Four individuals involved in a methamphetamine conspiracy were sentenced on Mar. 12, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge. Janet L. Bunting, 45, of Mountain City, Tenn., was sentenced to serve 46 months in federal prison followed by three years of supervised release. Heather M. Eller, 32, of Mountain City, Tenn., was sentenced to serve 92 months in federal prison followed by five years of supervised release. Debbie L. Snyder, 36, of Mountain City, Tenn., was sentenced to serve 60 months in federal prison, followed by four years of supervised release. Rachel M. Williams, 39, of Mountain City, Tenn., was sentenced to serve 62 months in federal prison followed by four years of supervised release. There is no parole in the federal system.
These individuals, along with 16 others 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 of those charged in this case have been adjudicated guilty and will be sentenced later this year.
The charges stemmed 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 the Western District of Virginia. The pseudoephedrine and other products were then used to manufacture methamphetamine utilizing the “shake and bake” method. The methamphetamine produced was used and distributed in the Eastern District of Tennessee.
“Methamphetamine has had a devastating effect on communities in eastern Tennessee. Thanks to the collaborative efforts of so many law enforcement agencies, we have recently seen a reduction in the number of methamphetamine laboratories across the district. Our office is dedicated to combat methamphetamine related crimes and will continue to aggressively prosecute these offenses,” stated 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, the Tennessee Methamphetamine Task Force, and the Drug Enforcement Administration. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represent the United States.
Kingsport Woman Pleads Guilty to Filing False and Fraudulent Federal Income Tax ReturnsRead the Press Release
GREENEVILLE, Tenn. – On Mar. 10, 2014, Melissa Ann Nowlin, 28, of Kingsport, Tenn., pleaded guilty in U.S. District Court to one count of conspiracy to defraud the government with respect to claims and four counts of theft of public money.
According to supporting documentation for the plea agreement, Nowlin conspired with Devin Ray Horne, 24, of Kingsport, Tenn., to fraudulently obtain funds by filing false federal tax returns using personal identifying information which Horne stole from other individuals in the Eastern District of Tennessee.
Nowlin previously pleaded guilty in August 2013 to other charges involving her participation with Horne and numerous others in a conspiracy to distribute oxycodone pills. Sentencing for Nowlin on both the oxycodone conspiracy and the fraudulent income tax return case is set for Jun. 30, 2014, before the Honorable J. Ronnie Greer, U.S. District Court Judge.
The investigation leading to the charges and guilty plea was conducted by the IRS Criminal Investigations Division, 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.
Aaron Kinzer Sentenced to 188 Months for Drug TraffickingRead the Press Release
GREENEVILLE, Tenn. – On Mar. 10, 2014, Aaron Kinzer, 32, of Bristol, Tenn., was sentenced to a total of 188 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison Kinzer will be supervised for eight years by the U.S. Probation Office.
Kinzer pleaded guilty in July 2012 to conspiring to distribute crack cocaine and marijuana, and money laundering. He led a conspiracy to traffic in marijuana and crack cocaine, obtained in Atlanta and Charlotte, in the Tri-Cities area. Kinzer’s sentencing brings to a close the investigation which resulted in the conviction of seven individuals.
Law enforcement agencies participating in the joint investigation included the Sullivan County Sheriff’s Office; Bristol Tennessee Police Department; Iredell County, North Carolina Sheriff’s Department; North Carolina State Highway Patrol; and Drug Enforcement Administration. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Tyler James Schaeffer Sentenced for Firearms ViolationsRead the Press Release
KNOXVILLE, Tenn. – On Mar. 3, 2014, Tyler James Schaeffer, 22, of Seymour, Tenn., was sentenced to serve a total of 100 years in prison by the Honorable Thomas Varlan, U.S. District Judge.
In May 2013, a jury convicted Schaeffer of three counts of brandishing a firearm during and in relation to three robberies of businesses engaged in interstate commerce (Hobbs Act robbery) and possession of a firearm in furtherance of a methylone trafficking conspiracy.
Prior to his conviction at trial, in April 2013, Schaeffer pleaded guilty to a series of seven armed robberies, as well as the methylone trafficking conspiracy, that occurred between July 2010 and September 2012. Based on the proof available at the time of trial, the United States pursued firearms charges in connection with three of the seven robberies, as well as the methylone trafficking conspiracy. The jury convicted Schaeffer of each of those four firearms-related counts.
Jerel Bray-Sean Johnson, 20, of Knoxville, Tenn., and Rodney James Ruffin, 22, of Sevierville, Tenn., also pleaded guilty to related robbery, drug trafficking and firearms charges, and did not go to trial with Schaeffer. Sentencing for Johnson is scheduled for May 2, 2014. Ruffin is scheduled to be sentenced on Apr.16, 2014.
Law enforcement agencies participating in the joint investigation which led to indictment, conviction and today’s sentencing of Schaeffer included the FBI’s Safe Streets Task Force, KPD, Office of District Attorney General James B. Dunn, Tennessee Highway Patrol, Knox County Sheriff’s Office, Sevier County Sheriff’s Office, Sevierville Police Department, Blount County Sheriff’s Office, and Alcoa Police Department. Assistant U.S. Attorneys Kelly A. Norris and Tracy L. Stone represented the United States at trial.
Schaeffer will be returned to Sevier County authorities to stand trial for a deadly automobile collision which occurred on September 16, 2012, as well as a burglary charge.
Dustin Patrick Wilcox Sentenced to 270 Months on Oxycodone Trafficking and Money Laundering ChargesRead the Press Release
GREENEVILLE, Tenn. – Dustin Patrick Wilcox, a.k.a. “Weiner”, 32, of Kingsport, Tenn., was sentenced on Mar. 3, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 270 months in federal prison for his leadership role in oxycodone and money laundering conspiracies centered in and around the Sullivan County, Tenn., area.
This conspiracy included 17 indicted individuals and involved large scale oxycodone trafficking dating 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. Wilcox stipulated that he conspired to distribute a conservative estimate of 14,000 (30 mg) oxycodone pills in the Eastern District of Tennessee. Many of these pills were sold from his residence in Kingsport, which was a well-known and commonly used location among other co-conspirators to sell, buy and use drugs. In fact, on two separate occasions in 2012 Wilcox sold a quantity of oxycodone to an individual working on behalf of law enforcement from this residence. Wilcox has agreed to forfeit his interest in this tract of real property as a result of the continued drug dealing that took place there.
Wilcox also sent numerous wire transfers and directed other individuals to send wire transfers to other co-conspirators in Detroit, Mich., to further and advance his oxycodone trafficking.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Wilcox 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.
