Northern District of Texas
Press releases recorded for this federal judicial district.
Five Individuals and Two Companies Plead Guilty to Felony Charges in Multimillion Dollar Scheme to Fraudulently Sell Popular Dietary SupplementsRead the Press Release
Five individual defendants and two companies pleaded guilty in Dallas to felony charges in connection with a scheme to fraudulently sell workout supplements, the Department of Justice announced today.
All of the defendants played roles in developing, manufacturing, or marketing the popular workout and weight loss supplements known as Jack3d and OxyElite Pro, which were distributed by Dallas-based dietary supplement company USPlabs. Cyril Willson, 38, of Ralston, Nebraska, and Matthew Hebert, 40, of Dallas, pleaded guilty today to introducing misbranded food into interstate commerce with the intent to defraud or mislead. Jonathan Doyle, 40, of Dallas, the president of USPlabs, pleaded guilty February 21 to conspiracy to introduce misbranded food into interstate commerce. Sitesh Patel, 35, of Irvine, California, the vice president of S.K. Laboratories, a California dietary supplement manufacturer, pleaded guilty on February 25 to conspiracy to introduce misbranded food into interstate commerce and to the introduction of misbranded food into interstate commerce. Jacobo Geissler, 42, of University Park, Texas, the CEO of USPlabs, pleaded guilty on February 28 to conspiracy to introduce misbranded food into interstate commerce. In addition, S.K. Laboratories pleaded guilty on February 25 to introduction of misbranded food into interstate commerce, and USPlabs pleaded guilty to conspiracy to introduce misbranded food into interstate commerce on March 5.
The misbranding charges all relate in part to OxyElite Pro, which was recalled in 2013 in the wake of an investigation by the Food and Drug Administration into whether the supplement caused liver injuries in consumers. All of the defendants were charged in a 2015 indictment returned by a Dallas federal grand jury in the Northern District of Texas.
“Dietary supplement makers may not disregard the law and trick consumers about what is in their products,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Consumers are entitled to trust that the products they consume are safe. We will continue to investigate and prosecute those who enable the sale of mislabeled and potentially unsafe dietary supplements.”
The indictment alleged that the defendants participated in a conspiracy to import dietary supplement ingredients from China, including the stimulant known as “DMAA,” using false certificates of analysis and false labeling, and then lied about the source and nature of those ingredients. According to the indictment, the defendants told some of their retailers and wholesalers that USPlabs products contained natural plant extracts, when in fact they contained a synthetic stimulant manufactured in a Chinese chemical factory. The indictment also alleged that the defendants sold some of their products without determining whether they would be safe to use. According to the indictment, USPlabs products related to the conspiracy brought the company hundreds of millions of dollars.
In pleading guilty, Doyle, Geissler, and Patel admitted that they imported substances with false and misleading labeling in part to avoid law enforcement and regulatory agency attention. Willson and Hebert admitted that they helped to cause a dietary supplement to be shipped with false labeling regarding the ingredients it contained.
“Consumers deserve to know exactly what’s in their dietary supplements,” said U.S. Attorney for the Northern District of Texas Erin Nealy Cox. “We cannot stand by as supplement companies deceive customers – especially when they use untested, suspect ingredients in their products.”
“Americans who choose to take dietary supplements expect that those products are safe and properly labeled,” said FDA Commissioner Scott Gottlieb, M.D. “Dietary supplement labeling that falsely or misleadingly declares its contents presents a risk to the public, and the FDA will exercise its full authority under the law to bring to justice all those who produce and distribute misbranded dietary supplements.”
Doyle and Geissler pleaded guilty before U.S. Magistrate Judge Renee Harris Toliver. Patel, Willson, Hebert, S.K. Laboratories, and USPlabs pleaded guilty before U.S. District Judge Sam A. Lindsay. Patel faces a maximum sentence of six years’ imprisonment; Doyle and Geissler face up to five years’ imprisonment; and Willson and Hebert face up to three years’ imprisonment. The individual defendants, together with the companies, agreed to pay criminal fines and forfeitures totaling about $60 million. The court set sentencing hearings for Willson and Hebert on July 8, 2019, for Patel and S.K. Laboratories on Aug. 12, 2019, and for USPlabs on Aug. 19, 2019. The remaining sentencing dates have not yet been set.
The case was investigated by FDA’s Office of Criminal Investigations. The case is being prosecuted by Trial Attorneys David Sullivan, Patrick Runkle, and Raquel Toledo with the Department of Justice’s Consumer Protection Branch, and Assistant United States Attorneys Errin Martin and John DelaGarza of the U.S. Attorney’s Office for the Northern District of Texas.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.
District Court Enters Permanent Injunction Against Texas Compounding Pharmacy and its Owner to Prevent Distribution of Adulterated DrugsRead the Press Release
The District Court for the Northern District of Texas entered a consent decree of permanent injunction against defendants JMA Partners Inc., a compounding pharmacy doing business as Guardian Pharmacy Services (Guardian), and Jack R. Munn, Guardian’s owner, the Department of Justice announced today. The injunction permanently enjoins the defendants from distributing adulterated, misbranded, and unapproved new drugs in violation of the federal Food, Drug, and Cosmetic Act (FDCA).
The Department filed a complaint in the U.S. District Court for the Northern District of Texas on March 6, 2019, at the request of the U.S. Food and Drug Administration (FDA), alleging, among other things, that the defendants failed to adequately address insanitary conditions at their drug-compounding facility. The complaint further alleges that defendants distributed misbranded and unapproved new drugs because, among other things, the drugs were distributed by the defendants without patient-specific prescriptions.
As part of the ordered permanent injunction, defendants cannot resume manufacturing, processing, or distributing sterile drugs until FDA determines that they have complied with specific remedial measures. Those measures seek to ensure that defendants manufacture and distribute drugs in conformity with applicable manufacturing standards.
“Doctors and patients must be able to rely on the safety and quality of drugs produced by compounding pharmacies,” said Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division. “The Department of Justice will continue to work with FDA to enforce the provisions of the Food, Drug, and Cosmetic Act.”
According to the complaint, defendants’ drugs were adulterated because they were prepared, packed, or held under insanitary conditions whereby they may have been contaminated or may have been rendered injurious to health. For example, the complaint alleges that during a 2018 FDA Inspection, defendants used non-sterile disinfectants that were labeled as sterile throughout the facility. The complaint further alleges that defendants failed to take adequate corrective actions after documenting repeated instances of high humidity levels in an area specially designed for aseptic processing of sterile drugs. High humidity levels in aseptic processing areas can lead to an increase in the proliferation of microorganisms present in those areas.
On July 28, 2017, FDA issued a Compounding Risk Alert to warn health professionals of adverse event reports concerning at least 43 patients who were administered intravitreal (eye) injections of a drug containing triamcinolone (a steroid) and moxifloxacin (an antibiotic) compounded by Guardian. According to the FDA’s Compounding Risk Alert, these patients developed various symptoms, including vision impairment.
Guardian initiated voluntary recalls of drug products in 2016 and 2018. The 2016 recall involved certain unexpired sterile drug products, and was initiated due to a lack of sterility assurance. The 2018 recall, initiated after FDA’s 2018 Inspection, involved products within expiry intended to be sterile. Guardian also temporarily ceased sterile production at that time.
“The Food, Drug, and Cosmetic Act is designed to protect the public health,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas. “Our district is a committed partner in enforcing the provisions of the Act in the interest of public safety.”
“When the FDA finds compounders that continue to violate the law by not adhering to manufacturing requirements, and put patients at risk, we are going to hold them accountable under the law,” said FDA Commissioner Scott Gottlieb, M.D. “We’ve continued to see violative behavior among compounding pharmacies, and we’re committed to taking enforcement actions against drug compounders that threaten the public health.”
The government is represented by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Mary M. (Marti) Cherry of the U.S. Attorney’s Office for the Northern District of Texas, with the assistance of Associate Chief Counsel, Enforcement, Jennifer Argabright of the Department of Health and Human Services’ Office of General Counsel.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.
U.S. Attorney Uses Civil and Criminal Authorities to Shut Down Drug-Infested HotelRead the Press Release
A U.S. District Judge has granted federal prosecutors’ motion to shut down a drug-infested hotel located just 1000 feet from a Dallas elementary school, U.S. Attorney Erin Nealy Cox announced today.
On Thursday, a task force of more than 50 agents and officers, accompanied by several attorneys, converged on Han Gil Hotel Town to effect arrests, execute search warrants, and post notices requiring the immediate clearing of the premises.
The Han Gil – which prosecutors say served as home base for multiple drug dealers selling cocaine, heroin and meth – became a “safe haven for drug distributors” and a “breeding ground for escalating criminal activity,” the government argued in a civil motion requesting the hotel’s immediate closure.
The Court’s resulting Temporary Restraining Order, signed Wednesday by Judge C. David C. Godbey, prohibits anyone other than Han Gil proprietors and immediate family from occupying the hotel, which the Court agreed likely “endangers the general welfare of the community.”
“The Han Gil is a magnet for drug dealers and violent criminals and needed to be shut down immediately for public safety reasons,” said U.S. Attorney Nealy Cox. “Instead of simply picking off dealers one-by-one, we asked the Court to issue a Temporary Restraining Order enjoining the hotel’s further operation. We believe this business was nothing but a front for criminal activity and posed significant danger to our community. We will continue to push to keep it shut down.”
Over the past eight months, the hotel, which is essentially caddy corner to Herbert Marcus Elementary, has seen three deaths, two non-fatal shootings, and dozens of drug-related incidents, according to the motion.
The husband-wife duo operating the Han Gil, Su Amos and Micha Mun, brazenly allowed controlled substances to be distributed on their property, the motion asserts. In return for an $80 per day “drug tax,” Mr. and Mrs. Mun allegedly permitted dealers to distribute drugs from inside guest rooms.
The motion alleges that at least one exterior door of the Han Gil was left unlocked so individuals who weren’t renting their own rooms could access the rooms where drug deals occurred. Mr. Mun also permitted dealers to install cameras and peepholes in order to detect and avoid police, and even gave dealers advance notice of upcoming inspections. On at least one occasion, he claimed to have deleted surveillance video evidence of an overdose victim being carried from the premises.
About a month after another woman with a history of drug abuse died in one of the rooms at the Han Gil, law enforcement recovered her body in a nearby wooded area.
“Rather than requesting assistance to combat this criminal activity,” the government’s motion says, “the Muns take advantage of it, knowingly profiting from the rampant drug use and sales occurring at the Han Gil.”
In a separate criminal case, Mr. Mun and his hotel corporation, One Way Investments, Inc. have been indicted on one count of maintaining a drug-involved premises, a violation of the Controlled Substances Act. If convicted, Mr. Mun, who is currently in federal custody, faces up to 20 years in federal prison and a fine of $500,000, while the corporation faces a fine of up to $2 million.
The indictment against Mr. Mun also includes drug charges against several dealers, including Erick Dewayne Freemen, aka “Stuff,” Kendrick Lamel Washington, aka “Kiki”, Kimberly Rosha Robinson, aka “Miss K,” and others. Mr. Freeman and Mr. Washington have also been charged with firearm offenses. These defendants face potential sentences of 10 years to life in prison.
“The Han Gil is a well-known haven and attraction for drug dealers and users,” said DEA Special Agent in Charge of the Dallas Division Clyde E. Shelley, Jr. “It is a place linked to violence and death within close proximity of a school. We will continue to pursue these investigations and make our communities safer.”
The government’s complaint and motion are merely allegations of violations of the law, not evidence or findings of liability. Similarly, an indictment is merely an accusation of criminal conduct, not evidence. All criminal defendants are presumed innocent until proven guilty in a court of law.
The Drug Enforcement Administration conducted the investigation with assistance from the Federal Bureau of Investigation, Coppell Police Department, Dallas Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the U.S. Marshal’s Service, Grand Prairie Police Department, Arlington Police Department, Grapevine Police Department, Lancaster Police Department, the State Department, IRS, U.S. Postal Inspection Service, Plano Police Department, Farmers Branch Police Department, Homeland Security Investigations, Garland Police Department, Rowlett Police Department, Denton Police Department, Lewisville Police Department and McKinney Police Department. Assistant U.S. Attorneys Scott Hogan, NDTX Civil Chief, Lindsey Beran, NDTX Deputy Civil Chief, and Braden Civins filed the civil motion. Assistant U.S. Attorneys Rick Calvert, Chief of NDTX’s Narcotics Section, and Phelesa Guy, Deputy Chief of the Narcotics Section, are prosecuting the criminal case.
Palo Pinto General Hospital CEO Pleads Guilty to Multi-Million Dollar Healthcare Fraud SchemeRead the Press Release
The former CEO of Palo Pinto General Hospital has pleaded guilty to defrauding three major insurance providers – BlueCross BlueShield of Texas, CIGNA Texas, and United Healthcare – out of millions of dollars, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
According to his plea papers, Palo Pinto General Hospital CEO Harris Brooks, along with his co-conspirators, used PPGH’s in-network contracts with large health insurance companies to engage in pass-through billing for laboratory services, a scheme that lasted from September 2017 through June 2018.
Using PPGH’s national provider identification number, Mr. Brooks and his co-conspirators submitted claims to insurance companies for allergy and genetic testing purportedly performed at PPGH, Harris admits. In reality however, PPGH did not have the equipment on-site to perform the tests for which it submitted claims, and the patients for whom claims were submitted were receiving treatment at various spas and clinics throughout Texas and elsewhere, not PPGH. The patients did not know about the pass-through charges using PPGH’s insurance contracts.
Over the nine-month period, Brooks and his co-conspirators submitted claims to health insurance providers for laboratory services totaling more than $55 million, the vast majority of which were fraudulent. As a result of these claims, the insurance companies paid PPGH more than $9 million.
The purpose of the scheme was to receive higher rates of reimbursement from the insurance companies, Harris said.
According to his plea agreement, Brooks faces up to five years in prison and will be required to pay restitution to those he defrauded.
The Federal Bureau of Investigation conducted the investigation; Assistant U.S. Attorney Megan Fahey prosecuted the case.
NDTX Roundup - 3/8/2019Read the Press Release
SENTENCING – Gary Morris (AUSA David Jarvis)
Following a four-day sentencing hearing, 70-year-old Gary Ronald Morris, of McKinney, was sentenced on March 6 to 5 years in federal prison and ordered to pay more than $2.2 million in restitution for his role in an investor fraud scheme. Mr. Morris pleaded guilty to wire fraud in May 2018. In his plea papers, Mr. Morris admitted he devised a scheme to defraud investors by deceiving them about the true state of his business, Greystone Digital Technologies. He admits he sent emails to investors falsely claiming that a third party was willing to invest millions in Greystone’s “cargo scanner” project; that he was working closely with Federal Express on the scanner project; and that other companies had partnered with him on the scanner project. At the conclusion of the hearing, a U.S. District Judge ordered Mr. Morris taken into custody immediately.INDICTMENT – Charles Grant (AUSA Walt Junker)
On March 7, a federal grand jury indicted Charles Edward Grant, of Dallas, on two counts of bank robbery. Mr. Grant, 23, allegedly robbed two Dallas banks, a Chase Bank and a Bank of America, in January 2019. He faces up to 20 years in prison on each count.PLEA -- Louis Medford (AUSA John Boyle)
Louis Douglas Medford pleaded guilty on March 7 to firearm and drug charges. Mr. Medford – who was an already convicted felon at the time -- admits he fled the scene of a June 2017 traffic stop after Garland police officers noticed marijuana in his vehicle. Search of the vehicle later revealed a 9 mm Glock under the driver’s seat. Less than a month later, Mr. Medfords admits, he was stopped again, this time with 486 grams of marijuana, a digital scale, and several small plastic bags. This week, he pleaded guilty to two counts of possession with intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of felon in possession of a firearm. The Garland Police Departmet] investigated.INDICTMENT* – Bertha Garay (AUSA Danielle Jones)
On March 6, 2019, a federal grand jury indicted Bertha Garay, 46, for theft of government funds, false statement to the Social Security Administration and Representative Payee Fraud. She was allegedly receiving SSA benefits on behalf of her minor daughter as her representative payee. However, her minor daughter was not in her custody and Ms. Garay was not using the benefits on her daughter. She mislead SSA by submitting signed paperwork stating that her daughter lived with her and she was using the benefits for the care of her daughter. If convicted of this case, Ms. Garay could potentially be compelled to pay back over $82,000. The SSA Office of the Inspector General investigated the case.SENTENCING -- Tony Contreras (AUSA George Leal)
On March 4, 39-year old Tony Contreras, of Hutchins, Texas, was sentenced to more than 8 years behind bars for conspiracy to possess with intent to distribute methamphetamine. According to court documents reflect, in February 2016, he ordered two kilograms of cocaine and one kilogram of methamphetamine from a co-defendant, and complained about a previous kilogram of methamphetamine being wet. The co-defendant told Contreras he would call Contreras when the methamphetamine was ready but that no cocaine was available. The case was investigated by the FBI and the Criminal Investigations Division of the Internal Revenue Service.SENTENCING -- Jose Juan Ortiz-Pacheco (AUSA George Leal)
On March 4, 23- year-old Jose Juan Ortiz-Pacheco, of Michoacán, Mexico, was sentenced to more than 7 years in federal prison for conspiracy to possess with intent to distribute cocaine by United States District Judge Sam A. Lindsay. Court documents reflect that in March 2017, Ortiz-Pacheco and his two co-defendants were arrested with three kilograms of cocaine at an apartment complex after they offered to sell it to another individual. It was noted at sentencing the defendant is an undocumented alien and should not have been in the United States at the time of the offense. The case was investigated by the Drug Enforcement Administration and the Lewisville Police Department.* An indictment is merely an accusation of criminal conduct, not evidence. All criminal defendants are presumed innocent until proven guilty in a court of law.
