Eastern District of Texas

PLANO, Texas – A Murphy, Texas, man, pleaded guilty today to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents, Fahad Shah, 44, admitted that he sought over $3 million in PPP loans from two different SBA-approved lenders. In the first application submitted to one lender, Shah sought over $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of over $700,000. In the second application, Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. According to court documents, WBF had only two employees. In connection with both PPP loan applications, Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.

“PPP loans were intended to help businesses keep themselves and their employees afloat during the COVID-19 pandemic,” said Acting U.S. Attorney Nicholas J. Ganjei.  “PPP loans were not, and never were, intended to serve as personal loans for personal use.  By applying and qualifying for PPP funds on fraudulent grounds, Fahad Shah took advantage of the COVID-19 economic crisis to enrich himself and his family.  By seeking a loan that he should not have received, Shah helped to deplete the amount of funds available to all potential legitimate borrowers who really needed financial support.  This plea shows that the Eastern District of Texas is dedicated to pursuing fraudsters and ensuring they do not benefit from their crimes.”

Shah admitted that he obtained over $1.5 million in PPP loan proceeds. Within days of receiving the PPP funds, Shah used over $1 million in fraudulently obtained proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

Shah was indicted by a federal grand jury on June 18, 2020, and pleaded guilty to wire fraud today. Under federal statutes, Shah faces up to 20 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

Acting U.S. Attorney Nicholas Ganjei of the U.S. Attorney’s Office for the Eastern District of Texas; Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Special Agent in Charge Amaleka McCall-Brathwaite of the U.S. Small Business Administration – Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG); Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG); Acting Special Agent in Charge Mark Pearson of the IRS Criminal Investigation (IRS-CI) Dallas Field Office; and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.

The SBA-OIG, FHFA-OIG, FDIC-OIG, IRS-CI, and TIGTA are investigating the case.

Assistant U.S. Attorneys Frank Coan and Robert Wells of the Eastern District of Texas and Trial Attorneys Della Sentilles and Louis Manzo of the Justice Department’s Fraud Section are prosecuting the case.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses. 

The Fraud Section leads the Department of Justice’s prosecution of fraud schemes that exploit the CARES Act. In the months since the CARES Act was passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real-estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/cares-act-fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

 

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A Texas man pleaded guilty today to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents, Fahad Shah, 44, of Murphy, admitted that he sought over $3 million in PPP loans from two different SBA-approved lenders. In the first application submitted to one lender, Shah sought over $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of over $700,000. In the second application, Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. According to court documents, WBF had only two employees. In connection with both PPP loan applications, Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.

Shah admitted that he obtained over $1.5 million in PPP loan proceeds. Within days of receiving the PPP funds, Shah used over $1 million in fraudulently obtained proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

Shah pleaded guilty to one count of wire fraud. He is scheduled to be sentenced at a future date and faces a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Nicholas Ganjei of the U.S. Attorney’s Office for the Eastern District of Texas; Special Agent in Charge Amaleka McCall-Brathwaite of the SBA – Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency – OIG (FHFA-OIG); Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – OIG (FDIC-OIG); Acting Special Agent in Charge Mark Pearson of the IRS Criminal Investigation (IRS-CI) Dallas Field Office; and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.

The SBA-OIG, FHFA-OIG, FDIC-OIG, IRS-CI, and TIGTA are investigating the case.

Trial Attorneys Della Sentilles and Louis Manzo of the Justice Department’s Fraud Section and Assistant U.S. Attorneys Frank Coan and Robert Wells of the U.S. Attorney’s Office for the Eastern District of Texas are prosecuting the case.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses. 

The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the CARES Act passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at:  https://www.justice.gov/criminal-fraud/ppp-fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

TEXARKANA, Texas – Four individuals, including two Red River Army Depot (RRAD) officials, have been charged with federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jimmy Scarbrough, 69, of Hooks, was an RRAD supervisor and is charged by criminal complaint with conspiracy to defraud the United States and 36 counts of bribery.  Scarbrough made an initial appearance before U.S. Magistrate Judge Caroline Craven today.

Jeffrey Harrison, 43, of Texarkana, and Justin Bishop, 50, of Clarksville, both RRAD vendors, are pleading guilty today to bribery charges.  

Devin McEwin, 41, of Avery, an RRAD official, has also been charged with bribery and is scheduled to plead guilty.

“The Red River Army Depot is a key component of our nation’s defense infrastructure and is the lifeblood of the surrounding community,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Scarbrough, Harrison, Bishop, McEwin, and others exploited the public trust in order to line their own pockets, and undermined the warfighting mission of the Depot in the process.”

“These guilty pleas are a direct reflection of the tenacity and teamwork by MPFU special agents and our law enforcement partners,” said SA Ray Rayos, Special Agent-in-Charge of the Southwest Fraud Field Office, Major Procurement Fraud Unit (MPFU), U.S. Army CID. “Bribery and other fraud schemes have no place in the government contracting system and those who attempt it will be caught.”    

“Today’s announcement highlights a successful collaboration among partner agencies as we collectively hold these defendants accountable for allegedly creating a fraudulent and deceptive scheme against the government and the people of the United States. We remain committed to the aggressive pursuit of those who selfishly leverage government programs for their own personal gain,” said Dallas FBI Special Agent in Charge, Matthew J. DeSarno.

According to information presented in court, Scarbrough was the Equipment Mechanic Supervisor at the RRAD in Texarkana, Texas, a position he held from November 2001 until May 2019. Scarbrough is alleged to have directed more than $7 million in purchases from RRAD to Harrison and Bishop through the government purchase card (GPC) program.  In order to manipulate the GPC program, which is designed to ensure a competitive bidding process, Scarbrough told the vendors what to bid, including the item, the quantity, and the price.  By collecting fake bids from multiple vendors, Scarbrough was able to direct RRAD purchases to his select vendors, in this case Harrison and Bishop, while maintaining the appearance of a competitive bidding process. Scarbrough also defrauded the United States by falsely certifying that he had received the purchased items, therefore causing the RRAD to pay his select vendors.  However, the reality was that Scarborough instructed the vendors not to deliver certain RRAD-purchased items. 

Scarbrough demanded hundreds of thousands of dollars in bribes from his selected vendors. Scarbrough accepted bribes in various forms, including receiving at least $116,000.00 in U.S. Postal Service money orders from Harrison. Scarbrough also had Harrison and Bishop purchase at least $135,000.00 in car parts or services for his hot rod collection, which included a red and black 1936 Ford Tudor, an electric green 1932 Ford Coupe, a cherry red 1951 Ford F-1 truck, and more. Scarbrough received more than $27,000.00 worth of firearms from Bishop, including rare Colt handguns and Wurfflein dueling pistols. Finally, Scarbrough directed at least $32,000.00 in donations to the Hooks Volunteer Fire Department while he was the Capitan of Operations. In total, Scarbrough received more than $300,000.00 in bribe payments from Harrison and Bishop.

Scarbrough is not the only official at RRAD who accepted bribes. Devin McEwin accepted more than $21,000.00 in bribes from Harrison, including hunting trips, donations directed to the Annona Volunteer Fire Department, and the refurbishment of his 1964 Ford truck.

Under federal statutes, the defendants each face up to 15 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit; the Federal Bureau of Investigation-Dallas Division, Tyler Resident Agency, and the U.S. Postal Inspection Service.  This case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

Criminal complaints, informations and indictments are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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PLANO, Texas – A Denton, Texas, woman has been sentenced for student loan fraud in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Tiffany O’Neal, 47, pleaded guilty on Nov. 19, 2020, to student loan fraud and was sentenced to five years of federal probation and ordered to pay restitution in the amount of $234,113.00 by U.S. District Judge Sean D. Jordan on May 17, 2021. 

“Funds earmarked for student financial aid provide critical educational and professional opportunities for students,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas is committed to ensuring that those funds serve that purpose.  However, when those funds are diverted or stolen, this case shows that EDTX, along with its law enforcement partners, will take action and hold those responsible.”

“Ms. O’Neal knowingly and willfully abused her position of trust for personal gain and in doing so, defrauded the school, the Federal student aid program, and America’s taxpayers. She’ll now be held accountable for her criminal actions,” said Edd Cole, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s (OIG) Southwestern Regional Office.  “OIG Special Agents will continue to work with our law enforcement partners to aggressively pursue those who seek to enrich themselves with Federal education funds. America’s students, their families, and taxpayers deserve nothing less.”

According to court documents, between 2012 and 2017, O'Neal was both a student at the University of North Texas as well as an employee in their financial aid office.  In this role, she had the ability to approve and reject financial aid awards and grants.  During this time, she submitted fictitious expenses relating to her husband's financial aid application, approved financial aid awards to her husband to which he was not otherwise entitled, and awarded monetary grants to her husband that he should not have received.  In addition, she fraudulently obtained additional funds in her own financial aid packages.  In sum, she misappropriated approximately $230,000 in funds that were earmarked for federal financial aid grants.     

This case was investigated by the Department of Education Office of Inspector General and prosecuted by the Plano office of the United States Attorney’s Office for the Eastern District of Texas. 

PLANO, Texas – A Fannin County, Texas, woman has been sentenced to federal prison for tax evasion in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Chelsea Jolynn Tucker, 45, pleaded guilty to tax evasion on Nov. 4, 2020, and was sentenced to 14 months and 23 days in federal prison today by U.S. District Judge Sean D. Jordan today.  Tucker was also ordered to pay restitution in the amount of $779,664.00.

“Tax-related offenses often go hand-in-hand with other financial crimes, because the perpetrator needs to conceal their ill-gotten gains from government scrutiny,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Today’s sentence and restitution award will help to make the American taxpayer whole.”

According to public court records, from approximately 1997 to 2016, Tucker was employed by a staffing and contract services company located in Addison, Texas.  In her role with the company, Tucker had various financial responsibilities, including administering payroll, preparing W-2 Forms, making employment tax deposits, paying business expenses, and monitoring the company’s tax obligations using QuickBooks and TaxGuard.

Between approximately 2012 and 2017, Tucker knowingly and willfully misappropriated and embezzled funds from the company by paying herself as both an employee and a vendor, issuing herself unauthorized bonuses and fraudulent expense reimbursements, using a corporate credit card for personal purchases, and using company funds to pay personal credit cards.

Tucker also willfully attempted to evade her income tax obligations by preparing false and fraudulent W-2 Forms, which substantially underreported the income owed to the Internal Revenue Service.  In addition, Tucker failed to pay the company’s employment taxes, which she had a duty to both truthfully account for and pay. As a result of Tucker’s criminal conduct, the amount still owed to the Internal Revenue Service totals approximately $779,664.

This case was investigated by the Internal Revenue Service-Criminal Investigation and prosecuted by Assistant U.S. Attorneys in the Plano office.

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TEXARKANA, Texas – The final two defendants in a Clarksville methamphetamine conspiracy have been sentenced to federal prison in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

According to court documents, Jacory Dewayne Coulter, 35, pleaded guilty on Oct. 5, 2020, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 102 months in federal prison on May 13, 2021, by U.S. District Judge Robert W. Schroeder III.

Brandon Charles Nickerson, 42, pleaded guilty on July 1, 2020, to the same charges and was sentenced to 70 months in federal prison on April 21, 2021 by Judge Schroeder.

“Today’s sentences close the book on a methamphetamine trafficking operation, and makes the Red River County area a safer place to live and work,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This operation also showcases how effective a joint federal, state, and local law enforcement operation can be.  Expect to see similar operations in the near future.”