U.S. Attorney William C. Killian stated, “We are pleased with this significant sentence and it reflects the seriousness of the crimes committed. The price for trafficking in prescription pills in the federal system is high, as it should be.”
Carlos Altiery Sentenced to 144 Months for Distributing Heroin and OxycodoneRead the Press Release
GREENEVILLE, Tenn. – On Feb. 28, 2013, Carlos Altiery, of New York City, N.Y., was sentenced to serve a total of 144 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison, Altiery will also be subject to supervised release by the U.S. Probation Office for eight years.
Altiery pleaded guilty in October 2013 to conspiring to distribute heroin and oxycodone in Sullivan County, Tenn. Altiery brought heroin and oxycodone from New York to east Tennessee, traveling on commercial buses. An undercover investigation culminated with his March 2013 arrest at a local bus terminal. He was found to be transporting over 900 bindles of heroin and 100 oxycodone tablets.
U.S. Attorney, William C. Killian noted that law enforcement is seeing a resurgence of heroin and other opioids on the street. “The U.S. Attorney’s Office will continue to target and prosecute individuals involved in large scale drug distributions, especially those involving deadly and addictive heroin,” said U.S. Attorney Killian.
Law enforcement agencies participating in the joint investigation included the Sullivan County Sheriff’s Office, Bristol Tennessee Police Department, Second Judicial District Drug Task Force and Drug Enforcement Agency Task Force. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Bristol, Virginia, Man Sentenced in Connection with Meth Lab ExplosionRead the Press Release
GREENEVILLE, Tenn. – Jason Anthony Carter, 35, of Bristol, Va., was sentenced on Mar. 3, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 97 months in prison, to be followed by three years of supervised release, for conspiring to manufacture methamphetamine, possession of equipment, chemicals, products, and materials which may be used to manufacture methamphetamine, and creating a substantial risk of harm to human life while manufacturing methamphetamine. Carter was also ordered to pay $98,911.13 in restitution for clean-up costs and damage to an apartment building as a result of multiple explosions and a fire caused by a methamphetamine laboratory. /p>
Carter and Amanda Beth Steadman and James Hulon Steadman were indicted in November 2012 for conspiring to manufacture methamphetamine, possessing equipment, chemicals, materials, and products to be used in the manufacture of methamphetamine, and creating a substantial risk of harm to human life. On Nov. 26, 2013, Amanda Steadman and James Steadman both pleaded guilty and were each sentenced to serve 77 months in prison followed by four years of supervised release. Carter was convicted in October 2013, following a two-day jury trial.
According to the evidence presented at Carter’s trial, Carter and the Steadmans planned to manufacture methamphetamine at an apartment building where the Steadmans resided in Bristol, Tenn., in August 2012. They purchased the supplies needed to manufacture methamphetamine at various businesses in Bristol before returning to the apartment to begin cooking methamphetamine utilizing the “one-pot” or “shake and bake” method. Once at the apartment, Carter and the Steadmans prepared the materials to manufacture methamphetamine and began cooking methamphetamine. The evidence further showed that while the methamphetamine was cooking, several explosions occurred, resulting in a fire in the apartment, the evacuation of most of the residents in the apartment building, extensive damage to the apartment building, and serious injuries to Amanda Steadman, including serious burns to over 15% of her body.
“Manufacturing methamphetamine is an inherently dangerous process and can result in explosions, fires, and serious injuries, as evidenced by this case. Our office takes all cases involving the manufacture of methamphetamine very seriously and will continue aggressively prosecute these offenses. Public safety is our highest priority,” stated U.S. Attorney William C. Killian.
This investigation was a joint effort of the Bristol Tennessee Police Department, Tennessee Methamphetamine Task Force, DEA, Second Judicial District Drug Task Force, and Sullivan County Sheriff’s Office. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Twenty Individuals Indicted for Conspiracy to Manufacture MethamphetamineRead the Press Release
KNOXVILLE, Tenn.-- A federal grand jury in Knoxville returned a 26-count indictment on Feb. 19, 2014, against Linda F. Pesterfield, 40, of Sweetwater, Tenn.; John G. Roberts, 38, of Sweetwater, Tenn.; Jeremy T. Palmer, 36, of Loudon, Tenn.; Adam W. Norman, 33, of Lenoir City, Tenn.; Randy P. Brewster, 19, of Sweetwater, Tenn.; Mandy L. Moser, 36, of Sweetwater, Tenn.; Ebony L. Gallaher, 27, of Lenoir City, Tenn.; Phillip B. Richardson, 23, of Philadelphia, Tenn.; Christy J. Givens, 39, of Lenoir City, Tenn.; Robert L. Smith, 27, or Lenoir City, Tenn.; Tracy D. Lowry, 31, of Sweetwater, Tenn.; Sherry R. Barr, 45, of Lenoir City, Tenn.; William C. Crew, 32, of Philadelphia, Tenn.; Eugenia D. Taylor, 31, of Lenoir City, Tenn.; Kenny R. O’Dell, 34, of Lenoir City, Tenn.; Miranda R. Lankford, 32, of Lenoir City, Tenn.; Cynthia E. Rowe, 35, of Lenoir City, Tenn.; Amanda R. Spencer, 23, of Knoxville, Tenn.; Lester S. Willis, 61, of Lenoir City, Tenn.; and Joshua L. Ferguson, 30, of Loudon, Tenn., for a conspiracy to manufacture methamphetamine.
In addition, Pesterfield, Roberts, Palmer, Norman, Brewster, Moser, and Gallaher were indicted for a conspiracy to distribute methamphetamine. Roberts and Palmer were also indicted for firearms violations, including possessing a firearm after having been convicted of a crime punishable by a term of more than one year in prison, and for possession of a firearm in furtherance of a drug trafficking offense.
Eleven of these individuals appeared in court on Feb. 26 and 27, 2014, before U.S. Magistrate Judge H. Bruce Guyton 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 Lenoir City, Loudon, and Sweetwater, Tenn.
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. In addition, Roberts and Palmer, face a maximum term of 10 years in prison, a maximum fine of $250,000.00, and a term of supervised release of up to three years, as to the possession of firearms by a prohibited person charges, and a mandatory minimum and mandatory five year sentence up to life, which by statute must be served consecutively with any other prison term imposed, a maximum fine of $250,000.00, and a term of supervised up to five years as to the possession of a firearm in furtherance of a drug trafficking crime charges. All also face mandatory court assessments.
This indictment is the result of an investigation by the 9th Judicial Drug Task Force, Loudon County Sheriff’s Office, McMinn County Sheriff’s Office, Monroe County Sheriff’s Office, Lenoir City Police Department, and the Drug Enforcement Administration. Assistant U.S. Attorney Caryn L. Hebets represents 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.