Dallas City Council Member Carolyn Davis Pleads Guilty to Accepting BribesRead the Press Release
Friday morning, four-term Dallas City Council Member Carolyn Davis pleaded guilty to accepting more than $40,000 in bribes, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
According to plea papers, Council Member Davis actively sought these bribes from a real estate developer who stood to benefit from her support of his low-income housing project.
In return for the money – plus the offer of a consulting contract once her tenure at the City Council concluded – Council Member Davis admits she lobbied and voted for the authorization of a $2.5 million development loan to fund the Royal Crest housing project, along with a City of Dallas resolution supporting 9 percent tax credits for Royal Crest, which was competing with another project. She also wielded her considerable influence as Chair of the Dallas Housing Committee in Royal Crest’s favor while advocating for the project with Dallas housing officials.
“Over the course of my 15-month tenure here at the U.S. Attorney’s Office, our team has been relentlessly dedicated to rooting out public corruption,” said U.S Attorney Nealy Cox. “I hope this case sends a message to public officials across our districts: When you prioritize your own financial interests ahead of your duty to you constituents, we will dig as deep as we have to in order to uncover the scheme. And we will bring you to justice.”
“As FBI Dallas continues to proactively investigate Public Officials who misuse their positions of trust, our investigative efforts will be just as focused on those who seek to use their personal wealth, influence, or facilitate relationships between those willing to pay or accept bribes,” said Eric K. Jackson, Special Agent in Charge of the FBI’s Dallas Division. “All of these actions continue to erode the public’s trust and do harm to the communities they were elected to serve.”
An Indictment charging the bribe payer, Ruel Hamilton, a principal with AmeriSouth Realty Group, was unsealed this morning as well.
According to the charging document, Mr. Hamilton allegedly paid out about a quarter of Council Member Davis’ bribe money – around $11,000 – in cash, often immediately after he withdrew the money from his bank account. The remaining 75 percent – roughly $29,500 – was funneled through a not-for-profit intermediary.
In an attempt to disguise the payments, Mr. Hamilton allegedly made out checks to the owner of the not-for-profit, then handed the checks to Council Member Davis, who delivered them to the not-for-profit owner; the owner then deposited or cashed these checks and gave the majority of the proceeds back to Council Member Davis. Not surprisingly, Council Member Davis did not disclose any of these payments to the City Council, or to the Housing Committee, or on her financial disclosure report.
According to the Indictment, Mr. Hamilton also bribed another public official, referred to in the documents as Council Person A, in August 2018. In return for Council Person A’s assistance in getting a referendum on the Council’s agenda and promoting another housing project, Mr. Hamilton wrote a $7,000 check to Council Person A to cover his personal needs.
Neither Council Member Davis nor Council Person A are currently serving in official capacities. Council Member Davis left office in 2016, and Council Person A’s tenure on the City Council ended August 9, 2018.
An indictment is merely an allegation of wrongdoing, not evidence. Mr. Hamilton is considered innocent until proven guilty in a court of law. If convicted, Mr. Hamilton faces up to 20 years in federal prison for two counts of bribery concerning a local government receiving federal benefits. Council Member Davis faces up to 5 years in federal prison on the charge to which she pleaded guilty, conspiracy to commit bribery concerning an agent of a local government receiving federal benefits.
The Federal Bureau of Investigation conducted the investigation with assistance from the Internal Revenue Service - Criminal Investigations. Assistant U.S. Attorneys Marcus Busch, Andrew Wirmani, and Chad Meacham prosecuted the case.
Man Pleads Guilty to Murdering Postal Worker in Fit of Road RageRead the Press Release
A Los Angeles man today pleaded guilty to murdering a postal worker during a road rage incident in Dallas last February, announced U.S. Attorney Erin Nealy Cox.
Donnie Arlondo Ferrell, 26, admits he shot and killed U.S. Postal Service employee Tony Mosby, who was behind the wheel of a USPS vehicle, on Feb. 19, 2018.
According to plea papers, Mr. Ferrell – one of three passengers inside a Mazda traveling eastbound on I-30 – became incensed at something he perceived Mr. Mosby had done on the freeway. He leaned out of the Mazda and fired four shots at the USPS vehicle.
Mr. Ferrell then watched as the USPS vehicle crashed into a retaining wall on the freeway.
When Mr. Ferrell later learned Mr. Mosby had been killed by a bullet to the head, Mr. Ferrell instructed the Mazda’s other passengers not to discuss the incident with anyone else.
When law enforcement attempted to arrest Mr. Ferrell two days later, he retreated into his residence and refused to surrender for several hours, according to his plea papers.
This morning, Mr. Ferrell pleaded guilty to one count of murder of an employee of an agency of the United States government, and one count of discharging a firearm during a crime of violence. He faces up to life in prison.
“It was devastating to learn of the senseless act of violence that took the life of a federal postal employee while on the job in our district,” said U.S. Attorney Nealy Cox. “I’m gratified we could bring the perpetrator to justice. My heart goes out to Mr. Mosby’s family and friends.”
“The wanton road rage murder of Postal Employee Tony Mosby by Donnie Ferrell was senseless and tragic,” said Damon E. Wood, Acting Inspector in Charge of the U.S. Postal Inspection Service’s Fort Worth Division. “Postal Inspectors will ensure an offense like this is investigated and the perpetrators are prosecuted to the fullest extent of the law. I’d like to thank the U.S. Attorney’s Office, Northern District of Texas, for their assistance and guidance. I would also like to thank the Dallas Police Department and the Federal Bureau of Investigation for their partnership in this investigation.”
A codefendant, Bei-jing Tashawna Walker, accused of accessory after the fact, entered a plea of not guilty last March.
The U.S. Postal Inspection Service conducted the investigation with assistance from the Dallas Police Department and the Federal Bureau of Investigation. U.S. Attorneys P.J. Meitl and John Kull prosecuted the case.
Prison Guard Sentenced for Sexual Relationship with InmateRead the Press Release
A federal corrections officer was sentenced yesterday to more than a year behind bars – the same environment where she took advantage of a prison inmate less than two years ago.
Erica McCoy, 32, pleaded guilty in August to abusive sexual contact with an inmate at FCI Seagoville, an all-male, low-security institution southeast of Dallas .
In plea papers, Ms. McCoy said she stumbled upon the inmate – identified only by his initials, D.E. – cleaning her office carpet in the summer of 2017. They had regular sexual contact, Ms. McCoy admitted.
Their relationship ended when D.E. was placed into the Special Housing Unit (SHU) and Ms. McCoy resigned amid an investigation by the Department of Justice Office of the Inspector General.
“Today’s sentence demonstrates that corruption and abuse of power have no place in our federal prisons and will not be tolerated,” stated Deputy Assistant Inspector General for Investigations Elise Chawaga. “Our office takes allegations of sexual contact between correctional officers and inmates seriously, and we thank the U.S. Attorney’s Office for the Northern District of Texas for their hard work on this case.”
A federal judge sentenced Ms. McCoy to one year and one day in federal prison and ordered her to self-surrender within 90 days. She will also be required to register as a sex offender.
The Department of Justice – Office of the Inspector General conducted the investigation. Assistant U.S. Attorney Suzanna Etessam prosecuted the case.
25+ Defendants in Wichita Falls Drug Bust SentencedRead the Press Release
More than 25 defendants apprehended in connection with OCDETF “Operation Flat Rate” – a methamphetamine trafficking investigation in Wichita Falls that netted 25 defendants in the summer of 2018 – have been sentenced, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Sentences ranged from a few months to 20 years in federal prison.
One defendant, Chmira Denise Williams, pleaded guilty to misprision of a felony (concealing the commission of felonious acts) and was sentenced to 8 months behind bars. Another defendant, Denene Griggs, pleaded guilty to concealing a person from arrest and was sentenced to 4 months in federal prison. She admits to sheltering two fugitives – her child’s father, Javaris Damon Scott, and his brother, Trevor Clifford Scott – inside her apartment; they were later arrested climbing out of her window.
The remaining defendants pleaded guilty to conspiracy to possess with intent to distribute a controlled substance and were sentenced by U.S. District Judge Reed O'Connor:
- LONTA HOBBS: 20 years in federal prison
- AARON TAYLOR : 19 years, 7 months in federal prison
- CHRISTIAN CHAVEZ: 17 years, 6 months in federal prison
- BRAD WHITE: 13 years in federal prison
- CHADRICK MCBRIDE: 12 years in federal prison
- JOHN DUPREE WESLEY: 7 years, 8 months in federal prison
- ADDIS SCALES: 7 years, 3 months in federal prison
- CHRISTOPHER DAVIS: 7 years in federal prison
- FLOYD RICHARDSON: 7 years in federal prison
- GALVIN DANIELS: 5 years in federal prison
- TERRY MURRAY: 5 years in federal prison
- DJUANNA NEWMAN: 5 years in federal prison
- JAVARIS SCOTT: 5 years in federal prison
- ADAM GARCIA: 4 years, 3 months in federal prison
- CANDACE RODGERS: 4 years in federal prison
- TEASIE SCOTT: 3 years in federal prison
- JACINDA BURRIS: 2 years, 6 months in federal prison
- AMBER HATCHER: 2 years in federal prison
- TREVOR SCOTT: 2 years in federal prison
- DEMARCUS MADISON: 1 year, 2 months in federal prison
- SHELBY FUNK: 1 year, 1 month in federal prison
- WAYLAND BRENT BALLARD: 6 months in prison
- ALVIN TRAVIS: 6 months in federal prison
- VIRGINIA WHITE: 6 months in federal prison
“As the U.S. Attorney, I lead an office that prosecutes a variety of very important federal cases, but few investigations are more important than those that protect the public from the danger and devastation caused by illegal drug trafficking,” Nealy Cox said at a press conference in Wichita Falls on July 12, following the bust.
The Federal Bureau of Investigation and Texas Department of Public Safety conducted the investigation with assistance from the Wichita Falls Police Department, Wichita County Sherriff’s Office, Vernon Police Department, 46th Judicial District Attorney’s Office, and the U.S. Marshals Service. Assistant U.S. Attorney Shawn Smith is prosecuting the case.
Justice Department Seeks to Shut Down Two Texas Tax Return PreparersRead the Press Release
The United States filed a civil injunction suit to permanently bar Smart Ilesanmi Ajayi, individually and doing business as Harplet Marketing LLC, Topps Tax Services, and Smart Tax Services, as well as JoAnn Villarreal, from preparing federal income tax returns for others, the Justice Department announced today.
The complaint, filed in the United States District Court for the Northern District of Texas, alleges that Ajayi and Villarreal prepare and file tax returns that falsely increase their customers’ deductions or losses. As a result, the complaint alleges, the customers’ tax returns claim larger refunds than they were entitled to receive.
The complaint alleges that defendants’ have prepared returns with fabricated or inflated noncash charitable donation deductions. The complaint further alleges that the defendants have prepared returns with fabricated or inflated businesses losses on Schedule C (Profit or Loss from Business).
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Man Indicted After Phishing Email Duped Crowley ISD Out of $2 MillionRead the Press Release
A Florida man has been formally indicted for his role in a scheme to steal money from Crowley Independent School District (ISD) in Crowley, Texas, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
A federal grand jury indicted Donald Howard Conkright, 61, on two counts of wire fraud after a phishing email duped the district into sending nearly $2 million to his personal bank account.
According to the indictment, in October 2018, an email was sent to Crowley ISD’s Director of Accounting, falsely claiming to contain updated banking information for a construction company with which Crowley ISD did business. In reality, the information was for Mr. Conkright’s personal bank account.
Relying on the false information provided in the email, Crowley ISD sent two wire payments, totaling $1,995,715.52, to Mr. Conkright’s account. Mr. Conkright used those funds to purchase a luxury vehicle and wrist watches, execute wire transfers, and make cash withdrawals.
“Unfortunately, these sorts of spear-phishing email attacks have become all-too-common – and perpetrators are targeting not just individuals, but corporations and public institutions as well,” said Nealy Cox. “We cannot allow bad actors to divert precious school resources away from educating our children.”
“We urge constant vigilance on email, and pledge to continue to partner with the FBI to identify perpetrators and bring them to justice,” she added.
An indictment is merely an allegation of wrongdoing, not evidence. Mr. Conkright is presumed innocent until proven guilty in a court of law.
The Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorney Robert Boudreau is prosecuting the case.
Dallas Tax Return Preparer Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
A tax return preparer operating in Irving, Texas, pleaded guilty today to conspiring to defraud the United States and to aiding and assisting in the preparation of a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Erin Nealy Cox for the Northern District of Texas.
According to documents and information provided to the court, Francisco Ventura owned and operated several tax preparation businesses located in Irving from at least 2012 through at least 2015. During 2014, Ventura ran a tax return preparation business named AJJ Tax and More, along with a second preparation business named Uptown Multi Services, which he co-owned with his co-defendant Mario Melendez.
From November 2013 and continuing through May 2014, Ventura conspired with Melendez and others to prepare fraudulent federal income tax returns, and he personally prepared individual income tax returns for clients that included false education credits and Schedule C expenses. Ventura also taught training classes for new tax return preparers during which he instructed employees how to prepare fraudulent tax returns in order to maximize client refunds. Ventura is responsible for attempting to cause over $8.3 million of tax loss to the United States.
Sentencing for Ventura is scheduled for June 14, 2019. Ventura faces a maximum of five years in prison for the conspiracy charge and three years in prison for the aiding and assisting in the preparation of a false tax return count, as well as a period of supervised release, restitution, and monetary penalties. Melendez pleaded guilty in November 2018 to conspiring to defraud the United States and to aiding and assisting in the preparation of false tax returns, and is awaiting sentencing.
Principal Deputy Assistant Attorney Zuckerman and U.S. Attorney Nealy Cox commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Alexander Effendi of the Tax Division and Assistant United States Attorney Melanie Smith, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Man Carrying Prohibited 3D-Printed Gun Found with List of Lawmakers’ AddressesRead the Press Release
A Dallas man was sentenced today to 8 years in prison after officers caught him with a partially 3D-printed AR-15 rifle and a list of lawmakers’ addresses in his backpack, despite a court order that prohibited him from possessing a firearm, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
In August 2015, following a violent altercation with a live-in girlfriend, a county judge enacted a protective order against Eric Gerard McGinnis, then 39. Despite that order – which barred him from possessing firearms or ammunition for two years – Mr. McGinnis attempted to buy a semi-automatic rifle component at a federally licensed gun shop in June 2016. The prospective purchase was rejected after an NICS background check uncovered the order, and ATF reminded Mr. McGinnis he wasn’t allowed to have a gun.
