Northern District of Texas

DALLAS — Shenandoah West Moneypenny, 34, of Gladewater, Texas, and Shawn Dale Sanders, 43, of Dallas, Texas, remain in federal custody on a federal criminal complaint for the sex trafficking of a 13-year-old female, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Moneypenny and Sanders are each charged with one count of conspiracy to use, persuade, induce, entice, and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. Both defendants were arrested on December 18, 2017 and will remain in federal custody pending trial.

According to the affidavit filed with the criminal complaint, in October 2017, a family member of a 13-year-old minor female (Victim) contacted a Garland Independent School District School Resource Officer after finding communications on the minor’s laptop computer between Victim and adult males. The family brought the laptop computer and Victim’s cellular phone to the School Resource Officer, who previewed the devices and observed sexually explicit communications.

 

During an interview with law enforcement, according to the affidavit, Victim disclosed that she had sexual contact with up to four adult men who she met online. When asked how she came to communicate with these men, Victim stated that she met a man online named “Aiden” and he put her in contact with other men to “meet up.” Aiden, who was later identified as Moneypenny, began to set up in-person meets for her through Craigslist advertisements that he placed. These advertisements sought men to meet Victim for sex. Responses to the Craigslist ads went directly to Moneypenny’s email account and, once he deemed the responder to be safe for Victim to meet, Moneypenny provided Victim with their contact information.

 

In August 2017, Victim met Sanders in response to the Craigslist ad. Sanders picked Victim up from the middle school and drove her to a local park where they had sexual conduct. During this meeting Sanders took sexually explicit pictures of Victim and sent them to Moneypenny as a trade-off for setting him up with the Victim. Sanders and Victim met approximately four times after that and engaged in sexual conduct.

 

Moneypenny received a total of 219 replies to the Craigslist advertisement, including Sanders reply.

 

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The penalty for the offense as charged is not less than 15 years or more than 30 years in federal prison, a $250,000 fine and a lifetime of supervised release.

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 Garland Police Department are investigating.  Assistant U.S. Attorney P.J. Meitl is in charge of the prosecution.

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DALLAS — Slater Washburn Swartwood, Sr., of Louisiana, has been charged with money laundering for his role in a fraud scheme that involved $3 million in illegal bribe and kickback payments, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The criminal felony Information filed yesterday charges Swartwood with one count of conspiracy to commit money laundering.  Signed plea papers were also filed indicating Swartwood’s intent to plead guilty.  Swartwood faces a maximum penalty of imprisonment not to exceed five 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, Swartwood started working with Person A as a real estate adviser in approximately 1985. In approximately 2010, he began doing real estate consulting for Company A, at first as an employee and later as a consultant.  Company A, which was owned and controlled by Person A, sold cameras and related services for school buses. Company A entered into various contracts and a licensing agreement with a Texas state agency acting through its superintendent,  Person B. Under these contracts and the licensing agreement, the state agency purchased millions of dollars of camera equipment from Company A.

 

Between 2011 and 2016, according to documents filed in the case, Person A provided Swartwood with approximately $2 million to funnel to Person B through Swartwood’s companies, Elf Investments, Cambridge Realty Group, LLC, and Anrock Realty Services, LLC, in return for further agreements and camera-equipment orders.

 

The investigation was conducted by the Federal Bureau of Investigation.

 

Assistant U.S. Attorneys Andrew Wirmani and Joseph Magliolo are in charge of the prosecution.

 

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FORT WORTH, Texas — Two men who admitted breaking into pharmacies and stealing controlled substances, Nicholas Evans, aka “Nico,” and Darrien Jefferson, aka “Smoke,” were sentenced today by U.S. District Judge Reed C. O’Connor, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Evans, 25, was sentenced to serve a total of 121 months in federal prison, and Jefferson, 36, was sentenced to a total of 168 months in federal prison. Each pleaded guilty in August 2017 to one count of conspiracy to commit 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.

Kenneth Sauls, aka “Smurf,” 23, also pleaded guilty to his role in the robbery and is scheduled to be sentenced on January 16, 2018.

Dion Clark, 36, was charged in a separate indictment and pleaded guilty to his role in the robbery. Clark is scheduled to be sentenced before U.S. District Judge John McBryde on February 14, 2018.

According to the factual resumes filed in the case, on April 9, 2016, Evans, Jefferson, Sauls, and Clark entered into an agreement to commit a robbery at the Walgreens Pharmacy located at 833 South Wilshire Blvd., Burleson, Texas. Clark waited in the vehicle as the get-a-way driver while Evans, Jefferson and Sauls entered the Walgreens, brandished firearms and “zip” tied the victims’ hands and feet. Collectively the group stole narcotics, cash, cigarettes, and approximately 150 booklets of stamps.

 

The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Fahey prosecuted.

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DALLAS — A defendant charged in a major drug distribution conspiracy that operated in the Dallas-Fort Worth metroplex and elsewhere was sentenced last week by U.S. District Judge Jane J. Boyle to 188 months in federal prison for his role in that conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Tony Ruvalcaba, a/k/a “Lil Tony,” 40, of Dallas, pleaded guilty in December 2015 to one count of conspiracy to possess with intent to distribute and to distribute a schedule II controlled substance. 

 

In July 2015, Ruvalcaba and 45 others were indicted, following a law enforcement operation. According to the plea agreement factual resume filed in Ruvalcaba’s case, beginning in November 2012, Ruvalcaba conspired with Javier Guerra, aka “Chop,” Eduardo Ruvalcaba, Jose Guerrero, aka “JD,” Eusebio Martinez Ramirez, Jr., aka “Sip,” Kenneth Johnson, aka “KJ,” Alex Gonzales, Noel Escamilla, and others to possess with intent to distribute 500 grams or more of methamphetamine. The defendants were supplied multi-kilogram amounts of methamphetamine which they then worked to distribute to various individuals.   

 

The Federal Bureau of Investigation, Dallas Police Department, and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigrations and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.

 

Assistant U.S. Attorneys George Leal and John de la Garza were in charge of the prosecution.

# # #

DALLAS — Thomas Adam Lewis, 37, of Mansfield, Texas, appeared yesterday in federal court before U.S. Magistrate Judge Renee Harris Toliver and pleaded guilty to one count of attempted production of child pornography.  Lewis, who has been in federal custody since his arrest in September on related charges, faces a maximum statutory penalty of not less than 15 years and up to 30 years in federal prison, a $250,000 fine, and a lifetime of supervised release.  Sentencing is scheduled for April 5, 2018.  U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement today.

According to the plea agreement factual resume filed in the case, on August 4, 2017, a Grand Prairie Police Department detective began an undercover investigation, posing as a thirteen year old boy, targeting adults who were soliciting minors on the internet through the use of a third party messaging application.

 

Lewis using the screen name “Twinks only 33” (“Twinks33”), contacted the Detective and asked the Detective for pictures of himself. After receiving an image of a minor male wearing jeans, a white tank top, and a baseball cap, Lewis replied, “Um you are sexy,” and asked the Detective if he had any shirtless pictures. During the next few days, Lewis repeatedly asked the Detective to take shirtless and nude pictures of himself and send the child pornography images to him.

 

The conversations continued, according to the factual resume, and Lewis asked, “when can we meet?” Sporadically over a few days Lewis and the Detective discussed meeting and on the afternoon of August 29, 2017, Lewis arrived at a designated apartment complex in Grand Prairie and was arrested. Lewis provided law enforcement with the passcode to his cellular device. Upon review of the phone, law enforcement located the communications between Twinks33 and the Detective. Lewis was using other social networking applications and was engaged in additional communications entailing the sexual exploitation of minors. Law enforcement contacted resource officers at two area high schools in an attempt to identify possible victims and located a 15-year-old boy who had also chatted with Lewis. The conversations were sexually explicit and Lewis attempted to entice the boy to have sex with him.

 

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 case was investigated by the Federal Bureau of Investigation and the Grand Prairie Police Department.  Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

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LUBBOCK, Texas — Timothy Wade Barton, 55, of Sweetwater, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 97 months in federal prison, following his guilty plea in July 2017 to a superseding information charging one count of possession of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Barton, who has been on bond, was ordered to report to the Bureau of Prisons on January 17, 2018.

According to documents filed in his case, between May 9, 2011 and September 23, 2014, Barton possessed a custom-built desktop computer and hard disk drive that contained numerous images and videos of child pornography.  Barton used his computer to search on the Internet to locate material depicting minors engaging in sexually explicit conduct.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 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.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case.  Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.

# # #

DALLAS — Kirk Patrick Keshler, 60, of Garland, Texas, appeared today in federal court in Dallas and pleaded guilty, before U.S. Magistrate Judge David L. Horan, to one count of transportation of child pornography.  The announcement was made today by Erin Nealy Cox, U.S. Attorney for the Northern District of Texas. 

Keshler faces a maximum penalty of not less than five, nor more than 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. He will remain in custody pending sentencing which is set for April 4, 2018.

According to the plea agreement factual resume filed in the case, Keshler, a teacher for special needs children at Garland High School, used the internet and a peer-to-peer file-sharing account to send and receive visual depictions of minors engaged in sexually explicit conduct.

 

On August 16, 2017, law enforcement received a search warrant for Keshler’s residence in Garland, Texas. While conducting the search of the residence, law enforcement entered the master bedroom of the home and located a nude, realistic-looking child size doll lying on the floor of a closet with a wig covering the face of the doll. Additionally, law enforcement observed in the master bedroom a large television connected to a laptop computer. The laptop computer was powered on and Windows media player was open on the screen showing that Keshler was actively viewing child exploitative movies when law enforcement made contact at his residence.

 

A forensic review of the seized laptop computer, according to the factual resume, revealed over 10,000 images and 3,000 videos involving toddler aged children to early and pubescent teens, both male and female, engaged in sexual activity with adults and with other children. Some of the child pornography files depict sadistic and masochistic content and bestiality. Law enforcement also seized several pairs of female children’s panties in various child sizes.