Leaders of Expansive Anderson County Based Methamphetamine Manufacturing Conspiracy Sentenced to Lengthy Prison TermsRead the Press Release
Lawrence “Stoney” Scriver sentenced to 30 years in prison
Jeffrey Scott Braden sentenced to minimum mandatory life sentence
KNOXVILLE, Tenn.—On Feb. 28, 2014, Lawrence “Stoney” Scriver, 46, of Lake City, Tenn., was sentenced to serve 30 years in prison by the Honorable Thomas A. Varlan, Chief U.S. District Judge. Scriver pleaded guilty in July 2013, to a federal grand jury indictment charging him with one count of conspiracy to manufacture 50 grams or more of methamphetamine and one count of distributing methamphetamine, aided and abetted by others. Scriver’s prior felony state drug conviction triggered a minimum mandatory 20 year sentence under federal sentencing laws. However, Chief Judge Varlan enhanced Scriver’s mandatory minimum sentence, based on the finding that Scriver was the leader of the conspiracy that produced approximately 1500 grams of methamphetamine over the course of the conspiracy.
On Feb. 27, 2014, Jeffrey Scott Braden, 37, of Vowell Mountain, Tenn. was sentenced to a mandatory life sentence by the Honorable Thomas A. Varlan, Chief U.S. District Judge. After a trial in U.S. District Court, Braden was convicted as charged in September 2013. The jury found Braden guilty of one count of conspiracy to manufacture 50 grams or more of methamphetamine, one count of possessing materials, chemicals, and equipment used to manufacture methamphetamine, and one count of possession of ammunition by a convicted felon. Braden’s six prior felony state drug convictions triggered a minimum mandatory life sentence with no possibility of parole under federal sentencing laws.
The indictment, which charged 42 people with methamphetamine manufacturing crimes, and subsequent convictions of Scriver and Braden, was the result of “Operation Meth-odical Destruction,” which was a joint investigation between the Drug Enforcement Administration, Tennessee Bureau of Investigation, Tennessee Methamphetamine and Pharmaceutical Drug Task Force, Anderson County Sheriff’s Office, Knox County Sheriff’s Office, Knoxville Police Department, Oak Ridge Police department, Seventh Judicial Crime Task Force, and Clinton Police Department. Since March 21, 2013, 41 of the 42 charged defendants have been convicted. Assistant United States Attorney David P. Lewen, Jr. represented the United States.
Seevers Arraigned on Charges of Attempted Murder and Aggravated Sexual Abuse by ForceRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville returned a three count indictment on Dec. 3, 2013, against William E. Seevers, 48, for one count of attempted murder and two counts of aggravated sexual abuse by force. Seevers appeared in court Feb. 27, 2014, before U.S. Magistrate Judge H. Bruce Guyton and pleaded not guilty to the charges in the indictment. He is being held pending trial, which has been set for Apr. 29, 2014, in U.S. District Court, Knoxville.
The indictment alleges that in June 2012, in the Great Smoky Mountains National Park, Seevers attempted to kill an individual by stabbing her in the neck with a knife. Additionally, Seevers engaged in sexual activity with the individual by use of force and placing her in fear of death by holding her at knife point and stabbing and punching her when she attempted to flee from him.
If convicted, Seevers faces two terms of life in prison followed by an additional 20 years.
This indictment is the result of an investigation by the National Park Service and Federal Bureau of Investigation. Assistant U.S. Attorney Jennifer Kolman 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.
Steven Marshall Fout Sentenced to 151 Months in Prison for Distribution and Possession of Child PornographyRead the Press Release
KNOXVILLE, Tenn.- Steven Marshall Fout, 24, of Sweetwater , Tenn., was sentenced on Feb. 20, 2014, to serve 151 months in prison by the Honorable Danny C. Reeves, visiting U.S. District Judge. The sentence was imposed as the result of a guilty plea entered by Fout in June 2013, to federal charges of knowingly distributing and possessing child pornography.
Upon his release from prison, Judge Reeves imposed a 30-year term during which Fout’s activities will be supervised by the U.S. Probation Office. He was also ordered to pay $2,500 in restitution to victims whose digital images were found on in his possession.
Also, as a result of the conviction, the federal Sex Offender Registration and Notification Act will require Fout to register following his incarceration with the state sex offender registry anywhere he resides, is employed, or is a student.
The investigation leading to the conviction and sentencing of Fout was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew T. Morris represented the United States at sentencing.
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."
Three Individuals Convicted of Sabotage at the Y-12 National Security Complex SentencedRead the Press Release
KNOXVILLE, Tenn.- On Feb.18, 2014, Michael Walli, Megan Rice, and Greg Boertje-Obed, were sentenced in U.S. District Court by the Honorable Thapar, U.S. District Judge. Sister Megan Rice was sentenced to serve 35 months in prison. Walli and Boertje-Obed were each sentenced to serve 62 months in prison. All three will serve three years supervised release upon their release from prison. Additionally, these individuals were ordered to pay $52,953 in restitution to the Department of Energy.
These individuals were convicted in May, 2013, of one count of injuring national defense premises, that is, the Y-12 National Security Complex, with the intent to interfere with the national defense of the United States, and another count of depredation against property of the United States.
On Jul. 28, 2012, in the middle of the night, the Walli, Rice and Boertje-Obed unlawfully intruded upon the Y-12 National Security Complex in Oak Ridge, Tenn. They used bolt cutters and cut through three highly-sensitive security fences and made their way to the Highly Enriched Uranium Materials Facility (HEUMF), which houses weapons-grade uranium. They splashed human blood and painted slogans on the exterior wall of the HEUMF.
Agencies participating in the investigation of these charges, which resulted in today’s sentences, included the U.S. Department of Energy - Office of Inspector General, and Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey E. Theodore represented the United States.
U.S. Attorney William C. Killian commended the sentences and said he hoped it would send a strong message. “The Y-12 National Security Complex plays a critical role in our country’s national defense. People cannot take the law into their own hands and unlawfully intrude upon sensitive government facilities. Those who violate the law and compromise the security of the Y-12 National Security Complex will be vigorously prosecuted.”
Chattanooga Resident Pleads Guilty to Preparing Fraudulent Tax ReturnRead the Press Release
CHATTANOGA, Tenn. – On Feb. 6, 2014, Dedric Landrum, 40, of Chattanooga, Tenn., was sentenced by the Honorable Curtis L. Collier, U.S. District Court Judge, to serve 18 months in prison, for preparing a false and fraudulent income tax return. Upon his release from prison, he will be subject to one year of supervised release. He was also ordered to pay $148,678 in restitution to the Internal Revenue Service (IRS).