Instead, Mr. McGinnis obtained a barrel, stock, upper receiver, and grip, then used a 3D printer to create a “lower receiver,” the gun’s firing mechanism, and assembled the parts to construct a short-barrel AR-15 style rifle.
In July 2017 – with just over one month left on his protective order – Mr. McGinnis took the 3D-printed gun to a wooded area just outside Dallas. Grand Prairie police officers, out on another call, heard three shots fired and eventually located him just off a major road. Ordered to put his hands up, Mr. McGinnis falsely claimed to be a member of the CIA. Body-cam video shows that officers directed him to kneel on the pavement, cuffed him, and shortly thereafter, inspected his backpack.
In the backpack, the officers discovered the partially 3D printed gun, loaded, and a list labeled “9/11/2001 list of American Terrorists.” The hit list – not included as evidence at trial but presented at sentencing – included office and home addresses of several federal lawmakers, both Democrat and Republican.
A subsequent forensic analysis of Mr. McGinnis’ electronic devices by U.S. Capitol Police suggests Mr. McGinnis had a strong interest in James Hodgkinson, the shooter who wounded Rep. Steve Scalise and several others at a GOP Congressional baseball practice in Virginia in June 2017, the federal prosecutor revealed at sentencing Wednesday.
In a jailhouse phone call to a family member, Mr. McGinnis admitted he’d “printed” part of the gun.
“I didn’t buy a gun, I built the gun,” he said in the recorded phone call. “The upper, I printed a lower, and I built it -- installed the trigger and did all that stuff. I built it.”
After a two-day trial presided over by Chief U.S. District Judge Barbara M.G. Lynn, a jury found McGinnis guilty of possessing an unregistered short barrel rifle and unlawfully possessing ammunition while subject to an active protective order.
This case, investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives with assistance from the Grand Prairie Police Department and U.S. Capitol Police, was brought as part of U.S. Attorney Erin Nealy Cox’s initiative to keep firearms out of the hands of domestic abusers. Assistant U.S. Attorneys Brian McKay and Rick Calvert prosecuted the case.
“When he realized he couldn’t legally purchase a firearm, Eric McGinnis circumvented our gun laws by 3D-printing his weapon, eliminating the need for a background check,” said Nealy Cox. “This case should send a message to prohibited persons contemplating acquiring guns by any method: this office is committed to keeping guns out of the hands of those who violate protective orders for domestic violence, no matter how the guns are obtained – by theft, purchase, or 3D printing.”
"Controls to determine if an individual is prohibited from purchasing firearms and ammunition worked," said Jeffrey C. Boshek II, Special Agent in Charge of ATF’s Dallas Field Division. “Mr. McGinnis applied evolving technology to by-pass those controls to manufacture an untraceable NFA weapon. The fact a prohibited person was able to manufacture an untraceable firearm with apparent ease and anonymity presents a significant challenge and major concern to law enforcement and our community.”
Mr. McGinnis is one of a number of defendants prosecuted for possessing firearms or ammunition after domestic violence convictions or while under protective orders in the Northern District of Texas.
Police body-cam footage of his arrest and audio of his jailhouse call are available upon request.
North Texas Man Charged by Criminal Complaint with Conspiring to Provide Material Support to a Foreign Terrorist OrganizationRead the Press Release
A north Texas man was charged today with conspiring to provide material support to a foreign terrorist organization, announced Assistant Attorney General for National Security John C. Demers and U.S. Attorney Erin Nealy Cox.
Michael Kyle Sewell, 18, was charged Friday morning by criminal complaint in Fort Worth, Texas with conspiring to provide material support and resources to Lashkar-e-Taiba, a Pakistani-based foreign terrorist organization.
As set forth in the complaint, Sewell recruited an individual, identified in the complaint as coconspirator 1, to join Lashkar-e-Taiba (LeT), a designated foreign terrorist organization. Sewell met the coconspirator online and encouraged him to join LeT.
Sewell provided the coconspirator with contact information for an individual he believed could facilitate the coconspirator’s travel to join the organization. Unbeknownst to Sewel and the coconspirator, the facilitator was an undercover FBI agent.
Sewell coached the coconspirator about what to say to convince the facilitator that he was sincere in his desire to fight for LeT. Sewell also contacted the facilitator to vouch for the coconspirator’s authenticity. Sewell told both the coconspirator and the facilitator that he would kill the coconspirator if he turned out to be a spy.
The coconspirator made contact with the facilitator and made arrangements with the facilitator to travel to Pakistan to join LeT.
“Sewell allegedly used social media to recruit and encourage an individual to travel overseas to join a foreign terrorist organization and conspired with that person to provide material support to that organization,” said Assistant Attorney General Demers. “The National Security Division is committed to hold accountable those who engage in this behavior.”
“We stay on constant alert for radicals plotting attacks targeting citizens of the United States, here or abroad,” said U.S. Attorney Nealy Cox. “Countering terrorist threats is our highest priority, and we will continue to work to stem the flow of foreign fighters abroad and bring justice to those who attempt to provide material support to foreign terror organizations. I would like to thank the FBI and our Joint Terrorism Task Force partners for all that they do to keep our communities safe.”
"The men and women of FBI Dallas along with our local, state, and federal partners will continue to work diligently against homegrown violent extremists who provide support to any foreign terrorist organization," said Eric K. Jackson, Special Agent-In-Charge of the FBI Dallas Division. "As threats are uncovered to the community we serve, the FBI and its partners must continue to ensure we are vigilant and determined to prevent any harm to this great nation."
The Federal Bureau of Investigation and its Joint Terrorism Task Force members, including the Arlington Police Department, the Fort Worth Police Department, the Tarrant County Sheriff’s Office, the Naval Criminal Investigation Service, the Department of Homeland Security, and the Texas Department of Public Safety, investigated the case.
NDTX Weekly Roundup -- 2/8/19Read the Press Release
SENTENCING – Bradley Matocha
On Feb. 8, Bradley James Matocha, II, was sentenced to more than 13 years in prison, followed by a 20-year term of supervised release, after pleading guilty to attempted enticement of a minor. Matocha, 32, of Plano, responded to an ad in which a father stated he had a daughter who needed to “learn the ropes.” Matocha chatted with both the father and the daughter, offering to meet them and have sex with the minor. With the meeting scheduled for June 26, 2018, Matocha suggested that he and the father first meet at a Jack-in-the-Box in Fort Worth and from there go back to their house where he would have sex with the daughter. When Matocha arrived at the Jack-in-the-Box, however, he was arrested by Fort Worth police, who had engaged in an undercover online operation to ferret out sexual predators.SENTENCING – Paul Morris
On Feb. 8, Paul David Morris of Irving, TX was sentenced to 20 years in prison on drug charges. Mr. Morris pleaded guilty to possession with intent to distribute methamphetamine in March. The Texas Department of Public Safety investigated the case.SENTENCING – Alvin Penn
On Feb. 5, Alvin Christopher Penn was sentenced to 14 years in prison for escape from federal custody and unlawful possession of a firearm. In July, a jury found Mr. Penn guilty of escaping from a residential reentry center in Hutchins, Texas. According to evidence presented at trial, shortly after he escaped from the halfway house, Mr. Penn took possession of a Smith & Wesson pistol and engaged in a gunfight with two men at an apartment complex in Grand Prairie. Shortly thereafter, he fled from police, driving 70 mph in a residential neighborhood, and ultimately crashed into another apartment building. Brandishing the gun at bystanders, he then fled on foot, and was subsequently apprehended by a U.S. Marshals and Grand Prairie Police officers.INDICTMENT* -- Modesto Balderas
On Feb. 5, a federal grand jury indicted Modesto Balderas on a firearm charge. Mr. Balderas, a convicted felon, allegedly possessed a Ruger 9 mm pistol with an obliterated serial number. If convicted, Mr. Balderas faces up to 10 years in federal prison.SENTENCING – Jose Velasquez
On Feb. 4, Jose DeJesus Velasquez was sentenced to more than a year in prison for conspiracy to defraud the United States. Mr. Vasquez, a commercial tax preparer, admits he allowed employees to file tax returns claiming education credits regardless of whether the taxpayer was entitled to those credits. The IRS - Criminal Investigation Division conducted the investigation.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
U.S. Attorney Erin Nealy Cox to Target Domestic Abusers with GunsRead the Press Release
U.S. Attorney Erin Nealy Cox today announced a new initiative to fight domestic violence using federal firearm laws.
Federal law prohibits convicted domestic violence abusers, as well as those subject to certain protective orders, from possessing guns.
Working in tandem with state and local law enforcement partners, U.S. Attorney Nealy Cox pledged to prosecute domestic violence offenders discovered with guns.
“With so many domestic disputes escalating from bruises to bullets and bloodshed, we can and should play a part in ending this senseless violence,” she said. “We’re hopeful that highlighting this focus will send a message to convicted abusers: Not only can the Justice Department prosecute you for firearm possession, but in the Northern District of Texas, we will.”
Research shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have that same access to a gun. Dallas County alone sees an average of 15 intimate partner violence fatalities each year – and more than half of victims are killed by gunfire.
Federal prosecutors in the Northern District of Texas have already indicted several domestic violence offenders on various firearm charges:
- John Gabriel Mejia, Jr. was indicted for possession of a firearm while subject to a domestic violence protective order, a violation of 18 U.S.C. § 922 (g)(8). Mr. Mejia, 25, was served with a protective order in 2018, after allegedly holding his girlfriend and her 7-year-old daughter in his garage against their will. With the protective order in effect, he used a 9 mm Glock to threaten his girlfriend.
- Rolando Novell was indicted for possession of a firearm by a prohibited person, a violation of 18 U.S.C. § 922 (g)(9). In 2018, Mr. Novell, 33, pleaded guilty to several assaults, including striking his girlfriend and choking her in front of their infant child. Following his conviction in state court, he signed a statement claiming he did not and would not possess any guns. Authorities arrested him with three pistols two months later.
- James Otis Foley was indicted for felon in possession of a firearm, a violation of 18 U.S.C. § 922 (g)(1). Mr. Foley, also 33, was convicted with aggravated assault with a deadly weapon in March 2011, after he beat his girlfriend, then followed her, brandishing a handgun, as she fled in her car. In 2016, he was again convicted of assault for slamming his girlfriend into a washing machine. Due to his felony convictions, he was not permitted to own guns. But following his release from prison, law enforcement, responding to a domestic dispute call, discovered him with a .45 caliber Glock.
If convicted, all three men face up to 10 years in federal prison. However, as usual, all three defendants are innocent until proven guilty in a court of law.
“We are committed to supplementing the passionate efforts of our state and local partners to hold abusers accountable – and to deter them from taking aim at their partners in the first place,” said U.S. Attorney Nealy Cox.
- John Gabriel Mejia, Jr. was indicted for possession of a firearm while subject to a domestic violence protective order, a violation of 18 U.S.C. § 922 (g)(8). Mr. Mejia, 25, was served with a protective order in 2018, after allegedly holding his girlfriend and her 7-year-old daughter in his garage against their will. With the protective order in effect, he used a 9 mm Glock to threaten his girlfriend.
Pill Mill Physician Convicted of Conspiracy to Distribute NarcoticsRead the Press Release
A federal jury on Friday returned a guilty verdict against a so-called “pill mill” physician who oversaw the illegal prescription of nearly a million units of narcotics with no legitimate medical purpose, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Carlos Luis Venegas was convicted of conspiracy to distribute a controlled substance before U.S. District Judge David C. Godbey in Dallas yesterday afternoon.
“These pill mills help to perpetuate the tragic opioid crisis gripping our country,” said U.S. Attorney Nealy Cox. “Last year, America lost, on average, 116 people per day to opioid overdoses. We cannot allow unscrupulous conduct by physicians to add to the supply of dangerous drugs on the streets.” (For additional facts and figures on the opioid epidemic, see the DEA's 2018 National Drug Threat Assessment.)
According to evidence presented at trial, Mr. Venegas acted as the supervising physician for a series of sham medical clinics – all merely fronts for the illegal distribution of hydrocodone and alprazolam.
Members of the conspiracy, witnesses testified, paid homeless and indigent people to pose as patients seeking pain medication. Runners coached these men and women on how to describe their (nonexistent) symptoms, drove them to the clinics, and paid for their appointments.
At the clinics, nurse practitioners, working under Mr. Venegas’ supervision, conducted only cursory medical exams, witnesses said. Medical files seize from the clinics showed that most exams were conducted without any medical testing and rarely produced documentation of patients’ purported ailments.
At the conclusion of the visit, patients were almost always prescribed a cocktail of medications, including Hydrocodone and Xanax, generally for the highest dosages available.
Mr. Venegas now faces up to 20 years in federal prison. Sentencing has not yet been set.
Several of his codefendants, including several nurse practitioners and clinic managers, previously pleaded guilty to their roles in the scheme.
The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorneys Myria Boehm, Renee Hunter, and Nicholas Bunch prosecuted the case.
NDTX Roundup - 1/17/2019Read the Press Release
PLEA – Roberto Rodriguez Salinas
On Jan. 17, Robert Rodriguez Salinas, 38, of Nuevo Laredo, Tamaulipas, Mexico, pleaded guilty to conspiracy to possess 500 grams or more of a mixture or substance containing a detectable amount of cocaine and conspiracy to launder money. Plea documents reveal Mr. Salinas was arrested with approximately 8 kilograms of cocaine, $115,913.00 in United States Currency, and a .380 Bersa Firearm. Mr. Salinas admitted he was conspiring with others to distribute the cocaine he had in his possession and that the currency was drug proceeds which he was going to send to an individual located in Mexico. Rodriguez Salinas agreed to forfeit the currency and the firearm. The case was investigated by the Drug Enforcement Administration, the Dallas Police Department, and the Dallas County Sheriff’s Department.SENTENCING – LaPorshya Polley
On Jan. 16, Chief Judge Barbara Lynn sentenced LaPorshya Polley, convicted of firearms offenses last April, to 4 years in federal prison, followed by 2 years of supervised release. Last year, a jury found her and her codefendant, Darius Fields, guilty of straw purchasing. Mr. Fields -- who was at the time a person of interest in the kidnapping and eventual murder of 13-year-old Shavon Randle -- is set to be sentenced in April. The FBI and Irving Police Department conducted the investigation.PLEA – Corry Jessie
On Oct. 16, Corry Jessie, 26, of Dallas pleaded guilty to two counts of felon in possession of a firearm. Jessie was prosecuted in connection with the Project Safe Neighborhoods program, an initiative bringing together federal and local law enforcement to stem violent crime in hard-hit communities. He now faces up to 20 years in prison and a fine of up to $500,000. The FBI investigated.SENTENCING – Jose Benavidez III
On Jan. 14, Judge Sam A. Lindsay sentenced 29-year-old Jose Benavidez, III, of Dallas, to 13 years in federal prison for conspiring to possess with intent to distribute 50 grams or more of methamphetamine between February 2017 and October 2017. Plea documents reveal that, on multiple occasions, Jose Benavidez, III sold methamphetamine from an address located on Duleth Street in Dallas. Lab reports revealed the methamphetamine ranged in purity from 94% to 100%. During one of the methamphetamine transactions Jose Benavidez, III opened the door of his residence and discharged a firearm. The Texas Department of Public Safety investigated.SENTENCING – Roger Zamora, 41
On Jan. 14, Roger Zamora was sentenced to 8 years in federal prison for his role in a RICO conspiracy. In March 2018, Zamora pled guilty to participation in a transnational criminal enterprise, comprised mostly of Colombian nationals or individuals of Colombian descent, whose members targeted and robbed traveling diamond and jewelry salesmen across the United States. Zamora participated in six armed robberies of traveling diamond and jewelry salesmen over a four month period, between 2015 and 2016, in Texas, Florida, Indiana, and Virginia.NOTE: Due the the lapse in appropraitions, the U.S. Attorney's Office in the Northern District of Texas will not be issuing press releases or distributing news roundups via email. We will, however, post roundups online.
