Northern District of Texas
Press releases recorded for this federal judicial district.
Dallas Woman Sentenced to Five Years in Federal Prison on Wire Fraud Conspiracy ConvictionRead the Press Release
Ran Ponzi Scheme Involving Medical Insurance Investments
DALLAS — Gloria Ann Solomon, 71, of Dallas, was sentenced today by U.S. District Judge Jane J. Boyle to five years in federal prison, following her guilty plea in July 2013 to a felony information charging one count of wire fraud; restitution will be determined at a later date. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
In a related case, Duncan MacDonald, 50, also of Dallas, was sentenced earlier this month to five years in federal prison. He also pleaded guilty to an Information charging the same offense.
According to documents filed, from at least 2006 and continuing into at least September 2012, MacDonald was President and Director of Global Corporate Alliance, Inc. (GCA). MacDonald operated GCA out of offices in Addison and Euless, Texas. He hired co-conspirator Solomon in January 2007 as GCA’s Chief Administrative Officer.
GCA managed the North American Consumer Alliance (NACA), a not-for-profit member association that created and packaged insured benefit association healthcare programs and policies administered to corporations, organizations and other entities. GCA sold the healthcare policies throughout the U.S. and maintained a conservative management fee. It collected fees called “overages” that were in excess of the conservative management fee.
In 2008, MacDonald created GCA’s “Overage Program” to sell interests in the overages through “Overage Purchase Agreements.” An investor’s potential return was directly related to the number of people who enrolled in a healthcare plan by purchasing a healthcare policy from CGA. GCA would pay the investor for each new healthcare plan enrollee. MacDonald installed Solomon as the program’s manager and she worked with MacDonald in conducting GCA’s activities regarding the Overage Program.
MacDonald initially planned to have only a single person invest in the Overage Program, but when one couldn’t be found, GCA fractionalized the program to make it available for multiple investors to provide smaller amounts of funds. GCA contracted with a sales agent to solicit individuals to invest, and the sales agent used information regarding the Overage Program that was provided by MacDonald and Solomon. That information included the number of current and projected healthcare plan enrollees that would drive investors’ potential returns.
MacDonald admits that he significantly inflated the current and projected enrollment figures by the thousands in an attempt to sell the Overage Program to investors. He and Solomon knew that the figures were false and that the sales agent would relay the figures to investors he was soliciting.
MacDonald also personally acquired investors for the Overage Program. In fact, MacDonald and Solomon provided false information to persuade one particular investor to invest $2 million in the Overage Program. They then used this money to make payments to existing program investors.
When GCA had difficulty making timely payments to Overage Program investors, MacDonald authorized Solomon to respond to investor complaints and inquiries with excuses for the delayed payments. Solomon sent these emails from accounts that were created for fictitious GCA employees.
The Overage Program did not generate any income or revenue. Less than 50 people actually bought any healthcare policies during the lifetime of the program. MacDonald and Solomon admit that any payments made to existing investors came from money that GCA received from new investors in the program.
In a parallel action, the U.S. Securities and Exchange Commission (SEC) charged both defendants with securities fraud and conducting an unregistered securities offering while acting as unregistered broker-dealers. That complaint alleges that GCA had raised nearly $10 million from investors and returned about $2 million to investors in the form of Ponzi payments. On August 8, 2013, the district court entered Agreed Partial Judgments against both defendants, enjoining them from future violations of federal securities laws. The SEC continues to seek disgorgement plus prejudgment interest and civil penalties against both defendants.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, which was established in 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The FBI conducted the investigation. The SEC’s Fort Worth Regional Office also provided valuable assistance. Assistant U.S. Attorney Chris Stokes led the prosecution.
Borger, Texas, Man Pleads Guilty to Federal Child Pornography OffenseRead the Press Release
AMARILLO, Texas — Aaron Robert Wells, 23, of Borger, Texas, appeared today in federal court, before U.S. District Judge Mary Lou Robinson, and pleaded guilty to one count of transportation of child pornography. Wells, who is on bond, faces a maximum statutory penalty of not less than five years and up to 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. Sentencing will be set at a later date. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to documents filed in the case, in March 2012, Wells was contacted online by an undercover law enforcement officer through file sharing software. Wells provided the undercover officer passwords necessary to download images of child pornography that Wells had saved his computer and had made available for online sharing. Among other images, the undercover officer downloaded two images of minor males engaged 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.”
The FBI is investigating the case. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
Abilene Man Sentenced to 188 Months in Federal Prison for Producing Child PornographyRead the Press Release
LUBBOCK, Texas — Tyrell Daniels, 20, of Abilene, Texas, was sentenced today by U.S. District Judge Sam R. Cummings, to 188 months in federal prison, following his guilty plea in December 2013 to one count of producing child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Daniels has been in custody since his arrest in November 2013 on a related federal criminal complaint. A federal grand jury indicted him later that month on one count of enticement of a child and one count of production of child pornography. In accordance with the plea agreement, the enticement charge was dismissed.
According to plea papers filed, after meeting a 12-year-old female child, “Jane Doe,” online, in September 2013, Daniels communicated with her for several days using his cell phone. During that time, Daniels often discussed his desire to engage in sexual intercourse with Jane Doe, even though she had informed him that she was only 12-years-old.
On September 12, 2013, Daniels used Internet messaging to ask Jane Doe to send a topless photo of herself to him. She complied, and Daniels told her that he would not post her pictures on the Internet if she would send him a more sexually explicit photo of her genitals. While Jane Doe sent Daniels a sexually explicit photo, he told her that it was not explicit enough. Jane Doe did not send him any additional photos.