Landrum pleaded guilty to a one count information charging him with these offenses. According to supporting documentation for the plea agreement, Landrum fraudulently obtained tax refunds by fraudulently inflating deductions and credits on tax returns prepared by him.
The investigation leading to the charges, guilty plea and sentencing was conducted by the IRS. Assistant U.S. Attorneys John P. MacCoon and James Brooks represented the United States.
Lenoir City Residents Arrested on Federal ChargesRead the Press Release
KNOXVILLE, Tenn. -- Joshua Hayworth, 23, and Timothy E. Chudley, 35, both of Lenoir City, Tenn., were charged on Feb. 5, 2014, with federal Hobbs Act violations for their roles in the Jan. 30, 2014, robbery of a Lenoir City Burger King restaurant.
Chudley was arrested in Knoxville on Feb. 5, 2014, without incident, and appeared in federal court the same day. Hayworth was arrested on state charges on Feb. 3, 2014, following a series of events which also resulted in federal carjacking charges against Hayworth. He will appear in federal court at a later date.
The criminal complaint on file with the U.S. District Court charges both men with federal Hobbs Act violations, while Hayworth is also charged with carjacking. The complaint alleges that Hayworth, with the assistance of Chudley, planned the robbery of the Lenoir City Burger King, which was carried out on Jan. 30, 2014. According to the complaint, on Feb. 3, 2014, Hayworth was observed driving a stolen vehicle in Knoxville, which Hayworth abandoned in a trailer park on Bob Gray Road, as law enforcement pursued.
Later the same day, Hayworth is accused of carjacking another vehicle from a pregnant female on Doubletree Lane in Knoxville, which he wrecked on Bob Gray Road. After fleeing on foot, it is alleged that Hayworth broke into a residence, where he was apprehended by law enforcement. Follow-up investigation by the multiple agencies involved uncovered Chudley’s role in the robbery scheme.
The arrests are the result of joint efforts by multiple law enforcement agencies, including the FBI Safe Streets Task Force (SSTF), composed of the FBI, Knoxville Police Department (KPD), and Knox County Sheriff’s Department (KCSO), the Lenoir City Police Department, KPD, KCSO, Loudon County Sheriff’s Office, and the Clinton Police Department. Assistant U.S. Attorney Kelly Norris will represent the United States.
Members of the public are reminded that the complaint constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Jonesborough Man Sentenced to Serve Three Years in Prison for Synthetic Drugs and StructuringRead the Press Release
GREENEVILLE, Tenn. – Jason Glenn Catoe, 23, of Jonesborough, Tenn., was sentenced on Feb. 5, 2012, by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 36 months in federal prison.
Catoe pleaded guilty to an information in March 2013, charging him with possession with intent to distribute synthetic cannabinoids and structuring currency transactions to evade reporting requirements. In a statement of facts submitted in support of his guilty plea, Catoe admitted that beginning in March 2011 he opened a "head shop" called "Ultimate Smoke" in Kingsport, Tenn. The business sold synthetic drugs, "bath salts" and "incense," as well as drug paraphernalia for the ingestion of the drugs. Ultimate Smoke generated substantial cash income, with "Crystal Clean," a synthetic cathinone, being one of the business's best-selling products. Ultimate Smoke also sold large quantities of synthetic cannabinoids. Local law enforcement agencies made undercover purchases of the drugs beginning in August 2011.
A federal search warrant was executed at Catoe’s residence in Jonesborough, Tenn., in March 2012. Agents recovered $290,794.00 in cash from a safe at the residence. In addition to five firearms and two bullet-proof vests, agents recovered synthetic drugs labeled “Mary Joy,” “K2 Summit,” “Hammer Head,” “Wacked,” “Outer Limits,” “Zombie,” “Happy Hour Passion Fruit,” “Mad Hatter,” Mystery Machine,” and “Da Bomb.” Bank records reflected that Catoe, assisted by his half-brother, structured over $400,000 in cash deposits to a local financial institution.
The cash seized from Catoe’s residence, along with approximately $80,000 seized from bank accounts and a commercial building in Kingsport, were forfeited to the United States.
Agencies involved in this investigation included the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Sullivan County Sheriff’s Office, Kingsport Police Department, and Second Judicial District Drug Task Force. Assistant U.S. Attorney Neil Smith represented the United States.
Bristol Man Indicted for Distributing Synthetic Drugs and Money LaunderingRead the Press Release
GREENEVILLE, Tenn. – A federal grand jury in Greeneville returned an indictment on Jan. 14, 2014 against Daniel Guy Bickley, 55, of Bristol, Va., for conspiracy to distribute and the distribution of controlled substance analogues as well as conspiracy to engage in monetary transactions in criminally derived property and engaging in such transactions.
Bickley appeared in court on Feb. 6, 2014 before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty. He was released pending trial, which has been set for Apr. 15, 2014, in U.S. District Court, in Greeneville.
According to the indictment on file with the U.S. District Court, Bickley began selling synthetic stimulants (“bath salts”) and synthetic cannabinoids (“spice” or “incense”) in 2010 from his business Exotic Illusions in Bristol, Virginia. When the Commonwealth of Virginia enacted legislation prohibiting certain synthetic drugs in March 2011, Bickley opened a business in Bristol, Tennessee called Cloud 9 Emporium from which he sold synthetic drugs. The indictment alleges Bickley obtained synthetic drugs from distributors in Florida, Arizona, New Mexico, and elsewhere and that Bickley stated he was making $10,000 a day from the sale of synthetic drugs. Bickley opened a second store, also called Cloud 9 Emporium, in Johnson City, Tenn., in October 2011 and opened a third location in December 2011 in Mountain City, Tenn. The indictment also alleges that Bickley and others opened a business in August 2011 in Kingsport, Tenn., called White Cloud Emporium for the purpose of selling synthetic drugs.
The indictment further alleges that Bickley conspired with others to engage in monetary transactions involving the proceeds of the drugs sales and charges fifty-one separate transactions involving $10,000 or more in cash totaling approximately $1.2 million.
If convicted, Bickley faces a term of up to 20 years in prison and fines of up to $1 million on each of the drug charges and up to 10 years in prison and fines of up to $250,000 on each of the money laundering charges.
This indictment is the result of an investigation by the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Sullivan County Sheriff’s Office, Bristol, Tennessee Police Department, Bristol, Virginia Police Department, Johnson City Police Department, and Second Judicial District Drug Task Force. 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.