Couple Convicted of Forcing Young, West African Girl to Labor in Their Southlake, Texas, Home for 16 YearsRead the Press Release
Defendants Mohamed Toure and Denise Cros-Toure, of Southlake, Texas, were convicted late yesterday by a federal jury in Ft. Worth, Texas, of forced labor and other federal felonies for compelling the domestic labor of a young, undocumented West African girl for 16 years. The verdicts were announced by Assistant Attorney General Eric Dreiband the Justice Department’s Civil Rights Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, and Special Agent in Charge Jeffrey McGallicher of the U.S. Department of State’s Diplomatic Security Service (DSS) Houston Field Office.
“The defendants preyed on a young and extremely vulnerable girl. Their despicable actions included cruelly abusing her, forcing her to work in their home, hidden in plain sight, for years without pay, and robbing her of her childhood,” said Assistant Attorney General Eric Dreiband. “Human trafficking is a disgraceful and unacceptable crime, and this verdict should send the very clear message that the Justice Department will investigate and vigorously prosecute these cases to hold human traffickers accountable and bring justice to their victims.”
“Our district is passionate about combatting forced labor. I’m gratified that we were able to obtain a measure of justice for this young woman, who suffered for years at the hands of this couple – people who assumed they could deprive a little girl of her rightful freedoms with impunity,” said U.S. Attorney Nealy Cox. “I’m especially grateful to the witnesses who helped rescue this woman and brought the defendants’ crimes into the light of day. If we want to wipe out human trafficking, we need the whole community to support the effort and be alert.”
“This verdict sends a strong message: Diplomatic Security is committed to making sure that those who exploit and traffic individuals, especially children, will face consequences for their criminal actions,” said Jeffrey McGallicher, Special Agent in Charge of the DSS Houston Field Office.
Following a four-day trial, the jury convicted the defendants of forced labor, conspiracy to commit alien harboring, and alien harboring. The defendants were acquitted of conspiracy to commit forced labor, and defendant Mohamed Toure was acquitted of making false statements to federal agents.
According to the evidence presented in court, in January 2000, the defendants arranged for the victim, then a young child, to travel alone from Guinea to Southlake, Texas, to work as their servant. The defendants were from powerful, wealthy, and politically connected families in Guinea, while the victim was uneducated, impoverished, and from a small, rural village. When the victim’s mother learned that the defendants were bringing the victim to the United States, she unsuccessfully attempted to hide her because she “didn’t want her [daughter] to be someone’s slave.” Despite her mother’s efforts, the defendants managed to bring the victim to Texas where they required her to cook, clean, and take care of their biological children, some of whom were close in age to the victim, without pay for the next 16 years.
The evidence further showed that the defendants gained the victim’s compliance from an early age and abused her to maintain that compliance. The defendants isolated the victim, deprived her of basic opportunities they afforded their children, and rendered her completely dependent on them for everything. While the defendants’ children attended school and some attended college, the defendants prevented the victim from doing the same and never enrolled her in school. When the victim disobeyed or otherwise did not perform the required labor to their liking, the defendants physically, emotionally, and verbally punished her. The defendants called the victim a “dog,” “slave,” “worthless” and an “idiot,” and repeatedly hit her. Defendant Denise Cros-Toure choked the victim on multiple occasions, pulled her hair, and whipped her with an electrical cord after realizing that the belt she had been using was no longer causing sufficient pain. On one occasion, defendant Mohamed Toure held the victim down, sitting on her back, while defendant Cros-Toure hit her. As another form of punishment, defendant Cros-Toure expelled the victim from their house, forcing her to sleep alone in a nearby park, where she kept warm using a public restroom hand dryer. Defendant Toure also shaved the victim’s head, because defendant Cros-Toure did not like the appearance of her hair. On another occasion, defendant Cros-Toure hosed off the victim outside because she thought the victim smelled. After years of abuse and being forced to work for the defendants, the victim was able to escape in 2016 with the assistance of several neighbors.
Sentencing has not yet been scheduled. The defendants face a maximum sentence of 20 years for forced labor, a maximum sentence of 10 years for conspiracy to commit alien harboring, and a maximum sentence of 5 years for alien harboring. Restitution in this case is mandatory under the law.
The U.S. Department of State’s Diplomatic Security Service, Houston Field Office, investigated the case. It is being prosecuted by Trial Attorney Rebekah Bailey and Special Litigation Counsel William Nolan of the Civil Rights Division’s Criminal Section and Human Trafficking Prosecution Unit and Assistant U.S. Attorney Alex Lewis for the Northern District of Texas.
NDTX Roundup - 1/9/2019Read the Press Release
PLEA – Isaiah Alexander Allen
On Jan. 2, 22-year-old Isaiah Alexander Allen pleaded guilty to cyberstalking, after law enforcement caught him posting so-called “revenge porn.” Allen met his victim, a California college student, on an internet gaming website. Over the course of their online relationship, she sent him several sexual photos. But when she refused to provide additional lascivious images, Allen posted dozens of her naked photos online, along with screenshots of B.K.’s driver’s license, college ID, and social security card, as well as her phone number and physical address. The photos, originally uploaded to Reddit and Imgur and later shared on sites like 4Chan and PornStarTube, have been viewed more than a million times. The FBI and Lubbock Police Department investigated.INDICTMENT* – Daniel Jenkins & Michael Atkinson
On Jan. 8, two Dallas men were charged with conspiracy to commit hate crimes, kidnapping, and carjacking. Daniel Jenkins, 19, and Michael Atkinson, 24, allegedly used fake profiles targeting gay men on Grindr, a GTBQ dating app, to lure at least nine men, ages 19 to 57, to an apartment complex, where they were assaulted, taunted, and robbed. At least five victims were physicaly assaulted, one was sexually assaulted with an object, and one was smeared with feces. The FBI investigated.VERDICT -- Robert Bazan
On Jan. 8, a federal jury found Robert Bazan, 45, of Seminole, Texas, guilty of methamphetamine and firearms offenses. According to the evidence presented at trial, in April 2018, Mr. Bazan sold an AR-style pistol and approximately one ounce of methamphetamine to a confidential informant. Less than four months later, Mr. Bazan led deputies with Gaines County, Texas, and Lea County, New Mexico, on a high-speed pursuit following a traffic stop. During the pursuit, which reached speeds over 95 miles per hour, Bazan attempted to discard two handguns and approximately 413 grams of methamphetamine. Upon being indicted, Mr. Bazan also attempted to intimidate a cooperating witness. A six-time convicted felon, Mr. Bazan now faces up to life in prison. The ATF and DEA conducted the investigation, along with the Gaines and Lea County Sheriff’s Offices.SENTENCING -- James Smith
On Jan.10, James Gabriel Smith, a former member of the military, was sentenced more than 12 years in federal prison after pleading guilty to attempted enticement of a minor. Smith, a former resident of Saginaw, Texas, admits he chatted online with an undercover NCIS agent posing as a 13-year-old girl. Over the span of three months, Smith sent graphic images of himself and told the 'girl' he wanted to engage in sexual activity with her. When Smith showed up to an apartment in Fort Worth in April 2018, he was arrested by NCIS agents and Fort Worth police.SENTENCING -- William Smith
On Jan. 11, William Brian Smith (no relation to above) was sentenced to 15 years' inprisonment followed by lifetime supervision after pleading guilty to receipt of child pornography. Smith, a resident of Fort Worth, was discovered with child pornography on his work computer after one of his co-workers complained. At his sentencing, Smith admitted to surreptitiously recording a child taking a shower -- and to taking surreptitious recordings of his female coworkers. The case was investigated by Saginaw Police Department and Homeland Security Investigations.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
NOTE: Due the the lapse in appropraitions, the U.S. Attorney's Office in the Northern District of Texas will not be issuing press releases or distributing news roundups via email. We will, however, post roundups online.
Dallas Men Indicted for Hate Crimes for Targeting Gay Men on GrindrRead the Press Release
Two Dallas men were charged with hate crimes today for using the Grindr app to lure men to an apartment complex, where the men were assaulted, taunted and robbed, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
A federal grand jury indicted Daniel Jenkins, 19, and Michael Atkinson, 24, for conspiracy to commit hate crimes, kidnapping, and carjacking. Mr. Jenkins was also charged with brandishing a firearm during a crime of violence.
According to the 15-count indictment – which supersedes an indictment filed under seal in August 2018 – members of the conspiracy set up fake profiles on Grindr, a social media dating platform for GBTQ men, to lure gay men to an apartment complex in Pleasant Grove, Texas in order to commit violent crimes against them including assaults, kidnapping, and carjacking. For approximately one week in December 2017, the conspirators lured at least nine victims, ages 19 to 57, to Solana Ridge Apartments.
On December 6, 2017, members of the conspiracy used Grindr to lure John Doe 8 to the Solana Ridge Apartments in Pleasant Grove. Jenkins and another unidentified man held John Doe 8 at gunpoint in a vacant apartment. Jenkins and his coconspirator took John Doe 8’s cellular phone and other property. The next day, John Doe 9 was contacted through Grindr and lured to the Solano Ridge Apartments where he was carjacked at gunpoint and forced to drive to local ATMs in order to withdraw cash.
On December 7, 2017, members of the conspiracy used Grindr to lure John Doe 1 to the Solano Ridge Apartments. He was robbed at gunpoint, carjacked and forced to drive his attackers to local ATMs to withdraw cash. On December 8, 2017, members of the conspiracy used Grindr to lure John Doe 2 to the Solana Ridge Apartments. A member of the conspiracy held John Doe 2 at gunpoint and demanded his property. A member of the conspiracy hit John Doe 2 in the head with an object.
On December 11, 2017, the conspirators used Grindr to lure another 4 men to the Solano Ridge Apartments. Jenkins met victims at their cars and invited them inside of Apartment # 186. According to the indictment, Atkinson brought a handgun to Apartment # 186. According to the indictment, Jenkins pointed a handgun toward at least one victim, physically assaulted at least two others and called the victims homophobic slurs. At least one victim was sexually assaulted and at least one victim was smeared with human feces.
“Criminals are using apps like Grindr to single out victims based on their sexual orientation,” said U.S. Attorney Nealy Cox. “My office is committed to rooting out these despicable crimes motivated by hate.”
“As the lead agency for the investigation of federal hate crime violations, the FBI is committed to aggressively identifying and pursuing those using online apps, such as Grindr, to commit acts of violence or intimidation against an individual or community based on their protected class status,” said FBI Special Agent in Charge of the Dallas Office Eric Jackson.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty. If convicted, both defendants face a maximum statutory penalty of life in prison for the hate crime and kidnapping charges, 15 years for the carjacking changes, five years for the conspiracy charge, and a fine of up to $250,000 with respect to each charge. Jenkins also faces a mandatory minimum of at least seven years in prison plus a $250,000 fine for each firearms charge.
The Federal Bureau of Investigation’s Dallas Field Office conducted the federal investigation; a separate criminal investigation is being conducted by the Dallas Police Department. Assistant U.S. Attorney Nicole Dana of the Northern District of Texas and Trial Attorneys Rose Gibson and Kathryn Gilbert of the Justice Department’s Civil Rights Division are prosecuting the case.
This is not the first hate crime case involving the use of the Grindr app; four men pleaded guilty to hate crimes in the Eastern District of Texas in 2018. All four men were sentenced to at least a decade in prison after admitting they used Grindr to arrange a meet-up at a victim’s home, where they physically assaulted, ridiculed, and robbed him.
USAO NDTX Roundup -- 12/20/2018Read the Press Release
IDICTMENT* – Joseph McDonell, 40
On Dec. 18, a federal grand jury returned a nine-count indictment against Joseph Heath McDonell, of Dallas, charging access device fraud and identity theft. McDonell was found in possession of credit and debit card making equipment, stolen personal identifying information, thousands of counterfeit credit card numbers, and several counterfeit Texas DPS drivers permits. If convicted, Mr. McDonell faces up to more than 4 years in federal prison. The FBI and Dallas Police Department investigated the case.INDICTMENT* – Vinson Burnett, 53
On Dec. 18 a federal grand jury indicted Vinson Burnett of Mesquite, Texas for using a peer-peer file sharing program to share and receive child pornography. Two different law enforcement agencies were able to download child pornography from Burnett over a two month period. Upon execution of a search warrant, child pornography was found on a cell phone and a computer hard drive. If convicted, Mr. Burnett faces up to 40 years in federal prison. The Mesquite Police Department and HSI investigated the case.INDICTMENT* - Quentin Amoako, 30
On Dec. 18, a federal grand jury indicted Quentin Amoako, of Dallas, for possessing with intent to distribute crack cocaine. Amoako was also indicted for possessing a firearm in furtherance of his drug trafficking activities. If convicted, Mr. Amoako faces up to 25 years in prison, with a mandatory minimum of 5 years in federal prison. The FBI investigated. This case stemmed from a Project Safe Neighborhood investigation, an initiative bringing together federal and local law enforcement to stem violent crime in hard-hit communities.INDICTMENT – RXpress owners & marketers
Eight Dallas-area pharmacy owners and marketers were indicted for their roles in a scheme involving approximately $92 million in compound drug claims to TRICARE and the U.S. Labor Department, which were allegedly the product of over $9.1 million in illegal kickbacks. DCIS, HHS, the FBI, and the VA – Inspector General investigated the case. Release here.INDICTMENT* – Katie Jeanne Johnson, 30
On Dec 18, a federal grand jury indicted Katie Jeanne Johnson for intent to rob a Bank of America in Garland, Texas. If convicted, Ms. Johnson faces up to 20 years in federal prison. The FBI investigated the case.SENTENCING -- Kenneth Wines, 44
On Dec. 17, Kenneth Wines was sentenced to 13 months’ imprisonment for his role in a prison bribery scheme. Wines, an inmate at the Federal Correctional Institute at Seagoville, Texas, was serving a 35-year sentence for drug trafficking when he and another inmate bribed a prison employee to smuggle contraband, including cigarettes and K2, into the prison in exchange for money. The court ordered Wines to serve the 13-month sentence consecutive to his undischarged 35-year sentence.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Chinese Citizens Sentenced in Scheme to Sell Mislabeled Dietary SupplementsRead the Press Release
Zhang Xiao Dong (aka “Mark Zhang”), of Shanghai, China, was sentenced in Dallas today to 24 months’ imprisonment and two years of supervised release in connection with a scheme to sell mislabeled dietary supplements, the Department of Justice announced.
Zhang was the Sales Manager for Genabolix USA, Inc. and Shanghai Yongyi Biotechnology Co., Ltd., Chinese firms that sell raw ingredients for use in dietary supplements. Zhang pleaded guilty in April 2018 in the Northern District of Texas to one count of mail fraud. Zhang’s co-defendant, Gao Mei Fang (a.k.a. Amy Gao), the Supply Chain Manager for Genabolix, was sentenced on July 17, 2018, to 12 months and a day of imprisonment after pleading guilty in April 2018.
In pleading guilty, Zhang and Gao admitted that they agreed to help sell synthetic stimulant ingredients to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Zhang, Gao, and another co-defendant agreed with a confidential government informant to either mislabel the synthetic ingredients or to otherwise help hide the true nature of a proposed dietary supplement from retailers. Zhang and Gao admitted that they knew major American dietary supplement retailers would refuse to carry supplements known to contain certain stimulants, such as DMAA. Gao also admitted to making false statements to FDA’s import division regarding a shipment of synthetic stimulants entering the United States.
“Americans must be able to trust that the products they consume are safe,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “This case shows that we will continue to prosecute those who attempt to import dangerous ingredients into the United States.”
Zhang and Gao were sentenced by U.S. District Court Judge Lindsay of the Northern District of Texas. Gao and Zhang both were arrested in September 2017 while attending a dietary supplement trade show in Las Vegas. A third defendant named in the case, Hu Chang Chun, is not believed to be in the United States.
“Consumers deserve to know exactly what they’re ingesting,” said U.S. Attorney Erin Nealy Cox of the Northern District of Texas. “We will not allow this sort of subterfuge to go unchecked in north Texas.”
“American consumers are put at risk when the true nature of ingredients for dietary supplements is hidden,” said Charles L. Grinstead, Special Agent in Charge, FDA Office of Criminal Investigations’ Kansas City Field Office. “We will continue to pursue and bring to justice those who jeopardize the public health.”
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch, and Kate Rumsey and Douglas Brasher, Assistant United States Attorneys for the Northern District of Texas.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.
