Northern District of Texas
Press releases recorded for this federal judicial district.
Dallas Man Arrested at Los Angeles International Airport on $62.6 Million Investment Fraud SchemeRead the Press Release
DALLAS—Christopher A. Faulkner, 41, from Dallas, Texas, was arrested Monday, June 18, 2018, at the Los Angeles International Airport by special agents with the Internal Revenue Service-Criminal Division (IRS-CI), Federal Bureau of Investigation (FBI), with assistance from Customs and Border Patrol. Faulkner was arrested on a federal complaint, charging him with securities fraud, mail fraud and money laundering, in connection with a scheme to defraud investors of millions of dollars. The announcement was made today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Faulkner made an appearance Monday in Los Angeles, California before a U.S. Magistrate Judge and will remain in custody pending further court hearings in Dallas, Texas.
According to the filed criminal complaint affidavit, between 2011 and 2016, Faulkner established and controlled several oil and gas companies located in Texas. On April 28, 2016, the IRS-CI and FBI executed search warrants and seized documents and electronic data from Breitling Oil and Gas Inc., Crude Energy, LLC and Patriot Energy, Inc., offices located in Dallas, Texas.
According to the criminal complaint affidavit, as part of the scheme to defraud investors, Faulkner made fraudulent misrepresentations to investors and raised over $62.6 million in investor funds through the sale of working interest units in 16 drilling prospects.
The affidavit alleges Faulkner’s companies marketed the working interest programs using multiple forms of misrepresentations, to include the hyperinflation of reasonable estimated costs to drill and test the well, which resulted in huge undisclosed profits to Faulkner’s companies. Well operators for each of Faulkner’s prospects created a written estimate of costs to drill a well in the form of an “Authority for Expenditure” (“AFE”) and provided these to Faulkner. However, these estimates were never included in the offering materials provided to investors. Instead, examination of emails and Faulkner’s computer, seized from his office, showed he commonly created AFEs in the name of the operator, but grossly inflated the estimated costs.
Additionally, the affidavit claims Faulkner made fraudulent misrepresentations to investors by having oversold many of the programs the company offered, and used inflated reports and production estimates supplied by a third party geologist. An examination of Faulkner’s seized computer and emails, revealed Faulkner was closely affiliated to the third party geologist and increased the already inflated estimates.
The affidavit further alleges that substantially all the investor money was transferred from segregated well accounts into general and operating bank accounts. Faulkner diverted significant amounts of investor funds for his own benefit while investors received minimal returns on their investment.
According to the affidavit, between 2011 and 2013, Breitling received investments totaling $41.4 million. However, the investors received less than $2.4 million of their initial investment. Faulkner, during this same period of time, received approximately $8 million in cash disbursements from Breitling. In addition to these direct cash payments, Faulkner also received at least $1.9 million of additional benefits by virtue of Breitling paying for personal expenses on credit cards and more than $2 million of investor funds on personal expenses in direct charges to its bank accounts.
Additionally, the affidavit states, in 2014 and 2015, Faulkner, by virtue of Crude Energy, LLC and Patriot Energy, Inc., diverted $13.8 million of commingled investor funds by means of $6.1 million in cash disbursements and approximately $7.7 million in personal American Express card charges. Additionally, the companies also paid more than $4 million in personal expenses through its bank accounts.
The complaint alleges Faulkner used the investor money to finance a lavish lifestyle that included high end vehicles, expensive jewelry, clothing, art, home improvements, professional concierge services, and chartered flights.
A federal criminal complaint is a written statement of the essential facts of the offense charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment. The maximum statutory penalty for the charged offenses is 35 years in federal prison and a $750,000 fine.
The investigation is being conducted by the Internal Revenue Service-Criminal Division, Federal Bureau of Investigation and U.S. Postal Inspection Service. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
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United States Attorney Announces the Appointment of a New Federal ProsecutorRead the Press Release
DALLAS, Texas — United States Attorney Erin Nealy Cox announced today the appointment of Rebekah Ricketts as a new Assistant United States Attorney. Ms. Ricketts was sworn in today before Chief Judge Barbara M. G. Lynn. Ms. Ricketts is assigned to the Violent and Major Crimes Section of the office’s Criminal Division.
Ms. Ricketts joins the U.S. Attorney’s Office from Gibson, Dunn & Crutcher LLP, where she was a senior litigation associate. Previously, Ms. Ricketts served clerkships for U.S. District Judge Richard Sullivan in the Southern District of New York, Judge Jose Cabranes on the U.S. Court of Appeals for the Second Circuit, and Justice Clarence Thomas on the U.S. Supreme Court. Ms. Ricketts received her undergraduate degree from the University of Texas and her law degree from Yale University.
“It’s my privilege to lead an office filled with incredibly talented and dedicated people who work tirelessly to carry out our mission of justice and fulfill our promise to the people of our community,” said U.S. Attorney Nealy Cox. “We are proud to welcome Rebekah Ricketts to our office. I know she will make an immediate impact in our District and serve the citizens of the United States with honor and distinction.”
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Mexican Citizen Sentenced to 235 Months in Federal PrisonRead the Press Release
DALLAS — Javier Contreras Vargas, aka “Cuñado,” a citizen of Mexico and in the United States illegally, was sentenced Monday, June 11, 2018, before U.S. District Judge David C. Godbey for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Vargas was sentenced to 235 months in federal prison following his guilty plea in August 2017, to one count of conspiracy to possess with intent to distribute and to distribute a schedule II controlled substance. He was in the United States illegally at the time of the offense and will be deported after serving his sentence. Vargas has been in custody since his arrest in August 2016.
Vargas was charged along with twenty-one others with various offenses related to a methamphetamine distribution conspiracy. Of the twenty-one charged, two are awaiting trial.
According to documents filed in the case, between January 1, 2015, and July 7, 2015, Vargas and his coconspirators conspired to distribute methamphetamine and used coded language to purchase multiple kilograms of the illegal substance so that he could distribute the drug to other people.
On July 7, 2015, law enforcement conducted a traffic stop and Vargas was found to be in possession of 2 kilograms of methamphetamine. Officers subsequently searched his residence and found approximately 17 kilograms of methamphetamine. Law enforcement also seized a firearm, and several thousand dollars in United States currency. As part of the plea agreement, Vargas agreed to forfeit the items seized, including the firearm and $25,137.00.
The Federal Bureau of Investigation investigated, with assistance from the Dallas Police Department and the Internal Revenue Service Criminal Investigations Division. Assistant U.S. Attorney George Leal prosecuted.
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FBI Agent Sentenced for Falsifying Information When Applying for a PassportRead the Press Release
FBI Agent Sentenced for Falsifying Information When Applying for a Passport
El PASO, Texas — Rhonda Lynn Chesser Lindstrom, 41, formerly of El Paso, Texas was sentenced Thursday, June 7, 2018, by Senior U.S. District Judge David Briones to four years probation and a $1,000 fine, on each count of the indictment, said terms to run concurrent, and to home confinement for a period of six months, following a four-day trial in March 2018, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Chesser Lindstrom was found guilty on three counts of false statement in application for a passport. In sentencing, the Court found Chesser Lindstrom had willfully obstructed justice.
Because Chesser Lindstrom worked as a Special Agent in the El Paso FBI office, and presented cases to the Western District of Texas U.S. Attorney’s office, the Western District of Texas Assistant U.S. Attorneys were recused, and Northern District of Texas Assistant U.S. Attorney Paulina Jacobo was appointed as a Special Attorney to the Attorney General.
According to evidence presented at trial, on June 10, 2014, Chesser Lindstrom personally appeared at the United States Department of State, El Paso Passport Agency (EPPA), and submitted an Application for a U.S. Passport. As required by the application, Chesser Lindstrom provided as proof of citizenship a State of Louisiana Birth Certificate issued on August 22, 2011. The date of birth on the birth certificate was August 26, 1977. As proof of identity, Chesser Lindstrom provided a State of Maryland Driver’s License with a date of birth of August 26, 1977.
A Passport Specialist conducted a thorough and detailed review of Chesser Lindstrom’s Passport Application, and noticed that the birth certificate appeared to have been altered. Specifically, the birth certificate showed clear signs of handwritten alterations in three places, the birth number, birth date, and the file date. The birth certificate had erasures and numbers rewritten in the three places. Since it was obvious that the birth certificate was altered, the case was referred to the Fraud Prevention Manager (FPM).
On June 12, 2014, the Passport Application was further reviewed by the Fraud Prevention Office to verify all information submitted by Chesser Lindstrom. The results of the review indicated that Lindstrom’s correct date of birth was August 26, 1976; no record was found of a Rhonda Chesser born on August 26, 1977, as indicated on the birth certificate she provided to the EPPA.
The EPPA asked for additional information and Chesser Lindstrom provided additional false documents after enticing her older sister to participate in creating those documents.
The Department of Justice Office of Inspector General investigated the case, assisted by the U.S. Department of State, Diplomatic Security Service, Criminal Fraud Investigations, and the United States Department of State, El Paso Passport Agency Program Fraud Office investigated. Assistant U.S. Attorneys Paulina Jacobo and Chris Wolfe prosecuted.
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Mabank, Texas Man Sentenced to 240 Months in Federal PrisonRead the Press Release
DALLAS — Noel Guest, 62, of Mabank, Texas, was sentenced last week by U.S. District Judge Jane J. Boyle to 240 months in federal prison, following his guilty plea in November 2016 to transportation and shipment of child pornography, announced Erin Nealy Cox, United States Attorney for the Northern District of Texas.
Guest has been in custody since his arrest in May 2016.
According to the factual resume filed in the case, the Federal Bureau of Investigation (FBI) was investigating a specialized peer-to-peer file-sharing program (P2P) in an undercover capacity. This specialized P2P program functions as a closed network similar to Facebook, where users choose who to invite into their network and what to share with their invited contacts.
On May 13, 2016, a search warrant was executed at Guest’s residence in Mabank, Texas and agents seized several electronic devices. A forensic examination revealed that the electronic devices contained over 602 images of child pornography and 2 videos of child pornography. The examination also revealed that Guest chatted with other like-minded individuals on the P2P network to obtain their passwords for their shared materials and that he also traded child pornography with them by providing them with the password to his child pornography collections and that Guest made available approximately 4344 shared files of child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Federal Bureau of Investigation and the Plano Police Department investigated the case. Assistant U.S. Shane Read prosecuted.
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Six Individuals Arrested on Drug Conspiracy ChargesRead the Press Release
FORT WORTH, Texas — Thomas Cody, of Stephenville, Texas, Chalee Campbell, of Fort Worth, Texas, Jacob Hendricks, aka, “Jake Hendricks, “of Clifton, Texas, Terry McConathy, of Benbrook, Texas, Rebecca Mullins, of Stephenville, Texas, and Christal Walker, of De Leon, Texas, are in federal custody following their arrests May 29, 2018, on federal drug conspiracy charges, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
The defendants were all charged with one count of conspiracy to possess with the intent to distribute a controlled substance, and made their initial appearance Tuesday, May 30, 2018, before U.S. Magistrate Judge Jeffrey Cureton.
According to the Complaint filed on May 10, 2018, from approximately July 2017 through January 2018, 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. A defendant is entitled to the presumption of innocence until proven guilty. The government has 30 days to present the matter to a grand jury for indictment. The maximum statutory penalty for the offense charged is 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 and Assistant United States Attorney Shawn Smith is in charge of the prosecution.
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Bank Employee Sentenced for Theft of the First State Bank Graham, TexasRead the Press Release
ABILENE — Edalia Martinez Oliver, 44, of Woodson was sentenced Friday, May 25, 2018, by Senior U.S. District Judge Sam R. Cummings to serve a total of 12 months in federal prison, and ordered to pay restitution in the amount of $41,992.20, following her guilty plea in February 2018 to Bank Theft from the First State Bank Graham (Texas), in Woodson Texas, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Oliver pleaded guilty to one count of Bank Theft; that is, to take and carry away, with intent to steal and purloin, money in an amount exceeding $1,000.00 belonging to, and in the care, custody, control, management, and possession of First State Bank Graham (Texas), Woodson, Texas, a bank whose deposits were insured by the Federal Deposit Insurance Corporation.
According to documents filed in the case, on June 29, 2017, FSB management conducted a surprise teller and vault cash audit at its Woodson branch. Oliver told FSB management that there would be money missing out of the vault. Upon completion of the cash audit, FSB learned that $38,592.20 was missing. On June 29 and 30, 2017, Oliver admitted to FSB management and the Sheriff of Throckmorton County, Texas that she had stole the money to gamble and had a gambling problem.