Aaron John Cashatt Sentenced to 50 Months in Prison for Credit Card Fraud SchemeRead the Press Release
KNOXVILLE, Tenn. – On Feb. 3, 2015, Aaron John Cashatt, 35, of Phoenix, Ariz. was sentenced by the Honorable Leon Jordan, Senior U.S. District Judge, to serve 50 months in prison for his role in a credit card fraud scheme. Upon his release from prison, Cashatt will be supervised by the U.S. Probation Office for a term of three years. Additionally, he was ordered to forfeit his interest in a laundry list of items which he used to perpetrate the scheme and purchased through the scheme, including computer equipment, cellular telephones, laminating equipment for fake identification cards, credit card readers, and a credit card encoder.
Cashatt pleaded guilty in October 2014 to a federal grand jury indictment charging him with conspiracy, access device fraud, and aggravated identity theft. The indictment and plea agreement on file with the U.S. District Court detailed the scheme in which Cashatt would use stolen credit card information with a credit card encoder to re-encode credit cards with the stolen information. He and his co-conspirators would then use a credit card reader and smart phone to “dump” funds from the stolen accounts into a bank account controlled by Cashatt. He purchased some of the stolen credit card account information and obtained some of the credit card account information by breaking into hotel rooms in the Phoenix area.
U.S. Attorney Bill Killian said, “The local and federal law enforcement agencies are to be congratulated for their detection, investigation and successful prosecution of this individual. The devastating economic consequences from identity theft affect many people. Our office, working with law enforcement, will continue our aggressive efforts to uncover these crimes and prosecute the individuals responsible.”
The indictment and subsequent conviction of Cashatt was the result of an investigation conducted by the U.S. Secret Service, with assistance from the Knoxville Police Department and U.S. Marshals Service. Assistant U.S. Attorney Matthew T. Morris represented the United States.
East Tennessee Residents Indicted in Counterfeiting ConspiracyRead the Press Release
GREENEVILLE, Tenn.-- On Jan. 14, 2014, a federal grand jury in Greeneville returned a three count indictment against Jordan Johnson, 20, Shannon Hawkins, 21, Tyler Monroe, 18, Ruben Suarez, 20, and Kayla White, 21, all of Kingsport, Tenn., charging them with conspiracy to defraud the United States; counterfeiting; and possessing counterfeited obligations.
Suarez was arrested on Jan. 27, 2014, and pleaded not guilty to the charges in U.S. District Court on Jan. 30, 2014. He was released on bond pending his trial date, which has not yet been set. Both Jordan and White are currently in state custody and will appear in U.S. District Court on Mar. 6, 2014, to enter pleas to the charges contained in the indictment.
Neither Hawkins nor Monroe has been arrested. As their current locations are unknown to law enforcement authorities, the Kingsport Police Department and U.S. Secret Service request anyone who has knowledge of either of their whereabouts to please contact the Kingsport Police Department at 423-229-9111.
This indictment is the result of an investigation by the U.S. Secret Service and Kingsport Police Department. Assistant U.S. Attorney Christian Lampe will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Four Additional Individuals Sentenced in Oxycodone ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On Jan. 24, 2014, three additional individuals involved in an oxycodone distribution conspiracy were sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge. Ashley Nicole Gray Patterson, 29, of Morristown, Tenn., was sentenced to serve 70 months in federal prison. Upon her release from prison, she will be subject to six years of supervised release, under the supervision of the U.S. Probation Office. Kerry Glenn Nelson, 44, of Morristown, Tenn., was sentenced to serve 48 months in federal prison. Upon his release from prison, he will also be subject to supervised release for three years. Kimberly Ann Vanover, 39, of Tazewell, Tenn., was sentenced to serve 15 months in federal prison. Upon her release from prison, she will be subject to supervised release for four years. On Jan. 27, 2014, Tamara Michelle Moles, 45, of Morristown, Tenn. was sentenced to serve 51 months in federal prison. Upon her release from prison, she will be subject to supervised release for three years. There is no parole in the federal system.
In October 2012 Patterson, Nelson, Vanover, Moles, and eight others were named in an 18-count federal indictment. Charges in the indictment involved drug trafficking of oxycodone, oxymorphone, and methamphetamine, firearms violations, and money laundering. Patterson, Nelson, Vanover, and Moles were each charged with conspiring to distribute oxycodone. Patterson was also charged with conspiring to distribute methamphetamine. Vanover was also charged with distributing oxycodone. The charges initiated from a lengthy investigation of the 12 individuals who traveled by commercial airlines and automobiles to Florida, Tennessee, and Georgia, to obtain oxycodone and other drugs to distribute throughout eastern Tennessee. The total conspiracy involved over 778,000 milligrams of oxycodone, which is the equivalent of nearly 26,000 dose units of 30 milligram oxycodone. All 12 charged in the indictment have been convicted. Two remain to be sentenced in 2014.
U.S. Attorney Bill Killian commended the law enforcement agencies who were involved in this investigation. “Prescription drugs, including oxycodone, continue to be a major problem in east Tennessee. Powerful narcotics are highly addictive and can lead to criminal activity, as evidenced by the extensive efforts of this drug trafficking organization. Our office will continue to work closely with all law enforcement agencies to cut off the illegal supply lines of oxycodone and other prescription narcotics,” stated Killian.
Agencies involved in this investigation included the Tennessee Bureau of Investigation, Morristown Police Department, and Hawkins County Sheriff’s Department. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Federal Jury Convicts Terry Michael Honeycutt for Unlawful List Chemical DistributionRead the Press Release
CHATTANOOGA, Tenn. – On Jan. 27, 2014, following a four-day trial in U.S. District Court, a jury convicted Terry Michael Honeycutt of Ringgold, Ga., of conspiring to distribute a listed chemical, iodine, knowing that the chemical would be used to manufacture methamphetamine (meth) and other related offenses.
Sentencing is set for 2:00 p.m., May 12, 2014, in U.S. District Court, Chattanooga. Honeycutt faces a maximum sentence of up to 20 years in prison and a maximum monetary judgment of up to $269,751.98, which represents the profit Honeycutt made from the sale of iodine. Earlier, Honeycutt’s brother, Tony Dewayne Honeycutt, pleaded guilty to a similar offense and agreed to a $200,000 monetary judgment, which he paid prior to his sentencing.
Evidence presented at trial showed that the Honeycutt brothers sold Polar Pure from the Brainerd Army Store. Polar Pure is a product ostensibly used to purify water but which contains 100% pure iodine in a form preferred by many involved in the clandestine manufacture of methamphetamine. One bottle purifies 500 gallons of water, yet the brothers were selling as many as 12 bottles in a single transaction. A witness testified that he was in line at the Brainerd Army Store when one of the brothers announced that the store was out of Polar Pure. The witness then observed all five or six customers who were in line leave the store. During the trial, Honeycutt testified that he was responsible for ordering and stocking the Polar Pure at the Brainerd Army Store. Ultimately, the Brainerd Army Store sold almost 21,000 bottles of Polar Pure from April 2008 to December 2010.