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 investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Santa Anna Police Department and the Abilene Police Department. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Abilene Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
ABILENE, Texas — Steven Edward Robb, 59, of Abilene, Texas, appeared today before U.S. Magistrate Judge E. Scott Frost, in federal court in Abilene, and pleaded guilty to one count of receipt of child pornography. Robb, who is on bond, faces a maximum statutory penalty of not less than five years or more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. A sentencing date was not set. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to documents filed in the case, in July 2013, Robb knowingly received two video files depicting minor females 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) and the Abilene Police Department are investigating. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
Former Employee at Medistat Group, Associates, Inc., in Desoto, Texas, Sentenced to 33 Months in Federal Prison for Role in Health Care Fraud ConspiracyRead the Press Release
Jerry C. Bullard and Okey Nwagbara Submitted Nearly $600,000
in False and Fraudulent Claims to MedicareDALLAS — Jerry C. Bullard, 57, of Mesquite, Texas, was sentenced this afternoon, by U.S. District Judge Sam A. Lindsay, to 33 months in federal prison and ordered to pay $317,779 in restitution, following his guilty plea in February 2012 to one count of conspiracy to commit health care fraud. Bullard worked in the durable medical equipment department of Medistat Group Associates, Inc., an association of health care providers in Desoto, Texas. Judge Lindsay ordered that Bullard surrender to the Bureau of Prisons on July 15, 2014. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
A co-defendant in the case, Okey Nwagbara, formerly of Plano, Texas, pleaded guilty in January 2012 to three felony offenses related to his involvement in the health care fraud conspiracy as well as providing false information to obtain citizenship. Nwagbara was the owner and operator of Advanced Medequip and Supplies, Ltd., (Advanced) a durable medical equipment company that was located in Richardson, Texas. He is currently serving a 36-month federal prison sentence; after the completion of that sentence, he will be referred to U.S. Citizenship and Immigration Services (CIS) for deportation.
Bullard admitted that he entered into an agreement with Nwagbara to submit false and fraudulent claims to Medicare. Bullard accepted kickbacks from Nwagbara to direct business to Advanced and to sign durable medical equipment orders for Advanced. Upon receiving cash payments from Nwagbara, Bullard would sign “JRoy MD” on Medistat prescription pads, durable medical equipment information forms and certificates of medical necessity for enteral nutrition products falsely indicating, among other things, that the beneficiary required tube feeding, when in fact the beneficiary did not. Bullard and Nwagbara admitted that they submitted and caused to be submitted $583,688 in these types of false and fraudulent claims.
The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. To learn more about the HEAT Strike Force, please visit: http://stopmedicarefraud.gov.
Assistant U.S. Attorneys Michael Elliott and Mindy Sauter were in charge of the prosecution.
Defendants Sentenced in Massive Stolen Identity Refund Fraud SchemeRead the Press Release
DALLAS — Two defendants, who were convicted on felony offenses related to their roles in a scheme to use stolen identity information to fraudulently obtain millions of dollars in tax refunds, were sentenced this afternoon in federal court in Dallas.
George Ojonugwa, 32, of Garland, Texas, was sentenced to 174 months in federal prison and ordered to pay $15,979,187 in restitution.
Eseos Igiebor, 43, of Richardson, Texas, was sentenced to 96 months in federal prison and ordered to pay $9,660,658 in restitution.
Defendant Ogiesoba City Osula, 38, of Dallas, will be sentenced next month. He was convicted, following a nearly one week-long trial in October 2013, on one count of conspiracy to commit wire fraud, mail fraud and bank fraud; seven counts of presenting fraudulent claims upon the U.S.; two counts of fraud in connection with access devices and aiding and abetting; and six counts of aggravated identity theft and aiding and abetting.
Late last year, Ebenezer Legbedion, 42, of Lagos, Nigeria, was sentenced to 40 months in federal prison and ordered to pay more than $1 million in restitution, and Evelyn Nyaboke Haley, 34, of Dallas, was sentenced to 60 months in federal prison and ordered to pay approximately $5.7 million in restitution.
Ojonugwa, Igiebor and Legbedion each pleaded guilty to one count of conspiracy to commit wire fraud. Igiebor also pleaded guilty to one count of aggravated identity theft. Haley pleaded guilty to one count of conspiracy to defraud the government with respect to claims.
The defendants conspired to defraud the U.S. by using stolen identity information and false information to create and electronically file false tax returns to claim refunds. The defendants had the refunds credited to stored value cards or bank accounts opened with stolen taxpayer identity information. Even while the defendants fraudulently obtained millions of dollars in tax refunds, they filed additional fraudulent returns, attempting to obtain millions more in tax refunds for their own use and benefit.
During Osula’s trial, the government presented evidence that Osula and his coconspirators sent information to and traded information with, a group running a similar scheme in Cincinnati, Ohio. On Nov. 8, 2011, police in a Cincinnati suburb questioned Osula and Ojonugwa, who were in a parked car after midnight with the leader of the Cincinnati ring. A drug detection dog alerted on the vehicle, and when it was searched, police found more than $300,000 in cash and money orders and numerous debit cards. During that incident, while Osula was in a police car and waiting to be questioned, he ate a debit card.
According to documents filed in this case and statements made in court:
SIRF is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States Treasury. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals.
- SIRF perpetrators complete Individual Income Tax Return Form using the fraudulently-obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.
- Perpetrators direct the U.S. Treasury Department to issue the refunds through checks (Tax Refund Treasury Checks) generated by the fraudulent 1040 forms to locations they control or can access, in various ways.