The FBI and Throckmorton County Texas Sheriff’s Office investigated the case. Assistant U.S. Attorneys Jeffrey Haag and Beverly Chapman were in charge of the prosecution.
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Fort Worth Man Convicted of Health Care Fraud SchemeRead the Press Release
FORT WORTH, Texas — Yesterday, following a two-day trial, a federal jury convicted David Williams, 54, of Fort Worth, Texas on four counts of Healthcare Fraud, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
Each healthcare fraud count carries a statutory penalty of 10 years in federal prison and a $250,000 fine. Williams is scheduled to be sentenced by U.S. District Judge Reed O’Connor on August 27, 2018.
According to evidence presented at trial, between November 2012 through August 2017, Williams advertised on his website, getfitwithdave.com that he offered in-home fitness training and therapy through his company, “Kinesiology Specialists.” Williams identified himself as “Dr. Dave” and stated that he served clients in most of Texas, Las Vegas, Denver, Tucson, Seattle, and Orlando. Through his website, Williams told potential clients that he was accepting most health care insurance coverage plans.
In order to bill insurance companies for his services, Williams registered as a health care provider with the Centers for Medicare and Medicaid Services. In completing the application, Williams falsely certified that he was a health care provider. Williams enrolled as a health care provider at least twenty times under different names or variations of his name and his company names and falsely certified that he was a health care provider in each application. Williams would then bill the insurance companies as if he were a medical physician and as if he had provided care requiring medical decision making of high complexity when Williams actually provided fitness and exercise training to his clients.
Williams recruited potential clients through the use of flyers, the internet, and word-of-mouth, according to evidence presented at trial. Once recruited, Williams would typically meet with or speak with the new client over the phone and review their health history and goals for their planned fitness training. Williams would then typically assign a personal trainer to that individual. The personal trainer typically met with the client between one and three times a week for approximately one hour and provided fitness training. Williams would then bill insurance companies for each training session using inaccurate codes and on certain occasions, billed for services that neither he nor his staff, ever provided.
Between November 2012 through August 2017, Williams was paid in excess of $3.9 million in relation to his fraudulent billing of United HealthCare Services, Inc., Aetna, Inc., and Cigna.
The Federal Bureau of Investigation investigated the case jointly with the Texas Department of Insurance, Fraud Unit. Assistant U.S. Attorneys P.J. Meitl and Nicole Dana prosecuted.
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McKinney Man Pleads Guilty to Scheme to Defraud Investors to Support Lavish LifestyleRead the Press Release
DALLAS — Gary Ronald Morris, 69, of McKinney, Texas, appeared in federal court yesterday before U.S. Magistrate Judge Rene Toliver and pleaded guilty to one count of wire fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
The filed Information alleged that during the period from at least 2008 through 2016, Morris owned and operated Greystone Digital Technologies, Inc. and Kiboga Systems Inc., based in Addison, Texas and registered in the state of Texas. Morris represented that Greystone developed and manufactured large bore cargo scanners capable of scanning cargo containers, and that Kiboga developed and maintained software that operated the large bore cargo scanners. It was also alleged that Morris falsely represented to investors that he completed his design and had actually built a fully functional “cargo scanner ”, and that this new “cargo scanner” had been built, tested and demonstrated a capacity to successfully scan vehicles, trucks, cargo containers, and other items for the detection of drugs, explosives and other contraband. In furtherance of the scheme, Morris made false representations to investors that he needed and used investor funds to finance the continued development of the software program for the cargo scanner.
The wire fraud count also alleged that the vast majority of the investor funds were used for Morris’ personal expenses and to support his lavish lifestyle. Among other things, Morris used investor funds for travel, to purchase luxury automobiles and two residences with a total value of nearly $1 million and as the source of funds for hundreds of thousands of dollars in cash withdrawals.
In his filed plea papers, Morris admitted that he engaged in a scheme to defraud investors for an extended period, from at least 2008 through 2016. Morris also admitted that as part of this scheme he made a series of false representations to investors in order to conceal from investors the true state of the business of Greystone Digital Technologies. Morris deceived investors in order to avoid demands for refunds of invested funds or possible lawsuits from investors. Specifically, Morris used a fraudulent email to falsely represent to investors that Greystone employees were physically on site and working on the cargo scanner project at the Federal Express facility in Memphis, Tennessee. In this fraudulent email, Morris also falsely represented that Greystone employees were engaged in ongoing activity with Federal Express employees focused on the development of a cargo scanner.
Morris faces a maximum penalty of imprisonment not to exceed twenty years and a $250,000 fine. Restitution could also be ordered. Sentencing has not been set.
The investigation was conducted by the Wichita Falls office of the Federal Bureau of Investigation and Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Irving Man Sentenced to 155 Months in Federal Prison for his Role in a String of Armed RobberiesRead the Press Release
DALLAS — An Irving man, David Rice, age 32, who admitted that he and his co-conspirator, Kevin Iles, committed the armed robberies of four grocery stores in June 2015, was sentenced Thursday by U.S. U.S. District Judge Jane J. Boyle to 155 months (13 years) in federal prison for conspiracy to commit Hobbs Act robbery and for a firearm offense related to the conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Rice pleaded guilty in July 2017, to one count of conspiracy to interfere with commerce by robbery and to one count of using, carrying and brandishing a firearm during and in relation to a crime of violence. He has been in custody since his arrest in October 2015.
According to the Factual Resume filed in the case, the two committed four armed robberies in Irving and Carrollton on June 4, 2015, at the following locations:
ALDI, Inc. 2926 North Beltline Road, Irving TX
TNL Superfoods 3113 North Beltline Road, Irving TX
Rainbow USA 2311 West Interstate Highway 20, Irving TX
Monaliza LLC 2625 Old Denton Road, Carrollton, Texas
All of these four robberies were committed in essentially the same manner, including Rice’s use and brandishing of a firearm to threaten and force store employees to comply with his demands. On June 4, 2015, Rice paid Iles cash from the robbery proceeds for Iles’ assistance in the above referenced robberies.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Irving Police Department. Assistant U.S. Attorneys Keith Robinson and Gary Tromblay prosecuted.
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Dallas Man Sentenced to 235 Months in Federal Prison for His Role in a Methamphetamine Distribution ConspiracyRead the Press Release
DALLAS —Juan Mauricio Araujo, Jr., aka “Pelon”, 35, was sentenced on Monday, May 14, 2018, before U.S. District Judge David C. Godbey for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Araujo was sentenced to 235 months in federal prison following his guilty plea in April 2017 to one count of conspiracy to possess with intent to distribute and to distribute a controlled substance, said substance being 500 grams or more of methamphetamine. Araujo has been in custody since his arrest in September 2016.
Araujo was charged along with twenty-one others with various offenses related to a methamphetamine distribution conspiracy. Of the twenty-one charged, two are awaiting trial.
According to documents filed in the case, between January 1, 2015 through March 18, 2016, Araujo and his coconspirators conspired to distribute methamphetamine and on several occasions, discussed pick up and drop off plans.
Specifically, Araujo used coded language to purchase multiple kilograms of methamphetamine so that he could distribute the methamphetamine to other people. Araujo, not being happy about the quality of a kilogram of methamphetamine, provided instruction to have the bad kilogram of methamphetamine swapped out for a better quality.
The Federal Bureau of Investigation investigated, with assistance from the Dallas Police Department and the Internal Revenue Service Criminal Investigations Division. Assistant U.S. Attorney George Leal prosecuted.
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Ten Individuals Charged for Conspiring to Traffic Contraband Through the Dallas/Ft. Worth International AirportRead the Press Release
DALLAS — A federal grand jury has returned an Indictment charging ten individuals for their role in conspiring to traffic contraband through Dallas Fort Worth International (DFW) Airport, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas, at a press conference today. The law enforcement operation was led by the Federal Bureau of Investigation, the Dallas Police Department, the Internal Revenue Service Criminal Investigation, and the Dallas Fort Worth International Airport Police Department.
The Indictment, returned last week and unsealed this morning, charges Nelson Pabon, 47, Jean Loui Vargas-Malave, 28, Juan Camacho Melendez, aka “Kendo Kaponi” and “Anthony,” 22, Ruben Benitez-Matienzo, 45, Jose Luis Gaston-Rolon, 24, Joshua Israel Pagan Zapata, 21, Domingo Villafane Martinez, III, 30, Luis Javier Collazo Rosado, aka “Luisito,” 21, Michael LNU, and Cristian David Cruz-Rodriguez, 23, with one count of conspiracy to possess with intent to distribute a schedule II controlled substance. The defendants were arrested yesterday and will make their initial appearances before a United States Magistrate Judge later this week.
“We have zero tolerance for employees who seek to undermine and evade the security protocols at airports,” said U.S. Attorney Erin Nealy Cox. “Smugglers are constantly seeking new ways to move illegal contraband across the country and we will do whatever necessary to thwart these criminals at every turn. Working together with federal and local law enforcement partners, we continue to prioritize efforts to help mitigate the insider threat to aviation security.”
According to the Indictment and beginning in August 2016, the defendants acquired a substance that they believed to be methamphetamine. They arranged for the transportation and delivery of the counterfeit drugs through the DFW Airport and onto commercial airline flights. The defendants utilized their position of employment with companies at DFW Airport to bypass security measures and in return, they accepted payment for the transportation and delivery of the counterfeit drugs. The defendants would also act as “look-outs” or engage in counter-surveillance to undermine police presence.
Also during the investigation, one of the defendants stated he could transport guns via commercial airlines. There were also discussions about transporting C-4 but the fees for transporting this type of contraband would be higher than what was charged for the smuggling of illegal narcotics. All told, the defendants facilitated the transportation of 66 kilograms of counterfeit drugs. The counterfeit drugs were transported to various locations throughout the United States, including Newark Liberty International Airport in Newark, New Jersey, Charlotte Douglas International Airport in Charlotte, North Carolina, and Sky Harbor Airport in Phoenix, Arizona.
“The FBI would like to thank its local and federal partners that assisted in this investigation. This joint operation allowed us to successfully arrest ten individuals who used their positions of employment and access to compromise an aspect of airport security,” said Eric K. Jackson, FBI Dallas Special Agent-In-Charge. “We at the FBI will continue to work diligently with our partners to ensure we aggressively investigate anyone who poses a threat to or attempts to compromise any aspect of U.S. aviation security.”
"DFW and the FBI have a strong partnership that is focused on keeping our customers and employees safe and secure, and these arrests demonstrate how well we work together,” said DFW Airport Police Chief Charles Cinquemani. “There will always be people who attempt to access the airport for illegal activities, but we will remain vigilant by investing in security and collaboratively sharing information and resources with the FBI, TSA, Customs and Border Protection and other federal, state and local agencies.”
A federal criminal Indictment is a written statement of the essential facts of the offense charged. A defendant is entitled to the presumption of innocence until proven guilty. If convicted, the defendants’ sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
Assistant U.S. Attorneys George Leal, John De La Garza and John Kull are prosecuting the case.
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Dallas Man Sentenced for Two Metro PCS Store RobberiesRead the Press Release
DALLAS, Texas — Sidney White, 21, of Dallas, Texas was sentenced Wednesday, May 2, 2018, by U.S. District Judge Ed Kinkeade to serve a total of 102 months in federal prison and ordered to pay restitution, following his guilty plea in December 2017 to two robberies of a Metro PCS store in Dallas, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
White pleaded guilty to one count of interference with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence. White has been in custody since his arrest in June 2017 for a string of robberies including the ones below and others that are being handled by the Dallas County District Attorney’s Office.
According to plea documents filed in the case, on August 10, 2016, White went to a Metro PCS store located at 3106 East Illinois Avenue, Dallas, Texas and purchased a cell phone. In connection with the purchase of the cell phone, White filled out an information sheet and listed his name and address. Two hours later, White returned to the store wearing the same clothing and told an employee that something was wrong with his phone. White then pulled out a pistol, racked the slide, and demanded money. Two employees emptied the cash registers and gave White approximately $1,600.00.
On August 19, 2016, White returned to the same Metro PCS store that he had robbed on August 10th and again, pointed a gun at the employees and demanded that they give him money. One employee gave White $112.00 from her cash register and another employee gave White $64.00 from his cash register.
The Federal Bureau of Investigation investigated the case and Assistant U.S. Attorney Shane Read is in charge of the prosecution.
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Richardson Tax Preparer Pleads GuiltyRead the Press Release
DALLAS — Rene Barrera, Sr, of Del Rio, Texas, who was one of several tax preparers at Tax Genius in Richardson, Texas, appeared in federal court Tuesday, May 8, 2018, before U.S. Magistrate Judge Irma Carrillo Ramirez and pleaded guilty to one count of aiding and assisting in the preparation of a fraudulent tax return, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Sentencing is set for December 14, 2018, before Chief U.S. District Judge Barbara M.G. Lynn. Barrera faces a statutory maximum penalty of three years in federal prison and a $100,000 fine. He may also be ordered to pay restitution.