“This case is an example of how law enforcement and the U.S. Attorney’s Office are working together to remove the major sources of supply for chemicals to individuals who manufacture methamphetamine and have no regard for the negative impact this substance has on society,” stated U.S. Attorney for the Eastern District of Tennessee William C. Killian.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Honeycutt included the Drug Enforcement Administration, Tennessee Bureau of Investigation, Hamilton County Sheriff’s Office, and Chattanooga Police Department. Assistant U.S. Attorney Jay Woods represented the United States at trial.
Tennessee and Appalachian Orthopedic Clinics to Pay Combined $1.85 Million to Settle False Claims Act Allegations That They Billed Medicare for Reimported ProductsRead the Press Release
KNOXVILLE, Tenn. – Two orthopedic clinics have agreed to pay a combined $1.85 million to resolve state and federal False Claims Act allegations that they knowingly billed state and federal health care programs for reimported osteoarthritis medications, known as viscosupplements. Tennessee Orthopaedic Clinics, P.C., headquartered in Knoxville, Tennessee, will pay $1.3 million and Appalachian Orthopaedic Clinics, P.C., headquartered in Kingsport, Tennessee, will pay $550,000.
Viscosupplements, such as Synvisc® and Orthovisc®, are injections approved by the Food and Drug Administration for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid, and other federal health care programs at a set rate based on the average sales price of the domestic product. The government contended that the clinics knowingly purchased deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal health care programs in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs. Allegedly, the reimported product included labeling in foreign languages and in English for additional uses not approved in the United States, which demonstrated that the product was reimported. Moreover, because the product was reimported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately.
As U.S. Attorney Bill Killian explained, “This scheme is yet another example of illegal actions by healthcare providers to profit from drugs imported into the United States. Medicare and FDA requirements are designed to prevent potential harm to patients. Noncompliance with the law to increase profit at the risk of patients will be pursued by the Department of Justice.”
“Attempts to increase profits by circumventing the law will not be tolerated,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Health care providers buying cut-rate, cheap drugs from foreign sources will end up paying a steep price.”
The allegations resolved by the settlement were first raised in a lawsuit filed against the clinics under the qui tam, or whistleblower, provisions of the False Claims Act by Douglas Estey who was a speaker for Genzyme Corporation, which manufactured Synvisc and sold it in the United States. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. Mr. Estey will receive $323,750.
Mr. Killian further noted that this settlement resulted from a comprehensive investigation which began as a result of a qui tam or whistleblower complaint filed in 2012. The investigative team whose efforts resulted in this settlement was comprised of representatives from the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) and Office of General Counsel (OGC), the Food and Drug Administration (FDA) Office of Criminal Investigations (OCI) and Office of Chief Counsel (OCC), the Federal Bureau of Investigation (FBI), and the Tennessee Bureau of Investigation (TBI), coordinated by the U.S. Department of Justice (DOJ) Civil Division Fraud Section and the Civil Division of the U.S. Attorney’s Office for the Eastern District of Tennessee. U.S. Attorney Killian commended the cooperative efforts of the agencies which participated in this complex investigation, in particular, lead HHS-OIG Special Agent Tony Maffei, FBI Special Agent Joelle Olszewski, TBI Special Agent Denise Woodby, FBI Forensic Accountant LeAnn Lanz, FDA OCI Special Agents Alex Alvarado and Ron Houston, FDA OCC attorney Kelsey Schaefer, HHS-OIG attorney Maame Gyamfi, HHS OGC attorneys Eden Heard and Jessica Bowman, Assistant Tennessee Attorney General Eli Swiney, Assistant Virginia Attorney General Adele Nieburg, DOJ Trial Counsel Doug Rosenthal, and Assistant U.S. Attorney Suzanne Bauknight.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services, in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $12.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases in 2013 alone exceeded $3.8 billion. False Claims Act recoveries by the United States Attorney’s Office for the Eastern District of Tennessee alone during the period since January 2009 exceed $100 million.
Twenty-Six Individuals Indicted for Conspiracy to Distribute MethamphetamineRead the Press Release
KNOXVILLE, Tenn.-- A federal grand jury in Greeneville returned a 24-count indictment on Jan. 14, 2014, against John A. Ayers, a.k.a. Blondie, 31, of Rutledge, Tenn.; Gary S. Valentine, 53, of Knoxville, Tenn.; Victor M. Lynn, 51, of Rutledge, Tenn.; Paula W. Teague, 45, of Fairmont, Ga.; Eric R. Sizemore, 37, of East Berndstadt, Ky.; Drew A. Gregg, Jr., 36, of Newport, Tenn.; Joseph A. Jackson, a.k.a. Joey Jackson, 47, of Russellville, Tenn.; Teresa J. Turner, a.k.a. Terri Red, 52, of Whitesburg, Tenn.; Charles E. Bishop, a.k.a. Chucky, 51, of Whitesburg, Tenn.; Donna S. Roberts, 58, of Thorn Hill, Tenn.; Casper G. Hurley, 39, of McKee, Ky.; Harold E. Long, 61, of Tazewell, Tenn.; Robert D. Purkey, 43, of White Pine, Tenn.; Christopher M. Lawson, 35, of Rutledge, Tenn.; James E. Hayes, 56, of Talbott, Tenn.; Bradley S. Johnson, 29, of Bean Station, Tenn.; Troy R. Eads, 40, of Tazewell, Tenn.; Lisa A. Meece, 35, of Mooresburg, Tenn.; Stephanie Ellis, 22, of Rutledge, Tenn.; Phillip R. McNeil, Jr., 31, of Corryton, Tenn.; Floyd S. Simpson, 44, of Taylor, Mich.; Jeffrey W. Flynn, 33, of Mascot, Tenn.; Adam W. Houchins, 32, of Mooresburg, Tenn.; Amanda C. Roach, 36, of Rutledge, Tenn.; Luciano Castro, 74, of Savannah, Ga.; and Smokey E. Fleenor, 32, of Morristown, Tenn., for a conspiracy to distribute methamphetamine.
In addition, Ayers, Valentine, Lynn, Gregg, and Jackson, were indicted for firearms violations, including possessing a firearm and/or after having been convicted of a crime punishable by a term of more than one year in prison, or for being a drug addict. Lynn and Jackson were also indicted for possession of a firearm in furtherance of a drug trafficking offense.
Thirteen of these individuals appeared in court on Jan. 16, 2014, and one appeared in court on Jan. 21, 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 obtaining methamphetamine from individuals in Georgia and were distributing these drugs in Tennessee and Kentucky.