- With Tax Refund Treasury Checks now in hand, SIRF perpetrators generate cash proceeds. Certain SIRF perpetrators sell Tax Refund Treasury Checks at a discount to face value. In turn, the buyers then cash the Tax Refund Treasury Checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses, or by depositing checks into bank accounts. When cashing or depositing Tax Refund Treasury Checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.
While this investigation was conducted by IRS Criminal Investigation and the FBI, the U.S. Secret Service Office in Cincinnati, Ohio, and the U.S. Attorney’s Office for the Southern District of Ohio, provided substantial assistance.
Assistant U.S. Attorneys Mark Penley, Christopher Stokes and P.J. Meitl prosecuted.
Dallas Men Sentenced on Firearms ConvictionsRead the Press Release
DALLAS — Two Dallas men, who were stopped by officers with the Dallas Police Department (DPD) for a traffic violation in March 2013, and who subsequently pleaded guilty to federal firearms offenses, have been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
U.S. District Judge Sam A. Lindsay sentenced Ivy Johnson, Jr., 26, to 40 months in federal prison. In February 2014, Judge Lindsay sentenced Jose Enrique Castaneda, 21, to 39 months in federal prison. Johnson, who is under indictment in Dallas County on a felony drug charge, pleaded guilty to one count of illegal receipt of a firearm by a person under indictment; Castaneda, who is illegally in the U.S., pleaded guilty to one count of being an illegal alien in possession of a firearm.
According to documents filed in the case, on March 21, 2013, DPD officers were investigating a drug complaint at a house on Cowan Avenue in Dallas when they observed a white truck leave the residence. Soon thereafter, the truck failed to come to a complete stop at the intersection of Marsha and Walnut Hill, and officers initiated a traffic stop. Castaneda was driving the vehicle and Johnson was in the passenger seat. There was a semi-automatic pistol in plain view on the driver’s seat, and what appeared to be a large rifle case between Johnson’s legs. As Castaneda exited the truck, Johnson opened the passenger door and fled, but was apprehended soon thereafter. Officers noticed a strong odor of marijuana in the truck.
In searching for the source of the marijuana odor, officers recovered a 9-millimeter pistol in the driver’s seat and a Romarm rifle in the rifle case. Officers also found two additional rifles in the floorboard behind the driver’s seat and 72 individually packaged bags of marijuana in the glove compartment.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the DPD investigated the case. Assistant U.S. Attorney Cara Pierce prosecuted.
Former Executive Director of Rockwall Housing Development Corporation Sentenced to 12 Months and One Day in Federal Prison for Role in Conspiracy to Steal Federal Funds from HUDRead the Press Release
DALLAS — Jennifer Tyson, 37, of Rockwall, Texas, the former Executive Director/Manager of the Rockwall Housing Development Corporation (RHDC), was sentenced this morning by U.S. District Judge Ed Kinkeade to 12 months and one day in federal prison and ordered to pay $195,421.00 in restitution for conspiring to steal federal funds from the U.S. Department of Housing and Urban Development (HUD). Judge Kinkeade ordered Tyson to surrender to the Bureau of Prisons on May 6, 2013. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas announced today.
Specifically, Tyson pleaded guilty to an Information charging one count of conspiracy to commit theft concerning programs receiving federal funds. The RDHC is a landlord to several authorized public housing agencies (PHAs) in Rockwall. These PHAs, and, in turn, the RHDC, receive federal funds from HUD through the “Housing Choice Voucher Program.” The RHDC owns and operates a 36-unit apartment complex in Rockwall, known as “the Meadows.”
In her role as the RHDC’s Executive Director/Manager from June 2009 to November 2013, Tyson was an agent of the RHDC. Her responsibilities included, among other things, reviewing and processing monthly housing assistance payments and had managerial discretion and responsibility for the day-to-day running of the Meadows.
According to the factual resume filed in the case, beginning in March 2010 and continuing until June 2011, Tyson wrote approximately 128 RHDC checks, made out to Co-conspirator B, later identified as Trent George, 38, of Wright City, Oklahoma, totaling approximately $126,063. While this co-conspirator did perform some work for the Meadows, such as watering plants and picking up trash, George did not earn, and was not owed, $126,063 over the course of less than 16 months. George has pleaded guilty to his role in the conspiracy and scheduled to be sentenced on June 25, 2014.
Generally, George cashed the checks that Tyson gave to him. Then, Tyson, along with George and his fiancé, Co-conspirator A, later identified as Rachel McKnight, 31, of Garland, Texas, used the cash to purchase illegal narcotics for their own personal use. McKnight is scheduled to plead guilty next week to her role in the conspiracy.
From February 2011 until January 2012, Tyson wrote approximately 94 RHDC checks made out to “cash” and used the proceeds for her own personal use.
From October 2009 until October 2012, Tyson wrote approximately 55 RHDC checks made out to “reimbursement” and used the proceeds for her own personal use.
In January 2011, McKnight was evicted from the Meadows and began living with George in hotels in Rockwall. Tyson would occasionally visit them and the three would often use illegal narcotics in these hotel rooms. Tyson paid for these hotel stays using RHDC funds.
The investigation was conducted by HUD and the FBI. Assistant U.S. Attorney P.J. Meitl prosecuted.
Purchaser and Seller in Loan Fraud Scheme Are SentencedRead the Press Release
A DFW Lawyer Who Served as Escrow Officer in Scheme is Sentenced
to Federal Prison for Covering up the Bank FraudDALLAS — Plano, Texas, residents, Vathany Teng, 43, and Lina Ma, 55, were sentenced yesterday for their role in a loan fraud scheme they ran from August 2007 to April 2008 that resulted in the total funding of more than $3 million in fraudulent loans, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
U.S. District Judge David C. Godbey sentenced Teng to 27 months in federal prison and ordered him to pay $4.2 million in restitution. Ma was sentenced to 18 months in federal prison and ordered to pay $2.1 million in restitution. Both must surrender to the Bureau of Prisons on July 7, 2014.