The U.S. Attorney’s Office will never stop fighting against the scourge of methamphetamine distribution that destroys so many lives,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We are grateful to our law enforcement partners who have also worked tirelessly to identify and disrupt these dangerous organizations.” 

Operation Big Red is a multiyear methamphetamine trafficking investigation in Red River County that has led to federal convictions of 11 men.  From at least January 2016, Counter and Nickerson were part of that conspiracy which distributed large amounts of methamphetamine in the Clarksville area.  Previously, Judge Schroeder sentenced other Mavin Earl Baty to 92 months in prison; Gregory Lamont Dillard to 102 months; Victor Gonzales to 63 months; Miguel Angel Hernandez to 78 months; Neopholis Dontray Scales to 70 months; Brian Bradley Beers to 70 months; Kevin Wayne Guess to 57 months; James Wayne Johnson to 145 months; and Billy Carl Webb, Jr., to 120 months in prison.

The Texas Department of Public Safety-CID and the Red River County Sheriff’s Office investigated the case.  Assistant U.S. Attorney Jonathan R. Hornok prosecuted the case.

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TEXARKARNA, Texas - A Frisco lawyer has been sentenced to federal prison in connection with a wire fraud scheme in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

David A. Krueger, 52, pleaded guilty on Jan. 5, 2021, to federal wire fraud violations and was sentenced to 18 months in federal prison today by U.S. District Judge Robert W. Schroeder, III.  He was also ordered to pay $350,000 in victim restitution.

“As an attorney in Texas, this defendant took an oath to act honestly and with integrity. He then violated that oath by scamming his client out of hundreds of thousands of dollars,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas will continue to hold accountable those who exploit positions of trust to defraud others.”

According to information presented in court, from February 2014 to September 2015, Krueger, an attorney licensed to practice in the state of Texas, devised a scheme to defraud current and former clients of his law practice by soliciting them to invest in and fund his outside business ventures.  Krueger represented to his clients that they would be receive guaranteed annual returns at rates of approximately ten percent of their investments.  To facilitate the scheme, Krueger persuaded a client to transfer $400,000 the client received from a legal settlement to Krueger himself for the purpose of funding a misting fan business.  Krueger used those investment funds not only for this misting fan business, but also other unrelated business ventures, as well as for his own personal benefit.  Krueger was not licensed to sell securities.  Krueger was indicted on federal charges on August 21, 2019.

This case was investigated by the Federal Bureau of Investigations – Texarkana Resident Agency and prosecuted by Assistant U.S. Attorneys Frank Coan and Jonathan Hornok.

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BEAUMONT, Texas - In honor of National Police Week, Acting U.S. Attorney Nicholas J. Ganjei recognizes the service and sacrifice of federal, state, local, and Tribal law enforcement. This year, the week is observed Sunday, May 9 through Saturday, May 15, 2021.

“This week is a time to honor our law enforcement officers who have made the ultimate sacrifice in service to our nation,” said Attorney General Garland. “I am constantly inspired by the extraordinary courage and dedication with which members of law enforcement act each day, putting their lives on the line to make our communities safer. To members of law enforcement and your families: we know that not a single day, nor a single week, is enough to recognize your service and sacrifice. On behalf of the entire Department of Justice, you have our unwavering support and eternal gratitude.”

“Law enforcement officers put their lives on the line each and every day to protect the safety and wellbeing of their fellow citizens,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Though the hours can be long, and the job fraught with peril, many brave men and women put on the badge and holster every morning to make our communities a safe place to live and work.  To these heroes—and especially to those who made the ultimate sacrifice in the line of duty—you have our deepest respect.  A grateful nation thanks you.” 

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices.  Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.  

Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty, and commitment to keeping our communities safe. This year the COVID-19 pandemic has highlighted law enforcement officers’ courage and unwavering devotion to the communities that they have sworn to serve.

During the Roll Call of Heroes, a ceremony coordinated by the Fraternal Order of Police (FOP), more than 300 officers will be honored.  Based on data submitted to and analyzed by the National Law Enforcement Officer Memorial Fund (NLEOMF), of the law enforcement officers who died nationwide in the line of duty in 2020, nearly 60 percent succumbed to COVID-19. Here in the Eastern District of Texas, four officers died in the line of duty.  A fifth officer who died in 1937 will also be included in this year’s induction.   

Additionally, according to statistics reported by the Federal Bureau of Investigation (FBI) through the Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 46 law enforcement officers died as a result of felonious acts and 47 died in accidents in 2020.  LEOKA statistics can be found on FBI’s Crime Data Explorer website. 

The names of the 295 fallen officers who have been added in 2020 to the wall at the National Law Enforcement Officer Memorial will be read on Thursday, May 13, 2021, during a Virtual Candlelight Vigil, which will be live-streamed to the public at 8:00 p.m. EDT. The Police Week in-person public events, originally scheduled for May, have been rescheduled due to ongoing COVID-19 concerns to October 13-17, 2021. An in-person Candlelight Vigil event is scheduled for October 14, 2021.

Those who wish to view the Virtual Candlelight Vigil on May 13, 2021, can watch on the NLEOMF YouTube channel found at https://www.youtube.com/user/TheNLEOMF. The FOP’s Roll Call of Heroes can be viewed at www.fop.net. To view the schedule of virtual Police Week events in May, please view NLEOMF’s Police Week Flyer.   

To learn more about National Police Week in-person events scheduled for October, please visit www.policeweek.org.

 

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A member of the Aryan Circle (AC) pleaded guilty Thursday to his role in an October 2016 violent assault, as well as conspiring to sell firearms to a convicted felon. Another individual pleaded guilty on April 19, to conspiring with members of the AC to sell methamphetamine.

Rodney Shane Holt, aka “Turbo,” 48, of Tyler, Texas, pleaded guilty to assault resulting in serious bodily injury in aid of racketeering, as well as conspiracy to sell firearms to a convicted felon. Holt committed the assault as part of his membership in the AC, a gang that operates in Texas and other states throughout the country. According to court documents, Holt planned and participated in the events surrounding a violent beating of another AC member who wanted to switch his gang affiliation, or “patch over,” from the AC to a different gang. Holt and other AC members carried out the attack in order to “X,” or remove the AC member from the gang, because joining another organization violated the AC’s rules. Holt also sold high caliber firearms to convicted felons.

Eulalio Torres-Cadenas, aka “Yayo,” 43, of Houston, Texas, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance, namely 500 grams or more of a mixture or substance containing methamphetamine. According to court documents, Torres-Cadenas supplied an AC member with multiple kilograms of methamphetamine in 2016, in the area of Houston, Texas. The AC member then went on to distribute the methamphetamine to buyers in Louisiana, including other AC members. The drug conspiracy that Torres-Cadenas pleaded to was uncovered as part of Operation Noble Virtue, an investigation that has focused on the criminal conduct of the AC’s leadership.

The AC is a violent, white supremacist organization that originated in the Texas Department of Corrections and operates in federal prisons across the country, as well as outside prisons in states including Texas, Arkansas, Louisiana, and Missouri. The AC enforces its rules and promotes discipline among its members, prospects, and associates through murder, attempted murder, assault, and threats. Members, and oftentimes associates, are required to follow the orders of higher-ranking members without question.

Sentencing dates have not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Holt faces maximum sentences of 20 years in prison for the assault in aid of racketeering and five years in prison for the firearms conspiracy, while Torres-Cadenas faces a mandatory minimum sentence of 10 years in prison, and a maximum sentence of life in prison.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas made the announcement.

This case is being investigated by an Organized Crime Drug Enforcement Task Force (OCDETF) consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) District Attorney’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office.

Trial Attorneys Bethany Lipman, Rebecca Dunnan and Alexander Gottfried of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Christopher Rapp of the Eastern District of Texas are prosecuting the case.

TYLER, Texas – Two Texas women have each been sentenced to 24 months in federal prison for conspiracy charges in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Pamela Sue Hannan, 68, of Sherman, and Pamela Sue Jennings, 69, of Houston, pleaded guilty on August 6, 2020, to conspiring with foreign co-conspirators to operate an unlicensed money transmitting business and were sentenced to 24 months in federal prison by U.S. District Judge J. Campbell Barker today. 

“Today’s sentences send a clear message that schemes targeting elderly victims will not be tolerated, and those facilitating such schemes will be held accountable,” said Acting U.S. Attorney Nicholas J. Ganjei.  “By acting as domestic money transmitters for foreign co-conspirators, these defendants played fundamental roles that allowed foreign actors to reach from overseas to target elderly victims in communities across the United States.  Bringing the remaining perpetrators to justice remains a priority for this office.”

According to information presented in court, over the course of several years, Hannan and Jennings received funds from romance scam victims and from victims of other fraudulent schemes on behalf of their co-conspirators, who were based outside of the United States.  In order to facilitate the scheme, Hannan and Jennings opened bank accounts in the names of businesses which purported to provide legitimate services.  In reality, Hannan and Jennings used these businesses as fronts to facilitate the money transmitting scheme.  Together, Hannan and Jennings received more than $4.1 million from victims of the schemes.  Hannan and Jennings transferred the majority of the funds they received to their co-conspirators’ foreign bank accounts. 

Hannan and Jennings were indicted by a federal grand jury on Oct. 16, 2019.   

In October 2017, the Elder Abuse Prevention and Prosecution Act (EAPPA) was signed into law.  The EAPPA’s purpose is to increase the federal government’s focus on preventing elder abuse and exploitation.  Subsequently, the Department of Justice launched the Elder Justice Initiative (EJI).  Through the EJI, the Department has participated in hundreds of criminal and civil enforcement actions involving misconduct that targeted vulnerable seniors.  In March of last year, the Department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country.  The EJI website contains useful information, including educational resources about prevalent financial scams so you can guard against them.

In August of 2020, the Eastern District of Texas announced its own initiative, in partnership with law enforcement and private financial institutions, to identify and prosecute transnational elder fraud.  This EDTX initiative is designed to combat these criminal organization, both foreign and domestic, as well their networks of associates and money mules who launder the stolen funds. 

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed from 10:00 a.m. to 6:00 p.m. Eastern Time, Monday-Friday. English, Spanish, and other languages are available.                                                                                                            

This case is being investigated by the U.S. Department of Homeland Security-Homeland Security Investigations with assistance from the U.S. Postal Inspection Service, the Sherman Police Department, and the Appleton (Wisconsin) Police Department.  It is being prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

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SHERMAN, Texas - A Huntington, New York, man has been sentenced to federal prison in connection with an identity theft scheme in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Daniel Brian Rink, 37, pleaded guilty on June 24, 2020, to conspiracy to commit bank fraud and was sentenced to 51 months in federal prison today by U.S. District Judge Amos L. Mazzant, III.  He was also ordered to pay $230,783 in victim restitution.

“Identify theft is not a victimless crime. Indeed, it often causes great hardship to its victims, and could lead to years of trying to repair one’s finances, reputation, and credit,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This sentence sends a clear message that the fraudulent use of victims’ identities will be aggressively prosecuted in the EDTX.”

According to information presented in court, Dallas-Fort Worth Airport police officers discovered drugs in Rink’s luggage on Oct. 7, 2018.  Police also found fraudulent identification cards that contained Rink’s photograph as well as credit cards and Sam’s Club membership cards that matched the names on the identification cards.  Further investigation revealed Rink had applied for credit accounts using the names on the fraudulent identification cards.  He then used those cards to purchase various items, including computers, iPhones, and prepaid gift cards.