Eight Dallas-Area Pharmacy Owners and Marketers Charged in $9 Million Kickback SchemeRead the Press Release
Eight Dallas-area pharmacy owners and marketers were charged in an indictment unsealed today for their roles in a scheme involving approximately $92 million in compound drug claims to TRICARE and the U.S. Department of Labor (DOL), which were allegedly the product of over $9.1 million in illegal kickbacks.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Michael Mentavlos of the Defense Criminal Investigative Service (DCIS) Southwest Field Office, Special Agent in Charge Steven Grell of the U.S. Department of Labor - Office of Inspector General’s (DOL-OIG) Dallas Region and Special Agent in Charge CJ Porter of the Office of Inspector General for the U.S. Department of Health and Services (HHS-OIG) made the announcement.
Richard Hall, 48; Scott Schuster, 47; Dustin Rall, 43; George Lock Paret, 34; and Michael Ranelle, 49, all of Fort Worth, Texas; John Le, 43, of Dallas; Quintan Cockerell, 37, of Manhattan Beach, California; and Turner Luke Zeutzius, 36, of Horseshoe Bay, Texas, were each charged in an indictment filed Dec. 12 in the Northern District of Texas with one count of conspiracy to defraud the United States and pay and receive kickbacks. Hall, Schuster, Rall, and Le were each additionally charged with four counts of paying kickbacks. Zeutzius was additionally charged with two counts of receiving kickbacks and Ranelle and Cockerell were each charged with one count of receiving kickbacks. Hall, Schuster, Rall, Le and Ranelle were arrested yesterday and had their initial court appearances before U.S. Magistrate Court Judge Irma C. Ramirez in Dallas. Paret, Cockerell and Zeutzius self-surrendered this morning and will have their initial court appearances today at 2 p.m. CST before Judge Ramirez.
According to the indictment, from May 2014 to September 2016, Hall, Schuster, Rall, Paret, Le and their co-conspirators allegedly engaged in a scheme to pay kickbacks and bribes for the referral of TRICARE and DOL beneficiaries to obtain expensive compound drugs. Hall, Shuster and Rall were co-owners of Rxpress Pharmacy and Xpress Compounding, compound pharmacies located at 1000 W. Weatherford St. in Fort Worth.
As alleged in the indictment, Rxpress and Xpress were separate in name only; Rxpress Pharmacy and Xpress Compounding employed the same staff, operated out of the same building, and utilized a call center to direct prescriptions depending on whether the prescriptions were for private or federal insurance. The indictment alleges that both companies utilized the same marketers but paid them differently depending on whether they were receiving a commission on a federal or private prescription, in order to disguise the illegal kickback payments on federal prescriptions. Specifically, Hall, Schuster, Rall, Paret and Le allegedly devised a scheme to make kickback payments to marketers through Xpress Compounding for the referral of federal prescriptions. These marketers were allegedly set up as sham “W-2” employees to appear as though they were bona fide employees of Xpress Compounding. At the same time, these marketers were paid as 1099 contractors by Rxpress Pharmacy, the indictment alleges.
The indictment alleges that as a result of the scheme, Zeutzius was paid approximately $4.4 million, Cockerell (through an unnamed person) was paid approximately $2.1 million, and Ranelle was paid approximately $2.6 million in illegal kickbacks, for a total of approximately $9.1 million in illegal kickbacks.
The charges in the indictment are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
DCIS, DOL-OIG, the U.S. Department of Health and Human Services Office of Inspector General, the FBI and the U.S. Department of Veterans Affairs Office of Inspector General investigated the case. Assistant Chief Adrienne Frazior and Trial Attorney Brynn Schiess of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and the U.S. Department of Health and Human Services (HHS) to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
New VIDEO: Trafficker with Massive Network Leads Law Enforcement on Wild Car ChaseRead the Press Release
Newly-released dash cam video shows the moment a drug trafficker with a distribution network worth hundreds of thousands of dollars fled the scene of an undercover drug buy.
At the wheel was Israel Vasquez, a 46 year-old-citizen of Mexico, who was sentenced last week to life in prison after pleading guilty to drug and money laundering charges earlier this year.
According to law enforcement, Mr. Vasquez’ methamphetamine distribution network stretched from Michoacán, Mexico, across the southern border, and into Texas and Louisiana. The drug ring netted hundreds of thousands of dollars in proceeds wired to his alias, “Adan Perez.”
Not long before the footage was recorded in March 2016, Grand Prairie Police officers initiated an undercover drug buy with a man later identified as Mr. Vasquez. He agreed to meet an undercover agent behind a retail store in Grand Prairie. Just before the meeting, however, Mr. Vasquez seemed to grow suspicious, pitching about half a kilogram of meth out his car window and speeding away. The subsequent footage shows he led Grand Prairie Police on a wild chase, zig zagging through heavy traffic on Interstate 20, blasting through stop lights, and driving the wrong way on residential streets.
After he ditched the vehicle, agents located a receipt inside that noted his alias, Adan Perez. They tracked Mr. Vasquez to Seattle, where he was arrested weeks later.
At sentencing, prosecutors revealed that at the time of the chase, Mr. Vasquez was a fugitive from justice, having fled to Mexico in 2010 after pleading guilty in another drug and money laundering case in 2009. While on the lam, Mr. Vasquez conspired with several co-defendants, including his wife and sister, to deal controlled substances, including meth and heroin, and move drug money into Mexico.
According to law enforcement agents, in 2013, Vasquez was kidnapped by a cartel and tortured due to a drug debt; as soon as his family raised money to release him, he returned to dealing, and eventually traveled to the Dallas area, where he continued to deal meth and heroin.
Testimony revealed that his drug cell included his wife, Amber Vasquez, sentenced to 115 months on drug and money laundering charges; his sister, Mia Vasquez, sentenced to 38 months custody on drug charges; David De Los Santos, sentenced to 151 months custody on drug and money laundering charges; and Melvin Williams, sentenced to 121 months custody on drug charges. He also had ties to notorious dealer Javier Guerra, a.k.a. Chop, who was sentenced to a term of 480 months on drug charges and 240 months on money laundering charges in August, testimony showed.
The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Grand Prairie Police Department; the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments. Assistant U.S. Attorneys George Leal, John Kull, and John De La Garza prosecuted the case for the government.The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Grand Prairie Police Department; the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments. Assistant U.S. Attorneys George Leal, John Kull, and John De La Garza prosecuted the case for the government.
USAO NDTX Roundup -- 12/13/18Read the Press Release
SENTENCING – Israel Vasquez, 46
Israel Vasquez, a 46 year old citizen of Mexico, was sentenced to life in prison after pleading guilty to drug and money laundering charges in June. Vasquez’s methamphetamine distribution network stretched from Michoacan, Mexico, through the southern border, and into Texas and Louisiana, and collected hundreds of thousands of dollars in drug proceeds wired to Vaszquez’s alias, Adan Perez. According to law enforcement agents, in 2013, Vasquez was kidnapped by a cartel and tortured due to a drug debt; as soon as his family raised money to release him, he returned to dealing. He was apprehended weeks after he ditched a stash of meth and fled the scene of a planned undercover drug buy. The FBI, Dallas Police Department, and IRS - Criminal Investigation led the investigation.ARREST – Drug traffickers
Thirteen people tied to Mexican cartels were arrested on federal drug conspiracy charges after an FBI-led bust on Dec. 12. Investigators say the individuals — who they say are connected to Mexico's Los Zetas and New Generation Jalisco cartels — have conspired to distribute methamphetamine, cocaine and heroin since March 2014. The criminal complaints were unsealed Wednesday afternoon. The DEA and Texas Department of Public Safety investigated. Release here.PLEA -- Ramon Hernandez, 41
On Dec. 11, Ramon Hernandez pleaded guilty to conspiracy to commit wire fraud. Hernandez admits that at the direction of a coworker, he stole medical equipment from his employer, made fraudulent entries in their database concerning the shipment of the equipment, and manipulated the devices’ electronic serial plates to conceal the theft. He now faces 5 years in prison. The FBI and FDA Office of Inspector General investigated.SENTENCING – Eddie Contreraz, 49
On Dec. 10, Eddie Contreraz of Frisco, TX was sentenced to more than 14 years in federal prison and ordered to pay $12,949,309 in restitution for his role as the ring leader of a $29 million bank fraud scheme. He and six co-defendants admit they used falsified income and employment information to complete at least 2300 fraudulent loan packages at 10 banks. The FBI’s Fort Worth Office conducted the investigation.SENTENCING – Jesus Chaparro, 26
On Dec. 7, Jesus Florencio Chaparro-Sanchez, a 26-year-old citizen of Mexico, was sentenced to 14 ¼ years in federal prison after authorities caught him transporting fentanyl, a powerful narcotic 50 times more potent than heroin. After a traffic stop, he admitted to investigators that a man in Mexico had offered him a job transporting drugs. He claimed he thought he was transporting cocaine. DEA testing revealed that the substance was actually about four kilograms of Tramadol plus about five kilograms of fentanyl. The DEA and the Texas Department of Public Safety investigated. Release here.- - -
AAG Visits Dallas
On Dec. 12, the Northern District of Texas welcomed Acting Attorney General Matt Whitaker, along with Solicitor General Noel Francisco and Assistant Attorney General Brian Benczkowski of DOJ’s Criminal Division, to discuss our Project Safe Neighborhoods program, which diminished violent crime in Dallas’ PSN hotspot by 19.9 percent from Q1 to Q3. “Our goal is to reduce violent crime. Thanks in large part to people in this room, we are achieving that goal,” Whitaker told law enforcement gathered at the Dallas Police Department’s NE Division. “That is why the Department of Justice is proud to invest in you.” Whitaker remarks here. Photos here.
13 Suspected Drug Traffickers with Cartel Ties Arrested in BustRead the Press Release
Thirteen individuals were arrested on federal drug conspiracy charges following a bust led by the FBI Wednesday morning, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
According to criminal complaints unsealed this afternoon, the defendants -- Juan Hernandez, Humberto Morales, Marcos Dominguez, Adolfo Ortiz, Albert Martinez, Alejandro Navarrete, Oscar Hernandez, Rebecca Mier, Leoncio Aguilar, Josue Coy, Fidel Alain Martin-Sosa, Yuniel Eduardo Lima Rivero, and Henry Alberto Echarte Rivero – conspired to distribute methamphetamine, cocaine, and heroin over a nearly five-year period, beginning in March 2014.
According to Organized Crime Drug Enforcement Task Force (OCDETF) investigators, the conspirators -- who had ties to the Los Zetas and the New Generation Jalisco Mexican cartels -- had a fluid hierarchy that evolved over time. Some of the money derived from the sale and distribution of the drugs were used to purchase additional drugs, while other drug money was sent to Mexico.
The investigation culminated yesterday, when FBI agents raided a home just across the street from a Grand Prairie elementary school, seizing 380 grams of heroin, a shotgun, and approximately 5 kilograms of methamphetamine. Additional agents seized seven firearms and ounce quantities of cocaine from two houses in Dallas. Agents in Carrollton, assisted by Carrollton Police Department seized 3 kilograms of methamphetamine that defendants Lima Rivero and Echarte Rivero attempted to discard.
In total, law enforcement also seized approximately $24,800 in U.S. currency.
A complaint is a written statement of the essential facts of the offense charged made under oath before a magistrate judge. The government has 30 days to present the matter to a grand jury for indictment. A defendant is entitled to the presumption of innocence until proven guilty through due process of law.
If convicted, defendants face up to 40 years in federal prison and a $5,000,000 fine.
The Federal Bureau of Investigation, in collaboration with the Bureau of Alcohol, Tobacco and Firearms, Texas Department of Public Safety, Dallas Police Department, Fort Worth Police Department, Carrolton Police Department, Grand Prairie Police Department, Arlington Police Department, Farmers Branch Police Department, and the Internal Revenue Service, conducted the investigation. Assistant U.S. Attorneys Shawn Smith and Laura Montes are prosecuting the case.
The case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Woman Admits Defrauding Medicaid a Second Time, This Time from PrisonRead the Press Release
In 2015, Alexis C. Norman pleaded guilty to healthcare fraud. But while awaiting sentencing, she concocted another healthcare fraud scheme.
Yesterday afternoon, Ms. Norman, 47, pleaded guilty once again, this time admitting one count of conspiracy to commit healthcare fraud and four counts of healthcare fraud – three committed before she was sentenced in the prior case and one committed while she was behind bars, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
According to court documents, Ms. Norman approached co-conspirator Karen Jones in February 2015 with a business idea she hoped could help pay legal fees from her previous case. Ms. Jones agreed to help Ms. Norman by listing herself as the administrator of Janus Children Services, Inc., opening a bank account in Janus’ name, and leasing office space for Janus in Tyler, Texas.
The company never occupied the office space, never hired any employees, and never provided any services.
Together, Ms. Norman and Ms. Jones used stolen identities of licensed counselors and Medicaid recipients to submit more than $810,000 in fraudulent claims to Medicaid, and were paid more than $427,000.
After Medicaid paid Janus for the false claims, Ms. Norman directed Jones to withdraw cash from the Janus bank account, always in amounts less than $9,500. Roughly once a month from April 2015 to February 2016, the pair would meet at a restaurant. When they finished their meal, Ms. Jones – who carried the cash in a gift bag – would leave the package on a chair for Ms. Norman.
Following Ms. Norman’s incarceration in April 2016, Ms. Jones agreed to help Ms. Norman submit additional fraudulent claims through a second company, Therapeutic Outreach Services Inc.
Ms. Jones helped Ms. Norman lease office space for Therapeutic in Waco, Texas, and visited Ms. Norman in prison on multiple occasions to gather billing instructions and identifying information of counselors and Medicaid clients. Ms. Norman concealed the information on a piece of paper hidden in her shoe, which she retrieved during Ms. Jones’ visits.
Like Janus, Therapeutic never operated out of the Waco location, had no employees, and provided no services.
Ms. Norman faces a maximum statutory penalty of 80 years in federal prison, mandatory restitution, and a $250,000 fine for each of the five counts. She is scheduled to be sentenced by U.S. District Judge Jane Boyle on March 29.
Ms. Jones, who has also pleaded guilty, faces a maximum statutory penalty of five years in federal prison, mandatory restitution, and a $250,000 fine. She is scheduled to be sentenced on January 14, 2019, by U.S. District Court Judge David C. Godbey.
The U.S. Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorney Douglas Brasher and DOJ Trial Attorney Christina Liu are prosecuting the case.
Mexican Citizen Sentenced to 11 ¼ Years in Federal Prison for Transporting FentanylRead the Press Release
A 26-year-old citizen of Mexico was sentenced today to 135 months in federal prison after authorities caught him transporting fentanyl, a powerful narcotic 50 times more potent than heroin, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Jesus Florencio Chaparro-Sanchez pleaded guilty to possession with intent to distribute in August.
In late May, a Texas Department of Public Safety trooper stopped Mr. Chaparro-Sanchez, who was driving a black Pontiac G6, for traffic violations. Near the vehicle’s rear axle, the officer located an after-market compartment. Inside, investigators discovered nine bundles of a white powdery substance.Mr. Chaparro-Sanchez later admitted that a man in Mexico had offered him a job transporting the drugs. He said he knew the vehicle contained drugs, and claimed he thought he was transporting cocaine. DEA testing revealed that the substance was actually about four kilograms of Tramadol plus about five kilograms of fentanyl.
“This deadly drug is wreaking havoc across the country. Many users don’t realize traffickers are cutting other, less potent drugs with cheap fentanyl,” said Nealy Cox. “We have zero tolerance for those that support the distribution of dangerous drugs in America and we will do everything in our power to stop fentanyl’s spread across North Texas.”
“The country is battling an opioid epidemic that is taking lives by the minute. Fentanyl is fueling this deadly epidemic,” said DEA Special Agent in Charge of the Dallas Division Clyde E. Shelley, Jr. “DEA Dallas will aggressively investigate and prosecute any and all persons involved in the illegal distribution of fentanyl throughout North Texas and Oklahoma.”
Fentanyl, which results in frequent overdoses, is responsible for the sharp increase in opioid deaths across the U.S. In just three years, the fentanyl death toll has risen more than 5,000 percent, from around 5,500 death in 2014 to almost 30,000 last year, according to the National Institute of Health. Because it can be ingested, inhaled, or absorbed through the skin, fentanyl poses a high risk of death not only to users, but to law enforcement. Just a few milligrams, equivalent to a few grains of table salt, may be deadly.