 

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 and Garland Police Department investigated.  Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

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DALLAS — Octavius Williams, 32, of Irving, Texas, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 168 months in federal prison, following his guilty plea in November 2015 to one count of conspiracy to possess with intent to distribute a controlled substance, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Williams has been in custody since his arrest in July 2015.

According to the plea agreement factual resume filed in the case, in 2014, Williams worked with associates of the Los Caballeros Templarios Mexican cartel to obtain and distribute multiple kilograms of cocaine throughout Dallas, Atlanta, Louisiana, Seattle, Oklahoma, and New York. Williams would distribute approximately 30 kilograms of cocaine per month, charging $800 to $900 per ounce. He kept between $159,000 to $200,000 cash at his house for multi-kilogram transactions.

 

Six Firearms, 551 rounds of ammunition, and approximately $103,354.00 were seized and forfeited as a result of Williams’ arrest.

 

The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.

 

Assistant U.S. Attorneys George Leal and John DeLaGarza were in charge of the prosecution.

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DALLAS — Donald Golden, 62, of Richardson, Texas, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 300 months in federal prison, following his guilty plea in July 2017 to one count of attempted production of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Golden has been in custody since the time of his arrest in March 2017.

According to the plea agreement factual resume filed in the case, on January 5, 2017, Golden sent a series of text messages and emails to John Doe #1, a minor boy under 15 years of age, requesting that he produce sexual explicit images of himself and send the images to Golden via text messaging. The messages included the following: “So, are you going to send me some pics … I need to see what you look like naked … I want to see what you look like from the neck down, no face, naked pics, just body …”

 

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 case was investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorney Shane Read was in charge of the prosecution.

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DALLAS — A Kaufman man, Danny Hall, 51, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 123 months in federal prison for committing multiple bank robberies, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Hall pleaded guilty in June 2017 to one count of bank robbery. He has been in custody since the time of his arrest in January 2017.

According to the plea agreement factual resume, on January 9, 2017, Hall entered the Wells Fargo Bank branch located at 1405 E. Renner Road, Richardson, Texas, and approached a teller. He handed her a note that read, “I have a gun, this is a robbery, and give me cash.” The teller gave Hall cash from the teller drawer totaling $2,692. Hall collected the money and left the bank. Later, he was identified in a photographic line-up by the teller and then arrested.

According to the factual resume, Hall also admitted to the following robberies: November 28, 2016 robbery of the BB&T Bank branch located at 11800 Preston Road, Dallas; January 18, 2017 robbery of the Capital One Bank branch located at 4208 Lemmon Avenue, Dallas; and December 22, 2016 robbery of the Chase Bank branch located at 11611 Preston Road, Dallas.

 The Federal Bureau of Investigation investigated the case.  Assistant U.S. Attorney Shane Read prosecuted.

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DALLAS —Nemelee Liwanag Jiao, 47, of Irving, Texas, pleaded guilty today, before U.S. Magistrate Judge Renee Harris Toliver, to orchestrating a Ponzi scheme that cost at least 35 investors more than $1,000,000, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. 

Jiao pleaded guilty to one count of wire fraud. She faces a maximum statutory penalty for wire fraud is 20 years in federal prison and a $250,000 fine. Jiao will remain on bond pending her sentencing, which is scheduled for April 4, 2018.

According to the plea agreement factual resume, beginning in February 2009 and continuing through September 2016, Jiao devised a scheme to cause individuals to invest in promissory notes purportedly issued by Shepherd’s Light Learning Center and Lord of Peace Learning Center, two non-profit schools located in the Philippines, but instead used the invested funds for her personal benefit.  Jiao raised at least $1,000,000 from at least 35 investors.

Specifically, Jiao represented to investors that she was a representative of Shepherd’s Light and Lord of Peace and entered into investment contracts, also known as promissory notes, with investors falsely promising rates of return of 10% to 100% on investments.  Jiao also promised repayment of principle and interest resulting from the investment within 30 days to one year following the investment.  Many of the investment contracts were notarized to make the investments appear legitimate.  Jiao then directed investors to write checks and wire funds to bank accounts controlled by her.  Jiao used the investors’ funds for her own benefit, including a country club membership and personal expenses.

 

The case was investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorney Mary Walters is in charge of the prosecution.

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DALLAS – DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today.  DaVita Rx is based in Coppell, Texas.

 

The settlement resolves allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.  In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in violation of the Anti-Kickback Statute.  Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card.  These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit.

 

“Providers should not make patient care decisions based upon improper financial incentives or encourage their patients to do the same,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.  “The U.S. Attorney’s Office has and will continue to work cooperatively with providers that bring such issues to light to redress the losses the federal healthcare system has incurred.”

 

DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit.  DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement.  In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

 

“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler.  “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.” 

 

“The conduct being resolved in this matter presents serious program integrity concerns” said CJ Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”

 

The lawsuit resolved by the settlement was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery.  The case is captioned United States ex rel. Gallian v. DaVita Rx, LLC, No. 3:16-cv-0943-B (N.D. Tex.).  The relators will receive roughly $2.1 million from the federal recovery.

 

The settlement of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).  HHS also offers several programs for health care providers to self-report potential fraud.  More information on self-disclosure processes can be found on the HHS-OIG website.

 

The investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas.  The claims asserted by the government are allegations only and there has been no determination of liability.

 

Assistant U.S. Attorney Lisa-Beth C. Meletta handled this matter for the U.S. Attorney’s Office.

 

# # #

DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today.  DaVita Rx is based in Coppell, Texas.

 

The settlement resolves allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.  In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in violation of the Anti-Kickback Statute.  Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card.  These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit.

 

“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler.  “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.” 

 

DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit.  DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement.  In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

 

“Providers should not make patient care decisions based upon improper financial incentives or encourage their patients to do the same,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.  “The U.S. Attorney’s Office has and will continue to work cooperatively with providers that bring such issues to light to redress the losses the federal healthcare system has incurred.”

 

“The conduct being resolved in this matter presents serious program integrity concerns” said CJ Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”

 

The lawsuit resolved by the settlement was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery.  The case is captioned United States ex rel. Gallian v. DaVita Rx, LLC, No. 3:16-cv-0943-B (N.D. Tex.).  The relators will receive roughly $2.1 million from the federal recovery.

 

The settlement of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).  HHS also offers several programs for health care providers to self-report potential fraud.  More information on self-disclosure processes can be found on the HHS-OIG website.

 

The investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas.  The claims asserted by the government are allegations only and there has been no determination of liability.

FORT WORTH, Texas — Jon Anthony Terry, 28, of Rockwall, Texas, was charged in a federal indictment, returned today by a grand jury in Fort Worth, Texas, with four counts of production of child pornography and one count of possession of prepubescent child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Terry is currently in custody on a related criminal complaint. A date has not yet been set for him to make his initial appearance.

The indictment alleges that, on one occasion in 2013 and three separate occasions in 2017, Terry induced three different prepubescent minors to engage in sexually explicit conduct while he recorded the conduct. The indictment also charges Terry with possessing images of child pornography in November 2017.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory penalty for the production count is not less than 15 years or more than 30 years in prison and for the possession count, not more than 10 years in prison. Both counts also carry a fine of up to $250,000 and a term of supervised release of up to life.    

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 investigation is being conducted by the U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

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DALLAS — A Dallas man, Stephen Christopher Plunkett, 42, was sentenced this week by U.S. District Judge Sam A. Lindsay to 114 months in federal prison and ordered to pay $10,220 in restitution for committing three bank robberies, in the Dallas-Fort Worth metroplex in March 2014, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Plunkett pleaded guilty in January 2016 to two counts of bank robbery. He has been in custody since his arrest in June 2015.

According to documents filed in the case and information presented at his sentencing hearing, Plunkett admitted to robbing the following three banks:

        March 24, 2014           Chase Bank, 10729 Preston Road, Dallas

 

        March 25, 2014           Wells Fargo, 14999 Preston Road, Dallas

 

        March 28, 2014           Wells Fargo, 2611 Cedar Springs Road, Dallas

 

Judge Lindsay ordered Plunkett to serve the 114-month sentence in this case consecutively to a 10 year sentence Plunkett received for the April 9, 2014 robbery of a Chase Bank branch located in Forsyth County, Georgia.

The Federal Bureau of Investigation investigated.  Deputy Criminal Chief Assistant U.S. Attorney Lisa Dunn prosecuted.

# # #

DALLAS — Jose Dominguez Berroa, aka “Ana Maria Rodriguez,” “Martha Vargas,” and “Michelle Dominguez,” of Dallas, appeared in federal court this morning and pleaded guilty before U.S. Magistrate Judge David L. Horan to one count of wire fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Berroa faces a maximum penalty of twenty years in federal prison, and a $250,000 fine.  The defendant could also be ordered to pay restitution. Berroa will remain on bond pending sentencing, which is set for April 4, 2018.

Co-defendant Rufus Kimangi Kariuki is scheduled to begin trial on April 23, 2018.

According to the plea agreement factual resume, from February 2012 through December 2012, Berroa and others opened several bank accounts in and around Dallas using false alias names and fraudulent passports. During this time Berroa and others filed approximately 18 fraudulent tax returns and obtained fraudulent refunds totaling at least $314,932 from the IRS.

 

After the fraudulent tax refunds were deposited into the bank accounts, according to the factual resume, Berroa used debit cards to purchase money orders at local stores and would give the blank money orders to Kariuki. Kariuki then distributed blank money orders to Berroa and to others who participated in the scheme.