On September 21, 2016, Barrera and co-defendants Jimmy Luis Briseno, Mike Cano and Christopher Lee DeLeon were charged with conspiracy to defraud the IRS and other charges related to the filing of false tax returns. According to the factual resume filed in the case, from January 2011 through April 2011, Barrera prepared and electronically filed taxes at Tax Genius in Richardson, Texas. In his plea papers, Barrera admitted that he and other employees prepared and caused to be electronically filed with the IRS individual income tax returns that contained one or more of the following falsely inflated or fictitious items: false Forms Schedule C; false and fabricated Education Credits, and false items used to inflate and maximize the Earned Income Tax Credit (EITC) on the tax return. During this period, Barrera and other Tax Genius employees engaged in a fraudulent scheme in which false and fraudulent information and documents were submitted to the IRS with the intent to defraud the IRS by causing the IRS to pay fraudulent refunds based on this false tax information.
Barrera caused the filing of eight false tax returns resulting in a tax loss of $67,100 due to false refunds claimed.
IRS Criminal Investigation is investigating the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Federal Jury Convicts Abilene Man on Drug Charges Related to Near-Fatal Heroin OverdoseRead the Press Release
ABILENE, Texas — Following a two-day trial before Senior U.S. District Judge Sam R. Cummings, a federal jury has convicted Michael Deon Thompson, 37, of Abilene, Texas, for his role in a heroin drug conspiracy resulting in serious bodily injury, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Specifically, on Tuesday a federal jury convicted Thompson on one count of distribution and possession with intent to distribute heroin resulting in serious bodily injury, and one count of conspiracy to distribute and possess with intent to distribute heroin. Judge Cummings ordered a presentence report prepared and will set a sentencing date once the presentence report is filed. The United States filed a Notice of Enhancement based on Thompson’s three prior felony drug convictions. If the Court finds those convictions final and valid, then, the Court must impose a sentence of life imprisonment as to the count charging distribution and possession with intent to distribute heroin resulting in serious bodily injury. Thompson has been in federal custody since his arrest in February 2018.
“Fighting the opioid epidemic that is ravaging the Big Country and the rest of the Northern District of Texas is going to require a shared effort by law enforcement and our communities,” said U.S. Attorney Nealy Cox. “The conviction of Michael Thompson is an example of just how successful those shared efforts can be. Through the efforts of citizens, state and local law enforcement, and federal authorities, Michael Thompson will never push heroin in the Abilene community again.”
According to evidence presented at trial, on October 6, 2017, Bobby Mason telephoned Thompson to coordinate for the delivery of heroin to Mason and A.M. in Abilene, Texas. Thompson distributed about two grams of heroin to Mason. Mason and A.M. then prepared to intravenously use some of the heroin that Thompson had given them. As soon as A.M. injected the heroin, she collapsed. Mason called 911 and then left the scene. Officers with the Abilene Police Department, and medical personnel from MetroCare and the Abilene Fire Department responded. When they arrived, they found A.M. cyanotic and with agonal respiration. According to the testimony of a medical expert, the heroin provided by Thompson caused A.M. a substantial risk of death and, but for the intervention of medical personnel, would have been fatal. Medical personnel administered Narcan to A.M. and she recovered.
The United States also presented evidence that on October 11, 2017, officers with the Abilene Police Department went to Thompson’s residence in Abilene to arrest Thompson and execute a search of his residence. When officers approached Thompson, he fled into his residence and stayed in the residence for about 25 minutes before finally surrendering to police. Upon searching Thompson’s residence, they discovered evidence of Thompson’s involvement in trafficking heroin and other illegal controlled substances such as cocaine, Xanax, and marijuana.
The defendants’ sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
The Abilene Police Department and Texas Department of Public Safety Crime Laboratory investigated. Assistant U.S. Attorneys Juanita Fielden and Jeffrey Haag are prosecuting the case.
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Euless Man Who Was Previously Convicted of Aggravated Robbery with a Deadly Sentenced to 9 Years in Federal Prison on Firearm and Drug ConvictionsRead the Press Release
DALLAS —Bryan Anthony Adams, 29, of Euless, Texas, who pleaded guilty in September 2017 to one count of being a convicted felon in possession of a firearm and one count of possession of a firearm in furtherance of a drug trafficking crime, was sentenced by Chief U.S. District Judge Barbara M.G. Lynn to 108 months in federal prison. U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement today.
According to documents filed in the case and statements made on the record at his sentencing hearing yesterday, on April 7, 2016, law enforcement executed a narcotics search warrant at an apartment on East Ash Lane in the City of Euless, Texas. A search of the apartment resulted in the discovery of approximately 51 grams of a mixture or substance containing cocaine, three firearms, digital scales and baggies-drug distribution paraphernalia. Law enforcement discovered that Adams, had been previously convicted of aggravated robbery with a deadly weapon.
The Irving Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives , investigated.
Assistant U.S. Attorney Gary Tromblay prosecuted.
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Former Bureau of Prisons Employee Agrees to Pay $50,000 to Resolve Anti-Kickback Act AllegationsRead the Press Release
Cary Hudson, a former financial administrator for the U.S. Bureau of Prisons (BOP) in Carswell, Texas, has agreed to pay the United States $50,000 to resolve allegations that he violated the Anti-Kickback Act by accepting improper payments from Mansfield, Texas-based Integrated Medical Solutions Inc. (IMS) in exchange for his assistance in obtaining BOP contracts. In May 2017, IMS and its former president, Jerry Heftler, agreed to pay more than $2.4 million to resolve their civil liability arising from the alleged scheme.
“This settlement demonstrates that the Department of Justice is committed to protecting the integrity of the federal contracting process from unscrupulous contractors,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Improper financial arrangements between government officials and private contractors corrupt taxpayer-funded contracts.”
The settlement announced yesterday resolves allegations that Hudson, while serving as a BOP financial administrator, accepted payments from IMS in exchange for providing favorable treatment in connection with BOP contracts to manage healthcare networks that provided medical care to federal inmates. Hudson’s assistance to IMS allegedly included the provision of certain confidential, non-public information that gave IMS an unfair competitive advantage in the bidding process. The government also alleged that, after IMS obtained the contracts with BOP, Hudson improperly assisted IMS in its performance of the contracts while simultaneously serving as a BOP financial administrator.
“This case, in which our office both criminally prosecuted the responsible employee and civilly recovered almost $2.5 million for the federal fisc, should serve as an example and warning to others who might be similarly tempted to abuse positions of trust in federal programs funded with taxpayer dollars,” said U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
In October 2014, Hudson pleaded guilty to a felony violation of 18 U.S.C. § 1001 for failing to disclose the payments he received from IMS as part of his annual obligation as a federal government employee to report any potential conflicts of interests.
This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas, with assistance from the Department of Justice Office of Inspector General.
Except to the extent of the admissions in Hudson’s guilty plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.
Federal Jury Convicts Two Dallas Men on Robbery ChargesRead the Press Release
DALLAS, Texas — Following a four-day trial, a federal jury has convicted Michael Wright, 28, and Rickey Cherry, 28, both of Dallas, of multiple robbery and firearm offenses, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Specifically, on Monday a federal jury convicted Wright on three counts of interference with commerce by robbery, three counts of using, carrying, or brandishing a firearm during and in relation to a crime of violence, and one count of possession of a firearm by a convicted felon. The jury also found Cherry guilty of two counts of interference with commerce by robbery and two counts of using, carrying, or brandishing a firearm during and in relation to a crime of violence. The two men are scheduled to be sentenced on August 22, 2018, by U.S. District Judge Ed Kinkeade. A third defendant, Kameron Robinson, was charged in the same indictment and pleaded guilty to one count of interference with commerce by robbery and one count of using, carrying, or brandishing a firearm during and in relation to a crime of violence. He is scheduled for sentencing before Judge Kinkeade on June 21, 2018.
Evidence presented at trial showed that Wright and Robinson committed one robbery and that Wright committed two additional robberies with Cherry. On January 2, 2015, Wright and Robinson used a handgun to rob an AT&T authorized retailer in Ennis, Texas, of cell phones and tablets. Ennis Police Department discovered the men during their flight from the robbery, prompting a high-speed chase into Ellis County, where police were able to apprehend the men after they wrecked their vehicle and fled on foot. Wright and Cherry used handguns to rob a Radio Shack store in Duncaville, Texas of cell phones and tablets on January 22, 2015, and an AT&T authorized retailer in Grand Prairie, Texas of cell phones and tablets on March 7, 2015.
The defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendants’ prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
The Federal Bureau of Investigation investigated the case with the assistance of Ennis Police Department, Duncanville Police Department, and Grand Prairie Police Department. Section Chief Keith Robinson and Assistant United States Attorneys Gary Tromblay and Brian McKay are prosecuting the case.
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Dallas Man Sentenced to 360 Months in Federal Prison on Child Pornography ChargesRead the Press Release
DALLAS — Yesterday, U.S. District Judge David C. Godbey sentenced Hugh Michael Glenn, 47, of Dallas, Texas, on child pornography offenses, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Glenn was convicted, following a three-day trial, of one count of transporting and shipping child pornography and one count of accessing with intent to view child pornography. Glenn has been in custody since the time of his arrest in September 2016.
The government presented evidence at trial that on August 1, 2016, Glenn transported child pornography by uploading an image of child pornography using Chatstep. Law enforcement obtained Glenn’s laptop computer, which contained the transported image and over 2,000 other images of child pornography. Glenn confessed to law enforcement that he had gone to chatrooms and viewed child pornography on the Internet.
In 2003, Glenn was convicted in the United States District Court for the Eastern District of Texas for transporting child pornography. In that case, he was sentenced to ninety-seven months of imprisonment.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Federal Bureau of Investigation and the Dallas Police Department investigated this case. Assistant U.S. Attorneys Camille Sparks and Jamie L. Hoxie prosecuted.
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57 Member/Associates of Various White Supremacists Gangs Charged in Kidnapping and Drug ConspiraciesRead the Press Release
DALLAS, Texas — Fifty-seven individuals, who are connected to various white supremacist gangs have been charged in a case led by the Texas Department of Public Safety Criminal Investigations Division and coordinated by the Texas Anti-Gang Center with participating partners such as the Dallas Police Department Criminal Intelligence Unit and the Drug Enforcement Administration. Erin Nealy Cox, U.S. Attorney for the Northern District of Texas made the announcement today at a press conference.
The 57 individuals were charged in conspiracy to commit kidnapping and drug trafficking conspiracies outlined in the Indictment. 42 of those defendants were arrested in last week’s takedown operation, 9 were already in custody at various locations on unrelated state charges, and 6 have not yet been arrested.
Each of those defendants arrested made their initial appearance last week or will do so today before a U.S. Magistrate Judge.
“Not only do white supremacists gangs subscribe to a repugnant, hateful ideology, they also engage in significant, organized and violent criminal activity,” Attorney General Sessions said. “Under the Trump administration, the Department of Justice has targeted every violent criminal gang member in the United States. The quantities of drugs, guns, and money seized in this case are staggering. And so I want to thank U.S. Attorney Erin Nealy Cox, Assistant U.S. Attorney P.J. Meitl, DEA, the Marshals Service, ATF, as well as our fabulous state and local partners, Texas DPS and the Dallas Police Department, for their hard work. Today’s indictment, arrests, seizures make this country safer.”
According to the Indictment, the defendants were members of, associated with, or performed drug transactions with, various white supremacists organizations or individuals including the “Aryan Circle,” the “Aryan Brotherhood of Texas” (ABT), the “Aryan Brotherhood,” the “Peckerwoods,” the “Soldiers of Aryan Culture,” and the “Dirty White Boys,” and they engaged in a conspiracy to distribute methamphetamine and other illegal narcotics throughout North Texas and elsewhere. Some defendants were also member of or associated with the criminal street or prison gang Tango Blast. Certain defendants used firearms to further their drug trafficking activities.
The Indictment alleges that from approximately October 2015 through April 2018, the defendants conspired together, and with others, to possess with intent to distribute 500 grams or more of methamphetamine. According to the Indictment, the defendants arranged for the acquisition of methamphetamine and its distribution and delivery. They used stash houses or other locations to store the methamphetamine and acted as intermediaries and brokers to negotiate the acquisition, price, delivery and payment for the quantities of methamphetamine.