The Drug Enforcement Administration and the Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorney Juanita Fielden is prosecuting the case.
Dallas Project Safe Neighborhood Taskforce Honored by Justice DepartmentRead the Press Release
Dallas’ Project Safe Neighborhoods Taskforce earned one of just two “Outstanding Overall Partnership” awards from the U.S. Department of Justice, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
Dubbed “Operation Badge #10934” in honor of fallen Dallas Police Officer Rogelio Santander, Dallas PSN was launched in February 2018 to tackle increasing violent crime. Led by U.S. Attorney Nealy Cox and Dallas Police Chief Renee Hall, the PSN Taskforce – a coalition of federal and local law enforcement that includes FBI, ATF, DEA, and the U.S. Marshals Service – has already made more than 120 arrests inside the PSN “hotspot,” a historically crime-riddled community nestled at the intersection of Route 75 and LBJ.
Over the past eight months, the hotspot has seen a 19.9% reduction in violent crime.
“Our PSN Taskforce in Dallas is Texas-sized,” Acting Attorney General Matt Whitaker said at an awards ceremony in Kansas City, MO Thursday. “It brings together 60 people, including law enforcement officers, local government officials, local school personnel, and 15 community organizations.”
“I’m incredibly proud of the way we’ve been able to marshal resources from federal and local law enforcement to foster lasting change in a neighborhood that sorely needs our help,” said Nealy Cox. “None of this would have been possible without our law enforcement team, which includes DPD Chief Hall, FBI SAC Eric Jackson, DEA SAC Clyde Shelley, ATF SAC Jeffrey Boshek, U.S. Marshal Rick Taylor, and many others.”
“I am extremely proud of the partnership between the Dallas Police Department and U.S. Attorney’s Office with Project Safe Neighborhood,” Chief Hall said in a statement. “The work of the Dallas Project Safe Neighborhood team is making a difference and being recognized by the Department of Justice. This enforcement effort is beneficial and allows us to focus on concentrated crime areas, while engaging with the community.”
Dallas’ PSN initiative relies on a three-pronged approach combining traditional enforcement, community outreach, and recidivism reduction. Federal prosecutors have charged dozens of individuals with felony crimes, from carjacking to straw purchasing. They’ve also held nearly 50 community events to explain how residents can help keep communities safe, and hosted nearly 2,500 ex-convicts and parolees at monthly “reentry nights” outlining ramifications of re-offending and presenting a buffet of resources, from job placement programs to counseling opportunities.
The Dallas PSN Taskforce is joined in the overall partnership category by Jackson, Mississippi’s PSN team. Ten other districts were honored for individual and organizational contributions to Project Safe Neighborhoods. The Northern District of Texas’ PSN operation is managed by Coordinator P.J. Meitl. More information on Dallas PSN here.
TCU Employee Sentenced for Stealing Money from Upward BoundRead the Press Release
A former Texas Christian University employee was sentenced today to five years in prison for theft of federal funds, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Margaret Faust, 69, who served as Assistant Director of TCU’s Upward Bound program for roughly 18 years, pleaded guilty in August to embezzling money from the program, which helps low-income high school students prepare for college.
According to court documents, Faust routinely pocketed cash from funds awarded to the university by the Department of Education. She stored the money – allotted for Upward Bound participant stipends – in a locked drawer inside her desk before depositing it in her personal checking account.
As part of her scheme, Ms. Faust instituted a program that allowed her to withhold the stipend money in $7 increments – about the cost of students’ bus fare, one former Upward Bound participant testified in court.
As a result of her conduct, TCU’s Upward Bound program was terminated.
Ms. Faust has paid back more than $210,000 – but it’s possible she stole significantly more than that, prosecutors told U.S. District Judge Reed O’Connor at her sentencing hearing today.
The Federal Bureau of Investigation and the U.S. Department of Education conducted the investigation. Assistant U.S. Attorney Megan Fahey prosecuted the case.
USAO NDTX Roundup -- 11/29/1Read the Press Release
SENTENCING –Anthony Turner, 26, Xavier Ross, 26 & Afraybeom Jackson, 28
On Nov. 28, Anthony Turner and Xavier Ross were sentenced to 7 years in federal prison for their roles in a robbery. Co-conspirator Afraybeom Jackson was sentenced to nearly 6 years. The defendants pled guilty to interference with commerce by robbery and brandishing a firearm during a crime of violence after they were arrested for robbing a jewelry store in Irving, Texas. The FBI investigated the case.SENTENCING – a Drug Trafficking Ring
On Nov. 28, six defendants were sentenced by U.S. District Judge Barbara M.G. Lynn for their roles in a cocaine trafficking organization:- Bruce Turner, 40, aka “BK” – 12.5 years
- Desmond Keith Wright, 36, aka “Deedy Weedy” – 9 years
- Datanya Deone Jones, 37, aka “Worm” – 6.5 years
- Gerald Jerome Duncan, 30, aka “Bear” or “Osso” – 18 months
- Kennard Henry Richards-Darby, 28, aka “Boom” – time served
- Johnny Lee Edwards, 37, aka “Bubba” – 3 years’ probation
The FBI investigated the case; ATF, Dallas County Sheriff’s Office, and Dallas Police Department assisted with the takedown.
INDICTMENT* – Jared Rice, 30
On Nov. 28, AriseBank CEO Jared Rice Sr. was arrested by the FBI, charged with duping hundreds of investors out of more than $4 million in a cryptocurrency scheme. According to the indictment, Rice lied to would-be investors, falsely claiming that AriseBank could offer consumers FDIC-insured accounts and traditional banking services, including Visa-branded credit cards. If convicted, he faces 120 years in prison. The FBI investigated the case. Press release here.SENTENCING – Jose Valentin, 39, Juan Gomez-Moreno, 28, & Gabriela Morales, 32.
On Nov. 28 and 29, three defendants were sentenced for their roles in a cocaine and methamphetamine distribution conspiracy. Jose Guadalupe Valentin, who was sentenced to 10 years in federal prison, pleaded guilty in June after Dallas DEA agents intercepted him on a wiretap negotiating and purchasing cocaine from a codefendant, and discovered cocaine, currency, and firearms at his home during a raid. Juan Alberto Gomez-Moreno, who was sentenced to nearly 6 years in prison, pleaded guilty in January, after DEA agents intercepted him on a wiretap negotiating meth. Gabriela Morales, who was sentenced to 14 years in prison, also pleaded guilty in January after DEA agents intercepted her on a wiretap making multiple deliveries of meth and cocaine to various customers in the Dallas area and collecting currency that represented the proceeds from drug trafficking.PLEA – Marcus Jones, 29
On Nov. 27, Marcus Darwyn Jones of Arlington pleaded guilty to two counts of use of a facility of interstate commerce in aid of a racketeering enterprise. Jones admitted to using Backpage.com to facilitate prostitution of two minor victims. Homeland Security Investigations, the Texas Attorney General’s Office, and the Fort Worth Police Department investigated.PLEA – Marcus Pierson
On Nov. 27, Marcus Jerod Pierson of Dallas pled guilty to one count of possession with intent to distribute a controlled substance. When Pierson was arrested, he had methamphetamine, cocaine, marijuana and a handgun in his vehicle. He faces up to 20 years in prison and a $1,000,000 fine. The DEA conducted the investigation.PLEA – Christina Hickson, 23
On Nov. 27, Christina Michelle Hickson of Arkansas pleaded guilty to escape from federal custody. Hickson admits that on or about May 1, she escaped from the Volunteers of America Residential Re-Entry Center after a conviction for the commission of a bank robbery. She faces up to five years in prison and a fine of $250,000. The United States Marshal’s Service investigated.SENTENCING – Bruce Brick, 51
On Nov. 26, 2018, Bruce Brick was sentenced to 18 months in federal prison for escaping from a half-way house where he was residing for failure to register as a sex offender. On June 21, 2018, Brick pled guilty to one count of escape, after he was arrested in California and transported back to Texas by the U.S. Marshal’s Service. His new sentence is to run consecutively to the sentence he received in federal court in June 2015.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Cryptocurrency CEO Indicted After Defrauding Investors of $4 MillionRead the Press Release
AriseBank CEO Jared Rice, Sr. was arrested by the FBI on Wednesday, charged with duping hundreds of investors out of more than $4 million in a cryptocurrency scheme, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Mr. Rice, who is also the subject of a civil action filed by the SEC’s Fort Worth regional office earlier this year, was indicted on three counts of securities fraud and three counts of wire fraud.
According to court documents unsealed today, Mr. Rice, 30, allegedly lied to would-be investors, claiming that AriseBank – which he billed as the world’s “first decentralized banking platform” based on a proprietary digital currency called AriseCoin – could offer consumers FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services. In actuality, AriseBank had not been authorized to conduct banking in Texas, was not FDIC insured, and did not have any sort of partnership with Visa.
Even as he touted AriseBank’s nonexistent benefits in press releases and online, Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, clothing, a family law attorney, and even a guardian ad litem.
He allegedly falsely claimed the “Initial Coin Offering,” or ICO, had raised $600 million within just a few weeks and failed to disclose that he’d plead guilty to state felony charges in connection with a prior internet-related business scheme. Meanwhile, investors were buying AriseCoin using digital currencies like Bitcoin, Ethereum, Litecoin, and fiat currency.
“My office is committed to enforcing the rule of law in the cryptocurrency space,” said Nealy Cox. “The Northern District of Texas will not tolerate this sort of flagrant deception – online or off.”
An Indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law. If convicted, Mr. Rice faces up to 120 years in federal prison.
The Federal Bureau of Investigations conducted the investigation. Assistant U.S. Attorneys Mary Walters and Sid Mody are prosecuting the case.
Sting Operation Nabs Spa Proprietor Mongering Illicit SexRead the Press Release
Following a sting operation at a Dallas hotel earlier this month, law enforcement liberated dozens of women sold for sex, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox. This week, a federal grand jury indicted Helen Kim – the alleged proprietor of the prostitution ring – on racketeering charges.
“It takes a lot of coordination to ensure an operation like this goes without a hitch. I’m proud of the way law enforcement came together to fight for these young women,” said Nealy Cox. “The defendant’s willingness to demean women for financial gain is sickening. We cannot and will not allow this type of behavior to go unchecked in North Texas.”
More than 50 officers from the Dallas Police Department, the Texas Department of Public Safety, and Homeland Security Investigations participated in the Nov. 1 undercover operation. Agents, posted at the hotel bar and in rooms upstairs, posed as out-of-town businessmen prepared to pay for illicit sex.
According to the indictment, Ms. Kim, 58, had agreed to provide dozens of women for that very purpose.
In earlier conversations with a confidential informant and an undercover Dallas Police Department detective, Ms. Kim and her 36-year-old son allegedly negotiated private sexual liaisons with 20 to 25 women at a rate of $2,000 each, for a total of at least $40,000. The pair promised the “girlfriend experience,” and even allowed the CI and UD to meet several of the women at a local Sushi bar.
During another meeting at a nearby Starbucks, Ms. Kim allegedly accepted an upfront payment of $5,000. She insisted the men should not talk publicly about the affair.
“The way this is set up,” her son told the undercover officer, “it could be considered human trafficking.”
At the Nov. 1 sting, Ms. Kim accepted the remainder of the cash, paid in marked bills, and was taken into custody shortly thereafter. Several of the women in her employ were taken to Mosaic House, a local shelter for women fleeing human trafficking. Many had been living at her purported “spas,” Pink One and Illusion, impelled to cater to customers at all times of the day and night.
If convicted, Kim faces up to five years in federal prison. Prosecutors have seized assets from her home and massage parlors.
An Indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law. Assistant U.S. Attorneys Ryan Raybould and Cara Foos Pierce are prosecuting the case.
At the Nov. 1 sting, Ms. Kim accepted the remainder of the cash, paid in marked bills, and was taken into custody shortly thereafter. Several of the women in her employ were taken to Mosaic House, a local shelter for women fleeing human trafficking. Many had been living at her purported “spas,” Pink One and Illusion, impelled to cater to customers at all times of the day and night.
If convicted, Kim faces up to five years in federal prison. Prosecutors have seized assets from her home and massage parlors.
An Indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law. Assistant U.S. Attorneys Ryan Raybould and Cara Foos Pierce are prosecuting the case.
Eight Individuals arrested on Drug Conspiracy ChargesRead the Press Release
Eight defendants are in federal custody following their arrests in October and November 2018 on federal drug conspiracy charges, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
The defendants -- Lea Lea Bills, of Stephenville, Texas, Jeanne Butler, of Stephenville, Texas, Shauna Michelle Campbell, of Morgan Mill, Texas, Edward Martin Carranza, of Dublin, Texas, Michael Tyler Davidson, of Stephenville, Texas, David Wayne Green, of Lipan, Texas, Brad Keith, of Stephenville, Texas, and Michaela Danese Moncrief, of Dublin, Texas -- were all charged with one count of conspiracy to possess with the intent to distribute a controlled substance, and made their initial appearance before U.S. Magistrate Judge Jeffrey Cureton.
According to a Complaint filed last month, from about July 2017 through August 30, the defendants conspired together, and with others, to possess with the intent to distribute 50 grams or more of methamphetamine throughout the Northern District of Texas and elsewhere.
Members of the conspiracy had a fluid hierarchy that evolved over time. Some of the money derived from the sale and distribution of the methamphetamine was used to purchase additional quantities of methamphetamine.
A complaint is a written statement of the essential facts of the offense charged and must be made under oath before a magistrate judge. The government has 30 days to present the matter to a grand jury for indictment. A defendant is entitled to the presumption of innocence until proven guilty through due process of law.
If convicted, defendants face up to 40 years in federal prison and a $5,000,000 fine.
The Drug Enforcement Administration and Stephenville Police Department are in charge of the investigation. Assistant U.S. Attorney Shawn Smith is prosecuting the case.
Fort Worth Man Sentenced to 10 Years in Hulen Mall ArsonRead the Press Release
A Fort Worth Man was sentenced today to 10 years in prison for the May 2018 Hulen Mall arson, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
In July, Craig Michael Tezeno, 46, of Fort Worth, Texas, pleaded guilty to igniting several Molotov cocktails inside two department stores in Fort Worth’s Hulen Mall.
According to court documents, Tezeno admits he lit a rag stuffed into a glass bottle filled with gasoline and placed it on the floor of Dillard’s department store on May 11. Later that same day, he lit a similar device inside a Sears. He returned to the same Sears a week later and ignited a third device, hoping to start a fire and damage the store.
The Federal Bureau of Investigation and the Fort Worth Police Department investigated the case, with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Fort Worth Fire Department’s Arson Investigations Unit, the Tarrant County District Attorney’s Office, and FBI Task Force Officers from the Tarrant County Sherriff’s Office, the Arlington Police Department, the Naval Criminal Investigation Service, the Department of Homeland Security, and the Texas Department of Public Safety. Assistant U.S. Attorney Jay Weimer prosecuted the case.
USAO NDTX Weekly Roundup -- 11/16/18Read the Press Release
SENTENCING – Eddie Galindo-Mendez, 44
On Nov. 9, Eddie Estuardo Galindo-Mendez was sentenced to just under 5 years in federal prison after pleading guilty to bank robbery. He admits that he robbed Lubbock’s Happy State Bank in November 2017. Dressed in a large coat, gloves, hat, and sunglasses, Mr. Galindo approached a teller and handed him a note threatening an active bomb. He then placed what appeared to be a pipe bomb next to the teller’s computer. After the teller surrendered the money, Mr. Galindo took the note and fled on a bicycle, leaving the purported bomb at the bank. (The bomb squad later determined the device – galvanized pipe and wires wrapped in duct tape and connected to a cell phone – was inert.) The Bureau of Alcohol, Tobacco & Firearms conducted the investigation..PLEA – Michael Asagba, 20
On Nov. 13, Michael Asagba of Mesquite, TX pleaded guilty to three counts of aggravated robbery and one count of using a firearm, during a crime of violence on November 13. Mr. Asagba admits to a string of food store robberies in Mesquite in late February. He now faces a minimum of 7 years and a maximum of 67 years in prison. The Bureau of Alcohol, Tobacco & Firearms investigated.INDICTMENT* -- Adrian Martinez, 44
On Nov. 14, a federal grand jury indicted Adrian Martinez, a CPS worker, on one count of enticement of a child. In September, Martinez contacted an undercover officer, who was posing as a 14-year-old girl, through the Skout social networking application and stated that he was looking for a friends-with-benefits situation. He engaged in sexually explicit communications with the undercover officer and asked if the girl would skip school to meet him. They agreed to meet at a Quik Trip in Haltom City on September 25. When Martinez arrived, he was arrested. During his interview later that day, Martinez stated that he had been chatting with five to six underage girls at the time of his arrest. The Texas Department of Public Safety and FBI investigated the case.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Dallas Tax Return Preparer Pleads Guilty in False Tax Return SchemeRead the Press Release
A Dallas, Texas, area tax return preparer pleaded guilty today to conspiring to defraud the United States and to assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Erin N. Cox for the Northern District of Texas.