 

The case was investigated by the Internal Revenue Service.  Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

# # #

FORT WORTH, Texas — Preston Anthony King, 23, of Burleson, Texas, was sentenced today by Senior U.S. District Judge Terry R. Means to 12 years in federal prison and 20 years of supervised release. The sentence follows King’s guilty plea in August 2017 to one count of enticement of a minor, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.

King has been in custody since November 2016 on a related complaint.

According to documents filed in the case, on March 14, 2016, a Fort Worth Police Officer acting in an undercover capacity and posing as a 13-year-old girl responded to an advertisement that King posted on Craigslist. The description of the advertisement indicated that King was looking to engage in sexual intercourse. During the conversation, the officer told King that she was 13 years old, and later in the conversation King told the officer that he wanted to engage in sexual intercourse with her. King agreed to meet, who he thought was a 13-year-old girl, on March 15, 2016, at a hotel room in Fort Worth, Texas, to engage in sexual intercourse. When King arrived at the agreed location the Fort Worth Police Department took King into custody.

 

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 Fort Worth Police Department investigated the case. Assistant U.S. Attorney Megan Fahey is in charge of the prosecution.

# # #

DALLAS — Gary Busby, 65, formerly of Flower Mound, Texas, was sentenced this morning by U.S. District Judge Sam A. Lindsay to 78 months in federal prison for his role in a conspiracy to illegally manufacture firearms that were sent to Mexico, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Busby was convicted in March 2017, following a two-week jury trial, on one count of conspiracy to manufacture firearms without a license and four counts of structuring financial transactions to evade reporting requirements.  Judge Lindsay ordered Busby to surrender to the Bureau of Prisons on March 6, 2018.

According to evidence presented at trial, over the course of 2010 and 2011, Busby manufactured hundreds of AR-15 and AK firearm receivers into fully functional firearms and made thousands of dollars doing so.  Law enforcement found approximately fifty of these firearms. Some were recovered smuggled into Mexico while the rest were recovered by Mexican authorities.

Evidence also showed that from approximately December 2010 to September 2012, Busby purchased hundreds of postal money orders at dozens of post offices in the Dallas-Fort Worth area, in an effort to hide the proceeds of his illegal firearm activity.  Busby would only purchase two $1,000 money orders at a time at one post office, using cash, and would travel to up to six post offices in one day, purchasing $2,000 in money orders at each.  Doing so, he was knowingly evading the federal reporting requirement for when a customer purchases $3,000 or more in money orders.  In 2011 alone, Busby purchased approximately $236,000 in postal money orders, in order to hide the money made manufacturing firearms.  Evidence presented to the jury showed that he knowingly structured these cash transactions.

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Postal Inspection Service investigated.  Assistant U.S. Attorney Kate Rumsey and Criminal Chief Chad Meacham prosecuted.

 

# # #

DALLAS — A federal grand jury in Dallas has indicted Joshua Pugh, 23, of Dallas, Texas, and Johnny Glenn Clifton, 50, of Frisco, Texas, on wire fraud charges stemming from an elaborate scheme to defraud an individual out of approximately $1 million between November 2015 and March 2017, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Specifically, the indictment charges Pugh, aka “Joshua Wealthy,” “Joshua Money,” “Joshua Looney” and “Jmoney” and Clifton, aka “John Mason” and “John Glenn,” with one count of conspiracy to commit wire fraud and five counts of wire fraud.  The indictment was returned this week and unsealed yesterday. Detention hearings for both defendants are scheduled for December 12, 2017 before U.S. Magistrate Judge Renee Harris Toliver. 

According to the indictment, in March 2016, Clifton contacted an individual, Victim 1, and detailed an opportunity to invest in Sectors Global Management (Sectors), a fictitious elite real estate company. According to Clifton, Sectors was backed by elite individuals. Clifton alleged that he would serve as the chief executive officer of Sectors and an individual that Clifton referred to as “Joshua Wealthy” was a leading member. 

Clifton explained to Victim 1 that both he and “Wealthy” were also members of or connected to the Illuminati, which he described as a clandestine cabal of high net worth individuals who delegated control of the world to a select group of 43 families through the manipulation of banks, politics, and intelligence/law enforcement organizations. Clifton stated that Victim 1 was selected to invest in Sectors because of a secret reason that even Clifton was not allowed to know.

The indictment alleges in an effort to convince Victim 1 of the legitimacy of these claims, Pugh and Clifton used extravagant means to effectuate their scheme to defraud Victim 1, including the use of helicopters, caravans, bodyguards, chauffeurs, falsified documentation, and contrived video chats and teleconferences with purported world leaders. The defendants also created a library of falsified documents intended to corroborate their claims, including, emails and communications describing major business deals; letters to major corporations and sport franchises discussing Pugh’s roles in such entities; alleged communications with businesses detailing endorsements with major companies such as Under Armour and the National Basketball Association (NBA); daily itineraries for “Wealthy,” which referenced frequent travel in private jets; and falsified tax documents and W-2 forms.

 

During certain meetings with Victim 1, Pugh outlined the ramifications to Victim 1 if he did not comply with their demands, which included the seizure of Victim 1’s assets, Victim 1’s incarceration by law enforcement and claimed his life would be in danger. The defendants would also send emails often demanding additional money from Victim 1 and outlined the consequences of non-compliance, according to the indictment.

 

Based on the representations and interactions with the defendants, Victim 1 feared the ramifications of not meeting their demands. Victim 1 invested approximately $1 million between November 2015 and March 2017 with Sectors. The money invested was used by the defendants to purchase two Porsche Panameras, a Maserati Quatraporte, merchandise from Louis Vuitton, a black mink stroller coat, a ticket to Super Bowl LLI, a private jet, $400 per month payment to an individual who would put in and take out Pugh’s contact lenses on a daily basis, and chartered helicopter rides.

  

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.  However, if convicted, the maximum statutory penalty for each count of wire fraud is 20 years in federal prison and a $250,000 fine.  Restitution could also be ordered.  The indictment also includes a forfeiture allegation that would require the defendant, upon conviction, to forfeit the proceeds obtained as a result of the offense, including, a 2010 Porsche Panamera, 2012 Porsche Panamera and 2007 Maserati Quattroporte. . 

The Federal Bureau of Investigation is in charge of the investigation.  Assistant U.S. Attorney PJ Meitl is in charge of the prosecution.

# # #

DALLAS — A Cleburne woman, Linzi Ladawn Shifflett, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 720 months in federal prison and a lifetime of supervised release, following her guilty plea to two counts of production of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Shifflett, 29, has been in custody since October 2016.    

According to the plea agreement factual resume and information presented at the sentencing hearing, from at least February 25, 2016 through September 28, 2016, Shifflett molested a four-year-old minor child who was in Shifflett’s custody and took sexually explicit photographs and videos of the child. Shifflett then sold the child pornography for nominal amounts of money to a man in Florida. As a part of the sentence, the Court ordered Shifflett to pay $194,815.17 in restitution.

 

Michael Eugene Williams, the man in Florida who paid for the child pornography, is being separately prosecuted by the U.S. Attorney’s Office for the Middle District of Florida.  He has pleaded guilty to one count of sex trafficking of a child.  His sentencing hearing is currently scheduled for January 29, 2018.       

 

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 investigation was conducted by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Cleburne Police Department in Texas, and the Jacksonville Police Department in Florida.  Assistant U.S. Attorney Jamie L. Hoxie prosecuted.

 

# # #

DALLAS — Crystal Burrows, of Arlington, Texas, was sentenced today by U.S. District Judge Jane J. Boyle to 28 months in federal prison and ordered to pay $320,375 in restitution.  The sentencing follows Burrows’ guilty plea in January 2017 to one count of wire fraud.  The announcement was made by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Judge Boyle ordered Burrows to surrender to the Bureau of Prisons on January 17, 2018.

According to documents filed in her case, beginning in 2014, Borrows knowingly and intentionally participated in a scheme to defraud the Internal Revenue Service (IRS).  More specifically, Burrows electronically filed tax returns for the tax year 2013 with her EFIN, and for tax years 2014 and 2015 with EFINs of coconspirators, under taxpayers’ names and social security numbers without the taxpayers’ knowledge or consent.  In total, Burrows prepared and filed at least 22 fraudulent tax returns using stolen identifying information of tax payers.  Burrows also used two stolen social security numbers to establish numerous credit card accounts, a car loan, store accounts, and care credit accounts typically used for medical procedures.

The case was investigated by IRS Criminal Investigation.  Assistant U.S. Attorney Andrew Wirmani is in charge of the prosecution.

# # #

AMARILLO — Following a three-day trial, a federal jury has convicted Jose Santillan, 25, of Amarillo, Texas, on one count of conspiracy to distribute and possess with intent to distribute 50 grams or more of pure methamphetamine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The conspiracy conviction carries a statutory penalty of at least ten years and not more than life in federal prison and a $10,000,000 fine.  Santillan is scheduled to be sentenced on March 26, 2018, by U.S. District Judge Sidney A. Fitzwater.

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. 

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 are prosecuting the case.

# # #

DALLAS — On December 6, 2017, a husband and wife were indicted on charges that they submitted false and fraudulent claims for home health services and defrauded Medicare of more than $3.4 million, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Edwin Oparaochaekwe, 53, and Chiazom Oparaochaekwe, 47, both of Grand Prairie, Texas, are charged collectively with 10 counts of health care fraud.  Today, both defendants were arrested and made their initial appearance before a U.S. Magistrate Judge.

The indictment alleges that from December 2011 through May 2017, Prime World Home Health (Prime World) was an approved home health agency located originally in Irving, Texas and most recently in Mansfield, Texas.  Edwin Oparaochaekwe was part-owner of Prime World and worked as a recruiter. Chiazom Oparaochaekwe was a registered nurse and also part-owner of Prime World.