In January 2018 and February 2018, according to the Indictment, four defendants kidnapped an individual and held the victim for several days to obtain stolen drug proceeds that the defendants believed belonged to them. The defendants pointed a pistol at the victims head, threatened to kill the victim, hit the victim with a large wooden object on the back of the head and used a hatchet to chop off a portion of the victim’s left index finger.
Throughout the investigation, agents stopped the flow or seized over 190 kilograms of methamphetamine, 31 firearms, and seized approximately $376,587 in cash.
“Drug trafficking is a dangerous and violent business—that is a reality. It is clear that these hate-fueled gangs will do whatever they must do in order to carry on their drug trafficking business. Firearms, body armor, illegal drugs, drug proceeds and unspeakable physical violence are the tools of their trade. The collaborative law enforcement and prosecutorial effort that led to the Indictment and arrest of these defendants is the first step in closing down their drug dealing organizations for good.”
This operation was coordinated through the Texas Anti-Gang Center. The TAG serves as the unified headquarters for an estimated 75 - 100 of the region’s most knowledgeable and experienced federal, state and local anti-gang investigators, analysts and prosecutors. The TAG is comprised of various law enforcement agencies, and has implemented innovative approaches to fighting violent criminal gangs and the transnational criminal organizations. Today violent criminal gangs and their allied networks are involved in virtually every type of felonious activity, including drug production and distribution; weapons-smuggling, extortion, kidnapping and murder for hire; home-invasion; metal and heavy equipment theft; major fraud, money laundering and bulk cash smuggling; gambling and dog-fighting; and prostitution and human-trafficking, including both adults and children for sexual exploitation.
A federal criminal Indictment is a written statement of the essential facts of the offense charged. A defendant is entitled to the presumption of innocence until proven guilty. If convicted, the defendants’ sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
The U.S. Marshal Service North Texas Fugitive Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Irving Police Department, Garland Police Department, Rockwall Police Department, Mesquite Police Department, Fort Worth Police Department, Dallas County Sheriff’s Office and Rockwall County Sheriff’s Office assisted in the investigation. Assistant U.S. Attorney P.J. Meitl is prosecuting.
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Amarillo Man Admits to Enticement of a MinorRead the Press Release
AMARILLO, Texas — Weston Scott Langwell, 26, of Amarillo, Texas, appeared today in federal court before U.S. District Judge Sidney A. Fitzwater and pleaded guilty to one count of attempted enticement of a minor, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
Langwell faces not less than 10 years and not more than life in federal prison, a $250,000 fine and five years to a lifetime of supervised release. He will remain in custody pending sentencing, which is scheduled for August 8, 2018.
According to the plea agreement factual resume filed in the case, on November 13, 2017, Langwell responded to a craigslist advertisement placed by Texas Department of Public Safety agents by texting the number listed. An agent posing as a sixteen year old minor female was monitoring the phone number and engaged in conversation with Langwell via text messaging. The officer sent a text to Langwell that stated she was almost 17. After Langwell learned the alleged age, he almost immediately turned the conversation to a sexual nature.
On November 14, 2017, Langwell sent a nude photograph of himself along with a sexually explicit text message. Langwell continued to communicate with the officer in a sexually explicit nature via text messages and suggested they meet up.
On November 15, 2017, Langwell and the officer agreed to meet in person. Langwell traveled to the prearranged meeting site to meet with who he believed was a 16 year old female, for sex. Agents were conducting surveillance of the prearranged meeting site and saw Langwell in the parking lot. Law enforcement moved in and arrested Langwell. Agents located condoms and a bottle of lubricant in Langwell’s possession. Additionally, a test message was sent to Langwell’s phone, and agents confirmed it was the same phone used to communicate with the UC.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Texas Department of Public Safety and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) investigated the case. Assistant U.S. Attorney Joshua Frausto is in charge of the prosecution.
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Methamphetamine Distributor Sentenced to 240 Months in Federal PrisonRead the Press Release
AMARILLO, Texas — This afternoon, U.S. District Judge Sidney A. Fitzwater sentenced Noel Cuellar, 37, of Amarillo, Texas, for his role in a methamphetamine distribution conspiracy that operated in the Amarillo area, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Cuellar pleaded guilty in January 2018 to one count of distribution and possession with intent to distribute methamphetamine. He has been in custody since the time of indictment in November 2017.
According to the plea agreement factual resume, on May 5, 2015, Texas Department of Public Safety (DPS) Criminal Investigations Division agents executed a search warrant on Jammie Lee Moore’s residence located in Amarillo, Texas. DPS agents located approximately nine pounds of methamphetamine and $10,000 in United States Currency in a Chevrolet pickup parked outside Moore’s residence and that agents had previously seen Moore driving.
Through further investigation, law enforcement learned that Cuellar had previously distributed this methamphetamine to Moore. Cuellar admitted to distributing pound quantities of methamphetamine for further distribution in the Amarillo area.
The Texas Department of Public Safety Criminal Investigations Division, Drug Administration Enforcement and Federal Bureau of Investigation investigated. Assistant U.S. Attorney Joshua Frausto was in charge of the prosecution.
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Coleman Convicted Felon Pleads Guilty to Possessing a Firearm After Massacre Threat at Coleman SchoolRead the Press Release
SAN ANGELO, Texas — Lorenzo Hale, 52, of Coleman, Texas, appeared in federal court this afternoon and pleaded guilty before U.S. Magistrate Judge E. Scott Frost to one count of convicted felon in possession of a firearm, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Hale faces a maximum statutory penalty of ten years in federal prison, and a $250,000 fine. Hale will remain in custody pending a sentencing date to be set by the Honorable Sam R. Cummings, Senior United States District Court Judge.
According to the plea agreement factual resume filed in the case, on February 15, 2018, law enforcement was dispatched to a residence in Coleman, Texas, to investigate a complaint about a threat being made. The officer went to that location and met with Hale. Hale stated that he had been threatened. Hale further stated that “If one hair on both my daughters’ head are harmed tomorrow, there will be a massacre. I want you to know I’m reporting it to you like that, there will be a massacre at that school.” Later in the conversation, Hale alluded to a firearm being in the residence.
The next day, a Texas Ranger and the Chief of the Coleman Police Department made contact with Hale’s girlfriend. They told her of Hale’s threat and asked if she would surrender any firearms to law enforcement. She agreed to surrender the firearm located at the residence.
Further investigation revealed that before Hale possessed the firearm, he had been convicted in a court of a crime punishable by imprisonment for a term in excess of one year. Specifically, on December 16, 2005, Hale was convicted of being a Convicted Felon in Possession of a Firearm, in the United States District Court for the Northern District of Texas, San Angelo Division, and sentenced to 51 months imprisonment.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Coleman Police Department and the Texas Rangers, Texas Department of Public Safety. Assistant U.S. Attorney Jeffrey Haag is in charge of the prosecution.
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Seven Defendants Sentenced Following Their Admissions to Trafficking Large Quantities of MethamphetamineRead the Press Release
LUBBOCK, Texas — Seven defendants charged in an indictment returned in November 2017 were sentenced in recent weeks by Senior U.S. District Judge Sam R. Cummings for their roles in a large-scale methamphetamine trafficking organization operating in the Lubbock, Texas area, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
The court imposed the following sentences:
Alejandro Garcia-Izazaga, aka “Flaco” and “Alex” – 365 months
Anthony Wayne Reiley, aka “Tony” – 235 months
Ivan Cruz-Martinez – 235 months
Zacarias Blanco-Olea – 210 months
Amanda Nicole Marney – 188 months
Ernesto Martinez, Jr. – 108 months
Patricia Ann Hernandez-Salas – 87 months
Garcia-Izazaga, Reiley, Cruz-Martinez, and Blanco-Olea have been in custody on related criminal complaints since their arrest in October 2017. Marney, Martinez, and Hernandez-Salas have been in custody following their arrests in November 2017.
According to plea documents filed in the case, Garcia-Izazaga was facilitating the transportation of pound-quantities of methamphetamine in Lubbock and other major cities in the State of Texas. On three separate occasions in the summer of 2017, Garcia-Izazaga offered to pay Reiley, Cruz-Martinez, and Blanco-Olea to transport large quantities of methamphetamine from other parts of the state to Lubbock, Texas. On each occasion, the defendants were stopped by law enforcement for traffic violations. Searches of the vehicles revealed large amounts of methamphetamine in hidden compartments.
Marney was arrested following a traffic stop in August 2017 where officers found her to be in possession of multiple ounces of methamphetamine and two firearms.
Martinez, Jr. and Hernandez-Salas each purchased and distributed large quantities of methamphetamine in the Lubbock, Texas area.
In total, law enforcement agents were able to seize in excess of 15 pounds of methamphetamine and several firearms.
The Drug Enforcement Administration is investigating with the assistance of Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Customs and Border Protection, the Lubbock County Sheriff’s Office, the Lubbock Police Department, and the Texas Department of Public Safety. Assistant U.S. Attorney Sean Long is in charge of the prosecution.
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Dallas Attorney Sentenced to 120 Months in Federal Prison for Role in $26 Million Fraud ConspiracyRead the Press Release
DALLAS — Tshombe Anderson, 55, of Grand Prairie, Texas, was sentenced today by Chief U.S. District Judge Barbara M.G. Lynn to 120 months in federal prison and ordered to pay $26,572,458.93 in restitution for his role in a scheme he ran along with his family members from July 2011 to September 2015 to fraudulently obtain more than $26 million from the Department of Labor (DOL) Office of Worker’s Compensation Program (OWCP), announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Anderson pleaded guilty in August 2017 to one count of conspiracy to commit health care fraud. Anderson agreed to forfeit $375,000 seized from his residence, a 2015 Mercedes, and his share of the $8,383,075 that was seized from 25 bank accounts. Anderson has been in custody since the time of his arrest in August 2015.
In addition to Anderson, his sister Lydia Bankhead, 63, his wife Brenda Anderson, 47, and his niece Lydia Taylor, 30, were also charged in the indictment returned in September 2015 and pleaded guilty to their roles in the scheme.
“Tshombe Anderson and others conspired to defraud the U.S. Department of Labor’s Office of Workers’ Compensation Programs (OWCP) of more than $26 million. Anderson stole patient information from over 200 injured federal workers and then used the information to fraudulently bill OWCP, enriching himself and others with taxpayer dollars intended for the treatment of injured federal workers. We will continue to work with our law enforcement partners to safeguard all Department of Labor programs,” said Steven Grell, Special Agent in-Charge of the Dallas Regional Office of the U.S. Department of Labor, Office of Inspector General.
“The sentence imposed today reaffirms the long-standing message that fraud committed against federal benefit programs is a serious crime and will not be tolerated,” said U.S. Postal Service Office of Inspector General Special Agent in Charge Christopher Cave, Southern Area Field Office. “The USPS-OIG, along with our law enforcement partners will continue to aggressively pursue anyone who engages in these criminal activities.”
According to plea documents in the case, Tshombe Anderson worked as an attorney for Union Treatment Centers (“UTC”). Anderson and his wife, Brenda Anderson, opened a durable medical equipment company called Best First Administration (“BFA”). BFA was formed, initially, to provide durable medical equipment to patients referred to BFA from UTC. In July 2011, Tshombe Anderson and Brenda Anderson disassociated from UTC.
In April 2013, Tshombe Anderson agreed with Bankhead to open Union Medical Supplies and Equipment (“UMSE”). In August 2013, Tshombe Anderson opened Skycare Medical Supplies and Equipment (“SMSE”). Both companies were created in order to submit claims that were inappropriate to OWCP. The same medical information that BFA had received from UTC was used and billed to the same universe of claimants for duplicate, unwanted durable medical equipment that was not medically necessary, using outdated medical information. Tshombe Anderson continued to do so despite knowing that they were billing OWCP for items that were not associated with the claimant’s injuries and that claimants were often refusing or rejecting the durable medical equipment for which their company had billed.
Tshombe Anderson had access to the operating accounts for UMSE and routinely transferred large sums of cash from those accounts for his personal use or to launder through business accounts for a shell company called American Federal Union Claims Advocates, as well as accounts associated with his law office.
The total amount paid to OWCP for UMSE and SMSE was $26,572,458.93.
The DOL Office of Inspector General and the U.S. Postal Service Office of Inspector General investigated the case. Assistant U.S. Attorneys Nicole Dana and P.J. Meitl prosecuted.
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Rockwall Man Sentenced to 15 Months in Federal Prison for BriberyRead the Press Release
DALLAS — Kevin Gerard Cauley, 51, of Rockwall, Texas, was sentenced yesterday by U.S. District Judge Sam A. Lindsay to 15 months in federal prison for his role in a bribery scheme involving the concealment of information to defraud the Texas Department of Public Safety (DPS), announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Cauley pleaded guilty in June 2017 to one count of honest services wire fraud. Judge Lindsay ordered Cauley to surrender to the Bureau of Prison on June 19, 2018.