On Nov. 15, 2018, Rink rented a 2018 Audi Q3 from Enterprise Rent-a-Car by using one victim’s Illinois identification card and paying for the rental with another victim’s credit card.  A few days later, the card issuer notified the Port of Portland, Oregon, Police Department that the credit card had been used to rent a hotel room at the Portland Airport.  Investigators located the Audi in the hotel parking lot and Rink inside the hotel.  Rink was in possession of the false Illinois identification, another fictitious Illinois identification card that contained his photograph, victim credit cards, and gift cards. His hotel room contained more fictitious identification cards with his photograph, fraudulent credit cards, cellular phones, and a gaming system.  Text and picture message exchanges on Rink’s phone included victims’ personal and credit information; discussions about the credit limit amounts they opened in victims’ names in Oregon and Colorado; and sharing of victims’ personal identification used to open and use credit in the victims’ names.

In addition, the investigation revealed that Rink’s co-conspirators used device-making equipment to manufacture fraudulent state identification documents and credit cards, provided other conspirators with fraudulent documents, and directed those conspirators to different cities throughout the United States, including Frisco and Plano, Texas, to open instant credit accounts to purchase merchandise. After purchasing the items, the conspirators would ship the illegally obtained goods to New York, where they were resold for cash. Conspirators used fraudulently obtained credit cards to rent vehicles to travel during their commission of the offense.

In all, Rink and his associates caused a loss of more than $1 million to various lenders and individual victims.  On Dec. 11, 2019, a federal grand jury in the Eastern District of Texas, returned a 35-count indictment against Rink and 17 others.

This case was investigated by Homeland Security Investigations, DFW Airport Police Department, and the Port of Portland, Oregon Police Department, and prosecuted by Assistant U.S. Attorney Matthew T. Johnson.

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TEXAS – One member of the Aryan Circle (AC) pleaded guilty today to his role in a violent assault of a man in October 2016, as well as conspiring to sell firearms to a convicted felon, and a Mexican national pleaded guilty on Monday, April 19, to conspiring with members of the AC and others to sell methamphetamine, announced Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas and Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division today.

Rodney Shane Holt, aka “Turbo,” 48, of Tyler, Texas pleaded guilty to assault resulting in serious bodily injury in aid of racketeering, as well as conspiracy to sell firearms to a convicted felon. Holt committed the assault as part of his membership in the AC, a gang that operates in Texas and other states throughout the country.  Eulalio Torres-Cadenas, aka “Yayo,” 43, of Mexico, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance, namely 500 grams or more of a mixture or substance containing methamphetamine.

“Today’s pleas demonstrate the unfortunate truth that violence and the drug trade go hand-in-hand,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Department of Justice and its state and local partners will continue to take a hard line against organized criminal gangs and their enablers.”

According to court documents, Torres-Cadenas supplied an Aryan Circle member with between 1.5 and 5 kilograms of methamphetamine over a number of occasions in 2016, in the area of Houston, Texas.  The AC member went on to distribute the methamphetamine to buyers in Louisiana, including other AC members. The drug conspiracy that Torres-Cadenas pleaded to was uncovered as part of Operation Noble Virtue, an investigation into the AC that has targeted AC leadership.

Holt’s offense conduct included planning and participating in the events surrounding a violent beating of another AC member who wanted to switch his gang affiliation, or “patch over,” from the AC to a different gang. Holt and other AC members carried out the attack in order to “X,” or remove the AC member from the gang, because it violated the AC’s rules to join another organization. Holt’s offense conduct also included several sales of high caliber firearms to convicted felons.

The AC is a violent, white supremacist organization that originated in the Texas Department of Corrections and operates in federal prisons across the country, as well as outside prisons in states including Texas, Arkansas, Louisiana, and Missouri. The AC enforces its rules and promotes discipline among its members, prospects, and associates through murder, attempted murder, assault, and threats. Members, and oftentimes associates, are required to follow the orders of higher-ranking members without question.

Sentencing dates have not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) District Attorney’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office.

Trial Attorneys Bethany Lipman, Rebecca Dunnan, and Alexander Gottfried of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Christopher Rapp of the Eastern District of Texas are prosecuting the case.

BEAUMONT, Texas - A Nederland woman has been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Keri Colleen Beck, 49, pleaded guilty on Jan. 27, 2021, to possession with intent to distribute methamphetamine and was sentenced to 151 months in federal prison today by U.S. District Judge Michael Truncale. 

According to information presented in court, on Jan. 19, 2020, the Jefferson County Narcotics Task Force executed a search warrant at Beck’s Nederland residence and found approximately one pound of methamphetamine. Beck also possessed an assortment of drug trafficking paraphernalia including resealable bags and digital scales.  Beck was indicted by a federal grand jury on Nov. 4, 2020 and charged with drug trafficking violations.

“Cases like this that partner local and federal law enforcement resources significantly interrupt the destructive flow of methamphetamine into our local communities,” said Acting U.S. Attorney Nicholas J. Ganjei.

This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney John B. Ross.

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SHERMAN, Texas – A Plano man has been sentenced for crimes involving firearms and sex offenses in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Wayne Edward Bearden, 40, pleaded guilty on Dec. 4, 2019, to being a felon in possession of firearms and to coercion, enticement and aiding and abetting, and was sentenced to a total term of imprisonment of 180 months by U.S. District Judge Amos L. Mazzant today.

“Today’s sentence takes a dangerous man off the street, and will bring a measure of closure and comfort to those he victimized,” said Acting U.S. Attorney Nicholas J. Ganjei.  “While this case began as a firearms investigation, due the excellent work of our federal and local law enforcement partners we were able to uncover – and dismantle – a commercial sex trafficking operation.”

“We will work relentlessly with all of our committed law enforcement partners to identify and rescue victims of human trafficking, and bring their exploiters and consumers to justice,” said Ryan L. Spradlin, Special Agent in Charge Homeland Security Investigations (HSI) Dallas. “This sentence may successfully conclude this particular operation but HSI’s efforts to eradicate sex trafficking continues.”    

According to information presented in court, in August 2018, Bearden called the Plano Police Department after individuals robbed his Plano home.  Responding officers observed a number of firearms in the home, and a subsequent investigation revealed that Bearden was a previously convicted felon, prohibited from possessing firearms under federal law.  During the course of the investigation, Plano detectives and special agents with Homeland Security Investigations determined that Bearden was the organizer and leader of a sex trafficking operation.  Specifically, Bearden employed a “booker” who coordinated the ads for sexual services, websites, and appointments for commercial sex appointments, and used other women in managerial roles, transporting the prostituted women to locations around the United States, obtaining hotel rooms, and managing cash payments.  As the leader of the operation, Bearden controlled the acts the women performed, where they worked, how often they worked, how much money they made, with Bearden controlling the proceeds the prostituted women earned.  As part of his plea, Bearden admitted to persuading, inducing, enticing, or coercing women to travel to other states to engage in illegal prostitution.

After his release from prison, Bearden will serve a total term of supervised release of five years.  In addition to Bearden, other members of the operation were previously sentenced by Judge Mazzant for conspiracy to travel or cause another to travel in interstate commerce and to use facilities of interstate commerce to promote, manage, establish, carry on and facilitate unlawful activity, including:

• Ashlynn Clark – sentenced on July 2, 2020 to five months in federal prison, five months home detention, and one year of supervised release;

• Shelby Holzen – sentenced on June 4, 2020 to three years of probation;

• Ashley Judith Schafer – sentenced on June 3, 2020 to six months in federal prison, six months home detention, and two years of supervised release.

This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

This case was investigated by Homeland Security Investigations – Dallas, the Plano Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.  The case was prosecuted by Assistant U.S. Attorneys Marisa Miller and Tracey Batson.

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SHERMAN, Texas – A Flower Mound man has been sentenced for the sexual exploitation of a child in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Jermaine Lanie Codrington, 39, was convicted by a jury on Sep. 4, 2020, of production of child pornography.  Codrington was sentenced to 30 years in federal prison by U.S. District Judge Amos L. Mazzant on May 4, 2021.  Upon his release from custody, Codrington will be on supervised release for 10 years and will be required to register as a sex offender.

“The exploitation of a child is among one of the worst offenses a person can commit, and the sentence handed down in this case reflects that,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas will continue to work with our federal, state, and local partners to punish those that engage in such heinous acts, and hopefully deter those that might be inclined to similarly engage in such acts of exploitation.”

“The sexual exploitation of a child is an inexcusable and unconscionable crime, often causing life-long harm to those victimized, said Ryan L. Spradlin, Special Agent in Charge Homeland Security Investigations (HSI) Dallas. “The lengthy sentence imposed will not eliminate the trauma endured by the victim, but it does highlight the seriousness of the sexual offense perpetrated by the abuser.”

According to information presented in court, in April 2019, a minor child reported sexual abuse by Codrington.  Law enforcement investigating the matter discovered images of child pornography on Codrington’s cellular phone.  Codrington testified at trial and admitted to taking the photographs, stating that he had done so at the child’s request, to teach the child about their anatomy.  Other evidence introduced at trial detailed the child’s interactions with Codrington and established that the child had no contemporaneous knowledge of the photos.  The district court determined that an upward variance from the U.S. Sentencing Guidelines was warranted and sentenced Codrington to a term of imprisonment of 30 years.

This case is 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 U.S. Attorneys’ Offices and the 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.justice.gov/psc.

This case was investigated by members of Homeland Security Investigations – Dallas and the Flower Mound Police Department.  The case was prosecuted by Assistant U.S. Attorneys Marisa Miller and Maureen Smith.

 

TYLER, Texas – A Mexican National has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Ramiro Ortiz Perez, 35, pleaded guilty on Jan. 7, 2021, to being a prohibited person in possession of a firearm and was sentenced to 30 months in federal prison today by U.S. District Judge Jeremy Kernodle.

“This investigation by Homeland Security Investigations is a reminder that possession of firearms by those not legally permitted to possess them, especially in connection with illegal narcotics trafficking, is a direct threat to the safety of our communities,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Our office, together with HSI, will continue to vigorously uphold the law.”

According to information presented in court, on July 3, 2020, Ortiz Perez possessed a pistol in Tyler.  At the time he possessed the pistol, he was illegally and unlawfully in the United States, having entered, and remained in, the United States without proper authority.  Ortiz Perez knew that he was in the United States illegally and admitted that he possessed the pistol in furtherance of his drug trafficking activities.

This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

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BEAUMONT, Texas – A Beaumont man has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Rustin Chase McKinsey, also known as “Dollar Bill,” 35, pleaded guilty on Jan. 6, 2021, to discharging a firearm in furtherance of a drug trafficking crime and being a felon in possession of a firearm.  McKinsey was sentenced to 15 years in federal prison today by U.S. District Judge Marcia A. Crone.

“Felons who possess firearms, and certainly those who use firearms in furtherance of drug trafficking or violent crimes, are among the most dangerous members of our society,” said Acting U.S. Attorney Nicholas Ganjei.  “These criminals will learn the hard way that violent drug trafficking will be met with swift and decisive action by law enforcement.”

According to information presented in court, on Sep. 4, 2020, law enforcement officers responded to a residence on Taylor Street in Beaumont, Texas in reference to a shooting. Upon arrival, officers discovered the victim laying on the front porch of the residence with a towel wrapped around a gunshot wound to his leg. The victim’s roommate told officers he awoke to an argument between McKinsey and the victim, and he observed McKinsey fire two shots at the victim before fleeing the scene.  The victim stated that he owed money to McKinsey for methamphetamine that McKinsey sold him. 