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. In addition, Ayers, Valentine, Lynn, Gregg, and Jackson, face a maximum term of 10 years in prison, a maximum fine of $250,000.00, and a term of supervised release of up to three years, as to the possession of firearms by a prohibited person charges. Lynn and Jackson, face a mandatory minimum and mandatory five year sentence up to life, which by statute must be served consecutively with any other prison term imposed, a maximum fine of $250,000.00, and a term of supervised up to five years as to the possession of a firearm in furtherance of a drug trafficking crime charges. All also face mandatory court assessments.
This indictment is the result of an investigation by the Third Judicial Drug Task Force, Fourth Judicial Drug Task Force, Eighth Judicial Drug Task Force, Claiborne County Tennessee Sheriff’s Department, Grainger County Tennessee Sheriff’s Department, Knox County Tennessee Sheriff’s Department, Knoxville Police Department, Bean Station Police Department, Rutledge Police Department, Morristown Police Department, Kentucky State Police, Tennessee Highway Patrol, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Tennessee Bureau of Investigation, and Drug Enforcement Administration. Assistant U.S. Attorney Caryn L. Hebets will represent the United States.
Three Sentenced in Vast Oxycodone ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On Jan. 13, 2014, Jason Curtis Jones, 36, of Elizabethton, Tenn., was sentenced to serve 78 months in prison; Michael Lelon Sharp, 50, of Blountville, Tenn., was sentenced to serve 72 months in prison; and Donnie Ray Horne, 55, of Kingsport, Tenn., was sentenced to serve 71 months in prison by the Honorable J. Ronnie Greer, U.S. District Court Judge, for their participation in an oxycodone conspiracy centered in and around the Sullivan County area.
A total of 17 individuals, including the three sentenced today, were indicted for their roles in this oxycodone trafficking conspiracy. Many of the pills were obtained from Michigan, Florida and Georgia and transported back to the Eastern District of Tennessee for resale. Jones and Sharp stipulated that they conspired to distribute at least 6,544 and 4,300 oxycodone pills respectively in the Eastern District of Tennessee. Horne was also convicted of engaging in a money laundering conspiracy used to further the oxycodone trafficking. Horne assisted his son, Devin Horne, 24, of Blountville, Tenn., who was also indicted, in collecting drug debts, selling oxycodone, wiring money to drug suppliers in Michigan and smuggling drugs into jail. Devin Horne is scheduled to be sentenced in April 2014.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent convictions of Jones, Sharp and Horne include the Bureau of Alcohol, Tobacco and Firearms, Sullivan County Sheriff’s Office, Kingsport Police Department, Bristol Tennessee Police Department and Elizabethton 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 with the sentences in these case and believe they reflects the seriousness of the crimes committed.”
Grundy County Man Sentenced to 10 Years in Prison for Possessing A Firearm in October 2012 Shoot-Out with PoliceRead the Press Release
CHATTANOOGA, Tenn. -- Russell Wayne Smith, 46, of Gruetli-Laager, Tenn., was sentenced on Jan. 13, 2014, to serve 10 years in prison by the Honorable Harry S. Mattice, Jr., U.S. District Judge. Smith pleaded guilty in October 2013 to a federal grand jury indictment charging him with being a prohibited person, by virtue of a felony conviction, in possession of a firearm. Smith’s sentence was the maximum allowed by the statute.
The investigation began when Smith, who had escaped from the Grundy County Jail, was found by Grundy County Sheriff’s Office deputies and fled from the scene, first on an all-terrain vehicle and then on foot. Deputies pursued Smith through a heavily wooded area and spotted him pointing a rifle in their direction. The deputies fired upon Smith hitting him at least twice. When he was apprehended he had two loaded firearms in his possession. Smith had previously been convicted of several felony offenses.
The indictment and subsequent conviction of Smith was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Tennessee Bureau of Investigation and Grundy County Sheriff’s Office. Assistant U.S. Attorney Terra Bay 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.
Abbott Laboratories to Pay $5.475 Million to Resolve Federal Health Care Fraud InvestigationRead the Press Release
KNOXVILLE, Tenn. - Abbott Laboratories, a global healthcare company, has agreed to pay $5.475 million to settle alleged violations of the False Claims Act, and other federal laws and regulations in connection with the operation of its medical device business which manufactures, markets and supplies carotid, biliary, and peripheral vascular products.
As alleged in the settlement agreement, between 2005 and 2010, through its employees and third party continuing medical education providers, Abbott offered physicians paid teaching and training assignments, consulting arrangements, speaking engagements, and/or sponsorship grants for physician conferences, for the purpose of inducing physicians to arrange for or recommend that the hospitals with which they were affiliated purchase or order Abbott’s carotid, biliary and peripheral vascular products. These financial arrangements were improper and did not meet the requirements of the Anti-Kickback Statute – a law designed to protect patients as well as the integrity of government- funded health care benefit programs such as Medicare. Where the choice of devices used in medical procedures is impacted by such improper arrangements, suppliers that cause claims for such devices and procedures to be submitted to Medicare and other federal health care programs violate the False Claims Act.
As U.S. Attorney Bill Killian explained, “Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business.” Federal law prohibits medical providers from submitting claims to government-funded health care benefit programs for services and devices referred, ordered, or arranged for by physicians who received such prohibited financial inducements.
“Offering financial inducements can distort health care decision-making,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.” During the period between 2005 and 2010 hospitals affiliated with the physicians who received such inducements submitted to the Medicare program claims which included the cost of the medical devices referred, ordered or arranged for by such physicians. Medicare paid the claims that included the cost of the medical devices. This settlement addresses the financial harm to the Medicare trust fund for the moneys paid out of the fund which resulted from violations of the False Claims Act resulting from the kickbacks.
Mr. Killian further noted that this settlement resulted from a comprehensive investigation which began as a result of a qui tam or whistleblower complaint filed in 2010. The investigative team whose efforts resulted in this settlement was comprised of representatives from the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the U.S. Attorney’s Office for the Eastern District of Tennessee, the U.S. Department of Justice Civil Division Fraud Section, and the U.S. Attorney’s Office for the Northern District of California. U.S. Attorney Killian commended the cooperative efforts of the agencies which participated in this complex investigation, and, in particular, lead HHS-OIG Special Agent Tony Maffei, DOJ Trial Counsel Adam Schwartz, Assistant U.S. Attorney Betsy Tonkin, Assistant U.S. Attorney Tom Green, and Special Assistant U.S. Attorney Ben Cunningham.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $12.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases in 2013 alone exceeded $3.8 billion. False Claims Act recoveries by the United States Attorney’s Office for the Eastern District of Tennessee alone during the period since January 2009 exceed $100 million.