According to the information filed in the case, Cauley worked as a Highway Patrol - Commercial Vehicle Enforcement (“CVE”) Sergeant employed by DPS and assigned to Region I, that covered Dallas County. As a CVE Sergeant, Cauley was responsible for, among other things, enforcing traffic and criminal laws, instructing in training schools and academies, and performing safety inspections of commercial vehicles in order to provide Commercial Vehicle Safety Alliance Inspection (“CVSA”) decals to commercial vehicles.
Safety inspections were performed by DPS CVE Troopers to ensure their commercial vehicles were safe for highway travel. Safety Inspections were coded Levels 1 through 5. A level 1 inspection was the highest level which meant it involved the most areas of inspection. Once a Level 1 inspection was passed, the commercial vehicle received a CVSA decal.
Orlinte Cruz owned commercial trucking companies that operated in Dallas, Texas, Cruz and Sons Transportation and UGMA Logistics.
The CVSA decal served as a notice to any other CVE personnel in the United States, Canada, or Mexico that the vehicle had recently passed a Level 1 inspection and prevented the vehicle from being stopped at an inspection station or scale so that safety violations were not as readily detected. A commercial vehicle company's safety rating was directly related to the number of violations recorded. A good safety rating translated into lower insurance premiums and a higher volume of contracts.
According to the information filed in the case, in July 2014 Cruz approached Cauley about conducting safety meetings for employees of Cruz and Sons Transportation. Shortly thereafter, Cauley began conducting inspections of Cruz and Sons Transportation and UGMA Logistics’s commercial trucks. From July 2014 and continuing until September 2015, Cauley reported conducting thirty-nine Level 1 inspections on Cruz and Sons Transportation’s vehicles. Thirty-nine of these inspections resulted in a CVSA decal. Cruz paid Cauley in United States currency at least $4,000, to receive favorable treatment from Cauley concerning the performance, or non-performance of CVSA inspection procedures.
Cruz has also pled guilty to his role in this scheme and is awaiting sentencing.
The Texas Rangers, Department of Transportation- Office of Inspector General, and FBI, investigated the case. Assistant U.S. Attorney Adrienne E. Frazior prosecuted.
# # #Resident of the Colony Admits Role in $10 Million FraudRead the Press Release
DALLAS — Ima Maria Isham, 22, of The Colony, Texas appeared this morning before U.S. Magistrate Judge Rebecca Rutherford and pleaded guilty to one count of conspiracy to commit bank fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Isham faces a maximum penalty of five years in federal prison and a $250,000 fine. Restitution is mandatory. Isham remains on bond; a sentencing date was not set.
According to documents filed in the case, beginning in March 2015 and continuing until March 2016, Isham, along with coconspirators Eddie Contreraz, Stephanie Loraine Contreraz, Bryce Carragan Armijo, Elizabeth Flint, Abraham Valdez, and Kwanghee (Kathy) Anh, conspired with each other, to commit bank fraud.
Isham and other conspirators were employed at Preferred Marketing Group (PMG), also known as PMG Business Solutions. PMG was a loan brokerage company that assisted clients obtain loans, lines of credit, and credit cards. Since the majority of clients had low credit scores, as well as insufficient or unverifiable income or employment, most lenders did not consider these clients to be good credit risks. To overcome these obstacles to obtaining funding, conspirator PMG employees were aware that conspirator Eddie Contreraz frequently created fake paystubs, tax forms and other fraudulent documents in order to falsely inflate clients’ income, as well as falsify a client’s employment position and length of employment. Isham and other conspirators caused many clients to fraudulently obtain funding by causing clients to submit to various lenders false financial and false employment information provided by co-defendant Eddie Contreraz.
The defendants fraudulently obtained loan proceeds from several federally insured banks in the Dallas and Fort Worth area by causing borrower loan applications to be submitted to banks which contained false information. False loan information submitted to financial institutions included, inflated false income figures; falsely list the loan applicant’s position as manager of a company (when the applicant actually owned the company or was employed in a lower salaried position); and falsely reported employment when a client was actually unemployed.
According to documents filed in the case, Isham and coconspirators caused borrowers with low credit scores to use “credit repair” services to raise the borrower’s credit score in order to qualify for loans later obtained through the use of false and fictitious documents created by defendant Eddie Contreraz.
From March 2015 through March 2016, Isham and coconspirators fraudulently obtained loans, credit lines, and credit cards from several banks in the total amount of at least $10 million.
The Fort Worth Federal Bureau of Investigation is investigating the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Dallas and Carrolton Men Plead Guilty for Role in a $2 Million Mail Fraud SchemeRead the Press Release
DALLAS — Robert Joseph Marano, 53, of Dallas, Texas, appeared in federal court this morning before U.S. Magistrate Judge Rebecca Rutherford and pleaded guilty to one count of mail fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
In March 2018, both Marano and Paul Anthony Dominguez, 32, of Carrollton, Texas, were charged in a felony information with a one count of mail fraud scheme. Dominguez pleaded guilty earlier this month to the same mail fraud scheme and is scheduled to be sentenced July 25, 2018. Marano is scheduled to be sentenced on August 1, 2018.
Both Dominguez and Marano face a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. Restitution could also be ordered. Dominguez and Marano will remain on bond while awaiting their sentencing hearings.
According to filed plea documents, Dominguez and Marano contacted client contractors with a proposal to collect outstanding unpaid debts of former customers of the contractor client. During the period from about March 2015 through December 2016, Dominguez and Marano caused at least 200 client contractors to sign an agreement in which the client contractors authorized the defendants to release liens filed by the client contractor in exchange for the payment of unpaid debts by former customers. Dominguez and Marano also falsely represented to client contractors that defendants would collect funds from delinquent clients, retain a commission fee, and then send the balance of the collected funds to the contractor client.
Dominguez and Marano later contacted many former customers of the contractor client. These former customers were delinquent in payment of debts to the contractor clients. Dominguez and Marano fraudulently caused these former customers to send settlement checks to a business controlled by Dominguez and Marano. Dominguez and Marano also stole funds from their client contractors when they unlawfully cashed these former customer checks, but failed to pay their contractor clients the total settlement amount owed.
The defendants preyed on the financial desperation of these client contractors who were owed large sums of money from former customers. The defendants deceived these client contractors by falsely representing to the client contractors that the defendants would honestly collect and pass on funds collected from former customers.
Dominguez and Marano defrauded at least 200 client contractors across the United States and received over $2 million dollars in settlement funds from former customers of the client contractors. The felony information alleged that Dominguez and Marano spent these stolen funds to support their lavish lifestyle, including trips to Las Vegas, Hawaii and Miami, as well as the purchase of two 2016 Harley Davidson motorcycles, a 2016 Kawasaki motorcycle, a 2015 Toyota Tundra, and a 2015 Corvette Stingray.
This case is one of many felony indictments of bankruptcy-related crimes prosecuted as part of the Bankruptcy Fraud Initiative, United States Attorney’s Office, Northern District of Texas. These bankruptcy prosecutions were identified and investigated from a larger number of criminal referrals regularly made to this office by the United States Trustee’s Office, Dallas, Texas. Since 2013, these focused bankruptcy prosecutions have resulted in 27 convictions of individuals engaged in various types of fraudulent conduct within the United States Bankruptcy Courts.
The United States Postal Inspection Service, Fort Worth, Texas investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Dallas Man Sentenced to Life in Federal Prison for Drug OffenseRead the Press Release
FORT WORTH, Texas — Arnoldo Morfin-Arias, aka “Efrain Arias” and “Pollo,” 44, of Dallas, Texas, was sentenced today by U.S. District Judge John McBryde to Life in federal prison following his guilty plea in November 2017 to one count of conspiring to traffic in methamphetamine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Morfin-Arias was charged in a superseding indictment in October 2017 along with six others for their roles in a methamphetamine conspiracy. Twenty-two others have also been charged in different indictments and informations in connection with Morfin-Arias for trafficking in methamphetamine, cocaine, heroin, and for money laundering. Morfin-Arias operated in the Dallas/Fort Worth area, and elsewhere in the United States. He has been in custody since the time of his arrest in California in August 2017.
Documents filed in the cases reveal that since at least early 2015, Morfin-Arias received large amounts of methamphetamine directly from a Mexico-based source of supply. In turn, Arias distributed multi-kilogram quantities of methamphetamine through multiple Dallas based distributors who have all pled guilty to the conspiracy.
The Federal Bureau of Investigation conducted the investigation with assistance from DEA, ATF, U.S. Marshals Service, Arlington Police Department, Fort Worth Police Department, Dallas Police Department, Dallas County Sherriff’s Clean Air Task Force, Grand Prairie Police Department, Denton County Sherriff’s Office, Texas Department of Criminal Justice Office of Inspector General, the Texas Department of Public Safety, ICE ERO, and Tarrant County Combined Narcotics Enforcement Team.
Assistant U.S. Attorney Shawn Smith prosecuted.
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Federal Jury Convicts Man on Firearm OffensesRead the Press Release
DALLAS — Darius Fields, 27, of Dallas, Texas was found guilty Wednesday following a three-day trial before Chief U.S. District Judge Barbara M.G. Lynn for aiding and abetting the false statement to a federally licensed firearms dealer to acquire a firearm, commonly called “lying-and-buying” or making a “straw purchase,” announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Fields was convicted on one count of acquiring a firearm from a licensed firearms dealer by false or fictitious statement, one count of false statement with respect to information required to be kept in records of a licensed firearms dealer, and one count of convicted felon in possession of a firearm and ammunition. Fields faces a maximum statutory penalty of 25 years in federal prison and a $250,000 fine. He has been in custody since his arrest in July 2017. A sentencing date will be set by the court in the near future.
According to evidence presented at trial, Fields, a convicted felon who was being sought as a person of interests in a state kidnapping investigation, was found at a motel in Irving on the night of June 29, 2017. When the police made contact with Fields at the motel, they smelled the odor of marijuana and entered the room for a protective sweep. There, they found Fields’ girlfriend and co-defendant, LaPorshya Polley, emerging from the bathroom after attempting to flush marijuana down the toilet. They also observed a box of ammunition in plain view on a desk. Using flashlights, the police also observed a partially concealed AK-47 weapon in the back of a black Honda Accord parked directly in front of Fields’ motel room. The police then secured a search warrant for the motel room and the Honda Accord.
Inside the motel room, according to evidence presented, the police seized the box of ammunition, a small amount of marijuana, two cell phones belonging to Fields, and approximately $5,000 in cash. They also found a loaded FNH pistol—with a round in the chamber and the safety in the “fire” position—in Polley’s bag of clothing. In the Honda Accord, the police seized a loaded AK-47 pistol. Polley had purchased both weapons. The police, in fact, discovered that Polley had recently purchased the FNH pistol from DFW Gun Range in Dallas. The police obtained security video recordings of Polley’s purchase from the gun dealer. The recording depicted a classic “straw purchase” of the firearm, as it showed Fields and Polley arriving together at the gun dealer, but walking in at different times to act as if they weren’t together. The video also showed Fields and Polley ignoring one another and acting as if they were not together. Finally, the video showed Fields monitoring Polley’s interaction with the gun salesman, and once Fields observed that Polley was wrapping up the purchase he walked back out to the car and waited for Polley. Text messages found on one of Fields’ cell phones showed that after Polley purchased the pistol, but before she left the gun dealer, she texted Fields about the type of ammunition that he wanted for the weapon. Lastly, when Polley walked out of the gun dealer with the FNH pistol and ammunition and got inside the car driven by Fields, Fields waited before driving off—reflecting that he was examining Polley’s purchase. When Polley purchased the FNH pistol—which she paid approximately $1,400 in cash—she stated on the transaction record that she was buying the pistol for herself and not for anyone else.
Fields contended that the firearms and ammunition found by the police were for Polley and that he did not knowingly possess them. He also contended that Polley purchased the FNH pistol for herself and not for him and, therefore, she did not lie to DFW Gun Range or put false information in the gun dealer’s records. On Fields’ cell phones, the police discovered numerous pictures of Fields displaying firearms and two videos of Fields shooting firearms at a gun range in February 2017. The court permitted the government to introduce this evidence as it shed light on Fields’ knowledge and intent. Fields, however, countered that the pictures of him displaying guns were “prop” guns, not real ones, and a defense witness even incredulously claimed that the videos of Fields shooting at the gun range depicted “blank guns”—even though the video showed bullets striking the dirt behind the targets.