As part of the scheme, the defendants marketed Prime World’s services directly to Medicare beneficiaries, instead of obtaining referrals from physicians who had legitimate physician-patient relationships with patients. To obtain the required physician homebound certifications and plans of care (CMS-485s), the defendants sought and obtained signatures on CMS-485s from physicians who had no prior relationship with the patients, and who, in many cases, never saw or treated them. The defendants sought home health certifications for patients regardless of the patient’s eligibility for home health care.

Prime World employees were directed to submit claims for patients that did not have legitimately signed CMS-485s.  For some of the unsigned CMS-485s, Chiazom Oparaochaekwe forged the signatures by photocopying physician signatures and affixing them on the unsigned document.  Chiazom Oparaochaekwe then placed a copy of the forged document in the patient’s medical record.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, each of the 10 counts of health care fraud carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.  Restitution could also be ordered.  In addition, the indictment includes a forfeiture notification that would require the defendants, upon conviction, to forfeit any property derived from proceeds of the offenses alleged.

The case was investigated by the Department of Health and Human Services-Office of Inspector General, the Federal Bureau of Investigation, and the Texas Medicaid Fraud Control Unit.  Assistant U.S. Attorney Kate Rumsey and Special Assistant U.S. Attorney Jason Meyer are handling the prosecution. 

 

# # #

AMARILLO, Texas —Rogelio Xochitl Amparan, 29, was sentenced this week by U.S. District Judge Sidney A. Fitzwater to 189 months in federal prison terms for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Amparan has been in custody since his arrest in June 2017 on a related federal criminal complaint. He pleaded guilty in September 2017 to one count of possession with intent to distribute 500 grams or more of methamphetamine.

Co-defendants Miguel Angel Bravo-Farias, 41, and Hector Terrazas, 25, were also arrested in June 2017. Bravo-Farias and Terrazas pleaded guilty to their roles and are awaiting sentencing.

According to the plea agreement factual resume, on June 8, 2017, an operation was conducted to purchase 20 pounds of methamphetamine from Bravo-Farias, an illegal immigrant, and Terrazas. When law enforcement agents met with Bravo-Farias and Terrazas they were in possession of a box containing a large amount of methamphetamine and were arrested at the scene.

 

During the operation, Amparan was observed leaving Terrazas’ residence. He was stopped by law enforcement and arrested for having a suspended registration.

 

A search of Terrazas’ residence revealed 2 containers with crystal like residue and 34 empty glass bottles with crystal like substance on the spouts in a bedroom. In the refrigerator, there were multiple containers containing a total of approximately 5,498 grams of liquid methamphetamine. In the same room was a closet that was converted into a work station with drying equipment. The closet contained fans and opened igloo style containers. On the floor there were used plastic gloves and utensils that had crystal like substance on them. The residence was used as a conversion lab from liquid to crystal methamphetamine.

 

During an interview, according to the plea agreement factual resume, Amparan admitted that he was involved in the methamphetamine operation. Amparan stated that he received all the money from the sale of methamphetamine and transported the money back to his brother, who lives in Juarez, Mexico.

 

The Amarillo Police Department and the Drug Enforcement Administration investigated the case with assistance from the Randall County Sheriff’s Office, the Potter County Sheriff’s Office, the Texas Department of Public Safety and the Potter County District Attorney’s Office.

 

Assistant U.S. Attorney Anna Bell prosecuted.

       

# # #

DALLAS — A local tax return preparer who managed a tax preparation business in Dallas, who admitted to filing fraudulent tax returns, was sentenced today, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Arslen Ramin Ayeze was sentenced by U.S. District Judge Ed Kinkeade to serve twelve months and one day in federal prison and ordered to pay $65,000 in restitution to the Internal Revenue Service (IRS). Ayeze pleaded guilty in July 2017 to one count of aiding and assisting in the preparation of a tax return and was remanded to custody following his guilty plea for a violation of his conditions of pretrial release.

 

According to the plea agreement factual resume filed in the case, from 2008 through 2010, Ayeze was a tax preparer doing business under the name of Universal Tax in Dallas, Texas. On January 20, 2010, Ayeze prepared and electronically filed with the IRS, a 2009 U.S. Individual Income Tax Return, Form 1040, on behalf of K.G. which was false and fraudulent. In preparing the tax return, Ayeze deceived the IRS by falsely including a business loss deduction in the amount of $10,575 for a purported sole proprietorship operated by K.G. Ayeze knew K.G. had not incurred the loss and was not entitled to claim the deduction on the tax return. The false deduction of $10,575 resulted in an actual tax loss to the United States in the approximate amount of $2,557.

 

The investigation was conducted by Internal Revenue Service Criminal Investigation.  Assistant U.S. Attorney Christopher Stokes prosecuted.

# # #

DALLAS — A federal grand jury in Dallas has indicted eleven defendants, including Alfredo Navarro Hinojosa, 57, of Dallas, Texas, on felony charges stemming from their involvement in laundering money and the distribution of cocaine at several North Texas nightclubs, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

The indictment supersedes an earlier indictment returned in the case. Eight defendants were charged in that indictment with various felony drug offenses. Four of those defendants have pleaded guilty, three remain fugitives and one is awaiting trial.

The thirty-three count superseding indictment returned yesterday charges Hinojosa, along with, Miguel Casas, 47, of Dallas; Martin Salvador Rodriguez, aka “Chava,” 55, of Dallas; Humberto Baltazar Novoa, 39, of Dallas; Eddie Villarreal, 48, of Carrollton, Texas; Craig Woods, 60, of Dallas; Eloy Alvarado Montantes, aka “Don Loy,” 36, of Grand Prairie, Texas; Jose Omar Santoyo Salas, aka “Omar Salas,” 32, of Arlington, Texas; Erick Johan Lopez Cuellar, aka “Erick Lopez,” 30, of Fort Worth; Raul Nunez, aka “Junior,” 25, of Grand Prairie, Texas; and Cesar Mendez, 27, of Dallas.

 

According to the superseding indictment, between 2014 and 2016 Hinojosa owned over forty nightclubs – including the Far West nightclub (Dallas), the OK Corral nightclub (Fort Worth), the OK Corral nightclub (Dallas), and the Medusa nightclub (Dallas) – and other businesses in Texas and elsewhere that brought in approximately $107 million in revenue. Hinojosa’s businesses dealt in large volumes of cash, which Hinojosa used as a means for hiding the true nature of certain cash deposits by using shell companies, making unusual deposits and transfers, and transporting cash from location to location. Hinojosa and Novoa also engaged in business transactions with bands who traveled back and forth to Mexico. These transactions included attempts to launder money for at least one band or for entities that were using the band.

 

In an effort to promote and guarantee profits at his nightclubs, including the Dallas OK Corral nightclub, Dallas Far West nightclub, and Fort Worth OK Corral nightclub, Hinojosa and his mangers – including Casas and Rodriguez – openly allowed cocaine to be sold to nightclub patrons. Certain selected dealers were permitted to sell approximately 100-200 baggies of cocaine each weekend at the nightclubs, resulting in multiple kilograms of cocaine being sold through the clubs for hundreds of thousands of dollars. The superseding indictment includes nineteen counts against Hinojosa, Casas, and Rodriguez for managing a drug premises at three of the nightclubs noted above.

 

Villarreal and Woods were both officers of the Dallas Police Department between September 1994 and October 2015, and October 5, 1981, and March 4, 2017 respectively. During portion of these time frames, both Villarreal and Woods also worked as security consultants or guards for Hinojosa. According to the superseding indictment, both Villarreal and Woods improperly used their positions as Dallas Police Officers to benefit Hinojosa.

 

Novoa, who worked with Hinojosa and as a band promoter, was charged with conspiracy to structure transactions to evade reporting requirements and making a false statement in an immigration document. The superseding indictment alleges that the remaining defendants – Montantes, Salas, Cuellar, Nunez, and Mendez – were connected to and involved in drug distribution.   

 

The superseding indictment includes references to recordings taken in Hinojosa’s headquarters, in which he discusses laundering funds and cleaning money.  

 

A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, 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 defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.   

 

Following the return of the superseding indictment, the parties filed executed plea documents for Hinojosa, Villarreal and Woods. According to the documents, Hinojosa has agreed to plead guilty to a conspiracy to manage a drug premises and conspiracy to structure transactions to evade reporting requirements. Per his plea agreement, Hinojosa has agreed to forfeit $200,000, a Ferrari F355, a Land Rover Range Rover, a Hummer H2, a Mercedes-Benz, and a Gillig Motorhome.

 

Both Villarreal and Woods have each agreed to plead guilty to a single count of making a false statement to the FBI.     

 

The case is being investigated by the Federal Bureau of Investigation, the Dallas Police Department, Internal Revenue Service, Texas Attorney General’s Office, and the Texas Alcoholic Beverage Commission. Assistant U.S. Attorneys P.J. Meitl, Errin Martin, John DelaGarza, and Jamie Hoxie are in charge of the prosecution.

 

# # #

DALLAS — Eric Barrientos, 34, of Dallas, Texas, was sentenced yesterday by U.S. District Judge Ed Kinkeade to 140 months in federal prison, following his guilty plea in April 2017 to one count of possession with intent to distribute a controlled substance and one count of possession of a firearm in furtherance of a drug trafficking offense, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Barrientos has been in custody since the time of his arrest in July 2016.

According to the plea agreement factual resume filed in the case, on November 3, 2015, federal agents, after making several controlled purchases of narcotics from Barrientos, executed a federal search warrant at his residence. Law enforcement seized ten firearms and distribution quantities of methamphetamine ice, black tar heroin, and marijuana.

 

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.  Assistant U.S. Attorney Andrew Wirmani was in charge of the prosecution.

# # #

DALLAS — Ignacio Arellano-Banuelos, 36, a citizen of Mexico, appeared this morning before U.S. District Judge David C. Godbey and was sentenced to 66 months in federal prison for reentering the United States illegally, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Arellano-Banuelos was convicted in April 2017, following a two-day trial, of one count of illegal reentry following deportation. He has been in custody since his arrest in June 2016 and will be deported after serving his sentence. 