On Oct. 9, 2020, law enforcement officers responded again to the same residence in reference to another shooting.  Upon arrival, officers discovered the same victim suffering from a gunshot wound to his back. A single spent .22 caliber shell casing was discovered at the scene. The victim stated that McKinsey shot him again over the same drug debt that was owed.  Officers then immediately headed to McKinsey’s residence, ultimately finding McKinsey hiding in a car across the street.     McKinsey admitted to officers that he had shot the victim on both occasions over a drug debt. 

McKinsey is a convicted felon having previously been convicted of possession of a controlled substance in Jefferson County, Texas, on Dec. 18, 2017.  As a convicted felon, McKinsey is prohibited by federal law of owning or possessing a firearm or ammunition. 

This case is being investigated by the Beaumont Police Department and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Matthew Quinn.

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SHERMAN, Texas – A Central Texas criminal defense lawyer was sentenced to federal prison today for an international fraud scheme involving his Colombian cocaine trafficking clients, announced Acting U.S. Attorney Nicholas J. Ganjei.      

James Morris Balagia, 65, of Manor, Texas was found guilty by a jury on Oct. 29, 2019, of five federal charges and was sentenced to 188 months in federal prison today by U.S. District Judge Amos Mazzant.  Balagia was also ordered to forfeit his law office building in Manor, Texas, and a money judgment of $1.5 million.

According to information presented in court, Balagia, also known as Jamie Balagia, also known as “The DWI Dude,” had a law practice with offices in San Antonio and Manor, specializing in defending clients charged with violations such as driving while intoxicated and drug possession.  In 2014, Balagia conspired with Florida private investigator Chuck Morgan, and Colombian attorney, Bibiana Correa Perea to swindle Colombian drug traffickers under the guise of bribing officials in the United Sates.  During meetings in Colombia and in Collin County, Texas, the group represented that in exchange for inflated “attorney fees,” they were in contact with government officials in the United States who would accept bribes resulting in either the dismissal of their criminal charges or significant reductions in their U.S. federal prison sentences.  In reality, there were no bribes or government officials. 

The Office of Foreign Assets and Control (OFAC) had previously designated Balagia’s Colombian clients as “Specially Designated Narcotics Traffickers.”  These individuals were considered some of the biggest drug traffickers in the world.  As such, they were on an OFAC list, essentially freezing their assets and prohibiting U.S. persons from engaging in any financial transactions or dealings with them unless they had received an OFAC license.  In order to comply with federal requirements under the “Kingpin Act,” Balagia was advised to obtain an OFAC license on multiple occasions but failed to do so.

As part of the scheme, Balagia provided Colombian co-conspirators with his personal bank account number and routing number.  Evidence at trial showed multiple deposits over several months into the account in amounts intended to avoid federal cash transaction reporting requirements.  The cash deposits were made at bank counters across the United States by anonymous individuals with daily deposits totaling just under the $10,000 reporting threshold.  Additionally, at least four bulk cash payments were made to Balagia in amounts ranging from approximately $70,000 to $120,000.  Balagia admitted to driving from his San Antonio office to a mall parking lot in Katy, Texas, where he was given a shopping bag filled with bundles of cash from either an unknown individual, or an individual who identified himself only as “Coco.”  In an attempt to conceal these payments, Balagia failed to report the payments as required by federal law.

Balagia was indicted by a federal grand jury on Dec. 15, 2016.  Bibiana Correa Perea pleaded guilty and was sentenced to 84 months in federal prison on June 29, 2018.  Chuck Morgan pleaded guilty and was sentenced to 72 months in federal prison on Mar. 8, 2018.

Balagia was found guilty following a two-week trial of conspiracy to commit money laundering; obstruction of justice, violation of the Kingpin Act; conspiracy to commit wire fraud; and conspiracy to obstruct justice.

“We live in a country with the greatest system of justice in the world,” said Acting U.S. Attorney Nicholas Ganjei.  “That system, however, cannot function when officers of the court are corrupt.  The evidence in this case demonstrated that Balagia had been shaking down his clients for years by claiming that he was able to purchase favorable deals from prosecutors and judges alike.  The Department of Justice will defend our Justice system vigorously and will prosecute predatory lawyers like Balagia every single time they are discovered.”

“The FBI combats public corruption at all levels and will protect and defend the U.S. justice system from those who attempt to diminish its integrity,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Today’s sentence demonstrates that officials who misuse their influence for personal financial benefit will be held accountable.”

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office – Frisco Resident Agency and prosecuted by Assistant U.S. Attorneys Heather H. Rattan and Jay Combs. 

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SHERMAN, Texas – A Kennedale man was found guilty by a jury of federal child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Robert Allen Hall, 31, was found guilty of attempted coercion and enticement of a minor today by a jury following a three-day trial before U.S. District Judge Amos L. Mazzant, III.

“While sexual predators are actively looking for their child victims, we are also actively looking for those predators,” said Acting U.S. Attorney Nicholas J. Ganjei. “Our law enforcement officers, federal agents, and prosecutors are dedicated to keeping the Eastern District of Texas safe from those who seek to destroy our greatest resource, our children.”

According to the court documents and testimony at trial, Hall reached out to and communicated with an individual he believed to be a 14-year-old child via a social media application. The two chatted between Feb 5, 2019 and May 21, 2019. These chats were sexually charged and contained graphic descriptions of the sex acts Hall wanted to perform on the minor child. On May 21, 2019, Hall traveled from Kennedale to a location in Collin County to meet the child. 

A federal grand jury returned an indictment charging Hall with federal violations on June 12, 2019. Under federal statutes, Hall faces up to life in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is 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 U.S. Attorneys’ Offices and the 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.justice.gov/psc.

This case was investigated by the Plano Police Department and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Marisa Miller and Lesley Brooks.

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PLANO, Texas – A Pilot Point woman was sentenced today to 24 months in prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Kristine Irene Lynch, 44, pleaded guilty on Nov. 12, 2020 to bank fraud and was sentenced to 24 months in federal prison today by U.S. District Judge Sean D. Jordan.  As part of her sentence, Lynch was also ordered to pay restitution in the amount of $467,280.00.

“Schemes like this can cripple an institution,” said Acting U.S. Attorney Nicholas J. Ganjei.  “One person’s greed can wreak havoc on countless others.”

According to the court documents, Lynch was employed at the North Texas Medical Center (NTMC) from 2006 until August 2017 as Comptroller.  As Comptroller, she was able to print checks herself, or have checks printed on her behalf.  Lynch devised a scheme to printing checks for personal use, or to have employees print them for her, drawn against the NTMC bank account.  Lynch then voided the checks in the accounting system after they cleared the bank in order to disguise her scheme.  Lynch spent the proceeds derived from the fraudulent checks for her own personal use.  A later audit revealed that Lynch was responsible for a total of 113 fraudulent checks, resulting in a total loss of $467,280.00.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney William R. Tatum.

 

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Alleged Arsonist Charged with Destroying Water Utility Pumping Stations that Serviced Hundreds of Athens Homes

TYLER, Texas - A federal grand jury in Tyler returned an indictment this week charging an Athens man with arson in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

According to court documents, Brandon Blake Neeley, 19, of Athens, was arrested on Oct. 5, 2020 as he attempted to leave the scene of a fire at the Dogwood Estates Water Company Pump No. 2 building.  Four days earlier, on Oct. 1, 2020, another building belonging to Dogwood Estates that housed Pump No. 4, was also set ablaze.  Dogwood Estates Water Company serves more than 400 Athens-area homes.  After both Pump No. 2 and Pump No. 4 were destroyed, Dogwood was forced to use a backup pump not designed to bear the full load of customer demands.  Customers have been asked to limit their water usage until the burned pumps can be repaired or replaced.  The two fires caused more than $200,000 in damage. 

“The destruction of the Dogwood Estates Pumps threatened water access for numerous Athens residents who rely on the pumping station to go about their daily lives,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Protection of our nation’s critical infrastructure from criminals, vandals, and saboteurs is a top priority for federal, state, and local law enforcement, and these charges demonstrate that.”

Neeley is charged with arson of property used in interstate commerce.  If convicted, he faces up to 20 years in federal prison.  A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Henderson County Sheriff’s Office are investigating the case.  Assistant U.S. Attorney Ryan Locker is prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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TYLER, Texas – A Jacksonville man was sentenced today to 78 months in federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Andres Gallegos, 38, pleaded guilty on Jan. 13, 2020, to possession with intent to distribute and distribution of methamphetamine and was sentenced to 78 months in federal prison today by U.S. District Judge J. Campbell Barker.

According to the court documents, an investigation into drug trafficking in Smith and Cherokee Counties revealed in October 2018 Gallegos regularly sold methamphetamine from his residence in Jacksonville.  Gallegos was indicted by a federal grand jury on Sep. 8, 2019, and charged with distributing methamphetamine on Oct. 16, 2018, Oct. 17, 2018, and again on Oct. 26, 2018.

“Over time, cases like this can make a big difference in our local communities,” said Acting U.S. Attorney Nicholas J. Ganjei. “Through a sustained, focused effort by federal, state, and local law enforcement, we can make our cities and town safer and drug-free.”

 

This case was investigated by the Smith County Sheriff’s Department, the Cherokee County Sheriff’s Department, the Jacksonville Police Department, and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Allen H. Hurst. 

 

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BEAUMONT, Texas – The U.S. Attorney’s Office for the Eastern District of Texas joins communities nationwide in commemorating the 40th anniversary of National Crime Victims’ Rights Week (NCVRW) from April 18–24, 2021. This year’s theme, Support Victims. Build Trust. Engage Communities, emphasizes the importance of leveraging community support to help victims of crime.

“The faces of crime victims are those of our families, friends, neighbors, and community members,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas is committed to upholding victims’ rights as we work to protect the safety of our communities and pursue equal justice under the law.  Now is the time to redouble our efforts so that fewer Americans become victims of crime.”

NCVRW is a time to renew a commitment to serving victims of crime, acknowledge achievements made in the victim services field, and remember crime victims and survivors.  For more information about this year’s NCVRW and how to assist victims in your community, please visit the NCVRW website (https://ovc.ojp.gov/program/national-crime-victims-rights-week/overview).

The Justice Department’s Office for Victims of Crime (OVC) leads communities throughout the country in their annual observances of NCVRW, during which victim advocacy organizations, community groups, and state, local, and tribal agencies traditionally host rallies, candlelight vigils, and other events to raise awareness of victims’ rights and services. For additional information about visit OVC’s efforts, please visit www.ovc.ojp.gov.

 

Note: Click to view superseding indictment.

SHERMAN, Texas – A federal grand jury in Sherman, Texas, returned a superseding indictment charging two Texas men with engaging in wage fixing and obstructing a federal investigation, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Neeraj Jindal, the former owner of a Texas-based therapist staffing company, and John Rodgers, a physical therapist and the clinical director of Jindal’s company, are charged with conspiring to fix prices, in violation of the Sherman Act, and with conspiring to obstruct a Federal Trade Commission (FTC) investigation.  Both defendants are also charged with obstruction of an FTC investigation.

According to the four-count superseding indictment, in 2017, Jindal, Rodgers, and their co-conspirators agreed to pay lower rates to certain physical therapists and physical therapist assistants in North Texas.  Their company, in turn, paid the agreed lower rates for several months after entering into the agreement. 