The case was investigated by the FBI and the Irving Police Department. Assistant U.S. Attorneys Gary Tromblay and Camille Sparks prosecuted.
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Chinese Citizen Pleads Guilty to Mail Fraud Related to Dietary Supplement SchemeRead the Press Release
DALLAS – Zhang Xiao Dong (a.k.a. Mark Zhang), of Shanghai, China, pleaded guilty today in Dallas to committing mail fraud in connection with a scheme to sell mislabeled dietary supplements, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
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. In pleading guilty, Zhang admitted that he agreed to help sell synthetic stimulant ingredients, including the substance known as 1,4-DMAA, to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Zhang and two co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers. Zhang admitted that he knew major American dietary supplement retailers would refuse to carry supplements known to contain certain stimulants, such as DMAA.
“Americans should be able to trust the products they consume are safe,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will continue to investigate and prosecute those who enable the sale of mislabeled and potentially unsafe dietary supplements.”
Zhang pleaded guilty before U.S. Magistrate Judge David Horan of the Northern District of Texas. He faces a statutory maximum sentence of 20 years of imprisonment. The Court set sentencing for Oct. 15.
“U.S. consumers trust that their dietary supplements are safe and contain appropriate labeling. When unscrupulous producers add undeclared or misidentified ingredients to dietary supplements, there is no assurance that the product is safe for consumption,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “The FDA will continue to pursue and bring to justice those who participate in fraudulently marketing dietary supplements to the detriment of public health.”
Zhang was arrested in September 2017 along with a co-defendant, Gao Mei Fang, while attending a dietary supplement trade show in Las Vegas. Gao pleaded guilty on April 3, 2018. A third defendant named in the case, Hu Chang Chun, is not believed to be in the United States.
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by Kate Rumsey, Assistant United States Attorney for the Northern District of Texas; and David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch.
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.
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Chinese Citizen Pleads Guilty to Mail Fraud Related to Dietary Supplement SchemeRead the Press Release
Zhang Xiao Dong (a.k.a. Mark Zhang), of Shanghai, China, pleaded guilty in Dallas to committing mail fraud in connection with a scheme to sell mislabeled dietary supplements, the Department of Justice announced today.
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. In pleading guilty, Zhang admitted that he agreed to help sell synthetic stimulant ingredients, including the substance known as 1,4-DMAA, to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Zhang and two co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers. Zhang admitted that he knew major American dietary supplement retailers would refuse to carry supplements known to contain certain stimulants, such as DMAA.
“Americans should be able to trust the products they consume are safe,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will continue to investigate and prosecute those who enable the sale of mislabeled and potentially unsafe dietary supplements.”
Zhang pleaded guilty before U.S. Magistrate Judge David Horan of the Northern District of Texas. He faces a statutory maximum sentence of 20 years of imprisonment. The Court set sentencing for Oct. 15.
“U.S. consumers trust that their dietary supplements are safe and contain appropriate labeling. When unscrupulous producers add undeclared or misidentified ingredients to dietary supplements, there is no assurance that the product is safe for consumption,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “The FDA will continue to pursue and bring to justice those who participate in fraudulently marketing dietary supplements to the detriment of public health.”
Zhang was arrested in September 2017 along with a co-defendant, Gao Mei Fang, while attending a dietary supplement trade show in Las Vegas. Gao pleaded guilty on April 3, 2018. A third defendant named in the case, Hu Chang Chun, is not believed to be in the United States.
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by Kate Rumsey, Assistant United States Attorney for the Northern District of Texas; and David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch.
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.
La Familia Michoacán Drug Cartel Leader Sentenced to 43 Years in Federal PrisonRead the Press Release
DALLAS — “La Familia Michoacán” (LFM) Mexican drug cartel leader, Arnoldo Rueda-Medina, aka “La Minsa,” 48, was sentenced today by U.S. District Judge Ed Kinkeade to serve a total of 520 months in federal prison and a $5 million fine for offenses related to his leadership role within LFM. LFM was responsible for trafficking thousands of kilograms of methamphetamine into the United States and delivered to stash locations in the Northern District of Texas and elsewhere. The announcement was made by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Rueda-Medina pleaded guilty in September 2017 to one count of conspiracy to possess with the intent to distribute a Schedule II controlled substance and one count of conspiracy to launder monetary instruments. Judge Kinkeade sentenced Rueda-Medina to 520 months in federal prison on the drug conviction and 240 months in federal prison on the money laundering conviction, to run concurrently. Rueda-Medina was arrested in Michoacán, Mexico on July 11, 2009, and was extradited to the United States on January 27, 2017.
“Thanks to the unrelenting efforts of our United States law enforcement team and the critical assistance and sacrifice of our Mexican counterparts, a notorious drug cartel leader is where he should be --behind bars,” said U.S. Attorney Nealy Cox. “My office will continue to devote our time, energy, focus and expertise to helping disrupt and dismantle transnational criminal organizations with our law enforcement partners in the United States and abroad to stem the flow of deadly drugs into our country and stop the violence inflicted by people like Rueda-Medina.”
“High ranking cartel figures operating in the North Texas area will not be tolerated,” said Drug Enforcement Administration (DEA) Special Agent in Charge, Clyde E. Shelley Jr. “The DEA and the US Attorney’s Office are working around the clock to combat the massive amount of drugs brought into the United States as a result of the direct actions of Arnoldo Rueda-Medina, aka “La Minsa,” and the continuing threat posed to our communities by the remnants of the LFM.”
On February 25, 2010, the U.S. Department of the Treasury sanctioned Rueda-Medina under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for his involvement in drug trafficking. The Kingpin Act blocks all property and interests in property, subject to U.S. jurisdiction, owned or controlled by significant foreign narcotics traffickers, as identified by the President. The Act also prohibits U.S. citizens and companies from doing any kind of business activity with Rueda-Medina, and it virtually froze all of his assets in the United States.
According to plea documents, from September 2007 through October 21, 2009, Rueda-Medina held a leadership position within LFM, a Mexican drug cartel and organized crime syndicate based in the Mexican State of Michoacán. LFM was responsible for trafficking methamphetamine into the United States through border checkpoints near Laredo, Texas and Tijuana, Mexico.
Rueda-Medina was arrested on July 11, 2009, by Mexican Law Enforcement. After his arrest, members of LFM attempted to free him, and although unsuccessful, a shootout ensued through the streets of Morelia, Michoacan. LFM operatives subsequently attacked several other locations and Federal Police Officers. In response, law enforcement deployed personnel to various locations throughout the state of Michoacan. On July 13, 2009, a group of 12 officers were kidnapped, tortured, and murdered. A note found at the scene where the bodies were dumped stated “Vengan por otro, los estamos esperando” (“Come for another, we are waiting for you”). At least four other officers and two Mexican Marines were killed by LFM operatives responding to the arrest of Arnoldo Rueda-Medina. Several others were wounded.
According to plea documents, LFM used a sophisticated network of individuals in Mexico and the United States to distribute the methamphetamine in the Dallas-Fort Worth area and to collect proceeds from the methamphetamine sales. The drug proceeds that were collected were delivered to cartel members or associates in Mexico either by way of bulk cash smuggling in vehicles utilized by LFM couriers or through money remitters such as Western Union.
The case was investigated by the Drug Enforcement Administration, Dallas Police Department, Garland Police Department and the Texas Department of Public Safety. The U.S. Marshals Service, U.S. Customs and Border Protection and U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) provided special assistance. The Department of Justice’s Office of International Affairs also assisted in the extradition of the defendant to the United States to face charges. The Government of Mexico assisted in the investigation and in securing the extradition of Rueda-Medina to the United States.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
OCDEFT and Narcotics Section Chief Assistant U.S. Attorney Rick Calvert and Assistant U.S. Attorney George Leal prosecuted the case.
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San Angelo Methamphetamine Trafficker Sentenced to 30 Years in Federal PrisonRead the Press Release
SAN ANGELO, Texas — A San Angelo, Texas, man, Mateo Raymond Flores, III, aka “Lawrence Flores,” “Arturo Flores,” “Rogelio Cadena,” “Gordo,” “Mr. G,” 49, was sentenced last week to 360 months in federal prison by U.S. District Judge Sam R. Cummings, following his guilty plea in November 2017 to an indictment charging one count of conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement today.
Flores, who was a fugitive on state charges and living in Mexico at the time of indictment, was charged in a July 2017 federal indictment along with codefendants, Romelia Flores, 47, Pablo Cantu Hernandez, 61, Mario Moreno, Jr., 39, and Shelly Brannon Fowler, 51. All defendants pleaded guilty to their roles. Judge Cummings previously sentenced Hernandez to 235 months in federal prison, Moreno to 151 months in federal prison and Fowler to 188 months in federal prison. Romelia Flores is awaiting sentencing.
According to the plea agreement factual resume, Flores was identified as a source of supply of methamphetamine in the San Angelo area. Flores used the residence of Hernandez as a storage location for his methamphetamine.
On April 26, 2016, a state search warrant was executed at the San Angelo residence of Hernandez. Hernandez admitted that he was storing methamphetamine for Flores. Investigators seized approximately 2.89 pounds of methamphetamine. Hernandez stated that he had stored and distributed approximately 150 pounds of methamphetamine for Flores for the past three years at his residence, collected drug proceeds and sent them to Flores in Mexico.
U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Juanita Fielden prosecuted the case.
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Forney Man Sentenced to 480 Months in Federal Prison for Sexually Abusing and/or Producing Child Pornography of at Least Ten BoysRead the Press Release
DALLAS — Kevin Scott Morris, 45, of Forney, Texas, was sentenced this morning by U.S. District Judge Ed Kinkeade to 480 months in federal prison and a lifetime of supervised release, following his guilty plea in December 2017 to one count of enticement of a minor, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
According to the factual resume and criminal complaint filed in the case, from at least 2009 through the time of Morris’ arrest in this case in 2016, Morris held himself out to parents and children as a member of law enforcement, a photographer, and a film director. In so doing, he convinced at least ten children and their parents to allow him to photograph the children, film the children, and even travel with Morris for the purpose of film and photography sessions that his victims thought would lead to modeling or acting careers. During these “sessions,” Morris built up the trust of, and groomed, several boys who he then sexually abused and/or used to create child pornography.
Law enforcement learned of Morris’ abuse when one of his victims made an outcry that Morris had sexually abused him when he was thirteen years old. When Morris was arrested, law enforcement uncovered numerous videos and images of Morris sexually abusing several other children. In addition, Morris possessed child pornography that he did not produce, including videos of toddlers being sexually abused and a video of a prepubescent boy being raped with his hands tied behind his back.
Morris and the government entered into a plea agreement, in which both parties agreed to the term of imprisonment.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI, the Kaufman County Sheriff’s Office, and the Cypress Police Department in California investigated the case. Assistant U.S. Attorney Jamie L. Hoxie prosecuted.
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Federal Jury Convicts Fort Worth Man on Drug and Firearm ChargesRead the Press Release
FORT WORTH, Texas — Following a one-day trial, a federal jury has convicted Lamone Ivory, 46, of Fort Worth, Texas, of multiple drug and firearm offenses, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Specifically, on Monday a federal jury convicted Ivory on one count of felon in possession of a firearm, one count of conspiracy to possess with intent to distribute a controlled substance, two counts of possession with intent to distribute a controlled substance and one count of possession of a firearm in relation to a drug trafficking crime. Ivory is scheduled to be sentenced on August 31, 2018, by U.S. District Judge John McBryde.
According to evidence presented at trial, on March 30, 2017, law enforcement executed a search warrant at a Fort Worth residence. As officers approached the rear of the residence, they saw a black object being thrown from a rear window, into the backyard. The black object was seized and determined to be a stolen firearm.
When officers entered the residence they encountered Ivory and Michael Demon Nixon. A search of the home revealed a variety of illegal drugs, including, heroin, marijuana, cocaine, and crack cocaine. Officers also found and seized four firearms.
Ivory has at least two felony convictions, one of which is a 1994 Tarrant County conviction for murder, for which Ivory received eighteen years in prison.
The defendants’ sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
The Fort Worth Police Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated. Assistant U.S. Attorneys Megan Fahey and Shawn Smith are prosecuting the case.
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Chinese Citizen Pleads Guilty to Mail Fraud and Smuggling Related to Dietary Supplement SchemeRead the Press Release
DALLAS – Gao Mei Fang (a.k.a. Amy Gao), of Shanghai, China, pleaded guilty in Dallas to mail fraud and smuggling charges in connection with a scheme to sell mislabeled dietary supplements, Erin Nealy Cox, U.S. Attorney for the Northern District of Texas made the announcement today.