According to evidence presented at trial, on May 8, 2015 Arellano-Banuelos was found in the United States after having been deported and removed on September 10, 2009, without receiving consent from the United States Attorney General or the Secretary of the Department of Homeland Security to reapply for admission since the time of the previous deportation and removal.

U.S. Immigrations and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO) investigated the case.  Assistant U.S. Attorney Shane Read and Special Assistant U.S. Attorney Lynn Javier prosecuted.

# # #

WASHINGTON – Pine Creek Medical Center LLC (“Pine Creek”), a physician-owned hospital serving the Dallas/Fort Worth area, has agreed to pay $7.5 million to resolve claims that it violated the False Claims Act by paying physicians kickbacks in the form of marketing services in exchange for surgical referrals, the Department of Justice announced today.

“Health care providers that attempt to profit from illegal kickbacks will be held accountable,” said Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division.  “Improper financial incentives can distort medical decision making and drive up healthcare costs for federal health care programs and their beneficiaries.” 

The government alleged that, between 2009 and 2014, Pine Creek engaged in an illegal kickback scheme whereby the hospital would pay for marketing and/or advertising services on physicians’ behalf and, in return, the physicians would refer their patients, including Medicare and TRICARE beneficiaries, to Pine Creek.  Among other things, Pine Creek allegedly paid for advertisements on behalf of the physicians in a number of local and regional publications.  Pine Creek also allegedly paid for radio and television advertising, pay-per-click advertising campaigns, billboards, website upgrades, brochures, and business cards, as well as other forms of marketing to induce physicians to refer patients to Pine Creek for medical services.

“The United States Attorney’s Office, in coordination with our partners at Main Justice and HHS-OIG, have and will continue to aggressively pursue those that violate the Anti-Kickback Statute, regardless of the nature or form that the kickback takes,” said Erin Nealy Cox, the U.S. Attorney for the Northern District of Texas.  “We must hold individuals and entities responsible for improperly furthering their financial interests at the expense of the federal health care programs.”

As part of the settlement, Pine Creek has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms for the next five years.

“Hospitals that try to boost their profits by paying kickbacks to physicians will instead pay for their improper conduct,” said Special Agent in Charge C.J. Porter, Department of Health and Human Services, Office of Inspector General’s Dallas Region.  “We will continue to investigate such illegal business arrangements that undermine impartial medical judgment.”

The settlement resolves allegations originally brought in a lawsuit filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblowers, Suzanne Scott and Savannah Sogar, former employees of Pine Creek’s marketing department, will receive $1,125,000.

The government’s intervention in this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The case was handled by the U.S. Attorney’s Office for the Northern District of Texas and the Justice Department’s Civil Division, with assistance from the Federal Bureau of Investigation, and in coordination with the U.S. Department of Health and Human Services Office of Inspector General. 

The lawsuit is captioned U.S. ex rel. Suzanne Scott, et al. v. Pine Creek Medical Center, LLC, Case No. 3:14-cv-3065 (N.D. Tex.). The claims settled by this agreement are allegations only; there has been no determination of liability.

# # #

DALLAS — A 37-year-old man from Dallas, Laroy Damont Johnson, was sentenced today before U.S. District Judge Sam A. Lindsay to serve a total of 96 months in federal prison for drug and firearm offenses, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

In August 2017, Johnson was convicted of one count of possession with intent to distribute a controlled substance, namely, heroin, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of being a felon in possession of a firearm. Johnson has been in custody since the time of his arrest in June 2016.

According to evidence presented at trial, Johnson was staying at a hotel room in Dallas that he used to sell heroin. Law enforcement searched the room and found Johnson sitting on the couch next to three cell phones and nearly $5,000 cash; distribution quantities of heroin in the fridge; a table covered in what appeared to be heroin residue, along with Xanax pills in a plastic baggie, cocaine, a digital scale, and a razor blade; and a loaded firearm wedged between the mattress and the box spring of the bed. The government presented additional evidence suggesting that Johnson had been staying in the room for several days distributing drugs.    

The Drug Enforcement Administration and the Irving Police Department investigated.  Assistant U.S. Attorneys Andrew Wirmani and Jamie L. Hoxie prosecuted the case.

 

 

# # #

DALLAS, Texas — Jody Sheffield, 44, of Austin, Texas, pleaded guilty today, before U.S. District Judge Sidney A. Fitzwater, to one count of conspiracy to commit health care fraud stemming from a scheme to defraud TRICARE through the submission of unnecessary toxicology and DNA cancer screening tests. The announcement was made today by Criminal Chief Chad Meacham of the Northern District of Texas.

Sheffield faces a maximum penalty of not more than five years in federal prison, a $250,000 fine, and may be ordered to pay restitution. Sheffield will remain on bond pending sentencing, which is scheduled for May 18, 2017.

According to the plea agreement factual resume filed in the case, , Sheffield was the operations manager for ADAR Group, LLC (ADAR Group), an outpatient toxicology testing facility. Erik Bugen owned and operated ADAR Group. Britt Hawrylak and Matthew Hawrylak were marketers for Xpress Laboratories, Inc. (Xpress Laboratories) and Progen Lab Systems, LLC (Progen Labs), and financiers of ADAR Group.

 

Starting in May 2015 and continuing through May 2016, ADAR Group collected urine and saliva samples from TRICARE, a healthcare program of the United States Department of Defense (DoD) Military Health System that provided coverage for DoD beneficiaries world-wide, including active duty service members, National Guard and Reserve members, retirees, their dependents, and survivors. The samples were sent to Xpress Laboratories and Progen Labs and billed to TRICARE and private insurance for unnecessary toxicology and DNA cancer screening tests.

 

Sheffield and Bugen induced TRICARE beneficiaries to provide urine and saliva samples with $50.00 Wal-Mart gift cards. Sheffield and his co­defendants disguised the kickback payments as a food assistance program for low income soldiers. They also paid monthly fees to doctors to sign test forms. Ultimately, Bugen obtained signature stamps from the doctors and Sheffield and other ADAR Group employees stamped the testing order forms. Beneficiaries did not see these doctors prior to obtaining the testing, did not receive test results, and did not know the purpose of their samples.

 

As a result of the scheme, TRICARE was billed approximately $36 million for tests that were not needed, not legitimately prescribed, and which were the product of kickbacks. For these claims, TRICARE paid approximately $4.8 million.

 

The Defense Criminal Investigative Service, Veteran’s Affairs- Office of Inspector General, and Federal Bureau of Investigation, are investigating. Assistant U.S. Attorney Adrienne Frazior is prosecuting. 

# # #

LUBBOCK, Texas — A Littlefield, Texas, resident, Luis Zubia, 36, was sentenced this morning by Senior U.S. District Judge Sam R. Cummings to 135 months in federal prison, following his guilty plea in September 2017 to an indictment charging one count of enticement of a minor, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

According to the plea agreement factual resume filed in the case, from February 2017 until April 2017, Zubia had text conversations that were sexual in nature with “Jane Doe,” a 16-year-old female. Zubia asked “Doe” to send him sexually explicit photos and videos of herself and eventually talked about meeting up with “Doe.”

Zubia asked for, and was provided, “Doe’s” address, along with the name of her school. On March 7, 2017, Zubia sent a text to “Doe,” stating his desire to meet up and to engage in sexual intercourse with her.

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 Littlefield Police Department investigated the case.  Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.

 

# # #

Pine Creek Medical Center LLC (“Pine Creek”), a physician-owned hospital serving the Dallas/Fort Worth area, has agreed to pay $7.5 million to resolve claims that it violated the False Claims Act by paying physicians kickbacks in the form of marketing services in exchange for surgical referrals, the Department of Justice announced today.

“Health care providers that attempt to profit from illegal kickbacks will be held accountable,” said Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division.  “Improper financial incentives can distort medical decision making and drive up healthcare costs for federal health care programs and their beneficiaries.” 

The government alleged that, between 2009 and 2014, Pine Creek engaged in an illegal kickback scheme whereby the hospital would pay for marketing and/or advertising services on physicians’ behalf and, in return, the physicians would refer their patients, including Medicare and TRICARE beneficiaries, to Pine Creek.  Among other things, Pine Creek allegedly paid for advertisements on behalf of the physicians in a number of local and regional publications.  Pine Creek also allegedly paid for radio and television advertising, pay-per-click advertising campaigns, billboards, website upgrades, brochures, and business cards, as well as other forms of marketing to induce physicians to refer patients to Pine Creek for medical services.

“The United States Attorney’s Office, in coordination with our partners at Main Justice and HHS-OIG, have and will continue to aggressively pursue those that violate the Anti-Kickback Statute, regardless of the nature or form that the kickback takes,” said Erin Nealy Cox, the U.S. Attorney for the Northern District of Texas.  “We must hold individuals and entities responsible for improperly furthering their financial interests at the expense of the federal health care programs.”

As part of the settlement, Pine Creek has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms for the next five years.

“Hospitals that try to boost their profits by paying kickbacks to physicians will instead pay for their improper conduct,” said Special Agent in Charge C.J. Porter, Department of Health and Human Services, Office of Inspector General’s Dallas Region.  “We will continue to investigate such illegal business arrangements that undermine impartial medical judgment.”

The settlement resolves allegations originally brought in a lawsuit filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblowers, Suzanne Scott and Savannah Sogar, former employees of Pine Creek’s marketing department, will receive $1,125,000.

The government’s intervention in this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The case was handled by the U.S. Attorney’s Office for the Northern District of Texas and the Justice Department’s Civil Division, with assistance from the Federal Bureau of Investigation, and in coordination with the U.S. Department of Health and Human Services Office of Inspector General. 