Jindal and Rodgers also conspired to obstruct an FTC investigation and to obstruct proceedings occurring before the FTC.  In furtherance of the conspiracy, Jindal and Rodgers made false and misleading statements and withheld and concealed information during the FTC’s investigation to determine whether their company or other therapist staffing companies violated the Federal Trade Commission Act.

The superseding indictment follows an indictment returned against Jindal in December 2020 for violating the Sherman Act and obstructing an FTC investigation.

“Wage-fixing agreements are, at their core, an attempt to artificially rig the labor market to depress wages and deprive workers of competitive salaries and benefits,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The present charges demonstrate that the Department of Justice and its partner agencies will not stand by and allow the exploitation of American workers and the manipulation of the marketplace.” 

“The charges announced today underscore the Antitrust Division’s ongoing commitment to enforcing antitrust laws, particularly when the victims are American workers who deserve the benefits of competitive wages, mobility, and competition among employers for their services,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department's Antitrust Division. “This prosecution also demonstrates how seriously we take our obligation to protect the integrity of investigations into anticompetitive conduct, whether those investigations are conducted by the Department of Justice or another agency.”

A violation of the Sherman Act carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.  The charged conspiracy to commit obstruction and obstruction offenses carry statutory maximum penalties of five years imprisonment and a $250,000 fine.

The charges in this case were brought in connection with the Antitrust Division’s ongoing commitment to prosecute anticompetitive conduct affecting American labor markets. Anyone with information on market allocation or price fixing by employers should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html. 

This case is being investigated by the Federal Bureau of Investigation’s International Corruption Unit and prosecuted by the Antitrust Division’s Washington Criminal I and II Sections with the assistance of United States Attorney’s Office for the Eastern District of Texas.

It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.

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BEAUMONT, Texas – A Baytown, Texas man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Fernando Salcido, 46, pleaded guilty to conspiracy to possess with intent to distribute cocaine today before U.S. Magistrate Judge Keith F. Giblin.

“The Eastern District of Texas is committed to attacking drug trafficking organizations at every level,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We will aggressively investigate and prosecute those who would try to harm our communities.”

According to information presented in court, from August 2018 through October 2019, Salcido was a member of a cocaine trafficking and money laundering operation.  The investigation included the seizure of a 12-kilogram shipment of cocaine being sent to Salcido within the false compartments of a vehicle.  Law enforcement also seized $54,100 in currency from a courier who had been transporting the proceeds at Salcido’s direction.

A federal grand jury returned an indictment charging Salido on Oct. 7, 2020. Under federal statutes, Salido faces up to life in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was investigated by the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Michael Anderson.

PLANO, Texas – A jury in Plano, Texas has convicted two Florida men of drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Omar Daniel Garcia-Agosto and Steven Thomas Mathis were found guilty by a jury for conspiracy to possess with intent to distribute cocaine following a week-long trial before U.S. District Judge Sean Jordan.

“Today’s guilty verdict sends a clear message to drug traffickers,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District is dedicated to dismantling their organizations—from top to bottom—and disrupting the flow of illegal drugs through the State of Texas.  We appreciate the hard work of the DEA as well as our state and local partners in putting this case together.”

According to evidence presented in court, from at least January 2019, and continuing until their arrests in December 2019, Garcia-Agosto, 46, of Deltona, FL, and Mathis, 34, of Orlando, FL, were involved in a drug trafficking operation that was responsible for distributing hundreds of kilograms of cocaine through the United States, including the North Texas area.  Supplied by members of the Cartel Del Noreste in Mexico, the cocaine was sent to Laredo, Dallas, and Houston, Texas.  From there, couriers transported the multi-kilogram shipments by car to Florida and locations in New York.  The defendants then purchased and distributed cocaine throughout the United States.  The investigation included the seizure of approximately 30 kilograms of cocaine and more than $300,000 in currency.

Following their conviction at trial, each defendant faces a minimum of 10 years and up to life in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case was investigated by the U.S. Drug Enforcement Administration, the Rockwall Police Department, the Mesquite Police Department, Lewisville Police Department, the Collin County Sheriff’s Office and the North Texas Criminal Interdiction Unit.  The case was prosecuted by Assistant United States Attorneys Ernest Gonzalez and Colleen Bloss and Special Assistant United States Attorney Bethany R. Pickett.

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TYLER Texas – A Wills Point, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

James Joseph Veeser, 59, pleaded guilty on Sep. 20, 2020, to receipt of child pornography and was sentenced to 97 months in federal prison by U.S. District Judge J. Campbell Barker today.  Upon release from prison, Veeser will be required to register as a sex offender.

“Sexual exploitation of children is a scourge that the U.S. Attorney's Office has set as a high priority for investigation and prosecution,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Those who receive these detestable images and videos drive the demand for them - and, hence, should face criminal liability for that conduct.”

According to information presented in court, on Jan. 8, 2019, law enforcement authorities executed a search warrant at Veeser’s residence in Van Zandt County, Texas, and recovered computer equipment.  A forensic examination of the computer equipment revealed visual depictions of minors engaged in sexually explicit conduct.  The videos and photos had been downloaded between Jan. 25, 2016 and Jan. 8, 2019. 

This case is 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 U.S. Attorneys’ Offices and the 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.justice.gov/psc.

This case was investigated by the Federal Bureau of Investigation and the Longview Police Department and prosecuted by Assistant U.S. Attorney Alan Jackson.

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TYLER, Texas – A husband and wife, along with two other co-conspirators in a methamphetamine and gun trafficking ring, were sentenced to federal prison today, announced Acting U.S. Attorney Nicholas J. Ganjei.

Amanda Rae Williams, 32, of Carthage, Texas, and Illona Annette Amburn, 41, of Longview, Texas pleaded guilty on August 4, 2020 to conspiracy to distribute methamphetamine.  They were both sentenced to 120 months in federal prison today.  Marvin Robert Williams, 38, also of Carthage, Texas, pleaded guilty on Sep. 22, 2020, to use, carrying, and possession of a firearm during and in furtherance of a drug trafficking crime.  Today, he was sentenced to 84 months in federal prison.  Larry Demontrie Mock, a/k/a “Boogati,” 39, of Houston, pleaded guilty on Dec. 7, 2020 to conspiracy to distribute methamphetamine and was sentenced to 151 months in federal prison today. 

The sentencing hearings were conducted before U.S. District Judge J. Campbell Barker.  Judge Barker also ordered each defendant to pay forfeiture in the amount of $5,000.00, which represents proceeds derived from their participation in the criminal conspiracy.

“The citizens of East Texas will not tolerate those who pump poison into our communities and traffic firearms in the process,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The sentences imposed on the Williams, Mock, and Amburn organization send a strong message to those who would try to profit from the misery of methamphetamine addiction or the violence that comes with underground firearm trafficking.  We will continue to investigate and prosecute the most dangerous members of our community, such as these individuals.”

According to court documents and information provided in court, beginning in April 2018, Amburn and Mock began brokering sales of methamphetamine and firearms that were being supplied by Amanda and Marvin Williams and others.  During the conspiracy, Amanda and Marvin Williams, Mock, and Amburn sold at least 150 grams of actual methamphetamine and at least 13 firearms during more than 10 separate transactions.  Marvin Williams, Mock, and Amburn are previously convicted felons who could not lawfully possess firearms.   

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the U.S. Drug Enforcement Administration; and the Panola County Sheriff's Office and prosecuted by Assistant U.S. Attorney Ryan Locker.

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MARSHALL, Texas – A Hawkins, Texas woman has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Brianna Clarisse Banks, 24, pleaded guilty to theft of government money today before U.S. Magistrate Judge Roy Payne.

“COVID has been financially devastating for many East Texans, especially for those who were already struggling,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Thieves who take the federal funds intended for the financially vulnerable will be aggressively investigated and prosecuted in the Eastern District of Texas.”

According to information presented in court, in April of 2020, the U.S. Treasury issued an Economic Impact Payment (EIP) check in the amount of $1,200.00, made payable to an individual and mailed it to that individual’s post office box in Avinger, Texas.  Banks stole the EIP check from the individual’s post office box and then used the victim’s name, social security number, and date of birth to open a checking account, but used Banks’ mailing address for the address on the account.  Banks deposited the stolen EIP check into the fraudulently opened bank account and then withdrew the funds and spent them for her own personal benefit.

A federal grand jury returned an indictment against Banks on Jan. 20, 2021. Under federal statutes, Banks faces up to 10 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  The CARES Act authorized over $2 trillion in relief programs, including approximately $560 billion for benefits to individuals.  An estimated $300 billion of that total was allocated for EIPs.

This case is being investigated by the U.S. Secret Service and the Cass County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Jim Noble.

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MARSHALL, Texas – A Gilmer, Texas man has pleaded guilty to federal child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Michael Parker, 41, pleaded guilty to sexual exploitation of a child today before U.S. Magistrate Judge Roy Payne.

“The U.S. Attorney’s Office for the Eastern District of Texas places the highest priority on protecting our children from sexual predators,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Those that seek to victimize minors should know that the EDTX will do whatever it takes to find them and bring them to justice for their heinous crimes.”

According to information presented in court, Parker hid a cellular phone in a bathroom for the purpose of capturing video recordings of a minor under the age of twelve.  Parker positioned the phone to intentionally capture images and videos of the child.  Parker then distributed the images and videos of the child to other individuals utilizing multiple online communications platforms, including e-mail, a cloud storage account, and a photo-sharing social media application. 

A federal grand jury returned an indictment charging Parker with federal violations on Sep. 17, 2020. Under federal statutes, Parker faces up to 30 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is 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 U.S. Attorneys’ Offices and the 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.justice.gov/psc.

This case is being investigated by the Department of Homeland Security, the Texas Department of Public Safety, the Gilmer Police Department and the Longview Police Department and prosecuted by Assistant U.S. Attorney Jim Noble.

MARSHALL, Texas – A Marshall, Texas man has been sentenced to prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Thomas Asa Harbarger, 57, pleaded guilty on Nov. 17, 2020, to possession of an unregistered destructive device and was sentenced to 72 months in federal prison today by U.S. District Judge Rodney Gilstrap.

“We are proud to work with our state and local partners to protect the public and ensure the safety of our community,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Thanks to the diligence and quick thinking of the Texas State Trooper in this case, a dangerous criminal is off the street.”

According to information presented in court, on August 2, 2019, Harbarger was working on a disabled vehicle on the side of Highway 49 in Cass County, Texas when he was approached by a Texas State Trooper.  During the incident the trooper learned that the vehicle had been reported stolen.  When asked for identification, Harbarger told the trooper he did not have his identification and gave a fictitious name.  Harbarger was subsequently detained, where it was determined that he had outstanding warrants.  After Harbarger’s arrest, a homemade pipe bomb was found in the driver’s side door pocket of the vehicle.  A later inspection of the device by the ATF, concluded that the pipe bomb was capable of causing injury or death to a person.

This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Texas Department of Public Safety, and the Atlanta, Texas Police Department.  The case was prosecuted by Assistant U.S. Attorney Jim Noble.

 

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PLANO, Texas – Two men have been sentenced for crimes against children, including attempted coercion and enticement of a minor and distribution of child pornography, in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

“The Eastern District of Texas, along with its law enforcement partners, is committed to locating and stopping the most dangerous predators,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Many of the events of these cases occurred during the height of the pandemic; however, these agents never stopped working to ensure the safety of the children in our community.”