Both Teng and Ma pleaded guilty to one count of conspiracy to commit bank fraud. The other defendant in the case, Jerry Goh, 51, a lawyer who had offices in the Dallas-Fort Worth metroplex, and who acted as the escrow officer for the Prosper Bank loan, pleaded guilty to one count of misprision of a felony. He was sentenced in February 2014 to serve seven months in federal prison, and he must surrender to the Bureau of Prisons on May 26, 2014, to begin serving that sentence. Judge Godbey also ordered that he serve the first seven months of a one-year term of supervised release on home confinement and he was ordered to pay more than $2.1 million in restitution.
According to documents filed in Teng and Ma’s case, Teng, Ma and Goh participated in a scheme to defraud and deceive Prosper Bank, United Central Bank (UCB) and the Small Business Administration (SBA). The conspiracy involved one fraudulent SBA guaranteed loan from Prosper Bank and two fraudulent loans from UCB.
The scheme involved making false representations and deliberate omissions of material information when fraudulent loan applications were submitted to these banks in connection with the three loans. According to Teng and Ma’s factual resumes, Teng, Ma and Goh falsely represented to Prosper Bank and UCB, and caused the HUD-1 Settlement Statement on all three loans to falsely represent, that Ma was the true source of loan down payments.
Goh, acting in his capacity as the escrow officer on the Prosper Bank loan, and thus with control of the loan proceeds, concealed from lender Prosper Bank the fraudulent release of $498,720 of loan proceeds to provide funds for a $431,000 down payment. Goh wired $498,720 of lender Prosper Bank’s funds from an escrow account, knowing that these seller proceeds funds would later be used as the source of borrower Lina Ma’s down payment on her loan from Prosper Bank.
This case was prosecuted in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
The case was investigated by the U.S. Small Business Administration – Office of Inspector General and the FBI. Assistant U.S. Attorney David L. Jarvis prosecuted.
Grand Prairie Man Sentenced to 96 Months in Federal Prison for Exchanging Sexually Explicit Photos with A MinorRead the Press Release
DALLAS — Aaron Garcia, 21,of Grand Prairie, Texas, was sentenced yesterday by U.S. District Judge David C. Godbey to 96 months in federal prison, following his guilty plea in October 2013 to an Information charging one count of receipt of child pornography. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, the investigation began as a result of a cyber-tip to law enforcement indicating that in September 2012, a minor girl, “Jane Doe,” began using an app on her cell phone to have sexual conversations with an adult male. The conversations included solicitations from both the adult male and Jane Doe to meet for sex. Jane Doe identified herself as a 14-year-old, although she was actually 13. The male also solicited nude photos of Jane Doe, which she sent. He sent her two sexually explicit images of himself.
An analysis of Garcia’s iPhone by the North Texas Regional Computer Forensic Lab revealed that it contained more than 40 images of child pornography, not including the images sent by Jane Doe.
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 investigation was conducted by the Grand Prairie Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Camille Sparks prosecuted.
Former Caseworker for the Dallas Project Reconnect Pleads Guilty to Witness Tampering, Making A False Statement to HUD and Deprivation Under Color of LawRead the Press Release
DALLAS — Lawrence Hart, 37, appeared today before U.S. Magistrate Judge Renée Harris Toliver and pleaded guilty to a felony and misdemeanor Information charging various offenses stemming from his role as a caseworker for an outreach program that is managed by the City of Dallas’s Housing Department. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically, Hart pleaded guilty to one count of witness tampering, one count of making a false statement to the U.S. Department of Housing and Urban Development (HUD) and one count of deprivation of rights under color of law. He faces a maximum statutory sentence of 20 years in federal prison and a $250,000 fine for the witness tampering count, and a maximum statutory sentence of one year in federal prison and a $100,000 fine for the false statement count and for the deprivation of rights count. He will remain on bond pending sentencing, set for July 14, 2014, by U.S. District Judge David C. Godbey.
According to documents filed in the case, in 2012 and 2013, Hart was a caseworker for Project Reconnect, a HUD-funded outreach program managed by the City of Dallas’s Housing Department. Project Reconnect provides reentry case management and community referrals to help non-violent offenders on parole settle back into the Dallas community. One of the main components of Project Reconnect is to provide housing to eligible individuals. As the program was being applied at the time, to be eligible for Project Reconnect, an individual must reside in Dallas, have felony conviction, be 18 years or older, be currently on parole or probation and meet HUD low to moderate income guidelines.
Hart admitted that in July 2012, he arranged for “Person A” to sign a lease for an apartment in Carrollton, under the Project Reconnect program, even though Person A did not qualify for the program at that time. The apartment’s rent was $980.00 per month, and Project Reconnect was responsible for $975 of that amount and Person A was responsible for $5.00 per month. Hart admitted that while he worked for the City of Dallas’s Housing Authority, he was in fact the sole occupant of that apartment and Person A never resided there. Hart further admitted that he submitted documentation to HUD reflecting that Person A was the sole occupant.
When HUD, the Dallas Police Department (DPD) and the FBI began investigating fraudulent activity related to Project Reconnect, they interviewed Hart about his involvement in Project Reconnect and his potential criminal activity. After that interview, Hart contacted Person A and instructed Person A to lie to a DPD detective and FBI special agent by telling them that Person A lived in the Carrollton apartment.