Gao was the supply chain manager for Genabolix USA, Inc. and Shanghai Yongyi Biotechnology Co., Ltd., Chinese firms that sell raw ingredients for use in dietary supplements. In pleading guilty, Gao admitted that she agreed to help sell synthetic stimulant ingredients, including the substance known as 1,4-DMAA, to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Gao and two co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers. Gao admitted that she 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.
“Protecting Americans from fraud and ensuring the safety of the products they consume are top priorities of the Department of Justice,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will pursue those who attempt to import dangerous and illegal commodities into the United States.”
Gao pleaded guilty before U.S. Magistrate Judge David Horan of the Northern District of Texas. She faces a statutory maximum sentence of 20 years of imprisonment on both the mail fraud and smuggling counts. The Court set sentencing for October 1, 2018.
“As evidenced by the global scope of this investigation and this plea of guilty, my office is fully committed to protecting our citizens,” said U.S. Attorney Nealy Cox. “We will continue to vigorously investigate and prosecute those who fraudulently mislead and endanger the American public.”
“U.S. consumers trust that their dietary supplements are safe and contain appropriate labeling. When unscrupulous producers add undeclared or misidentified ingredients to dietary supplements, there is no assurance that the product is safe for consumption,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “The FDA will continue to pursue and bring to justice those who participate in fraudulently marketing dietary supplements to the detriment of public health.”
Gao was arrested in September 2017 along with a co-defendant, Zhang Xiao Dong, 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.
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by Kate Rumsey, Assistant United States Attorney for the Northern District of Texas; and David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch.
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.
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Carrolton Man Pleads Guilty for His Role in a “Foreclosure Rescue Scheme” That Exploited Vulnerable Homeowners Facing ForeclosureRead the Press Release
DALLAS — Mark Demetri Stein, 38, of Carrollton, Texas, appeared in federal court this morning before U.S. Magistrate Judge Rebecca Rutherford and pleaded guilty to one count of mail fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Stein faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. Restitution could also be ordered. Stein will remain on bond pending sentencing which will be set at a later date.
A federal grand jury in Dallas returned an indictment in December 2016 charging Stein and three others with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013. Bruce Kevin Hawkins, 52, of Desoto, Texas, Richard Bruce Stevens, 51, of San Antonio, Texas, and Christina Renee Caveny, 37, of Dallas, have pleaded guilty to their roles in the scheme. Hawkins and Caveny have been sentenced to 41 months and 15 months in federal prison, respectively. Stevens is scheduled to be sentenced before U.S. District Judge David C. Godbey on May 7, 2018.
According to documents filed in the case, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, as foreclosure rescue companies. The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive a new home loan with a reduced interest payment and reduced monthly payment. Hawkins and other conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage. They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.
Furthermore, Hawkins and other conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.
As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders. As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”
Further, according to plea documents, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property. The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners. In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct. Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.
The defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.
This case is one of many felony indictments of bankruptcy-related crimes prosecuted as part of the Bankruptcy Fraud Initiative, United States Attorney’s Office, Northern District of Texas. These bankruptcy prosecutions were a part of a larger number of criminal referrals regularly made to this office by the United States Trustee’s Office, Dallas, Texas. Since 2013, these focused prosecutions have resulted in 25 convictions of individuals engaged in various types of fraudulent conduct within the United States Bankruptcy Courts.
The Dallas FBI investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Three Men Convicted for Roles in Trafficking of Multiple Underage GirlsRead the Press Release
FORT WORTH, Texas — Following a four-day trial before U.S. District Judge Reed C. O’Connor, a federal jury convicted three men, last week, for their roles in a conspiracy to commit sex trafficking of underage girls. U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement.
The jury convicted Pierre Lagrone, aka “P” or “Pedro,” 33, on one count of conspiracy to engage in sex trafficking of children, four counts of sex trafficking of children and one count of possession of child pornography. Lagrone faces a minimum of 10 years and up to life in federal prison and a $1 million fine.
Herman Sanders, aka “Pooh,” 29, was convicted on one count of conspiracy to engage in sex trafficking of children, one count of production of child pornography and one count of possession of child pornography. Sanders faces a minimum of 15 years and up to 35 years in federal prison and a $1 million fine.
Demarcus Davis, aka “Zigg,” 25, was convicted on one count of sex trafficking of children. He faces a minimum of 10 years and up to 35 years in federal prison and a $1 million fine.
Lagrone and Davis are scheduled to be sentenced by Judge O’Connor on July 23, 2018. A sentencing date for Sanders has not been set.
According to evidence presented at trial, Lagrone and Davis were violent pimps who recruited, controlled, and profited off underage female victims through commercial sex acts. Lagrone and Davis recruited and advertised underage female victims for commercial sex acts. The defendants communicated with potential clients, collected proceeds, and paid for motels rooms and supplies. Lagrone and Davis kept almost all, if not all, of the proceeds of the commercial sex acts, providing only food, shelter, and occasional clothing to the underage female victims. Sanders conspired with and assisted Lagrone in this sex trafficking.
The U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Federal Bureau of Investigation and the Fort Worth, Tyler and Arlington Police Departments are investigating. Assistant U.S. Attorneys P.J. Meitl and Nicole Dana are in charge of the prosecution.
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Fort Worth Man Sentenced to 240 Months in Federal Prison after Pleading Guilty to Felony Offense Related to Elder AbuseRead the Press Release
FORT WORTH — Micaha Paul Sneed, aka “Micaha “Mike” McGrath,” 40, of Fort Worth, Texas, was last week by U.S. District Judge John McBryde to serve 240 months in federal prison following his guilty plea in October 2017 to a felony offense related to elder abuse, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Specifically, Sneed pleaded guilty to one count of wire fraud. He has been in custody since the time of his arrest in August 2017.
According to the factual resume filed in the case, starting in 2008 and continuing until June 2017, Sneed devised and operated a scheme to defraud, and to obtain money by false and fraudulent pretenses, representations and promises. McGrath solicited and obtained large sums of money from multiple victims by making false representations that he needed help paying legal fees and other costs related to a lawsuit with the U.S. government over his biological father’s Florida estate and obtaining proceeds of a life insurance policy for which Sneed was the beneficiary. Neither the estate nor the life insurance policy existed.
Sneed, according to the factual resume, was given money by each of the victims in exchange for his promise to pay the victims from either the fictitious estate or fictitious life insurance policy. Between October 20, 2014, and June 29, 2017, McGrath provided approximately 18 counterfeit checks to the victims, falsely representing that the checks were payments of partial proceeds from the lawsuit and/or the life insurance policy.
The Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Nancy Larson prosecuted.
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Dallas County Schools Superintendent Charged in $3 Million Kickback SchemeRead the Press Release
DALLAS — Rickey Dale Sorrells, 62, of Dallas, has been charged for his role in receiving more than $3 million in bribe and kickback payments to help secure over $70 million in contracts, agreements, and orders, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
The criminal felony Information filed today charges Sorrells with one count of conspiracy to commit honest services wire fraud. Signed plea papers were also filed indicating Sorrells’ intent to plead guilty. Sorrells faces a maximum penalty of imprisonment not to exceed twenty years and a $250,000 fine. Restitution could also be ordered. An arraignment date has not yet been set.
According to the filed Information and plea papers, from 2011 through 2017, the president of a technology company (Person A) that put cameras on school buses, paid Sorrells, the superintendent of Dallas County Schools (DCS), in excess of $3 million in bribe and kickback payments in exchange for favorable official action, including Sorrells’ decision to enter into contracts and licensing agreements on behalf of DCS and to purchase school-bus-camera equipment.
Payments made to Sorrells were funneled through various pass-through companies created and operated by his business associate, Slater Washburn Swartwood, Sr., as well as through a law firm. An account in the name of a nonexistent company was created to conceal payments that were made toward Sorrells’ credit card debt. To further disguise the bribe and kickback payments, Sorrells received a portion of the payments through shell companies which, at the behest of Person A, he created in his and/or a family member’s name(s).
In an effort to obscure the illegal purpose of the payments, according to documents filed in the case, Sorrells and others created fake consulting agreements, fake invoices, a fake real estate business, fake loan documents, discussed tying all past payments from Person A to Sorrells to the “note,” conspired to have Sorrells begin making payments on the “loan,” after which Person A would “recycle” the money back to Sorrells, and created a document with a narrative to ensure that they all had their stories straight.
The investigation was conducted by the Federal Bureau of Investigation.
Assistant U.S. Attorney Andrew Wirmani is in charge of the prosecution.
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Chinese Citizen Pleads Guilty to Mail Fraud and Smuggling Related to Dietary Supplement SchemeRead the Press Release
Gao Mei Fang (a.k.a. Amy Gao), of Shanghai, China, pleaded guilty in Dallas to mail fraud and smuggling charges in connection with a scheme to sell mislabeled dietary supplements, the Department of Justice announced today.
Gao was the supply chain manager for Genabolix USA Inc. and Shanghai Yongyi Biotechnology Co. Ltd., Chinese firms that sell raw ingredients for use in dietary supplements. In pleading guilty, Gao admitted that she agreed to help sell synthetic stimulant ingredients, including the substance known as 1,4-DMAA, to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Gao and two co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers. Gao admitted that she 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.
“Protecting Americans from fraud and ensuring the safety of the products they consume are top priorities of the Department of Justice,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will pursue those who attempt to import dangerous and illegal commodities into the United States.”
Gao pleaded guilty before U.S. Magistrate Judge David Horan of the Northern District of Texas. She faces a statutory maximum sentence of 20 years of imprisonment on both the mail fraud and smuggling counts. The Court set sentencing for Oct. 1.
“As evidenced by the global scope of this investigation and this plea of guilty, my office is fully committed to protecting our citizens,” said U.S. Attorney Erin Nealy Cox. “We will continue to vigorously investigate and prosecute those who fraudulently mislead and endanger the American public.”
“U.S. consumers trust that their dietary supplements are safe and contain appropriate labeling. When unscrupulous producers add undeclared or misidentified ingredients to dietary supplements, there is no assurance that the product is safe for consumption,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “The FDA will continue to pursue and bring to justice those who participate in fraudulently marketing dietary supplements to the detriment of public health.”
Gao was arrested in September 2017 along with a co-defendant, Zhang Xiao Dong, 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.
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by Kate Rumsey, Assistant United States Attorney for the Northern District of Texas; and David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch.
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.
South Carolina Man Sentenced to 120 Months in Federal Prison for Enticing a MinorRead the Press Release
LUBBOCK, Texas — A South Carolina resident, Travis Daron Pitts, 51, was sentenced this morning by Senior U.S. District Judge Sam R. Cummings to 120 months in federal prison, following his guilty plea in November 2017 to one count of enticement and attempted enticement of a minor, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Pitts has been in federal custody since his arrest in September 2017.
According to the plea agreement factual resume filed in the case, on August 11, 2017, Pitts, who lived in South Carolina, began communicating with an 11-year old female who lived in the Lubbock, Texas. Pitts and the minor female, Jane Doe communicated over the Internet, using an application that provides a way for individuals to share photos, videos, text messages and make phone calls. The sexually explicit communications between Pitts and Jane Doe took place in the “preteenies” girls only chat room. Jane Doe’s stepmother learned of the communications and notified authorities.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Federal Bureau of Investigation, Texas Department of Public Safety and Texas Rangers investigated the case. Assistant U.S. Attorney Jeffrey Haag was in charge of the prosecution.
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Illegal Alien Sentenced for His Role in a Methamphetamine Distribution ConspiracyRead the Press Release
DALLAS — Diego Morales-Ramirez, 25, a citizen of Mexico and in the United States illegally, was sentenced Wednesday before U.S. District Judge Ed Kinkeade for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Morales-Ramirez was sentenced to 120 months in federal prison following his guilty plea in August 2017 to one count of possession with intent to distribute a schedule II controlled substance, said substance being 50 grams or more of methamphetamine. Morales-Ramirez will be deported following completion of his prison term. He has been in custody since his arrest in March 2017.
According to documents filed in the case, on February 3, 2017, Morales-Ramirez was stopped by a police officer for failing to signal while changing lanes. During the stop Morales-Ramirez was extremely nervous and a K-9 alerted to the presence of a controlled substance inside the vehicle. Also during the stop it was learned that Morales-Ramirez was inside the United States illegally and that he had been previously deported. Morales-Ramirez was advised he was going to be detained for being illegally present in the United States and officers offered to return his vehicle and some of his personal items to the apartment he just came from.