“Crimes against children are some of the most reprehensible acts that law enforcement is determined to prevent and punish once they occur,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We are thankful for the collaboration of our partners in the Dallas Child Exploitation and Human Trafficking Task Force. It is because of this partnership that these two individuals are now facing lengthy sentences for their crimes.”

Christopher A. Sheffer, 58, of Media, Pennsylvania pleaded guilty to attempted coercion and enticement of a minor on Oct. 30, 2020 and was sentenced to 240 months in federal prison today by U.S. District Judge Sean D. Jordan.  Judge Jordan also ordered Sheffer to pay a fine of $40,000 and a $5,000 assessment pursuant to the Justice for Victims of Trafficking Act of 2015. 

According to information presented in court, in September 2019, Sheffer was the administrator of a group on a popular social media and communications application.  As an administrator, he had the authority to determine who could join the group, which was devoted to incest and individuals who sexually abuse children.  Participants in the group shared child pornography as well as their interest in molesting children.  Sheffer privately communicated with an individual who he believed had access to a prepubescent child.  Over the next few months, Sheffer expressed his interest in meeting the child for sex, mailed the child gifts, and sent the child private messages.  On July 10, 2020, Sheffer flew from his home in Pennsylvania to Texas, where he then rented a car and drove to a specific location to meet the child and engage in sexual acts.

Judge Jordan also sentenced Thomas Earl Cardwell, Jr., 43, of Kemp, Texas, to 210 months in federal prison.  Cardwell had previously pleaded guilty to distributing child pornography on Oct. 19, 2020. 

According to information presented in court, Cardwell had been arrested for and convicted of online solicitation of a minor, sexual conduct in July 2019 in the 371st District Court of Tarrant County, Texas.  He was released from the Texas Department of Criminal Justice in December 2019.  Two months later, in February 2020, Cardwell began communicating with individuals on a social media application about his desire to perform oral sex on female children.  As part of those communications, on March 6, 2020, Cardwell distributed four videos of child pornography, depicting prepubescent minors engaged in sexually explicit conduct.

This case is 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 U.S. Attorneys’ Offices and the 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.justice.gov/psc.

These cases were investigated by the Federal Bureau of Investigation – Dallas Child Exploitation and Human Trafficking Task Force and members of the Plano Police Department.  These cases were prosecuted by Assistant U.S. Attorney Marisa Miller.

 

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SHERMAN, Texas – A Carrollton, Texas man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Moses Moreira, 42, pleaded guilty to conspiracy to commit wire fraud and wire fraud on April 1, 2021 before U.S. Magistrate Judge Christine A. Nowak.

“The identification and disruption of white collar fraud schemes, and the vigorous prosecution of the criminals responsible for them, is a top priority for the Eastern District of Texas,” said Acting U.S. Attorney Nicholas J. Ganjei.  “It is our mission to make internet communication and commerce as safe as possible and rooting out online fraud schemes—such as the one here—are an integral part of that process.”

According to court documents, Moreira worked with co-conspirators to devise and execute an online fraud scheme, which involved, among other things, fabricating false identities and stories to entice victims and ultimately lure money from them.  Moreira and his co-conspirators used the fraudulently obtained funds for personal purchases and converted portions of these funds for use in international shipping. According to the indictment, at least 80 victims sent money to Moreira and his co-conspirators, with at least 60 victims sending money directly to Moreira or accounts controlled by Moreira. These victims have lost a combined total of approximately $4 million.  Moreira was indicted on Feb. 10, 2021 and charged with federal violations.

Under federal statutes, Moreira faces up to 20 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office. 

This case is being investigated by the Federal Bureau of Investigation and prosecuted by the United States Attorney’s Office for the Eastern District of Texas.

 

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WASHINGTON — Two individuals associated with the Oath Keepers, a large but loosely organized collection of individuals who explicitly focus on the recruitment of current and former military, law enforcement and first responder personnel, were indicted yesterday in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges. James and Minuta are the 11th and 12th defendants to be charged in this case.

Joshua James, 33, of Arab, Alabama, was arrested on March 9, 2021 in Arab, Alabama; and Roberto Minuta, 36, of Prosper, Texas, was arrested on March 7, 2021, in Newburgh, New York. Both individuals were charged by superseding indictment with conspiracy, obstruction of an official proceeding, and entering and remaining in a restricted building or grounds. If convicted, James and Minuta each face a maximum penalty of 20 years in prison.

According to the charging documents, James and Minuta communicated with co-conspirators in advance of the Jan. 6, 2021, incursion on the U.S. Capitol. The indictment alleges frequent and consistent communication leading up to the attack, such as in reserving hotel rooms and making phone calls to co-conspirators the morning of the breach.

According to the indictment, in response to a call for individuals to head to the Capitol after the building was breached, James and Minuta drove to the Capitol in a golf cart, at times swerving around law enforcement vehicles with Minuta stating, “Patriots are storming the Capitol…so we’re en route in a grand theft auto golf cart to the Capitol building right now…it’s going down guys; it’s literally going down right now Patriots storming the Capitol building…”

Once they arrived, Minuta aggressively berated and taunted law enforcement officers in riot gear guarding the perimeter of the Capitol near the East side of the building. At 3:15 p.m., Minuta and James forcibly entered the Capitol building through the same east side Rotunda doors through which their alleged co-conspirators had entered earlier.

They then stormed the building, wearing military gear. Minuta additionally wore hard-knuckle tactical gloves, ballistic goggles, a radio with an earpiece and bear spray. Video captures Minuta yelling at an officer: “All that’s left is the Second Amendment!” as he exited the building at 3:19 p.m. Not long after 4:00 p.m., individuals who breached the Capitol – including James, Minuta and many of their alleged co-conspirators – gathered together approximately 100 feet from the Capitol near the northeast corner of the building.

The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Department of Justice’s National Security Division, Counterterrorism Section. Valuable assistance was provided by the U.S. Attorneys’ Offices for the Southern District of New York, Eastern District of Texas and Northern District of Alabama. The case is being investigated by the FBI’s New York, Dallas, Birmingham and Washington Field Offices.

The charges contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

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SHERMAN, Texas – A Colombian soccer star was sentenced to federal prison today for drug trafficking crimes in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Jhon Eduis Viafara Mina, 42, a native of Robles, Colombia, pleaded guilty on Nov. 23, 2020, to conspiracy to import five kilograms or more of cocaine into the United States and was sentenced to 135 months in federal prison today by U.S. District Judge Amos Mazzant.  Viafara Mina, an international soccer star, previously played for the Colombian National Team and Once Caldas football club, as well for the English football clubs Portsmouth and Southampton, among many others.

“The defendant in this case had it all, worldwide fame, wealth, and stature—despite all of this, he chose to use his talents to advance the evil of the drug trade,” said Acting U.S. Attorney Nicholas Ganjei.  “The Eastern District of Texas will identify drug trafficking operations and dismantle them at their source, stopping deadly drugs before they reach our shores.  Traffickers should take note, no matter who you are; no matter where in the world you live; the United States will prosecute you if you join in a conspiracy to send drugs to our country.”

According to information presented in court, in August 2017, DEA Dallas Field Division Group 3, in conjunction with the DEA Bogota Country Office, the DEA San Jose Country Office, and the Panama City Country Office began an investigation into a cocaine drug trafficking organization operating out of Colombia, which included Jhon Eduis Viafara Mina, also known as “Futbolista,” “Goleador,” and “Makelele.”  Viafara was involved in the logistical preparations of dispatching large cocaine shipments by aircraft or boat from Colombia to Mexico via Central America for subsequent distribution within the United States.  Based on this conduct, Viafara was indicted by a grand jury based on June 13, 2018.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Colleen Bloss.

 

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MARSHALL, Texas – A Marshall, Texas, man was sentenced to federal prison today for drug trafficking crimes in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Fernie Moreno, 35, pleaded guilty on Nov. 23, 2020, to possession with intent to distribute methamphetamine and was sentenced to 120 months in federal prison today by U.S. District Judge Rodney Gilstrap.

“Drug traffickers who ply their deadly wares in our communities will be met with harsh consequences,” said Acting U.S. Attorney Nicholas J. Ganjei.  “EDTX, along with its law enforcement partners, will do whatever it takes to ensure that Harrison County is kept safe and drug free.”               

According to information presented in court, Moreno was a member of a criminal organization responsible for selling large quantities of methamphetamine in Marshall.  Moreno and eight others were indicted by a federal grand jury on Feb. 19, 2020, with five of these co-defendants already having been sentenced for their roles in the criminal conspiracy. Danny Brian Hernandez was sentenced to 17 years in federal prison, while Ronald Charles Parker received 14 years, Armando Ivan De La Torre received 16 years, Daniel Ramirez received 10 years, and Martin Lopez received 10 years.  Pursuant to Operation Pine Curtain, numerous other co-conspirators have been arrested and are awaiting dispositions in their respective cases.

Operation Pine Curtain is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The case was investigated by the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Texas Department of Public Safety; the Harrison County Sheriff’s Office; and the Marshall Police Department.  This case was prosecuted by Assistant U.S. Attorney Lucas Machicek.

 

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TYLER, Texas – A Kilgore, Texas man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Christopher Marcell Mumphrey, 43, pleaded guilty to possession with intent to distribute methamphetamine today before U.S. Magistrate Judge John D. Love.

“As evidenced by this plea and a co-defendant's plea last week, local and state law enforcement, partnering with the FBI, are making a difference in shutting down the flow of illegal drugs in our communities,” said Acting U.S. Attorney Nicholas J. Ganjei.

According to information presented in court, on Feb. 5, 2020, Mumphrey was a passenger in a vehicle which was used to transport and distribute methamphetamine in Smith County, Texas.  Mumphrey exited the vehicle and signaled to the buyer to approach the vehicle to complete the transaction.   

A federal grand jury returned an indictment charging Mumphrey with federal drug trafficking crimes on Nov. 6, 2020. Under federal statutes, Mumphrey faces up to 40 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Federal Bureau of Investigation, the Smith County Sheriff’s Office, and the Texas Department of Public Safety-CID and prosecuted by Assistant U.S. Attorney Alan Jackson.

SHERMAN, Texas – Two Longview brothers were sentenced to federal prison this week in separate firearms cases, announced Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas.

Thomas Ricardo “Big Hub” Hubbard, 40, pleaded guilty on January 9, 2020, to use, carrying, and possession of a firearm during and in furtherance of a drug trafficking crime.  Today, he was sentenced to 104 months in federal prison by U.S. District Judge J. Campbell Barker.

Dennis Derrell “Little Hub” Hubbard, 39, pleaded guilty on October 28, 2020, to being a felon in possession of a firearm.  On March 25, 2021, he was sentenced to 57 months in federal prison by U.S. District Judge Jeremy D. Kernodle.  Both Hubbard brothers were also ordered to forfeit firearms and ammunition related to their offenses.

“These cases demonstrate that we will vigorously pursue felons who acquire and use firearms in their crimes,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The defendants were multi-convicted felons who chose to acquire and carry firearms.  We will continue to partner with federal and local agencies to investigate and prosecute the most dangerous members of the criminal community.”