The lawsuit is captioned U.S. ex rel. Suzanne Scott, et al. v. Pine Creek Medical Center, LLC, Case No. 3:14-cv-3065 (N.D. Tex.). The claims settled by this agreement are allegations only; there has been no determination of liability.

LUBBOCK — Four Lubbock residents have been charged in a federal indictment, unsealed today, with felony offenses stemming from their role in a furanyl fentanyl distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The defendants made their initial appearances in federal court in Lubbock before U.S. Magistrate D. Gordon Bryant, Jr. and will remain in custody pending trial.

The four-count indictment charges Steven Lawrence Forcum, 32; Krisandrea Monee Dobbs, 31; Peyton Cleveland Wilson, 27; and Ashlyn Paige Utley, 23, with one count of conspiracy to distribute and possess with intent to distribute furanyl fentanyl. In addition, Utley and Wilson are charged with one count of distribution and possession with intent to distribute furanyl fentanyl.  Wilson is also charged with one count of possession of a firearm in furtherance of a drug trafficking crime.

A federal indictment is an accusation by a grand jury.  A defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, 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 defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.   

The Drug Enforcement Administration and the Lubbock Police Department are in charge of the investigation.

Assistant U.S. Attorney Russell Lorfing is in charge of the prosecution.

# # #

AMARILLO, Texas — Two defendants, who pleaded guilty to their respective roles in  distributing large quantities of methamphetamine in Amarillo, Texas, were sentenced this afternoon by U.S. District Judge Sidney A. Fitzwater, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Benigno Paez, 29, was sentenced to a total of 248 months in federal prison. He pleaded guilty in August 2017 to one count of possession with intent to distribute methamphetamine and one count of possession of a firearm in furtherance of a drug trafficking crime.

Co-conspirator Eliazar Rocha, 35, also pleaded guilty in August 2017 to one count of possession with intent to distribute methamphetamine and was sentenced to 108 months in federal prison.

Judge Fitzwater ordered Paez and Rocha to surrender to the Bureau of Prisons on January 9, 2018.

According to the plea agreement factual resumes filed for both defendants, on April 30, 2017, Rocha, Paez and two other codefendants met with undercover officers to deliver six pounds of methamphetamine in exchange for $5,500 per pound. Rocha exited a vehicle, driven by Paez, to deliver the methamphetamine at which time officers indicated they did not have the money with them. When Rocha returned to the vehicle officers arrested the four defendants. Officers located 2,622 grams of methamphetamine in the vehicle and a stolen firearm.

Agents learned that the methamphetamine came from a residence in Amarillo, Texas. A search warrant was executed at the residence and law enforcement located an additional 1,846 grams of methamphetamine.

The case was investigated by the Drug Enforcement Administration. Assistant U.S. Attorney Joshua Frausto was in charge of the prosecution.

           

# # #

AMARILLO, Texas — Eduardo Gutierrez-Zamora, 31, of Amarillo, Texas, was sentenced yesterday by U.S. District Judge Sidney A. Fitzwater to 210 months in federal prison on a methamphetamine distribution conviction, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.

Gutierrez-Zamora pleaded guilty in June 2017 to one count of conspiracy to distribute or possess with intent to distribute 500 grams or more of methamphetamine.  He has been in custody since January 8, 2017 on a related criminal complaint. Gutierrez-Zamora was in the United States illegally at the time of the offense and will be deported after serving his sentence.

According to the plea agreement factual resume filed in the case, on January 7, 2017, the Texas Department of Public Safety (TXDPS) received information from the Arizona state police that they stopped a vehicle for a traffic violation and the narcotic detection canine alerted to the vehicle. The trooper located eight bundles of suspected methamphetamine in the vehicle. Arizona officers informed TXDPS that the driver was willing to cooperate with law enforcement and deliver the methamphetamine to the intended recipient, Gutierrez-Zamora, in Amarillo, Texas.

The driver called Gutierrez-Zamora and was instructed to deliver the methamphetamine to Gutierrez-Zamora at his residence. Once the delivery was made, agents executed a search warrant at the residence and located the methamphetamine delivered and additional narcotics.

The Drug Enforcement Administration, U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and TXDPS investigated.  Assistant U.S. Attorney Joshua Frausto prosecuted.    

 

# # #

AMARILLO, Texas — A 49-year-old man from Bushland, Texas, Thomas Roy Clark, who pleaded guilty in August 2017 to one count of health care fraud, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 41 months in federal prison and ordered to pay $514,576.29 in restitution, joint and severally with his codefendant. The announcement was made today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

As part of the plea agreement Clark agreed to forfeit a total of $84,750.23. Judge Fitzwater ordered Clark to surrender to the Bureau of Prisons on January 9, 2018.

 

According to the plea agreement factual resume, from July 2012 through July 2015, Clark operated Panhandle Chiropractic Clinic (PCC) in Amarillo, Texas, without a license issued by the Texas Board of Chiropractic Examiners. Co-defendant Karen Denise Jones, 56, assisted Clark in billing insurance companies on PCC’s behalf for services properly billable only by a licensed chiropractor. They also billed for services not rendered and for services rendered in lesser quantities billed.

 

Clark and Jones would omit Clark’s name or national provider identifier on PCC’s itemized billing statements, which prevented insurance companies from knowing they were being billed for services provided by a chiropractor without a license. Clark and Jones also listed the specific type of procedure or service PCC provided by misrepresenting to insurance companies that the procedures being billed were performed by a licensed health care provider in good standing with their state board.

 

Health care providers issued approximately $524,547.89 in payments to PCC from 12 insurance companies.

 

The case was investigated by the Federal Bureau of Investigation and the Randall County Sheriff’s Office.

Assistant U.S. Attorney Joshua Frausto was in charge of the prosecution.

# # #

AMARILLO, Texas — Neal Edmond Brown, 46, of Canyon, Texas, appeared this afternoon before U.S. District Judge Sidney A. Fitzwater and pleaded guilty to a superseding information charging one count of possession of prepubescent child pornography, announced Erin Nealy Cox, United States Attorney for the Northern District of Texas.

Brown faces a maximum penalty of not more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. Brown has been in custody since his arrest in October 2017 and is scheduled to be sentenced on March 26, 2018. 

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 investigating the case. Assistant U.S. Attorney Joshua Frausto is in charge of the prosecution.

 

# # #

DALLAS — A federal grand jury returned a two-count indictment earlier this month charging Freddie Thomas Gilbert, 33, of Dallas, Texas, with offenses related to the October 29, 2017 shooting of a vehicle in Kaufman County, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The indictment charges Gilbert with one count of possession of a firearm by a felon and one count of possession with intent to distribute a controlled substance. Gilbert will remain in custody pending further court hearings.

According to the complaint affidavit filed in the case and unsealed today, on October 29, 2017 law enforcement officials in Kaufman County received a call that the driver of a black Hyundai Elantra had fired a round of ammunition at their vehicle in the area of United States Highway 80 and County Road 212 in Kaufman County. Law enforcement officials were able to locate the vehicle and initiated a traffic stop. A vehicle pursuit ensued, reaching speeds up to one hundred and ten miles per hour when the vehicle refused to stop. The vehicle eventually became involved in a vehicle accident with another vehicle on the roadway. Gilbert was identified as the driver of the black Hyundai Elantra.

 

Subsequent to Gilbert’s arrest, he told law enforcement officials that the body of a girl was in the trunk of the vehicle. Law enforcement officials found a female victim in the trunk of the vehicle who had a visible gunshot wound to the head. Law enforcement officials also found a Taurus .38 caliber revolver in the side-pocket of the driver’s side door and a detectable amount of cocaine. 

 

Prior to October 29, 2017, Gilbert had been convicted in the state of Louisiana and served jail time for felony drug offenses.

 

An indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, Gilbert faces up to 10 years in federal prison for being a convicted felon in possession of a firearm, and a maximum penalty of up to 20 years in federal prison and a $1,000,000 fine for the possession of a controlled substance count.

The Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Texas Department of Public Safety, Kaufman County Sheriff’s Office and the Forney Police Department conducted the investigation.  Assistant U.S. Attorney P.J. Meitl is in charge of the prosecution.

 

 

# # #

DALLAS — Jason Lee Randall, 33, of Mesquite, Texas, was sentenced yesterday by U.S. District Judge Sam A. Lindsay to 540 months in federal prison, following his guilty plea in January 2017 to multiple child pornography offenses, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Randall pleaded guilty to production of child pornography, transportation of child pornography, possession of prepubescent child pornography and penalties for registered sex offenders.  Randall has been in custody since the time of his arrest in September 2016.

 

According to the indictment, factual resume, and information from his sentencing hearing, Randall, a registered sex offender previously convicted of several possession-of-child-pornography charges, used an online alias of “Emily Randall” to communicate with other children on the internet.  Randall, using various online accounts, pretended to be a 12-year-old girl and convinced other girls he met online to engage in sexually explicit conduct and create child pornography of themselves.  Randall would then send this child pornography to other children to convince them to engage in sexually explicit conduct and create more child pornography.  On at least one occasion, Randall video-chatted with a child and engaged in a sex act visible to the child.  Randall victimized at least twenty girls around the world, the majority of which were between the ages of 9 and 13 years old.  Randall also possessed thousands of images and videos of prepubescent child pornography, including videos involving infants being sexually abused.    

 

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 investigation was conducted by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Mesquite Police Department in Texas, and the Burrillville Police Department in Rhode Island.  Assistant U.S. Attorney Jamie L. Hoxie was in charge of the prosecution.

 

# # #

DALLAS — Christopher Arnold Jiongo, 57, of Houston, Texas, appeared this morning before U.S. District Judge Sidney A. Fitzwater and was sentenced to 46 months in federal prison and ordered to pay $3,786,595 in restitution for his role in a diamond investment scheme, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Jiongo pleaded guilty in May 2017 to one count of wire fraud. Judge Fitzwater ordered Jiongo to report to the Bureau of Prisons on January 9, 2018.