According to documents and information provided to the court, Mario Melendez, 29, worked as a manager and tax return preparer at Uptown Multi Services, which was a tax preparation business located in the Northern District of Texas.
From November 2013 and continuing through at least May 2014, Melendez conspired with others to prepare federal income tax returns for clients that included false education credits and Schedule C expenses as well as other fraudulent items. As the manager of Uptown, Melendez taught training classes for new return preparers during which he instructed employees how to prepare fraudulent tax returns in order to maximize client refunds. Melendez is responsible for attempting to cause a tax loss of over $3.8 million to the United States.
Sentencing is scheduled for April 5, 2019. Melendez faces a statutory maximum of eight years in prison, as well as a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Cox commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Alexander Effendi of the Tax Division and Assistant United States Attorney Melanie Smith, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
United States Attorney Announces Appointment of Four New Federal ProsecutorsRead the Press Release
U.S. Attorney Erin Nealy Cox is proud to announce the appointment of four new Assistant United States Attorneys: Kristina Williams, assigned to the Dallas Appellate Division, Tiffany Eggers, assigned to the Dallas Criminal Division, Laura Montes, assigned to the Fort Worth Criminal Division, and Ann Howey, assigned to the Lubbock Criminal Division.
All four prosecutors were sworn in on November 9 before Chief U.S. District Judge Barbara M.G. Lynn.
A graduate of Texas A&M University and the University of Houston Law Center, Ms. Williams previously served as a Senior Attorney at Dykema Cox Smith, where she represented clients before the U.S. Supreme Court, U.S. Court of Appeals for the Fifth Circuit, and the Texas Court of Appeals. She also served as a Term Law Clerk under the Honorable Edith H. Jones of the United States Court of Appeals for the Fifth Circuit, as a Law Clerk for The Honorable Nathan Hecht of the Supreme Court of Texas, and as a Clerk for Sen. John Cornyn, R-TX, at the Senate Judiciary Committee.
Ms. Eggers joins the Northern District of Texas from the Northern District of Florida, where she spent more than 13 years prosecuting federal crimes, focusing on money laundering and fraud. Before that, she served as an Assistant State Attorney in the First Judicial Circuit of Florida’s State Attorney’s Office. Ms. Eggers received her undergraduate degree from Jacksonville State University and her law degree from Florida State University College of Law.
A graduate of Wheaton College and Northeastern University School of Law, Ms. Montes joins the Northern District of Texas from the U.S. Attorney’s Office of the District of Puerto Rico, where she prosecuted cases for the Organized Crime Drug Enforcement Task Force (OCDETF) for three years. Prior to her work there, she spent two years prosecuting cases at the Middlesex District Attorney’s Office in Massachusetts and served as a Law Student Clerk at the United States Court of Appeals for the First Circuit.
Before joining the U.S. Attorney’s Office, Ms. Howey served as an attorney advisor for U.S. District Court Clerk’s Office here in the Northern District of Texas. While there, she evaluated proposed national legislation, rules, and policy to determine impact on local civil and criminal procedure. Prior to that, she serve as Assistant General Counsel at Texas Tech University System, where she received both her undergraduate and law degrees.
“We’re delighted to welcome these talented attorneys to offices across our district,” said Nealy Cox. “I’m confident they will serve the cause of justice with honor.”
USAO NDTX Weekly Roundup -- 11/08/1Read the Press Release
INDICTMENT --- Robert Grafton, 52
On Nov. 7, a federal grand jury indicted Robert Grafton, of Dallas, on three counts of bank robbery. Over a two week period, he allegedly robbed three Capital One bank locations in Dallas, brandishing a weapon and demanding bank tellers hand over the currency in the register. If convicted, Mr. Grafton faces up to 20 years in federal prison on each count. The FBI along with the Dallas Police Department investigated the case.SENTENCING – Lawrence Shahwan, 41
On Nov. 6, 41- year-old Lawrence Shahwan, the lead defendant in the Gas Pipe synthetic cannabinoid case, was sentenced to six years in federal prison. In March 2015, Mr. Shahwan pleaded guilty to conspiracy to contribute a controlled substance analogue. He admits that for years, he manufactured so-called “spice” products – made using chemicals that mimic the effects of THC -- and distributed the product to head shops around Dallas, branded as “Assassin Revolution,” “Venom,” “Wolf Pack Rage,” etc. At sentencing, Chief Judge Barbara M.G. Lynn remarked on the dangers of synthetic cannabinoids, which can be fatal. The Drug Enforcement Administration, the Duncanville, Desoto, and Dallas Police Departments, the Denton County Sheriff’s Office, Internal Revenue Service Criminal Investigation, and the U.S. Marshals Service conducted the investigation. More about the case here.INDICTMENT -- Gary Lyn Black, 60
On Nov. 6, a federal grand jury indicted Gary Lyn Black – also known by the street name “Godsmack” -- for distributing more than 500 grams of methamphetamine, possessing a firearm in furtherance of a drug conspiracy, possessing a firearm as a convicted felon, and maintaining a drug-involved premises. If convicted, Mr. Black, of Johnson County, faces a mandatory minimum sentence of 10 years in federal prison and a maximum sentence of life. The Cleburne Stop the Offender Program investigated the case.INDICTMENT – Gustavo Palafox-Acuna & Marcos Escalante-Acuna
On November 7, 2018, a federal grand jury indicted Gustavo Palafox-Acuna and Marcos Escalante-Acuna for conspiracy to possess with intent to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. The two were arrested on October 18, 2018, with approximately 113 pounds of methamphetamine.INDICTMENT – Eugene Mitchell, 44
On Nov. 6, a federal grand jury indicted Eugene Mitchell, of Chicago on a felon in possession of a firearm charge. If convicted, Mr. Mitchell faces up to 10 years in federal prison. The Bureau of Alcohol, Tobacco, Firearms, & Explosives and the Lancaster Police Department conducted the investigation.US Attorney Outlines North Texas Election Day ProgramRead the Press Release
U.S. Attorney Erin Nealy Cox has announced that Assistant United States Attorney (AUSA) Nicole Dana will lead the efforts of her office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 6, 2018, general election.
AUSA Dana has been appointed to serve as the District Election Officer (DEO) for the Northern District of Texas, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
“Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud,” said Nealy Cox. “The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 6, 2018, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Nealy Cox stated that AUSA/DEO Nicole Dana will be on duty in this District while the polls are open. She can be reached by the public at by phone at 214-659-8600.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 972-559-5000.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or 202-307-2767, by fax at 202-307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
According to U.S. Attorney Nealy Cox, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
USAO NDTX Weekly Roundup -- 11/01/18Read the Press Release
SENTENCING -- Tanya Scroggins
On Oct. 25, Tanya Lynn Scroggins was sentenced to 17 ½ years in federal prison for her role in a methamphetamine ring managed by white supremacists. In July, Scroggins pled guilty to one count of possession with intent to distribute, after Texas DPS agents found her with a significant amount of methamphetamine, multiple firearms, and a large amount of cash.SENTENCING – Garry Newton, 21
On Oct. 31, Garry Dewayne Newton was sentenced to just shy of 3 years in federal prison on drug and firearms charges. He was one of 15 defendants indicted in December 2017 following an ATF investigation targeting a violent Dallas street gang known as “YNB StretchGang.” After agreeing to sell meth to a customer he later learned was an uncover law enforcement officer, Newton was arrested carrying multiple drugs, drug paraphernalia, and a stolen 9mm Taurus handgun. He later pleaded guilty to possession with intent to distribute methamphetamine and possession of a firearm by a user of a controlled substance. Newton admits that he and other YNB StretchGang members sold controlled substances, including meth, cocaine, alprazolam (Xanax), and marijuana, and produced music videos glorifying violence.SENTENCING -- Shakil Mukadam
On Oct. 31, Shakil Mukadam was sentenced to more than 6 years in federal prison for robbing four Dallas banks over a two-day period in December 2017. In March, Mukadam pled guilty to one count of robbing a Wells Fargo Bank in Dallas but admitted robbing a Chase Bank and two BBVA Compass Bank locations as well. The FBI conducted the investigation.SENTENCING -- Antwan Dickerson
On Oct. 31, Antwan Dickerson was sentenced to 2 years in federal prison for firearm possession by a convicted felon. When Dallas Police Department executed a narcotics search warrant at Dickerson’s residence, they found multiple guns inside, including a shotgun that had been stolen from a federal firearms licensee. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas Police Department investigated the case.PLEA – Patricia Armstrong, 32
Patricia Armstrong of Coppell, TX pleaded guilty to conspiracy to commit health care fraud on Nov. 1. Armstrong admits to participating in a scheme to defraud Medicare and Medicaid of over $60 million by causing those programs to be billed for hospice beneficiaries who were ineligible for hospice care, were fraudulently recruited to hospice care, or who were not provided billed-for services. She now faces up to 10 years in prison and a fine of up to $250,000. The FBI, HHS-OIG, and MFCU investigated.SENTENCING – Yousef Hendi, 26
On Nov. 1, Yousef Hendi was sentenced to 40 years’ imprisonment after pleading guilty to multiple counts of sexual exploitation of children. Hendi, a Palestinian national, coerced more than 34 minors, many of them inside the U.S., into sending sexually explicit images and videos. (Investigators have identified 19 of those victims thus far.) Hendi found a number of his victims by impersonating a female and joining an online, teen-only group, where he would challenge members to prove they were really female. Once Hendi had obtained a nude image of the minor, he would then threaten and coerce her into sending additional sexually explicit images and videos. HSI conducted the investigation.USA Erin Nealy Cox Appointed to AG’s China InitiativeRead the Press Release
Attorney General Jeff Sessions today appointed U.S. Attorney for the Northern District of Texas Erin Nealy Cox – along with four other U.S. Attorneys, from New York, California, Alabama and Massachusetts – to serve on the Justice Department’s China Initiative combating economic espionage by Beijing.
This group is led by Assistant Attorney General for National Security John Demers and composed of five U.S. Attorneys and several other Department of Justice leaders, including senior FBI officials and Assistant Attorney General Brian Benczkowski of the Criminal Division.
The new initiative will aggressively pursue high-priority Chinese theft of trade secret and economic espionage cases.
“We cannot and will not allow foreign actors to take advantage of American ingenuity to line their own pockets,” said Nealy Cox. “I am proud to join this important effort and look forward to advancing the China initiative with my DOJ colleagues across the country.”
As the Attorney General noted at a press conference in Washington, DC this afternoon, despite China’s public commitment that it would not target American companies for economic gain, Chinese economic espionage against the United States has been rapidly increasing.
“Discoveries that took years of work and millions of dollars in investment here in the United States can be stolen by computer hackers or carried out the door by an employee in a matter of minutes,” Sessions said today. “Enough is enough.”
Initiative Goals:
• Identify priority trade secret theft cases, ensure that investigations are adequately resourced, and work to bring them to fruition in a timely manner
• Develop an enforcement strategy concerning non-traditional collectors (e.g., researchers in labs, universities, and the defense industrial base) that are being coopted into transferring technology contrary to U.S. interests
• Educate colleges and universities about potential threats to academic freedom and open discourse from influence efforts on campus
• Apply the Foreign Agents Registration Act to unregistered agents seeking to advance China’s political agenda, bringing enforcement actions when appropriate
• Equip the nation’s U.S. Attorneys with intelligence and materials they can use to raise awareness of these threats within their Districts and support their outreach efforts
• Implement the Foreign Investment Risk Review Modernization Act (FIRMA) for DOJ (including by working with Treasury to develop regulations under the statute and prepare for increased workflow)
• Identify opportunities to better address supply chain threats, especially ones impacting the telecommunications sector, prior to the transition to 5G networks
• Identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses
• Increase efforts to improve Chinese responses to requests under the Mutual Legal Assistance Agreement (MLAA) with the United States
• Evaluate whether additional legislative and administrative authorities are required to protect our national assets from foreign economic aggression
US Attorneys in Working Group:
• Erin Nealy Cox (Northern District of Texas)
• Richard P. Donoghue (Eastern District of New York)
• Andrew E. Lelling (District of Massachusetts)
• Jay E. Town (Northern District of Alabama)
• Alex G. Tse (Northern District of California)
25th Defendant in Wichita Falls Drug Bust Pleads GuiltyRead the Press Release
Thirty four year-old Lonta Hobbs, the final defendant associated with a July 2018 drug bust that netted 25 defendants in Wichita Falls, has pleaded guilty, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
One defendant, Chmira Denise Williams, pleaded guilty to misprision of a felony.
The remaining 24 defendants associated with the bust pleaded guilty to conspiracy to possess with intent to distribute methamphetamine:
• Floyd Raymond Richardson
• Wayland Brent Ballard
• Brad Deshaun White
• Christopher Davis
• Virginia Ann White
• Trevor Clifford Scott *
• Teasie Winnell Scott
• Terry Lamar Murray
• John Dupree Wesley
• Javaris Damon Scott *
• Djuanna Kyvon Newman
• Chadrick Deshawn McBride
• Galvin Lamar Daniels
• Demarcus Madison
• Shelby Breanna Funk
• Christian Joseph Chavez
• Adam Domingo Garcia
• Lonta Hobbs
• Candace Rebecca Williams
• Aaron Floyd Taylor
• Jacinda Renee Burris
• Addis Scales
• Alvin Gerald Travis
• Amber Dawn Hatcher
Denene Griggs, 24, also pleaded guilty yesterday to concealing a person from arrest. She admits to sheltering two fugitives from the drug bust – her child’s father, Javaris Damon Scott, and his brother, Trevor Clifford Scott – inside her apartment. (The Scott brothers had been on the run after authorities uncovered their role in the drug conspiracy. They were arrested on September 6, 2018, when FBI and Wichita Falls Police Department investigators caught them climbing out the window of Griggs' Wichita Falls apartment.)
“As the U.S. Attorney, I lead an office that prosecutes a variety of very important federal cases, but few investigations are more important than those that protect the public from the danger and devastation caused by illegal drug trafficking,” Nealy Cox said at a press conference in Wichita Falls on July 12, following the bust.
The Federal Bureau of Investigation, Wichita Falls Police Department, Texas Department of Public Safety, Wichita County Sherriff’s Office, Vernon Police Department, 46th Judicial District Attorney’s Office, and the U.S. Marshals Service conducted the investigation. Assistant U.S. Attorney Shawn Smith is prosecuting the case.