In late 2012, according to the factual resume filed in the case, Hart met “Person B” and fast-tracked Person B through the Project Reconnect program. While Person B was qualified for the program, Hart propositioned her for sex and expedited her placement in an apartment because she agreed to have sex with him. In January 2013, Person B ended her intimate relationship with Hart. Acting under color of law, Hart removed her from the HUD-subsidized apartment, wilfully depriving her of the right, to be free from discrimination in the terms, condition and privileges of rental of a dwelling because of her sex.
The DPD, HUD and FBI investigated the case. Assistant U.S. Attorney Errin Martin is prosecuting.
Financial Planner Sentenced to Serve 10 Years in Federal Prison on Wire Fraud and Money Laundering ConvictionsRead the Press Release
Defendant Also Ordered to Pay Nearly $100,000 in Restitution
FORT WORTH, Texas — Caleb Deason, 34, of Fort Worth, Texas, was sentenced yesterday by U.S. District Judge John McBryde to serve a total of 120 months in federal prison, following his conviction at trial in December 2013 on one count each of wire fraud and money laundering. Departing upward from the U.S. Sentencing Guidelines, Judge McBryde remarked that it was obvious to him that Deason was nothing more than a “con man and a flim-flam” who has been amoral in the majority of his dealings in his professional life. Judge McBryde also ordered Deason to pay $99,491 in restitution. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
Deason owned and operated CD Financial, a financial services business in Fort Worth. He was an agent of Transamerica Life Insurance Company from November 2006 through May 2012. In October 2011, Deason sold an individual a Transamerica policy with a death benefit of approximately $1 million.
In January 2012 the insured died unexpectedly. Transamerica conducted extensive due diligence before agreeing to pay the policy’s death benefit to the insured’s wife. However, Deason fraudulently changed the bank account and routing information and forged the beneficiary’s signature on a Transamerica wire request form in order to divert the proceeds from the life insurance policy to his own personal use, which included purchasing a 2010 Range Rover. The Range Rover was administratively forfeited by the U.S. Secret Service.
The U.S. Secret Service and the Texas Department of Insurance investigated. Assistant U.S. Attorneys Brian Poe and John de la Garza prosecuted.
Executive Sentenced to Five Years in Federal Prison on Wire Fraud Conspiracy ConvictionRead the Press Release
Ran Ponzi Scheme Involving Medical Insurance Investments
DALLAS — Duncan MacDonald III, 50, of Dallas, was sentenced yesterday afternoon by U.S. District Judge Jane J. Boyle to five years in federal prison, following his guilty plea in July 2013 to a felony Information charging conspiracy to commit wire fraud. Restitution owed will be determined at a later date. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
In a related case, Gloria Ann Solomon, 71, also of Dallas, will be sentenced by Judge Boyle on April 17, 2014. She pleaded guilty to an Information charging the same offense.
According to documents filed, from at least 2006 and continuing into at least September 2012, MacDonald was President and Director of Global Corporate Alliance, Inc. (GCA). MacDonald operated GCA out of offices in Addison and Euless, Texas. He hired co-conspirator Solomon in January 2007 as GCA’s Chief Administrative Officer.
GCA managed the North American Consumer Alliance (NACA), a not-for-profit member association that created and packaged insured benefit association healthcare programs and policies administered to corporations, organizations and other entities. GCA sold the healthcare policies throughout the U.S. and maintained a conservative management fee. It collected fees called “overages” that were in excess of the conservative management fee.
In 2008, MacDonald created GCA’s “Overage Program” to sell interests in the overages through “Overage Purchase Agreements.” An investor’s potential return was directly related to the number of people who enrolled in a healthcare plan by purchasing a healthcare policy from CGA. GCA would pay the investor for each new healthcare plan enrollee. MacDonald installed Solomon as the program’s manager and she worked with MacDonald in conducting GCA’s activities regarding the Overage Program.
MacDonald initially planned to have only a single person invest in the Overage Program, but when one couldn’t be found, GCA fractionalized the program to make it available for multiple investors to provide smaller amounts of funds. GCA contracted with a sales agent to solicit individuals to invest, and the sales agent used information regarding the Overage Program that was provided by MacDonald and Solomon. That information included the number of current and projected healthcare plan enrollees that would drive investors’ potential returns.
MacDonald admits that he significantly inflated the current and projected enrollment figures by the thousands in an attempt to sell the Overage Program to investors. He and Solomon knew that the figures were false and that the sales agent would relay the figures to investors he was soliciting.
MacDonald also personally acquired investors for the Overage Program. In fact, MacDonald and Solomon provided false information to persuade one particular investor to invest $2 million in the Overage Program. They then used this money to make payments to existing program investors.
When GCA had difficulty making timely payments to Overage Program investors, MacDonald authorized Solomon to respond to investor complaints and inquiries with excuses for the delayed payments. Solomon sent these emails from accounts that were created for fictitious GCA employees.
The Overage Program did not generate any income or revenue. Less than 50 people actually bought any healthcare policies during the lifetime of the program. MacDonald and Solomon admit that any payments made to existing investors came from money that GCA received from new investors in the program.
In a parallel action, both defendants were also charged by the U.S. Securities and Exchange Commission (SEC) with securities fraud and conducting an unregistered securities offering while acting as unregistered broker-dealers. That complaint alleges that GCA had raised nearly $10 million from investors and returned about $2 million to investors in the form of Ponzi payments. On August 8, 2013, the district court entered Agreed Partial Judgments against both defendants, enjoining them from future violations of federal securities laws. The SEC continues to seek disgorgement plus prejudgment interest and civil penalties against both defendants.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, which was established in 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The FBI conducted the investigation. The SEC’s Fort Worth Regional Office also provided valuable assistance. Assistant U.S. Attorney Chris Stokes led the prosecution.