Co-defendants Craig Allen Otteson, 65, and Jay Bruce Heimburger, 59, were previously sentenced by Judge Fitzwater to 121 months and 97 months, respectively, in federal prison.  Jiongo received a reduction to his sentence due to his early guilty plea and cooperation with the government’s investigation, as well as his testimony at Heimburger’s recent sentencing hearing.

According to the plea agreement factual resume filed in the case, Otteson acted as the Managing Member and Chief Compliance Officer of Stonebridge Advisors, LLC, located in Dallas.  Stonebridge Advisors was involved as the Managing Partner of Worldwide Diamond Ventures, L.P., also located in Dallas, and it acted as the General Partner of Worldwide Diamond.  Heimburger acted as a Principal Partner of Worldwide Diamond, and he was also listed as the registered agent and Director of JBH Securities, Inc. located in Dallas. JBH Securities was primarily involved in the business of providing investment advice. Worldwide Diamond was primarily involved in the business of buying and reselling diamonds on the international market.  On October 1, 2013, Worldwide Diamond filed for bankruptcy in the Northern District of Texas.

The indictment charged that Jiongo drafted $50,000 diamond notes which Jiongo, Otteson and Heimburger later used as investment vehicles to generate investment funds. As part of their original business plan, Jiongo, Otteson and Heimburger represented to American Safe Retirements (ASR) that all investment funds would be used to buy and resell diamonds and that every dollar invested would always be fully secured by the cash and diamond inventory of Worldwide Diamond.  Jiongo, Otteson and Heimburger all understood that ASR would instruct ASR sales agents to represent to investors that every dollar invested through the diamond notes would always be fully secured by the cash and diamond inventory of Worldwide Diamond.

 

The indictment also alleged that sometime in the summer of 2011, Jiongo, Otteson and Heimburger all realized that their original business plan was not working out as planned and that the defendants therefore could not honor the original promises and representations made to investors. Rather than inform ASR and the investors of the changed circumstances caused by their failed business plan, Jiongo, Otteson and Heimburger chose to deceive ASR when they failed to inform ASR that 100% of all investment funds would not be secured by cash and/or the diamond inventory of Worldwide Diamond. By deceiving ASR, Jiongo, Otteson and Heimburger knew that they were also causing the investors to be deceived about the use of investor funds.

 

The indictment alleged that during the period from 2011 through 2013, Otteson, Heimburger, and Jiongo caused over $6.4 million to be fraudulently collected from 77 Worldwide Diamond investors. 

 

This case is one of many felony indictments of bankruptcy-related crimes prosecuted as part of the Bankruptcy Fraud Initiative (BFI), United States Attorney’s Office, Northern District of Texas. These prosecutions were the result of criminal referrals made by the United States Trustee’s Office in Dallas, Texas. Since 2013, as a result of the BFI, 23 defendants have been convicted and 2 defendants are pending trial.

The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney David Jarvis prosecuted.

# # #

DALLAS — Gregorio Alexandro Landeros, 30, of Dallas, Texas, was sentenced this morning by U.S. District Judge Sidney A. Fitzwater to 210 months in federal prison, following his guilty plea to one count of receipt of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

According to the plea agreement factual resume filed in the case, in June 2015, the father of a fourteen year old minor female child, Jane Doe 1, reported that he had reviewed his daughter’s cellular telephone and noticed that a person named “Alex” had sent nude videos to the child and requested that the child send photos and videos of herself to him. Texts from “Alex” stated that he was 17 years old and that Jane Doe 1 had told “Alex” she was 15 years old. Text messages were also sent to Jane Doe 1 directing her on how to produce sexually explicit videos. Law enforcement determined that the cellular telephone number used by “Alex” belonged to Landeros.

 

A search warrant was obtained for Landeros’ cell phone and a review of the phone revealed images of child pornography of Jane Doe 1 that Landeros had the child produce and send to him.

 

On March 30, 2016, Landeros was arrested and consented to an interview, according to the plea agreement factual resume. Landeros admitted to using his cellular telephone to misrepresent himself as a teenage male to Jane Doe 1 and multiple other minor females in hopes of obtaining sexual images from them. Landeros solicited female minors because he felt they were the most likely to provide him with nude images. Landeros used the photographs of younger friends and random nude images from the internet to mask his identity while communicating with the children.

 

At the time of his arrest, Landeros possessed a total of 206 images and 22 videos of child pornography on his cellular telephone.

 

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 investigated.  Assistant U.S. Attorney Shane Read prosecuted.

 

# # #

DALLAS — Edgar Solorzano, 24, of Dallas, was sentenced today before U.S. District Judge Sam A. Lindsay to 231 months in federal prison for the November 19, 2015 armed assault of two federal law enforcement officers in southwest Dallas, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

In April 2017, Solorzano pleaded guilty to one count of possession with intent to distribute a controlled substance, two counts of assault on a federal officer and one count of using, carrying, brandishing and discharging a firearm during in relation to a crime of violence.  He has been in custody since the time of his arrest in August 2016.

Co-defendant Victor Manuel Solorzano, 32, was convicted, following a four-day trial, of one count of possession with intent to distribute methamphetamine, two counts of assault of a federal officer, and two counts of using, carrying, brandishing and discharging a firearm during and in relation to a crime of violence.  Victor Solorzano was sentenced on November 2, 2017 to 567 months in federal prison. 

According to documents filed in the case, on November 19, 2015, Victor and Edgar Solorzano, cousins who lived across the street from each other, fired numerous gunshots at two federal officers with the U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) with high-powered, semi-automatic firearms, and riddled their pickup truck with bullets as the officers fled.

Officers went to install a court-ordered tracking device on Victor Solorzano’s vehicle at his residence on Wilbur Street in Dallas, Texas. Victor was under federal investigation by HSI for trafficking methamphetamine at the time. Immediately after installing the tracking device on Victor’s vehicle, Victor, armed with a pistol, confronted the officer in the street and began firing at the officer. The officer got inside the passenger’s side of a pickup as Victor and Edgar began firing numerous gunshots at the two federal officers, who did not return fire. Victor and Edgar continued firing at the federal officers as they sped away. The officer who installed the court-ordered tracking device sustained four non­fatal bullet wounds and the pickup driven by the other officer sustained numerous bullet strikes, all from the back. 

After the shooting, Edgar hid the pistol in the attic of his residence and the pistol used by Victor in a neighbor’s backyard. The police searched Edgar’s residence and found the pistol hidden in the attic. The police also found in Edgar’s bedroom more than eight grams of methamphetamine, drug-distribution paraphernalia, and a variety of firearms and ammunition. The pistol used by Victor was found in the neighbor’s backyard.

The Federal Bureau of Investigation, the Dallas Police Department and U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated.  Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay and Assistant U.S. Attorneys John Kull and Rachael Jones prosecuted.

 

 

# # #

DALLAS — Fifteen members and associates of the white supremacist organization, Aryan Circle, have been charged in a federal indictment with offenses stemming from their roles in a methamphetamine distribution conspiracy that operated from January 2017 through November 2017. U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement today.

Eleven defendants were arrested and four others are in state custody. The eleven arrested have made their initial appearances in federal court and will remain in custody pending further court hearings.

 

Defendants, mostly residents of the area surrounding Lake Tawakoni, who are charged in this indictment include:

            Crystal Leann Sharkey, aka “Crystal Leann Jordan,” 36

            Michael Paul Watts, 28

            Jason Wayne McClure, 43

            Kellie Lea Locke, 37

            Michael Brandon Powell, 43

            Jody Heather Bausch, aka “Jody Land,” 41

            Scott Ralph Land, 47

            Jeremiah Jason McGregor, aka “Wicked,” 40

            James Earl Goodin, aka “Bo,” 35

            Nicole Joni Culpepper, 27

            Kyle Quincy Ketchum, 30

            Ember Nicole Berg, 33

            Shannon Marie Morgan, 42

            Aaron Dewayne Marrs, 39

            Leslie Irene Cates, 34

 

This just-unsealed indictment charges all of the above-listed defendants, with one count of conspiracy to possess with intent to distribute a controlled substance and one count of possession of a controlled substance with intent to distribute.  The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit any property that constitutes or was derived from proceeds traceable to the offense, including multiple firearms.

A federal indictment is an accusation by a grand jury.  A defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, 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 defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.

 

The investigation is being led by the Bureau of Alcohol Tobacco and Firearms and Texas Department of Public Safety, with assistance from the Henderson County Sheriff, Hunt County Sheriff, Quinlan Police Department, Rockwall County Sheriff, Texas Highway Patrol, and Van Zandt Sheriff.

Assistant U.S. Attorney P. J. Meitl is prosecuting.

# # #

LUBBOCK, Texas — A 45-year-old San Angelo, Texas, man, Michael Doerr, who pleaded guilty in August 2017 to one count of receipt of a visual depiction of a minor engaging in sexually explicit conduct, was sentenced today by U.S. District Judge Sam R. Cummings to 121 months in federal prison, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Judge Cummings remanded Doerr into immediate custody to begin serving his sentence.

According to plea documents filed in the case, on August 25, 2016, Doerr used computer hard disk drives to save images and videos depicting minors engaged in sexually explicit conduct. Doerr received the material over the Internet and saved the material on the hard disk drives at his residence. 

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 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 Department of Homeland Security, Homeland Security Investigations, the Texas Department of Public Safety, and the San Angelo Police Department investigated the case.  Assistant U.S. Attorney Steven M. Sucsy prosecuted.

# # #

LUBBOCK, Texas — Tarvinn Djuan Williams, 29, of Lubbock, Texas, was sentenced today by U.S. District Judge Sam R. Cummings to 188 months in federal prison, following his guilty plea in August 2017 to one count of production of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Williams has been in custody since his arrest in June 2017.