According to court documents and statements made in court, on January 20, 2019, a Tatum Police Officer attempted to stop Dennis “Little Hub” Hubbard on suspicion of drunk driving after Hubbard’s vehicle was seen swerving.  Hubbard refused to stop and traveled several miles at low speed before finally pulling over.  As the officer approached Hubbard’s vehicle, he gave Hubbard commands to exit his vehicle with his hands visible.  Hubbard started to comply, but then abruptly drove away as the officer approached.  After a short distance, Hubbard again pulled over and again began to comply with the officer’s instructions to exit the vehicle.  However, Hubbard again drove away from the officer as he approached Hubbard’s vehicle.  After a few more miles of pursuit, Hubbard entered the City of Beckville, Texas, where officers had converged to set up a roadblock at an intersection.  Hubbard attempted to drive around the roadblock before he was finally boxed-in by police.  Hubbard then surrendered and was arrested.  A handgun and .40 caliber ammunition were located inside Hubbard’s car.  Hubbard has multiple prior felony convictions.

In a separate incident, on April 8, 2019, Gregg County Organized Drug Enforcement (CODE) officers executed a search warrant at Thomas “Big Hub” Hubbard’s home and located a rifle, ammunition, 16.42 grams of PCP, 37.62 grams of “ice” methamphetamine, and 32.9 grams of crack cocaine.  All of these items were located in Thomas Hubbard’s bedroom.  He claimed ownership of those items in a subsequent interview and also admitted that, among other reasons, he possessed the firearm for the purpose of protecting his drug dealing activities.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Gregg County CODE Unit; the Tatum Police Department; and the Panola County Sheriff’s Office.  The case was prosecuted by Assistant U.S. Attorney Ryan Locker.

TYLER, Texas – A Longview, Texas man was sentenced to federal prison today for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Allen Martez Anthony, 30, pleaded guilty on June 25, 2020, to distribution of methamphetamine and was sentenced to 188 months in federal prison today by U.S. District Judge J. Campbell Barker.

“This case illustrates how effective we can be at disrupting narcotics trafficking when our state and local law enforcement officers coordinate with federal agencies like the DEA,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The U.S. Attorney’s Office is fully committed to supporting the efforts of our drug task forces and the local, state and federal agents who are working tirelessly to rid our communities of addictive narcotics like methamphetamine.” 

According to information presented in court, on October 8, 2019, Anthony was stopped along Interstate 20 in Smith County, Texas.  During the traffic stop, a police canine alerted to the presence of narcotics in Anthony’s vehicle.  A subsequent search revealed 1,958 grams of methamphetamine hidden inside the car.  Anthony was indicted by a federal grand jury on December 15, 2020, and charged with drug trafficking violations. 

This case was investigated by the U.S. Drug Enforcement Administration and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Jim Noble.

SHERMAN, Texas – A Sherman, Texas man was sentenced to federal prison today for drug trafficking and firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Tyton Hester, 30, pleaded guilty on June 30, 2020, to conspiracy to possess with intent to manufacture and distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime.  Today, he was sentenced to life in federal prison by U.S. District Judge Amos Mazzant.

“Today’s sentence sends a strong message to those who would seek to profit from the trafficking of illegal narcotics,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We will continue to collaborate with all of our law enforcement partners to stem the flow of deadly drugs into the United States.”

“Mr. Hester furthered the plague of drug trafficking with a pattern of menacing and intimidating behaviors that victimized vulnerable individuals and jeopardized the lives of children in order to obfuscate his illegal activities,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “Today’s life sentence should send comfort to the greater community of Sherman that the FBI, along with our federal and local partners, continues to work diligently to remove dangerous criminals from our streets.”

According to information presented in court, in 2018, law enforcement officials received information that a major drug distributor was conducting operations in Sherman, Texas, and southern Oklahoma.  Hester was identified as a multi-kilogram distributor of methamphetamine, cocaine, heroin, and Xanax.  Hester, who ran his drug trafficking activities out of a mechanic shop in Sherman, recruited down-on-their-luck individuals to help with the narcotics trafficking.  He offered them food, shelter, and drugs in exchange for conducting drug deals and securing his “trap house.”  To appear less suspicious Hester also had these individuals, including children, accompany him on trips to Dallas where his sources of supply were located.

Hester was indicted by a federal grand jury in May 2018.  He proceeded to trial and was found guilty by a jury on June 30, 2020.

Ultimately, eight other members of Hester’s operation were also indicted.  Hester is the final defendant to be sentenced.  The others had previously pleaded guilty and collectively received sentences totally more than 100 years in federal prison.

TYLER, Texas – Four men were sentenced to prison today for federal firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

U.S. District Judge J. Campbell Barker imposed the following sentences after the defendants pleaded guilty:

 

Patrick Odell Session, 27, of Carthage, Texas, was sentenced to 84 months for felon in possession of a firearm;

 

Cory Tederrel Dawkins, 43, of Longview, Texas, was sentenced to 72 months for felon in possession of a firearm;

 

Isaiah Bodate Pierce, 29, of Longview, Texas, was sentenced to 72 months for felon in possession of a firearm; and

 

Tramaine Keishone Robinson, 22, of Carthage, Texas, was sentenced to 37 months for felon in possession of a firearm. 

 

“Prohibiting the possession of firearms by convicted felons illegally in our country is a critical component of keeping our communities safe,” said Acting U.S. Attorney Nicholas J. Ganjei.  “The Eastern District of Texas remains committed to keeping the guns out of the hands of the most dangerous members of our society.”

According to information presented in court, the defendants were prohibited from possessing firearms under federal law because of prior felony convictions.  Law enforcement encountered the defendants on separate dates following traffic stops that resulted in the discovery of firearms and, in several instances, other criminal contraband such as controlled substances and distribution paraphernalia.  In addition to being prohibited from possessing firearms, several of the defendants were also identified by law enforcement as documented gang members.  The defendants were separately indicted by a federal grand jury and charged with violations of federal firearms laws.

These cases were prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Federal Bureau of Investigation; the Longview Police Department; and the Tatum Police Department and prosecuted by Assistant U.S. Attorney Lucas Machicek.

TYLER, Texas – A Tyler, Texas man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Cory Jsamard Ford, 33, pleaded guilty to possession of cocaine with intent to distribute today before U.S. Magistrate Judge John D. Love.

“This case is another example of how federal, state, and local law enforcement, working together, can significantly interrupt the flow of controlled substances in our communities,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Cases like this, sustained over time, can make a big difference in our towns and cities.”

According to information presented in court, between Jan. 23, 2020 and Feb. 5, 2020, Ford distributed cocaine and methamphetamine in Smith County, Texas.  A federal grand jury returned an indictment charging Ford with federal drug trafficking crimes on Nov. 2, 2020. Under federal statutes, Ford faces up to 20 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Federal Bureau of Investigation, the Smith County Sheriff’s Office, and the Texas Department of Public Safety-CID and prosecuted by Assistant U.S. Attorney Alan Jackson.

 

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SHERMAN, Texas – A Denison, Texas, woman has pleaded guilty for her role in a conspiracy scheme in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Lydia Henslee, 29, pleaded guilty to conspiring to possess and use means of identification in connection with various offenses today before U.S. Magistrate Judge Christine A. Nowak.  Her co-conspirators, Demetrius Cervantes, 46, of McKinney, Texas, and Amanda Lowry, 40, of Sherman, Texas, previously pleaded guilty to conspiracy to obtain information from a protected computer and are awaiting sentencing.

“Prescriptions are not for sale in the Eastern District of Texas — the monetization of patient information and fabrication of physicians’ orders will not be tolerated,” said Acting U.S. Attorney Nicholas J. Ganjei.  “This office will vigorously prosecute defendants who place profits over patients and manipulate the healthcare system for their personal gain.”

The defendants were indicted by a federal grand jury on Sep. 11, 2019, and were each charged with conspiracy to obtain information from a protected computer and conspiracy to unlawfully possess and use a means of identification.

According to information presented in court, the defendants breached a health care provider’s electronic health record (EHR) system in order to steal protected health information and personally identifiable information belonging to patients.  This stolen information was then “repackaged” in the form of false and fraudulent physician orders and subsequently sold to durable medical equipment (DME) providers and contractors.  Within approximately eight months, the defendants obtained more the $1.4 million in proceeds from the sale of the stolen information.  The proceeds of the offenses were traced, which resulted in the discovery of the following forfeitable assets: a 2019 Land Rover Range Rover Supercharged; a 2019 Dodge Durango SUV; a 2018 Polaris RZR XP4 1000 EPS; a 2019 Can-Am Outlander 450; a 2019 Sea-Doo RXT-X 300 W; a 2019 Sea-Doo RXT-X 300 W; and a 2019 Karavan Sea-Doo Move.

On Nov. 18, 2020, Henslee was charged in a ten-count superseding indictment with one count of conspiracy to unlawfully transfer, possess, and use a means of identification, and nine counts of unlawfully transferring, possessing, and using a means of identification.  Henslee was also charged in a separate superseding indictment along with Steven Churchill, 34, of Boca Raton, Florida, Samson Solomon, 23, of West Palm Beach, Florida, David Warren, 49, of Boca Raton, Florida, and Daniel Stadtman, 67, of Allen, Texas, with one count of conspiracy to commit illegal remunerations. 

According to the superseding indictment, the defendants are alleged to have conspired to pay and receive kickbacks in exchange for orders from physicians that were subsequently used to obtain payments from federal health care programs.  The conspirators obtained patient information, including protected health information and personally identifiable information, and used the information to create fictitious physician orders.  The conspirators then sold the physicians’ orders to each other and to other DME providers.  Within approximately eight months, the defendants collectively obtained more than $2.9 million in proceeds from the criminal scheme. 

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federally funded programs, including Medicare, Medicaid, and TRICARE.

Under federal statutes, Henslee faces up to 15 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.  Henslee has agreed to forfeit $253,520.00.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, U.S. Department of the Treasury, Internal Revenue Service, Criminal Investigation, and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service.  It is being prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and Adrian Garcia and Special Assistant U.S. Attorney Bethany R. Pickett.

 

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SHERMAN, Texas – A Nigerian national based in Plano, Texas has been sentenced to federal prison for violations related to a bank fraud and money laundering conspiracy in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Babatope Joseph Aderinoye, 30, was convicted by a jury on Oct. 14, 2020, of conspiracy to commit bank fraud, wire fraud, and money laundering; wire fraud; aggravated identity theft; and mail fraud.  Aderinoye was sentenced to 408 months in federal prison today by U.S. District Judge Amos Mazzant.  Aderinoye was also ordered to pay restitution in the amount of $1,919,526.13. 

“The types of fraud committed by Mr. Aderinoye and his co-conspirators not only have lasting ramifications for the affected victims, but also threaten the integrity of our country’s financial systems,” said Acting U.S. Attorney Nicholas J. Ganjei.  “While today’s sentence is a decisive victory for the victims of Mr. Aderinoye and his co-conspirators, the overall fight against cyber fraud continues.  EDTX will do everything in its power to bring other cyber criminals to justice, and to recover ill-gotten gains for those victimized.”

“The defendant defrauded senior citizens, a school district, and a non-profit aimed at helping the families of the terminally-ill. The money stolen was needed for critical services, basic everyday necessities, and retirement,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “Business Email Compromise is a financially devastating scam that targets both businesses and individuals. The FBI is committed to holding cyber criminals accountable for the harm they do to everyday citizens and our financial institutions.”