Final Defendant Sentenced in “Operation Cowtown Tobacco”Read the Press Release
ATF, Texas Comptroller of Public Accounts and Euless Police Department
Led Investigation into Trafficking of Contraband CigarettesDALLAS — A multi-year investigation into the trafficking of untaxed cigarettes, including purchasing cigarettes and selling them with counterfeit tax stamps to avoid paying state cigarette taxes, in violation of the Contraband Cigarette Trafficking Act, has led to the conviction of 11 Texas residents, most of whom are from North Texas.
The last convicted defendant was sentenced this week in federal court in Dallas. Glen Murray McDonald, 50, of Pasadena, Texas, was sentenced by U.S. District Judge David C. Godbey to serve nine months in federal prison and nine months on home confinement. He pleaded guilty in August 2013 to one count of trafficking in contraband cigarettes and one count of receipt of counterfeit securities. Ten other convicted defendants pleaded guilty to similar offenses and received a variety of sentences. In addition, convicted defendants were ordered to pay restitution in amounts ranging from approximately $24,000 to $1.1 million.
The investigation began in October 2009 when officers from the Euless Police Department responded to a suspicious person call at a home in Euless, Texas. Later that same night, they executed a search warrant at the house and confiscated more than 2,760 cartons of contraband cigarettes and 11,580 counterfeit Texas tax stamps.
In making the announcement today, U.S. Attorney Saldaña said, “I commend the efforts of the men and women of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Texas Comptroller of Public Accounts, the Euless Police Department and the Tarrant County District Attorney’s Office in this operation.”
During the investigation, special agents with ATF received information about various tobacco tax diversion schemes in North Texas, including purchasing cigarettes and selling them with counterfeit tax stamps to avoid paying state cigarette taxes.
“ATF’s mission is to stop violent criminals and dismantle criminal organizations. Through this joint investigative effort, multiple criminal organizations were dismantled which were responsible for the diversion of state revenue caused by the trafficking of contraband tobacco products. I’d like to recognize the Euless Police Department, the Texas Comptroller of Public Accounts and the Tarrant County District Attorney’s Office whose outstanding efforts contributed to the successful outcome of this investigation,” said ATF Special Agent in Charge Robert R. Champion of the Dallas Field Division.
“This is an example of how federal investigators utilize the expertise of the Comptroller’s office to bring tax cheats to justice,” Texas Comptroller Susan Combs said. “We have the expertise and statutory authority to conduct tax investigations as well as share information such as business purchases and tax reports with law enforcement. We will continue to provide our services to federal and local investigators to ensure compliance and protect honest retailers.”
Cigarettes sold in Texas are required to have a federal tax assessed; that tax is paid by the manufacturer before cigarettes leave the warehouse. Texas also requires that a state tax be paid in the form of a tax stamp affixed to each package of cigarettes sold. Only companies licensed by the Texas Comptroller’s Office are allowed to purchase tax stamps and bond them to cigarette packages. The current cigarette tobacco tax stamp is $1.41 per package of cigarettes. By purchasing contraband cigarettes, people involved in the sale of untaxed cigarettes avoid paying Texas taxes in the amount of $1.41 per package, or $14.10 carton, or $846 for a master case of 60 cartons.
Assistant U.S. Attorney Katherine E. Pfeifle prosecuted the cases.
Prosecution of Methamphetamine Drug Trafficking Organization Results in Lengthy Federal Prison Sentences and Significant Cash SeizuresRead the Press Release
LUBBOCK, Texas — The last defendants convicted in an Organized Crime Drug Enforcement Task Force (OCDETF) operation targeting the Simon Chavez Drug Trafficking Organization (DTO), have been sentenced. That DTO was responsible for distributing large quantities of methamphetamine in Lubbock, Texas, and surrounding areas. The operation resulted in significant seizures of methamphetamine, three vehicles and more than $313,000 in cash. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
On March 21, 2014, U.S. District Judge Sam R. Cummings sentenced Simon Orlando Chavez, Jr. to the statutory maximum of 240 months in federal prison. Chavez pleaded guilty to distribution and possession with intent to distribute methamphetamine. Judge Cummings also sentenced Jimmy Cordova, who pleaded guilty to the same offense, to 188 months in federal prison.
“Targeting drug organizations that have infiltrated north Texas and jeopardized the safety and security of our communities continues to be a priority in this district,” said U.S. Attorney Saldaña. “I commend the dedicated investigative efforts of the DEA and Homeland Security Investigations (HSI), who were assisted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Internal Revenue Service Criminal Investigation, the Lubbock Police Department, the Lubbock County Sheriff’s Office and the Texas Department of Public Safety.”
“The convictions of Simon Orlando Chavez, Jr. and his co-conspirators are indicative of DEA’s continued commitment to fully identify, investigate and bring to justice drug trafficking organizations determined to make a living on the backs of addiction,” said Daniel R. Salter, Special Agent in Charge of DEA, Dallas Field Division. “A prison sentence of 240 months, which Chavez received, should serve as a warning to other drug trafficking organizations that DEA and our state, local and federal partners are united in our efforts to keeping our communities safe.”