NDTX Weekly Roundup -- 10/25/18Read the Press Release
PLEA – Larry Duncan, 72
On Oct. 22, four-term Dallas City Councilman Larry Duncan, a former president of Dallas County Schools’ Board of Trustees, pleaded guilty to one count of tax evasion. The charge stems from the federal investigation into the Dallas County Schools bribery scandal, which claimed its fifth conviction Monday. Press release here.INDICTMENT* – Jeffrey Richie, 53, & Wendy Richie, 58
On Oct. 23, a federal grand jury indicted a Red Oak, Texas couple who allegedly embezzled $14.5 million from retirement plans they managed. Jeffrey Richie, 53, and Wendy Richie, 58, co-owners of Vantage Benefits Administrators, were charged with conspiracy, theft from an employee benefit plan, wire fraud, and aggravated identify theft after they allegedly misappropriated funds from at least 1,000 participants in at least 20 employer’s plans. Press release here.INDICTMENT* – Michelle North, 53
On Oct. 23, a federal grand jury indicted Michelle North, of Balch Springs, for theft of government funds and making false statement to the Social Security Administration (SSA). She allegedly received income-based disability payments from SSA while also receiving a large amount of Indian tribal funds. Ms. North failed to accurately tell SSA how much money she was receiving from the Tribal Counsel. If convicted on this case, Ms. North will have to pay back approximately $32,000 in restitution. SSA Office of the Inspector General investigated the case.PLEA – Chris Faulkner, 41
On Oct. 23, Texas oil-and-gas mogul Christopher A. Faulkner pleaded guilty to securities fraud, engaging in illegal monetary transactions, and tax evasion. A frequent media commentator and self-proclaimed “frack master,” Faulkner admits he bilked investors out of millions of dollars and concealed millions more from the IRS. He now faces 12 years in prison. The IRS-CI, FBI, and U.S. Postal Inspection Service investigated. Press release here.SENTENCING – Bill Day, 39 & Laura Day, 47
On Oct. 23, Bill and Laura Day, of Seymour, Texas were both sentenced in Wichita Falls federal court to 30 years in prison for child sexual exploitation. The husband and wife duo admitted to producing sexually explicit images involving an infant in 2015. The images were discovered while the Department of Public Safety was conducting a child pornography investigation of the Days in May 2017. DPS and HSI conducted the investigation.SENTENCING – Miller Hogan, 44
On Oct. 24, Miller Hogan was sentenced to nearly 4 years in federal prison for his role in a cocaine distribution conspiracy. In March, Hogan pled guilty to one count of conspiracy to possess with the intent to distribute, after Dallas Drug Enforcement Administration agents intercepted him on a wiretap negotiating and purchasing 1.5 kilograms of cocaine from a codefendant.SENTENCING – Mohammed Natour, 33
On Oct. 24, Mohammed Natour was sentenced to more than 12 years in federal prison for his role in a RICO conspiracy. In March, Natour pled guilty for his participation in a transnational criminal enterprise, comprised mostly of Colombian nationals or individuals of Colombian descent, whose members targeted and robbed traveling diamond and jewelry salesmen across the United States. Natour participated in four armed robberies of traveling diamond and jewelry salesmen over a one-year period, between 2014 and 2015, in Oklahoma, Texas, and Florida.SENTENCING – Glenn Eugene Halfin, 64
On Oct. 24, a 64-year-old Grapevine, man was sentenced to 12 months in federal prison for a hate crime after he repeatedly threatened an African American family living in the apartment above him because of their race. Glenn Eugene Halfin admits he hung a baby doll dangling from a noose around a railing in their apartment complex. He pleaded guilty to interfering with housing rights. The FBI and Grapevine Police Department, in conjunction with the Tarrant County District Attorney’s Office, investigated. Press release here.SENTENCING – Horacio Alpizar, 58
On Oct. 24, Horacio Alpizar was sentenced to 5 years in federal prison for his role in a cocaine distribution conspiracy. In April, Alpizar pled guilty to one count of conspiracy to possess with the intent to distribute, after Dallas Drug Enforcement Administration agents found $186,681 of drug proceeds in his home along with drug paraphernalia. In a separate residence, DEA agents found a firearm, drug paraphernalia, cocaine, and a garage set up as a mechanic shop to load and unload vehicles with drugs and drug proceeds. As part of his punishment, Alpizar was ordered to forfeit the cash, firearm, two vehicles, and three properties, all totaling nearly one million dollars.PLEA – Denene Griggs, 24
On Oct. 25, Denene Griggs of Wichita Falls pleaded guilty to concealing a person from arrest. She admits to sheltering two fugitives – her child’s father, Javaris Damon Scott, and his brother, Trevor Scott -- inside her apartment. The Scott brothers, wanted in connection with a July 12 drug bust, were arrested Sept. 6, when officers spotted them climbing out of Grigg’s window. She now faces up to 5 years in prison. The FBI, DEA, DPS – Criminal Investigation Division, Wichita Falls PD, Rhome PD, and Iowa Parks PD investigated.* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Grapevine Man Sentenced for Hate CrimeRead the Press Release
A 64-year-old Grapevine, Texas, man was sentenced today to 12 months in federal prison for a hate crime, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox and Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division.
In July, Glenn Eugene Halfin pleaded guilty to interfering with housing rights after he repeatedly threatened and intimidated an African American family living in the apartment above him because of their race.
In court documents, Mr. Halfin admits that in December 2017, he purchased a baby doll at Walmart, fashioned a rope into a noose, and slipped the noose around the baby doll’s neck. He then hung the noose from the railing directly in front of the staircase the victims used to access their apartment.
The defendant “recognized that this display would be particularly intimidating for the African-American victims who had a young daughter,” documents say.
“No family should be afraid for children in their own home,” said U.S. Attorney Nealy Cox. “The Northern District of Texas will not tolerate crimes born of bigotry. Prosecuting those that persecute others based on race is a priority for my office.”
“The Justice Department will not tolerate unlawful acts of racial intimidation,” said Acting Assistant Attorney General Gore. “We will continue to prosecute hate crime offenders like Halfin to ensure that all families can feel safe in their own homes, regardless of their race, religion, or national origin.”
The Federal Bureau of Investigation and the Grapevine Police Department, in conjunction with the Tarrant County District Attorney’s Office, conducted the investigation. Trial Attorney Rebekah Bailey of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Nicole Dana prosecuted the case.
Couple Indicted for Embezzling $14.5 Million from Retirement FundsRead the Press Release
A federal grand jury indicted a Red Oak, Texas couple who allegedly embezzled $14.5 million from retirement plans they managed, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
Jeffrey Richie, 53, and Wendy Richie, 58, co-owners of Vantage Benefits Administrators, were charged with conspiracy, theft from an employee benefit plan, wire fraud, and aggravated identify theft.
According to the indictment, Vantage served as third party administrator for dozens of retirement funds, including several 401(k)s. With her husband’s knowledge, Ms. Richie -- posing as various beneficiaries -- allegedly submitted fraudulent distribution requests to the retirement fund custodian, Matrix Trust Co. Instead of depositing the money into beneficiaries’ accounts, however, she transferred it into Vantage’s operating account. The couple allegedly used those funds to pay Vantage payroll and other operating expenses, as well as personal expenses, including mortgage and escrow payments, farming equipment, and home décor.
The Richies misappropriated funds from at least 1,000 plan participants in at least 20 employer’s retirement plans, prosecutors say.
“This couple took advantage of innocent people who were working hard and saving for their future,” said Nealy Cox. “We cannot permit such brazen financial misconduct to go unchecked.”
“An important mission of the Office of Inspector General is to investigate allegations of fraud related to U.S. Department of Labor programs. We will continue to work with DOL’s Employee Benefits Security Administration and our law enforcement partners to safeguard retirement benefits intended for American workers,” stated Steven Grell, Special Agent-in-Charge, Dallas Region, U.S. Department of Labor Office of Inspector General.
"Theft from pension funds violates the law and deprives plan participants of their hard-earned retirement benefits," said Deborah Perry, Employee Benefits Security Administration (EBSA) Regional Director, Dallas. "The U.S. Department of Labor will continue to aggressively investigate fiduciaries and others who misuse assets of private-sector benefit plans."
If convicted on all counts, the Richies face up to 81 years in federal prison.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
The Department of Labor – Office of Inspector General, the Federal Bureau of Investigation, the Department of Labor’s Employee Benefits Security Administration, and the Texas State Auditor’s Office conducted the investigation. Assistant U.S. Attorney Christopher Stokes is prosecuting the case.
Oil-and-Gas Businessman Pleads Guilty to Defrauding Investors out of MillionsRead the Press Release
Texas oil-and-gas mogul Christopher A. Faulkner has pleaded guilty to securities fraud, engaging in illegal monetary transactions, and tax evasion, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
A frequent media commentator and self-proclaimed “frack master,” Faulkner, 41, admits he bilked investors out of millions of dollars and concealed millions more from the IRS.
According to documents unsealed today, from 2011 to 2016, Faulkner raised more than $71 million from working interest investors, who took on a fixed portion of projected drilling costs in exchange for a share in his oil and gas profits.
But in marketing materials distributed to these investors, Faulkner inflated the estimated drilling cost by as much as 800 percent, allowing his three companies – Breitling Energy Corp., Crude Energy, LLC and Patriot Energy, Inc. – to pocket the difference between his projections and the actual cost of the wells.
He also gave would-be investors a “Geology Report,” ostensibly prepared by an independent expert, estimating future production for each well. Unbeknownst to them, the report was generated by a geologist on Faulkner’s payroll, and consistently overstated the wells’ potential.
Faulkner routinely oversold shares, then transferred investment funds into comingled accounts, despite promising investors their money would be deposited in a segregated bank account used only to pay for drilling activities.
Over a five-year period, he admits, he diverted approximately $23 million for his own personal benefit, shelling out hundreds of thousands of dollars at a time for luxury travel, professional concierge services, maintenance of multiple residences, and at least seven vehicles, including an Aston Martin, a Bentley, and a Mercedes Benz. During that time, his companies paid out just $6.2 million to investors, according to the criminal complaint filed in June.
“As Mr. Faulkner continued to deceive his investors about drilling expenses and potential oil well output, he spent their millions of investment dollars on his lavish lifestyle, ” said Nealy Cox. “Let this case send a message that this type of egregious investor fraud will be prosecuted to the fullest extent of the law.”
In 2014, Faulkner says, he concealed at least $4.5 million in taxable income from the federal government, failing to file a return or pay income tax.
Following an FBI raid on his offices in Dallas in April 2016, Faulkner was arrested in June 2018 at the Los Angeles International Airport, and later transported to Texas. He is currently in federal custody at FCI Seagoville, and now faces 12 years in prison and $350,000 in fines. According to the terms of his plea agreement, he will be required to pay restitution to those he defrauded.
Faulkner’s guilty plea comes on the heels of a civil settlement with the Securities & Exchange Commission (SEC), which filed a complaint in June 2016 alleging multiple violations of federal securities laws. Faulkner’s settlement with the SEC, which is subject to court approval, orders him to disgorge $23.8 million; permanently enjoins him from violating, among other things, the antifraud provisions of the federal securities laws and from participating in any unregistered securities transactions; and bars him from serving as an officer or director of any SEC-reporting company and from participating in any offering of a penny stock.
The Internal Revenue Service – Criminal Division, Federal Bureau of Investigation, and U.S. Postal Inspection Service conducted the criminal investigation; Assistant U.S. Attorneys Christopher Stokes, Katherine Miller, and Mark Tindall prosecuted the criminal case.
Amid Bribery Scandal, Former Dallas City Councilman Pleads Guilty to Tax EvasionRead the Press Release
This morning, four-term Dallas City Councilman Larry Duncan, a former president of Dallas County Schools’ Board of Trustees, pleaded guilty to one count of tax evasion before Chief Judge Barbara M.G. Lynn, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
The charge stems from the federal investigation into the Dallas County Schools bribery scandal, which has now claimed its fifth conviction.
According to plea papers, between 2012 and 2016, Mr. Duncan, 72, accepted nearly a quarter of a million dollars in campaign contributions from Force Multiplier Solutions president Robert Leonard, who happened to be pursuing lucrative stop-arm camera contracts with DCS.
Instead of putting Mr. Leonard’s money towards legitimate campaign expenses associated with his DCS re-election bid, Mr. Duncan admits he used at least $184,726.03 for personal benefit, taking out cash withdrawals, passing on money to his wife, and even using funds to pay car-related expenses.
He then failed to disclose the money he diverted from the campaign on his tax returns, hiding the income from the IRS.
“Today marks another important step in our ongoing commitment to expose public corruption,” said Nealy Cox. “Those who seek to capitalize on positions of power undermine public trust in the very system they are meant to serve. And that is something we cannot abide.”
“Being a public official comes with its share of rewards and responsibilities; part of those responsibilities is to report all of your taxable income and pay your taxes. Deliberate failure to do so is a serious matter, and IRS Criminal Investigation is dedicated to ensuring everyone is properly reporting and paying in accordance with the tax laws,” said Tamera Cantu, Special Agent-in-Charge of the IRS Criminal Investigation Division’s Dallas Field Office.
“The FBI remains committed to investigating anyone associated with the financial exploitation at Dallas County Schools,” said Eric K. Jackson, Special Agent-In-Charge of the FBI Dallas Division. “This latest indictment continues the efforts of the FBI, along with our partners at the IRS and U.S. Attorney’s Office, to protect and defend Dallas taxpayers from those who would exploit their position for personal gain.”
Mr. Duncan now faces up to a year in federal prison. In his plea agreement, Mr. Duncan agreed to reimburse the government for its tax loss.
Duncan’s campaign contributor, Mr. Leonard, along with former Mayor Pro Tem Dwaine Caraway, pleaded guilty in August to conspiracy to commit honest services wire fraud, after the DCS investigation revealed that Mr. Leonard had funneled over $3 million in bribes to Caraway and Dallas County Schools Superintendent Ricky Sorrells. Mr. Sorrells pleaded guilty in April to conspiracy to commit honest services wire fraud. Another defendant, Slater Swartwood, who operated the shell companies used to conceal the bribes, admitted in December 2017 to conspiring to launder money.
Dallas County Schools, an agency that collected property taxes to fund its fleet of around 2,000 buses, was shuttered in November 2017, approximately $103 million in debt.
The Internal Revenue Service Criminal Investigation unit (IRS-CI) and Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Andrew Wirmani, Marcus Busch, Chad Meacham, and Joseph Magliolo prosecuted the case.
Violent Pimp Sentenced to Life Behind BarsRead the Press Release
A Dallas-area pimp who preyed on teenage girls was sentenced to life in prison this afternoon, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Allen Nash, 31, was convicted in April of sex trafficking of children, conspiracy to commit sex trafficking, sex trafficking through force, fraud or coercion, transportation of a minor to engage in commercial sex acts, and illegal possession of ammunition after he forced two victims, aged 17 and 19, into the illicit sex trade in the fall of 2014.
During his four day trial, victims told jurors Nash lured them into engaging in commercial sex acts by promising a better life. Instead, he joined forces with the owner of the “Doll House” massage parlor, demanding the girls work day and night. He confiscated their proceeds and used violence and threats to keep them from leaving.
When one victim dozed off in a motel room, Nash dragged her out of bed and slammed her head into a toilet, cracking the seat with her skull – a warning to other victims about what could happen to them if they failed to earn enough money.
Nash recruited the 17-year-old via Facebook, with promises of gifts and trips, evidence showed. One day, he showed up at her mother’s apartment in a Mercedes to drive her to a liaison.
“I was a vulnerable little girl in need of guidance. I was desperate for help. Allen Nash knew that,” the young woman, now 22, said in an impact statement read aloud in court today. “I think it’s safe to say the devil lives in him.”
Nash routinely uploaded profanity-laced videos of himself clutching fistfuls of dollar bills, boasting about “ho money,” prosecutors said. He, Doll House owner Connie Su Moser, and manager Kum Shugars arranged illicit meetups on Backpage.com, thinly disguised as “body rub” treatments.
“Preying on vulnerable young women is despicable, and this sentence validates that important message,” said Nealy Cox. “I’m proud of the women who came forward to help us bring Mr. Nash to justice. We will continue to prioritize human trafficking cases across the Northern District of Texas.”
Ms. Moser, who pleaded guilty to racketeering and misprision of a felony in July 2017, had already been sentenced to 8 years in prison. Ms. Shugars, who testified at Nash’s trial, pleaded guilty to racketeering in June 2017, and was sentenced to just over 2 years in prison. Authorities seized over a million dollars in assets from Ms. Moser, including more than $400,000 in cash from her home, $70,000 in her bank account, and her 2015 Lexus – all of which the court determined were proceeds from the trafficking operation.
The Department of Homeland Security, the Texas Department of Public Safety, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Shreveport Police Department and the Federal Bureau of Investigations’ Shreveport office conducted the investigation. Assistant U.S. Attorneys Cara Foos Pierce, Myria Boehm and OCDETF Section Chief Rick Calvert prosecuted the case.