According to plea documents filed in the case, on March 26, 2017, Williams made contact through Facebook messaging with a 16-year-old minor female, Jane Doe l, for the purpose of convincing her to engage in sexually explicit conduct with him. Williams concealed his true identity by representing himself to be “Samantha Pena,” a female alias that he created for the purpose of recruiting females to engage in sex acts with Williams.

Williams, representing himself to be “Samantha Pena,” convinced Jane Doe l to meet him to engage in sexual intercourse with him and represented that “Samantha Pena” would pay Jane Doe 1 to engage in the sex acts with Williams. Jane Doe 1 met with Williams at least three times and engaged in sexual intercourse with him.

 

In the course of the communications between Williams, using the identity of “Samantha Pena,” and Jane Doe 1, Williams asked Jane Doe l to take sexually explicit pictures and send them to Pena. “Samantha Pena” told Jane Doe 1 that she wouldn’t be required to have sex with Williams if she would send the sexually explicit material. Jane Doe 1 complied with the requests and took and sent pictures and one video. “Samantha Pena” made repeated promises to Jane Doe l that she would be paid, but “Samantha Pena” never paid Jane Doe 1.

 

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 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 Lubbock Police Department investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.

# # #

DALLAS – Erin Nealy Cox has taken the oath of office to become the United States Attorney for the Northern District of Texas. Ms. Nealy Cox was nominated by President Donald Trump on September 22, 2017 and confirmed by the U.S. Senate on November 9, 2017. She took the oath of office from U.S. District Judge Jane J. Boyle.  She succeeds John Parker who has been serving as the United States Attorney since December 2014.

 

“I am honored to return to the United States Attorney’s Office and I am looking forward to working with the great people here, our many law enforcement partners, and all those in the community who have a commitment to the pursuit of justice,” said U.S. Attorney Nealy Cox.

 

As U.S. Attorney, Ms. Nealy Cox is the top-ranking federal law enforcement official in the Northern District of Texas, which includes Dallas, Fort Worth, Lubbock and Amarillo. She oversees a staff of 215 employees, including 100 attorneys and a similar number of non-attorney support personnel. The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, public corruption, child exploitation, firearms, and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.

 

Ms. Nealy Cox, a Mississippi native, most recently worked as a Senior Advisor at McKinsey & Co. in the cybersecurity and risk practice. She also served on the Board of Directors of Sally Beauty Holdings, a large retailer on the NYSE. From 1999 to 2008, Ms. Nealy Cox served as an Assistant United States Attorney in the Northern District of Texas, where she prosecuted cyber crimes, white collar crimes, and general crimes. In 2004 and 2005, she served at Main Justice as chief of staff and senior counsel to the Assistant Attorney General in the Office of Legal Policy. From 2008 to 2016, Ms. Nealy Cox was a member of the executive leadership team at Stroz Friedberg, a cybersecurity and investigations consulting firm. Ms. Nealy Cox ultimately lead the firm’s global incident response business, the unit responsible for assisting and supporting private sector corporations investigate complex computer intrusions. Ms. Nealy Cox clerked for the Honorable Henry A. Politz, when he served as Chief Judge of the United States Court of Appeals for the Fifth Circuit, and the Honorable Barefoot Sanders, United States District Judge in the Northern District of Texas.

 

Ms. Nealy Cox received her J.D., magna cum laude, from Southern Methodist University Dedman School of Law and her B.B.A. in finance from the McCombs School of Business at the University of Texas at Austin. She is a member of the Texas and New York Bar Associations.

 

As she took on her new responsibilities, U.S. Attorney Nealy Cox thanked Mr. Parker for his many years of public service with the U.S. Attorney’s Office and his commitment to justice over the last three years as he served as the United States Attorney. 

 

 

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DALLAS — Fourteen defendants have been charged in a federal indictment, unsealed yesterday, with felony offenses stemming from their role in a Dallas–based criminal street gang known as “YNB Stretch Gang” and a drug distribution group known as “2600 Money Block,” announced U.S. Attorney John Parker of the Northern District of Texas.

“These violent, drug-dealing gangs should be on notice,” said U.S. Attorney Parker.  “We’re going after them wherever they are.”

 

Ten defendants, mostly from Dallas, were arrested earlier last week and one is in custody on state charges. Those arrested made their initial appearances in federal court and were detained.  Three remain fugitives.

In connection with the takedown, law enforcement seized quantities of cocaine, crack cocaine, PCP, prescription pills, marijuana and multiple firearms, including an assault rifle.

The 26-count indictment charges the following: Nykees Earl Campbell, aka “#1,” “NaNa,” “Ny-Nizzle,” 19; Avery Wayne Davis, aka “AD,”  36; Demond Lynn, aka “Slime,” 36; Kearwon Dmargo Magee, 23; Rodney Eugene Roquemore, aka “Turbo,” 31; Lawrence Williams, aka “One Eye”; Kris Landon Greene, aka “#5,” 20; Bryson Deontae Bright, 24; Ralph Earl Campbell III, 22; Garry Dewayne Newton, aka “#4,” 20; Stacy Moore, aka “Jay,” 23; Marcus Jackson, aka “Marty-Mar,” 23; Mitchell Holmes; Cedric Charles Witcher, 22.

The indictment alleges, beginning in January 2016, the defendants used an area in Dallas referred to as “2600 Money Block” to cut, package and distribute cocaine, crack cocaine, marijuana, methamphetamine and ecstasy/OxyContin pills to numerous customers. The proceeds from the sale of drugs were used to produce music videos glorifying acts of violence and promoting the lifestyle of YNB Stretch Gang members and associates.

 

Prosecutors are seeking to forfeit several things used as part of or as a result of the criminal conspiracy, including multiple firearms.

A federal indictment is an accusation by a grand jury.  A defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, 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 defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.   

This indictment is the result of an investigation by the Bureau of Alcohol Tobacco and Firearms, United States Marshal’s Service, Dallas Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert.

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FORT WORTH, Texas — Bruce Trenshel Davis, aka “Wheatie,” 25, of Shreveport, Louisiana and Brandon Ray Austin, aka “Pep,” 31, of Fort Worth, Texas, appeared yesterday in federal court before U.S. Magistrate Judge Jeffrey L. Cureton, on a federal criminal complaint stemming from their attempt to threaten witnesses who were cooperating with law enforcement in the prosecution of a child sex trafficking organization, announced U.S. Attorney John Parker of the Northern District of Texas.

 

The complaint charges both Davis and Austin with one count of attempting to obstruct or interfere with enforcement and one count of tampering with a witness, victim, or informant.  Magistrate Judge Cureton ordered both defendants to remain in custody pending further court hearings.

 

“Protecting victims and witnesses is one of the most important jobs of law enforcement,” said U.S. Attorney Parker.  “We will aggressively prosecute those who attempt to threaten, intimidate, or do physical harm against those who cooperate and work with law enforcement.  That commitment is never more steadfast than in cases such as this, involving violent threats against minor female victims who have been sexually exploited.”

 

In March of 2017, the Fort Worth Police Department’s VICE Unit conducted a recovery operation in response to a lead sent from the National Center for Missing and Exploited Children (NCMEC) in reference to a suspected victim of Child Sex Trafficking. Fort Worth VICE Unit located and utilized a Backpage.com ad containing photographs of a minor female that advertised commercial sex acts.  As a result of the operation, the minor female was recovered. Additionally, two other minor females, Jane Doe 2 and Jane Doe 3, were also located. The operation resulted in eight men being arrested on sex trafficking of children charges.

 

Demarcus Davis, Kentrell Davis, Pierre Lagrone, Herman Sanders and Reginald Smith were among the eight charged.

 

According to the affidavit filed with the complaint, on July 25, 2017, Bruce Davis, a relative of Demarcus Davis and Kentrell Davis, sent threatening text messages to Jane Doe 2, the 17-year-old female victim in the case mentioned above. Bruce Davis threatened physical harm to Jane Doe 2 and her family because he believed she was cooperating with law enforcement in the prosecution of Kentrell Davis and Demarcus Davis.

 

Another witness who cooperated with law enforcement and provided valuable evidence that detailed the size and scope of the same child sex trafficking organization received threats from Austin, according to the affidavit. Austin was friends with Lagrone, Sanders and Smith. On October 18 and 19, 2017 Austin sent text messages to the witness threatening her in relation to her cooperation in the prosecution of Lagrone, Sanders and Smith.

 

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 penalty for the offense is not more than 20 years in federal prison.

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. Attorney P.J. Meitl is in charge of the prosecution.

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FORT WORTH, Texas — Timothy Paul Malone, 39, of River Oaks, Texas, appeared this morning before U.S. Magistrate Judge Jeffrey L. Cureton and pleaded guilty to three child pornography counts, announced John Parker, United States Attorney for the Northern District of Texas.

Malone pleaded guilty to two counts of sexual exploitation of children and one count of attempted sexual exploitation of children. Malone faces a maximum term of imprisonment of not less than 15 years and not more than 90 years, a total of $750,000 in fines and up to a lifetime of supervised release. Malone has been in custody since the time of indictment in September 2017.  He is scheduled to be sentenced on March 5, 2018.

According to documents filed in the case, Malone persuaded and enticed two minor children in Watauga and Haslet, Texas to engage in sexually explicit conduct for the purpose of producing a video. Malone also attempted to use another minor child to create a video of the minor engaged in sexually explicit conduct.

In January 2017, law enforcement conducted a search warrant, according to plea documents, at Malone’s residence and seized a number of electronic devices. An examination of the devices revealed a number of child pornography videos and images including those of the minors previously mentioned.

The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 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.”

River Oaks Police Department, Tarrant County District Attorney’s Digital Forensics Unit, and U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case. Assistant U.S. Attorney A. Saleem is in charge of the prosecution.

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