Upon arrival Morales-Ramirez gave officers consent to search his apartment. Before officers entered the apartment Morales-Ramirez said there was a gray bin on the right side with “stuff” in it. Upon opening the gray bin officers found several bags containing a crystal like substance that field tested positive for 10.97 kilograms of methamphetamine.
The offices of Homeland Security Investigations and Enforcement and Removal Operations, and Task Force Officers from the Rowlett and Fate Police Departments investigated and assisted in the case. Assistant U.S. Attorney George Leal prosecuted.
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FBI Agent Convicted for Falsifying Information When Applying for a PassportRead the Press Release
EL PASO, Texas — Following a four-day trial, a federal jury has convicted a woman on felony offenses for submitting false information when applying for a passport in June 2014, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
Rhonda Lynn Chesser Lindstrom, 41, most recently from Washington, D.C., was convicted last week on three counts of false statement in application for passport. Each false statement count carries a statutory penalty of not more than 25 years in federal prison and a $250,000 fine. Lindstrom is scheduled to be sentenced by U.S. District Judge David Briones on June 7, 2018.
Because Chesser Lindstrom worked as a Special Agent in the El Paso FBI office, and presented cases to the Western District of Texas U.S. Attorney’s office, the Western District of Texas Assistant U.S. Attorneys were recused and Northern District of Texas Assistant U.S. Attorney Paulina Jacobo was appointed as a Special Assistant to the Attorney General.
According to evidence presented at trial, on June 10, 2014, Chesser Lindstrom personally appeared at the United States Department of State, El Paso Passport Agency (EPPA), and submitted an Application for a U.S. Passport. As required by the application, Chesser Lindstrom provided as proof of citizenship a State of Louisiana Birth Certificate issued on August 22, 2011. The date of birth on the birth certificate was August 26, 1977. As proof of identity, Chesser Lindstrom provided a State of Maryland Driver’s License with a date of birth of August 26, 1977.
A Passport Specialist conducted a thorough and detailed review of Chesser Lindstrom’s Passport Application. He noticed that the birth certificate appeared to have been altered. Specifically, the birth certificate showed clear signs of handwritten alterations in three places, the Birth Number, the Birth Date, and the File Date. The birth certificate had erasures and numbers rewritten in the three places. Since it was obvious that the birth certificate was altered, the case was referred to the Fraud Prevention Manager (FPM).
On June 12, 2014, the Passport Application was further reviewed by the Fraud Prevention Office to verify all information submitted by Chesser Lindstrom. The results of the review indicated that Lindstrom’s correct date of birth was August 26, 1976; no record was found of a Rhonda Chesser born on August 26, 1977, as indicated on the birth certificate she provided to the EPPA.
The EPPA asked for additional information and Chesser Lindstrom provided additional false documents after enticing her older sister to participate in creating those documents.
The Department of Justice Office of Inspector General was the lead investigation agency, assisted by the U.S. Department of State, Diplomatic Security Service, Criminal Fraud Investigations, and the United States Department of State, El Paso Passport Agency Program Fraud Office investigated. Assistant U.S. Attorneys Paulina Jacobo and Chris Wolfe prosecuted.
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Canyon, Texas Man Sentenced to 135 Months in Federal Prison for Child Pornography OffenseRead the Press Release
AMARILLO, Texas — Neal Edmond Brown, 46, of Canyon, Texas, was sentenced this week by U.S. District Judge Sidney A. Fitzwater to 135 months in federal prison, following his guilty plea in November 2017 to possession of prepubescent child pornography, announced Erin Nealy Cox, United States Attorney for the Northern District of Texas.
Brown has been in custody since his arrest in October 2017.
According to the plea agreement factual resume filed in the case, the National Center for Missing and Exploited Children (NCMEC) received information that an image depicting child pornography had been uploaded using the Skype program. Law enforcement discovered that the IP address responsible for uploading the image belonged to the Region 16 Education Service Center (ESC) in Amarillo, Texas. With the assistance from Region 16 ESC personnel, agents were able to verify that Brown, the Director of School Finance Operations at Region 16 ESC, was uploading child pornography from his work computer.
On June 21, 2017, a search warrant was executed at Region 16 ESC and agents seized several electronic devices located in Brown’s office. A forensic examination revealed that the electronic devices contained over 900 images of child pornography and over 200 videos of child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Federal Bureau of Investigation and Amarillo Police Department are investigated the case. Assistant U.S. Attorney Joshua Frausto prosecuted.
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California Men Plead Guilty to Roles in Fentanyl Distribution ConspiracyRead the Press Release
AMARILO, Texas — Two men from California, Erasmo Ramirez-Romero and Jorge Ramirez, appeared yesterday afternoon before U.S. District Judge Sidney A. Fitzwater, and pleaded guilty to their roles in a fentanyl distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Ramirez-Romero, 31, and Ramirez, 22, each pleaded guilty to one count of possession with intent to distribute fentanyl. The defendants face a maximum sentence of not more than 20 years in federal prison and a $1 million fine. Judge Fitzwater set a sentencing date of July 11, 2018.
According to documents filed in the case, on January 14, 2018, law enforcement was working routine patrol in Carson County, Texas stopped a 2005 Nissan Altima for driving in the left lane when not passing. The officer made contact with the driver of the vehicle, who was later identified as Ramirez, and the passenger, who was later identified as Ramirez- Romero. The officer noticed indicators of possible criminal activity and inconsistencies with Ramirez’s and Romero’s stories about their trip.
Ramirez consented to a search of the vehicle. During the search of the vehicle, law enforcement located four bundles of Fentanyl, weighing approximately 10 pounds, in the passenger side quarter panel in the trunk.
The case is being investigated by the Texas Department of Public Safety and the Drug Enforcement Administration. Assistant U.S. Attorney Joshua Frausto is in charge of the prosecution.
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Amarillo Man Sentenced to 212 Months in Federal Prison on Drug ChargeRead the Press Release
AMARILLO — U.S. District Judge Sidney A. Fitzwater sentenced Jose Santillan, 25, of Amarillo, Texas, earlier this week to 212 months’ in federal prison. Santillan was convicted in December 2017, following a three-day trial, on one count of conspiracy to distribute and possess with intent to distribute 50 grams or more of pure methamphetamine The announcement was made today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Santillan has been in custody since the time of his arrest in April 2017.
According to evidence presented at trial, on February 2, 2016, a Texas Department of Public Safety agent working in an undercover capacity arranged to purchase eight ounces of methamphetamine from Guadalupe Vargas-Mayorga. Through surveillance and recorded telephone calls between the undercover agent and Vargas-Mayorga, law enforcement learned that Vargas-Mayorga obtained the eight ounces of methamphetamine from Jose Santillan and then delivered that methamphetamine to the undercover agent. Laboratory results confirmed that Vargas-Mayorga and Santillan delivered 192 grams of pure methamphetamine to the undercover agent on February 2, 2016. The evidence presented at trial also showed that Santillan had been supplying Vargas-Mayorga with methamphetamine for further distribution since approximately 2014. Additionally, evidence presented at sentencing showed that Santillan was receiving large shipments of liquid methamphetamine from Mexico.
The Drug Enforcement Administration, Department of Homeland Security, Texas Department of Public Safety, Amarillo Police Department, Potter County Sheriff’s Office, and Randall County Sheriff’s Office investigated. Assistant U.S. Attorneys Sean Taylor and Joshua Frausto and Deputy Criminal Chief Assistant U.S. Attorney Jeffrey Haag prosecuted the case.
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Radiation Therapy Company Agrees to Pay up to $11.5 Million to Settle Allegations of False Claims and KickbacksRead the Press Release
DALLAS – Texas-based SightLine Health LLC (SightLine), which operates radiation therapy centers throughout the United States, has agreed to settle a False Claims Act lawsuit alleging that it knowingly submitted claims to the Medicare program that violated the Anti‑Kickback Statute, the Justice Department announced today. Together with Integrated Oncology Network Holdings LLC (ION), which acquired SightLine in 2011, SightLine has agreed to pay the government up to $11.5 million. The announcement was made today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and instead is based on the best interests of the patient. It prohibits anyone from offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. Claims submitted in violation of the Anti-Kickback Statute may subject the claimant to liability under the False Claims Act.
The settlement announced today resolves allegations that SightLine violated the Anti-Kickback Statute and the False Claims Act by targeting physicians that were able to refer patients to its cancer treatment centers, and paid those physicians a share of its profits pursuant to investment arrangements that were set up to allow physicians to profit from their referrals. Specifically, the United States alleged that SightLine formed a series of leasing companies in which referring physicians were permitted to invest, and through which SightLine allegedly distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy.
“As the professionals charged with recommending and referring medical procedures for our community, physicians’ primary motivation must remain the well-being of their patients,” said U.S. Attorney Erin Nealy Cox. “Today’s settlement demonstrates our determination to eliminate complex business ventures that improperly interpose financial considerations into our physicians’ medical judgment.”
“Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal inducements, in whatever form, that undermine the integrity of our public health programs.”
In addition to resolving their alleged False Claims Act liability, ION, SightLine, and their related entities have entered into a five-year Corporate Integrity Agreement with the HHS-OIG. This agreement is intended to increase accountability and transparency and to deter future misconduct. The Corporate Integrity Agreement includes internal and external monitoring of the relationships between the ION and SightLine entities and referring physician investors.
“Companies seeking to boost profits by paying physicians kickbacks for patient referrals undermine impartial medical judgment and increase health care costs for everyone,” said Chief Counsel to the HHS Inspector General Gregory Demske. “We will continue to investigate such illegal, wasteful business arrangements in order to protect government health programs and the patients served by them.”
The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery. The act also allows the Government to take over the case, as it did here in part. The whistleblower will receive up to $1.725 million.
This matter was handled by the Assistant U.S. Attorney Kenneth Coffin of the U.S. Attorney’s Office for the Northern District of Texas, the Justice Department’s Civil Division, and the HHS Office of the Inspector General.
The case is captioned United States ex rel. IIRT, LLC v. Sightline Health LLC, et al.., Civil Action No. 3-15CV-3202N (N.D. Tex.). The claims resolved by this settlement are allegations only and there has been no determination of liability.
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Radiation Therapy Company Agrees to Pay up to $11.5 Million to Settle Allegations of False Claims and KickbacksRead the Press Release
Texas-based SightLine Health LLC (SightLine), which operates radiation therapy centers throughout the United States, has agreed to settle a False Claims Act lawsuit alleging that it knowingly submitted claims to the Medicare program that violated the Anti‑Kickback Statute, the Justice Department announced today. Together with Integrated Oncology Network Holdings LLC (ION), which acquired SightLine in 2011, SightLine has agreed to pay the government up to $11.5 million.
The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and instead is based on the best interests of the patient. It prohibits anyone from offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. Claims submitted in violation of the Anti-Kickback Statute may subject the claimant to liability under the False Claims Act.
The settlement announced today resolves allegations that SightLine violated the Anti-Kickback Statute and the False Claims Act by targeting physicians that were able to refer patients to its cancer treatment centers, and paid those physicians a share of its profits pursuant to investment arrangements that were set up to allow physicians to profit from their referrals. Specifically, the United States alleged that SightLine formed a series of leasing companies in which referring physicians were permitted to invest, and through which SightLine allegedly distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy.
“Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal inducements, in whatever form, that undermine the integrity of our public health programs.”
“As the professionals charged with recommending and referring medical procedures for our community, physicians’ primary motivation must remain the well-being of their patients,” said U.S. Attorney Erin Nealy Cox. “Today’s settlement demonstrates our determination to eliminate complex business ventures that improperly interpose financial considerations into our physicians’ medical judgment.”
In addition to resolving their alleged False Claims Act liability, ION, SightLine, and their related entities have entered into a five-year Corporate Integrity Agreement with the HHS-OIG. This agreement is intended to increase accountability and transparency and to deter future misconduct. The Corporate Integrity Agreement includes internal and external monitoring of the relationships between the ION and SightLine entities and referring physician investors.
“Companies seeking to boost profits by paying physicians kickbacks for patient referrals undermine impartial medical judgment and increase health care costs for everyone,” said Chief Counsel to the HHS Inspector General Gregory Demske. “We will continue to investigate such illegal, wasteful business arrangements in order to protect government health programs and the patients served by them.”
The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery. The act also allows the Government to take over the case, as it did here in part. The whistleblower will receive up to $1.725 million.
This matter was handled by the U.S. Attorney’s Office for the Northern District of Texas, the Justice Department’s Civil Division, and the HHS Office of the Inspector General.
The case is captioned United States ex rel. IIRT, LLC v. Sightline Health LLC, et al.., Civil Action No. 3-15CV-3202N (N.D. Tex.). The claims resolved by this settlement are allegations only and there has been no determination of liability.