Ryan Michael Guesford Sentenced to Serve 120 Months in Prison for Conspiring to Distribute OxycodoneRead the Press Release
GREENEVILLE, Tenn. – Ryan Michael Guesford, 40, of Morristown, Tenn., was sentenced on Dec. 19, 2013, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 120 months in federal prison for distributing and conspiring to distribute oxycodone. Upon his release from prison Guesford 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.
Guesford and 11 others were named in an 18-count indictment in October 2012, returned by a federal grand jury sitting in Greeneville, Tenn. The charges in the indictment involved drug trafficking of oxycodone, oxymorphone, and methamphetamine, firearms violations, and money laundering. Guesford was named in two counts of the indictment, which charged a conspiracy to distribute oxycodone and distribution of oxycodone. The charges initiated from a lengthy investigation of 12 individuals who traveled by commercial airlines and automobiles to Florida, Tennessee, and Georgia, to obtain oxycodone and other drugs to distribute throughout eastern Tennessee. The total conspiracy involved over 778,000 milligrams of oxycodone, which is the equivalent of nearly 26,000 dose units of 30 milligram oxycodone.
All 12 individuals charged in the indictment have been convicted and Guesford was the fourth defendant to be sentenced. Gerald Glenn Horner, 36, of Mooresburg, Tenn., was sentenced by Judge Greer on Oct. 21, 2013, to serve 108 months in federal prison. Joey Wayne Vanover, 36, of Tazewell, Tenn., was sentenced by Judge Greer on Oct. 28, 2013, to serve 63 months in federal prison. Kera Leann Greene, 24, of Morristown, Tenn., was sentenced by Judge Greer on Nov. 4, 2013, to a serve nine months in prison plus six months of home detention with electronic monitoring. Gregory Allen Rhea, Johnny Wayne Neeley, Kerry Glenn Nelson, Kimberly Ann Vanover, Ricky Allen “Rooster” Seal, Tamara Michelle Moles, and Ricky Collins are all awaiting sentencing in 2014.
U.S. Attorney Bill Killian commended the law enforcement agencies who were involved in this investigation. “Prescription drugs, including oxycodone, continue to be a major problem in East Tennessee. Powerful narcotics are highly addictive and can lead to criminal activity, as evidenced by the extensive efforts of this drug trafficking organization. Our office will continue to work closely with all law enforcement agencies to cut off the illegal supply lines of oxycodone and other prescription narcotics. We will aggressively prosecute those who traffic prescription drugs and the ‘pill mills’ that supply criminal organizations,” stated Killian.
Agencies involved in this investigation included the Tennessee Bureau of Investigation, Morristown Police Department, and Hawkins County Sheriff’s Department. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Fayetteville Man Sentenced to 30 Months in Prison for Possession of Child PornographyRead the Press Release
CHATTANOOGA, Tenn. – Thomas Kandziorski, 62, of Fayetteville, Tenn., was sentenced on Dec. 16, 2013, to serve 30 months in prison by the Honorable Harry S. Mattice, Jr., U.S. District Judge. Kandzioski was also ordered to complete 15 years of supervised release upon his release from prison and pay a $100 Special Assessment fee. He will also be required to register as a sex offender. Kandziorski pleaded guilty in August 2013, to an information charging him with one count of possession of child pornography.
A search warrant was executed by the Lincoln County Sheriff’s Department at Kandziorski’s residence and a computer, a camera, and several other electronic storage devices were seized. Some of those devices were found to contain images of child pornography. Kandziorski admitted to law enforcement that he was aware of the sexually explicit images of child pornography stored on these devices.
The successful prosecution of Kandziorski was the result of an investigation conducted by the Federal Bureau of Investigation, Tennessee Bureau of Investigation, Lincoln County Sheriff’s Department, and Winchester Police Department, who took the lead role in this investigation. Assistant U.S. Attorneys Terra L. Bay and John MacCoon represented the United States.
The U.S. Attorney for the Eastern District of Tennessee, William C. Killian stated, “This is yet another example of the hard work and partnership between the federal, state, and local law enforcement agencies to protect the children of our District and prosecute the predators who endanger them.”
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."
Stephen Leon Williams Sentenced to 90 Months on Federal Drug and Gun ChargesRead the Press Release
GREENEVILLE, Tenn. – Stephen Leon Williams, 62, of Kingsport, Tenn., was sentenced on Dec. 18, 2013, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 90 months in federal prison. Williams was convicted for his participation in an oxycodone conspiracy centered in the Kingsport, Tenn., area of the Eastern District of Tennessee and for selling a firearm to an undercover agent.
In February 2013, Williams sold 55 oxycodone pills to an individual working on behalf of law enforcement. In March 2013, Williams sold another 5 oxycodone pills to this individual and in a subsequent transaction on the same day, sold a .38 caliber handgun and a clip with six rounds to an undercover law enforcement agent. Overall, Williams stipulated that he conspired to distribute approximately 2,250 (30 mg) oxycodone pills between June 2011 and June 2013.
Williams was on parole at the time he committed these offenses from a 1981 first degree murder conviction in Hawkins County. Within a fairly short amount of time after being granted parole on the murder conviction, Williams became involved in the trafficking of oxycodone. After completing his 90 month federal sentence, Williams still faces revocation of his parole on his murder conviction.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Williams include the Bureau of Alcohol, Tobacco and Firearms, Sullivan County Sheriff’s Office and Kingsport 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 with the sentence in this case and believe it reflects the seriousness of the crimes committed.”
Federal Jury Convicts Greeneville Oncologist and Practice Manager of Violating Food, Drug and Cosmetic ActRead the Press Release
Cancer Clinic Purchased Unapproved Drugs For Three Years
GREENEVILLE, Tenn. - Following a six day trial in U.S. District Court, Greeneville, Tenn. a jury convicted Anindya Kumar Sen, M.D., 65, and his wife and practice manager Patricia Posey Sen, 66, of Greeneville, Tenn., of causing the introduction of misbranded drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act.
Sentencing is set for 1:30 p.m. on Apr. 30, 2014 in U.S. District Court in Greeneville. Both face a possible sentence of up to 29 years in prison and up to $2.9 million in fines.
According to evidence presented at trial, the Sens’ medical practice, East Tennessee Hematology Oncology and Internal Medicine (ETHOIM), also known as 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 bore 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 eighty percent to 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% for Medicare), a provider can increase his profits by purchasing cheaper unapproved drugs.
The Food, Drug and Cosmetic Act (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 Mar. 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, Tennessee.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent convictions of the Sens 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 at trial.