Six additional defendants also pleaded guilty to distribution and possession with intent to distribute methamphetamine and were sentenced as follows:
- Jose Luis Lara-Sosa, 87 months
- Jose Montemayor, 87 months
- Sammy Chavez, 121 months
- Antonio Rosa, 51 months
- Ruben Deleon, 71 months
- Anthony Deleon, 57 months
Other defendants pleaded guilty to various other offenses and were sentenced:
- Jessica Trevino, 120 months, possession with intent to distribute methamphetamine
- Brian Melcher, 175 months, possession with intent to distribute methamphetamine
- Francisco Avalos-Alejandre, 100 months, possession with intent to distribute 500 grams or more of methamphetamine
- Ira Newton-Davis, 48 months, unlawful use of a communication facility
- Tiffany Lashell Copley, 12 months and a $5,000 fine for operating an illegal gambling business
“To maximize our effectiveness, organized criminal actions require a unified law enforcement response,” said David M. Marwell, Special Agent in Charge of HSI Dallas. “Our collaborative work with the OCDETF task force resulted in this successful investigation, and these significant prison sentences. The methamphetamine addiction that this criminal operation was promoting has destroyed countless lives.”
Assistant U.S. Attorney Justin Cunningham, of the U.S. Attorney’s Office in Lubbock, prosecuted the cases.
Father and Son Sentenced to Lengthy Federal Prison Sentences on Conspiracy and Health Care Fraud ConvictionsRead the Press Release
Defendants Owned a Physician House Call Company and Billed for Services Not Rendered
DALLAS — Two Grand Prairie, Texas, men, convicted at trial in October 2013 on conspiracy and health care fraud charges related to their operation of A Medical House Calls, a physician house-call company in North Texas, were sentenced this morning by U.S. District Judge David C. Godbey, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Lawrence Dale St. John, 67, was sentenced to serve a total of 262 months in federal prison, and his son, Jeffrey Dale St. John, 42, was sentenced to serve a total of 135 months in federal prison. Both St. John’s were ordered to pay restitution to the Centers for Medicare and Medicaid Services (CMS).
Each defendant was convicted at trial on one count of conspiracy to commit health care fraud and 13 substantive counts of health care fraud. Co-defendant Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, pleaded guilty in September 2013 to one count of conspiracy to commit health care fraud. Dr. Padron, who joined A Medical as its medical director in December 2009, testified, as did a number of nurse practitioners, physician assistants and company staff, services billed were never performed. Earlier this month, Judge Godbey sentenced Dr. Padron to 57 months in federal prison and ordered that he also pay restitution to CMS.
A Medical provided physician visits to Medicare beneficiaries in their homes rather than at a doctor’s office. A Medical, aka A+ Medical House Calls and ANM Physician House Calls, was owned by Lawrence St. John; Jeffrey St. John ran its daily operations. A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas. Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.
Once A Medical established a Medicare beneficiary for physician home-visit services, it would submit billing for fraudulent care plan oversight claims. The company did not provide primary care physician services to Medicare beneficiaries.
According to documents filed in the case and evidence presented at trial, from May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program. A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit.
The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.
In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all. Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.
The U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas investigated. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch prosecuted.
Illegal Alien Carrying Numerous Assault-Style Rifles in His Vehicle’s Trunk Is Sentenced to 40 Months in Federal PrisonRead the Press Release
DALLAS — Jesus Gonzales, 25, who pleaded guilty in May 2013 to a one-count indictment charging possession of a firearm by a prohibited person, was sentenced this morning by U.S. District Judge Barbara M. G. Lynn to 40 months in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, on October 25, 2012, officers with the Dallas Police Department responded to a suspicious car call in the 2500 block of Wentworth Drive in Dallas. After locating the car and observing it commit traffic violations, officers pulled it over; Jesus Gonzales was the driver.
Gonzales gave officers consent to search the vehicle, and officers found 15 assault-style rifles individually wrapped in plastic in the car’s trunk. Gonzales did not have a driver’s license and admitted being in the U.S. illegally.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas Police Department investigated. Assistant U.S. Attorney Taly Haffar prosecuted.
Former Denton County Insurance Agent Sentenced to 292 Months in Federal Prison and Ordered to Pay More Than $4 Million Restitution on Fraud ConvictionRead the Press Release
Defendant Used Elderly as Straw Buyers in Fraud Scheme
DALLAS - A former Denton County insurance agent, who was convicted at trial last summer on several felony offenses stemming from a scheme to defraud various life insurance companies, was sentenced today in federal court in Dallas.
U.S. District Judge Reed C. O’Connor sentenced Vincent Bazemore, 40, formerly of Aubrey, Texas, to serve a total of 292 months in federal prison and ordered him to pay $4,014,627 in restitution. A jury deliberated just one hour before convicting him in July 2013 on all counts of an indictment charging four counts of mail fraud. Today’s announcement was made by U.S. Attorney Sarah R. Saldana of the Northern District of Texas.
Between October 2007 and April 2009, Bazemore, an insurance agent, engaged in a scheme to obtain substantial commissions by inducing life insurance companies to issue policies on applications of individuals who appeared to be wealthy and seeking insurance for estate planning purposes, when in fact, the applicants were of modest financial means, and the policies were intended to be transferred to investors.
Bazemore solicited elderly individuals to apply for policies by representing that the life insurance was an investment with no financial cost or exposure and would result in a sizable monetary benefit to the individuals heirs. Bazemore prepared the applications and related documents, on behalf of the applicants that contained forged signatures and falsified financial information to induce the life insurance companies into issuing the policies.
Bazemore also submitted the false and fraudulent applications and related documents to financial institutions to obtain premium financing on the policies. In fact, the applicants were of modest financial means and the policies were obtained for the purpose of being transferred to investors. Bazemore had agreements with insurance companies and managing agents that provided he would receive, for each policy issued on an application he submitted, a commission of 95 to 105 percent of the first year’s premium paid on the policy.