According to information presented in court, Aderinoye would obtain fake passports in the names of others.  He would then use those fraudulent passports and the identifying information of others to establish false business entities and fraudulent bank accounts.  To this date, 13 individual aliases, 12 business aliases, and over 40 fraudulent bank accounts have been tied to Aderinoye, and there is evidence to suggest more aliases exist.  Once Aderinoye would open the fraudulent bank accounts, co-conspirators would engage in various business email compromise scams and telephone compromise scams to defraud individuals and businesses out of money.  In these scams, co-conspirators would pose as a known individual and direct the targeted victims to wire or send funds to Aderinoye or the fraudulent accounts Aderinoye had set up.  Once the ill-gotten money posted in Aderinoye’s fraudulent accounts, he would immediately withdraw the funds, transfer the monies to other fraudulent accounts, or wire them internationally to a bank account he had set up in Nigeria.  The illicit proceeds were used to pay off co-conspirators and further fund their fraudulent schemes.  From June 2018 through September 2019, over $6.7 million was deposited into alias accounts of Aderinoye, with almost all of those funds being withdrawn or wired internationally.  The victims of the BEC scams included school districts such as Community ISD, Project 4031, a non-profit organization that helps families of the terminally ill, an individual whose identity was used to drain his retirement account, and an elderly man who had over $352,000 stolen from his investment account.  The investigation is ongoing, as co-conspirators and victims continue to be identified.

This case was investigated by the Federal Bureau of Investigation’s Dallas Financial Crimes Task Force, which includes FBI agents and members of the Fort Worth Police Department.  This case was prosecuted by Assistant U.S. Attorneys Wes Wynne and Will Tatum. 

 

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TYLER, Texas -- A Shreveport, Louisiana woman has pleaded guilty for her role in an elder fraud scheme in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Monica Ruiz, 45, pleaded guilty to wire fraud today before U.S. Magistrate Judge John D. Love.

“Schemes that target elderly victims are particularly troubling,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Ruiz manipulated a vulnerable victim, exploited his trust, and stole much of his hard-earned life savings.  Protecting senior citizens from exploitation has been, and will remain, a priority in the Eastern District.”

According to information presented in court, Ruiz enlisted a variety of false and fraudulent pretenses, representations, and promises in a scheme to defraud an elderly victim from Bullard, Texas.  Among the various misrepresentations Ruiz made in order to obtain money from the victim were the following:

- That Ruiz had been in a coma;

- That Ruiz had brain surgery;

- That Ruiz was falsely arrested and imprisoned;

- That Ruiz had bribed a judge and prosecutor;

- That Ruiz’s son died in a car accident in Pennsylvania;

- That Ruiz was in a car accident;

- That Ruiz had a kidney transplant;

- That Ruiz’s daughter was committed to a mental institution;

- That Ruiz was incarcerated; and

- That Ruiz’s grandmother died.

 

At times, Ruiz impersonated other people in communications with the victim.  At other times, she created and used false personas in communications with the victim.  Over the course of her scheme, Ruiz obtained more than $4.85 million from the victim.

A federal grand jury returned an indictment charging Ruiz with federal violations on Nov. 19, 2020.  Under federal statutes, Ruiz faces up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

In October 2017, the Elder Abuse Prevention and Prosecution Act (EAPPA) was signed into law.  The EAPPA’s purpose is to increase the federal government’s focus on preventing elder abuse and exploitation.  Subsequently, the Department of Justice launched the Elder Justice Initiative (EJI).  Through the EJI, the Department has participated in hundreds of criminal and civil enforcement actions involving misconduct that targeted vulnerable seniors.  In March of last year, the Department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country.  The EJI website contains useful information, including educational resources about prevalent financial scams so you can guard against them.

In August of 2020, the Eastern District of Texas announced its own initiative, in partnership with law enforcement and private financial institutions, to identify and prosecute transnational elder fraud.  This EDTX initiative is designed to combat these criminal organization, both foreign and domestic, as well their networks of associates and money mules who launder the stolen funds. 

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. Eastern Time. English, Spanish, and other languages are available.

This case is being investigated by the U.S. Secret Service with the assistance of the Tyler Police Department and the Louisiana State Police – Gaming Enforcement Division and is being prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

BEAUMONT, Texas – A Nederland, Texas man has been sentenced to federal prison for firearms and drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Esdras Homero Pedroza, 27, pleaded guilty on January 6, 2021, to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime.  Today, he was sentenced to 180 months in federal prison today by U.S. District Judge Marcia A. Crone.

“Today’s sentence sends a clear message that this sort of criminal conduct—possession of drugs with an intent to distribute, and having a gun to facilitate the distribution—will not be tolerated in the Eastern District of Texas,” said Acting U.S. Attorney Nicholas J. Ganjei. 

According to information presented in court, on August 7, 2020, Jefferson County Narcotics Task Force officers stopped Pedroza’s pickup truck after a brief pursuit on Highway 69 South in Port Arthur. After a drug detection dog alerted on the truck, the officers searched the vehicle. They found 336 grams of methamphetamine; a digital scale; $1,259 cash; and an AR-15 rifle.  Pedroza was indicted by a federal grand jury on November 4, 2020 and charged with firearms and drug trafficking violations.

This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney John B. Ross.

MARSHALL, Texas – An El Paso man was sentenced to prison today for his role in a money laundering conspiracy in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Damian Munoz, 36, pleaded guilty on April 20, 2020 to conspiracy to commit money laundering and was sentenced to 35 months in federal prison by U.S. District Judge Rodney Gilstrap today.

“Drug trafficking is a predatory enterprise that victimizes vulnerable addicts, while simultaneously encouraging violence and criminality for profit,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We are committed to cutting off the flow of profits to those who would harm our communities in order to put them out of business.” 

According to information presented in court, Munoz was associated with an organization responsible for importing large quantities of methamphetamine from Mexico and distributing it in Hughes Springs and elsewhere.  The organization was also responsible for trafficking numerous firearms acquired in East Texas down to Mexico.  Munoz received more than $15,000 in drug proceeds from traffickers and then transported this cash to others located in Mexico.  On May 16, 2019, twenty-one others were indicted by a federal grand jury, and charged with violations of federal drug trafficking, firearms, and money laundering laws. 

Operation Patch Over is a long-term drug trafficking and money-laundering investigation that has already resulted in the arrest and prosecution of numerous co-conspirators.  Twenty others have already pleaded guilty and been sentenced in the case, including Oscar Dean Davis, who received 264 months in prison as the head of the East Texas methamphetamine distribution ring.

This is an Organized Crime Drug Enforcement Task Force (OCDETF) case and is being investigated by the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Texas Department of Public Safety.  This case is being prosecuted by Assistant U.S. Attorney Lucas Machicek.  OCDETF is the largest anti-crime task force in the country and its mission is to disrupt and dismantle the most significant drug trafficking and transnational criminal organizations that threaten the United States. The prosecutor-led, intelligence-driven, multi-agency task forces leverage the authorities and expertise of federal, state, and local law enforcement.

TYLER, Texas – Two individuals from Gilmer, Texas have pleaded guilty to conspiring to commit identity theft in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Emilee Fenton, 24, pleaded guilty to conspiracy to unlawfully transfer, possess, and use a means of identification today before U.S. Magistrate Judge K. Nicole Mitchell.  Dalton Brewer, also 24, pleaded guilty to the same charge on March 4, 2021.

“Economic Impact Payments were designed to reach the most needy, not to line the pockets of criminals.  The Eastern District of Texas is committed to fighting fraud and criminal activity related to the COVID-19 pandemic,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Today’s plea is just another example of how our office and our law enforcement partners are holding accountable the wrongdoers who exploit this crisis.”

Fenton and Brewer were indicted by a federal grand jury on August 19, 2020 and charged with conspiracy to unlawfully transfer, possess, and use a means of identification.  Fenton was also charged with theft of government money and aggravated identity theft. 

According to the indictment, from at least November 2019 through June 2020, Brewer and Fenton conspired to possess and use the means of identification of other persons, including names, Social Security numbers, and dates of birth, in connection with the theft of government money, aggravated identity theft, wire fraud, theft of mail, and fraudulent use or possession of identifying information.  Fenton was also charged with theft of government money and aggravated identity theft for her role in obtaining two Economic Impact Payments (EIPs) using the means of identification of other persons.  

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  The CARES Act authorized over $2 trillion in relief programs, including approximately $560 billion for benefits to individuals.  An estimated $300 billion of that total was allocated for EIPs.

At sentencing, Brewer and Fenton each face up to 15 years in federal prison. 

This case is being investigated by the U.S. Postal Inspection Service (USPIS), Treasury Inspector General for Tax Administration (TIGTA), and the Internal Revenue Service-Criminal Investigations (IRS-CI) and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

 

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BEAUMONT, Texas – A Houston man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Robert Lance Kuperman, 71, pleaded guilty to interstate transportation of money by fraud on March 22, 2021 before U.S. District Judge Michael J. Truncale.

“Insurance fraud ultimately harms individual Americans in the form of higher insurance premiums, making every business more expensive to operate, and passing these costs on to the consumer in the form of higher prices” said Acting U.S. Attorney Nicholas J. Ganjei.  “Our office will diligently prosecute those who seek to commit insurance fraud in the Eastern District of Texas.”

According to information presented in court, Kuperman purchased a home on Lake Livingston in Polk County, Texas in 2013, and, in July of 2015, submitted an insurance claim related to water damage to the house that he said was caused by a defective water heater. As part of the claim, Kuperman submitted fraudulent documentation for out-of-pocket costs for the purported replacement of personal property destroyed by the water leak.  Based on Kuperman’s fraudulent claims, American Strategic Insurance Company issued a series of checks, made payable to Kuperman including a check for more than $136,000.00. As part of the plea, Kuperman has agreed to repay $136,000.00.

A federal grand jury returned an indictment charging Kuperman with federal violations on July 1, 2020.  Under federal statutes, Kuperman faces up to 10 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Polk County Sheriff’s Office, and the Texas State Fire Marshals Office and is being prosecuted by Special Assistant U.S. Attorney Tommy Coleman.

TYLER, Texas – A Wills Point, Texas, man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Namand Joaquincy Battles pleaded guilty on July 29, 2020, to possession with intent to distribute a controlled substance.  Today, he was sentenced to 27 months in federal prison by U.S. District Judge J. Campbell Barker. 

“I commend the hard work of the investigative team that put this case together,” said Acting U.S. Attorney Nicholas J. Ganjei.  “We will continue to use a multi-agency approach to combat international drug trafficking.  We will not tolerate drug dealers like this one trying to profit off the addictions of our fellow citizens.”

According to information presented in court, in January 2020, law enforcement officials received information that a package had been seized as it was being shipped from the United Kingdom to a Wills Point, Texas, address.  The package, which was marked “clothing,” contained some clothes and snacks as well as 50,000 Tramadol tablets.  Federal agents were able to determine a second package was being mailed from the United Kingdom to the same Wills Point, Texas address.  That package also contained 50,000 Tramadol tablets and had been intercepted by law enforcement at the John F. Kennedy airport in New York.   Battles was identified as the intended recipient.  The investigation revealed that after receiving the packages from overseas sources, he would repackage the tablets for distribution by using United States Postal Service Priority Mail boxes and envelopes.  Battles admitted to having possessed with intent to distribute at least 100,000 Tramadol 100 mg tablets during the course of his criminal activities.  He was indicted by a federal grand jury on January 15, 2020.

This case was investigated by the U.S. Customs and Border Protection, Homeland Security Investigations, U.S. Postal Inspection Service, Texas Department of Public Safety-Criminal Investigations Division, and Van Zandt County Sheriff’s Office, and prosecuted by Assistant U.S. Attorney Allen Hurst.