Today's announcement is related to efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) that was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The FBI investigated the case. Assistant U.S. Attorney Christopher Stokes prosecuted.
Dallas Man Sentenced to Serve A Total of 300 Months in Federal Prison for Role in Conspiracies to Distribute Cocaine and MethamphetamineRead the Press Release
Defendant Also Convicted on Obstruction and Perjury Charges
DALLAS — A Dallas man who was arrested last summer as part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation and later convicted at trial, was sentenced this afternoon by U.S. District Judge Reed C. O’Connor to serve a total of 300 months (25 years) in federal prison, announced U.S. Attorney Sarah R. Saldana.
Reynaldo Macedo-Flores, 35, was convicted on all five counts of the indictment, including one count of conspiracy to possess with intent to distribute cocaine; one count of conspiracy to possess with intent to distribute methamphetamine, one count of obstruction of justice and two counts of perjury. The obstruction and perjury convictions stem from Macedo-Flores’s false testimony at the trial of his mother, Austreberta Macedo-Flores, in September 2013, also before Judge O’Connor. (Austreberta Macedo-Flores was convicted of conspiring to distribute methamphetamine; her sentencing hearing is set for April 10, 2014.)
The government presented evidence at trial that Reynaldo Macedo-Flores repeatedly sold narcotics to an undercover officer, bragged about taking the risk of distributing narcotics on a wiretap, and plotted to present false testimony – and then did so – at his mother’s trial.
The eight remaining defendants in the case have been convicted; four have been sentenced.
The case involved undercover purchases, wiretaps and search warrants, and was investigated by the FBI in conjunction with the Dallas Police Department. In total, over 15 kilograms of cocaine, four and one-half pounds of methamphetamine (ICE), five firearms, four luxury vehicles and $351,010 in cash – much of it, as trial testimony showed, packaged for shipment to Mexico – was seized in the operation.
Assistant U.S. Attorneys Jason Schall and John Kull prosecuted the case.
Federal Grand Jury Charges Search Engine Optimizers with Extorting Money from A Local Merger and Acquisitions FirmRead the Press Release
Defendants Threatened to Inflict Economic Harm
DALLAS, Texas — A federal grand jury in Dallas returned an indictment late yesterday charging a man and his sister, who did business as a search engine optimization company, with felony offenses stemming from their attempts to extort money from a business in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
William Laurence Stanley, 51, and his sister, Lynn Stanley Faust, 54, are each charged with one count of transmitting threats in interstate and foreign commerce and one count of Hobbs Act – Extortion. A U.S. citizen, William Stanley most recently resided in Romania with his wife, a Romanian national. He traveled several times in 2013 between Europe and the United States. On March 3, 2014, he was arrested on a related federal criminal complaint at George Bush Intercontinental Airport in Houston, where he arrived on a flight from Europe. Faust is also a U.S. citizen who also traveled internationally in 2013. Stanley appeared before a U.S. Magistrate Judge in the Southern District of Texas and was ordered detained. A date has not yet been set for him to appear in federal court in Dallas.
William Stanley is also known as “William Laurence,” “Bill Stanley,” “William Davis,” “William Harris” and “William L. Stanley.” Lynn Faust is also known as “Lynn Michaels.” Stanley and Faust operated a search engine optimization (SEO) company and used emails reflecting various business names to include “reputation rewards” and “posting showcase.”
According to the complaint filed in the case, in November 2009, Generational Equity (GE), a Dallas-based merger and acquisitions firm, entered into a contract with Stanley for SEO services and reputation management. Stanley was hired because of his ability to improve a firm’s online reputation through search results. However, GE sought to terminate its relationship with Stanley after it determined he had acted outside of his contracted duties. GE also observed websites allegedly created by Stanley that had the ability to damage GE’s reputation by associating GE with a scam. From November 2010 through January 2011, GE paid Stanley a total of $80,000 to terminate the relationship.
According to the indictment, from December 13, 2013, until the end of February 2014, Stanley and Faust transmitted threatening communications, via email and telephone, from foreign countries to GE in the Northern District of Texas. Those communications threatened to post comments on the Internet wrongfully disparaging GE’s reputation, if GE did not send money to Stanley.
Because of Stanley’s threats to harm GE’s reputation through negative Internet posts that would adversely affect GE’s ability to conduct business if it failed to send money, GE responded to the wrongful inducement by sending four payments totaling $29,556 by MoneyGram to Stanley in Brasov, Romania.
An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty. 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. However, upon conviction, the maximum statutory penalty for transmitting threats in interstate and foreign commerce is two years in federal prison and a $250,000 fine. The maximum statutory penalty for Hobbs Act – extortion is 20 years in federal prison and a $250,000 fine.
The FBI is investigating and can be contacted at 972-559-5000. Assistant U.S. Attorney C.S. Heath is in charge of the prosecution.
Slaton, Texas, Man Admits Producing Child PornographyRead the Press Release
LUBBOCK, Texas — Dale Wray Fulford, 77, of Slaton, Texas, appeared this morning before U.S. District Judge Sam R. Cummings and pleaded guilty to an indictment charging one count of production of child pornography. He faces a statutory penalty of not less than 15 years or more than 30 years in federal prison and up to a $250,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
Fulford, who is in custody, admitted that between February 2013 and early February 2014, he used, persuaded, induced and enticed a female minor, under age 18, to engage in sexually explicit conduct that he recorded on a digital camera.
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) and the Lubbock County Sheriff’s Office investigated the case. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
Garland, Texas, Man Sentenced to 20 Years in Federal Prison on Child Pornography ConvictionRead the Press Release
DALLAS — Christian James Gieseke, 39, was sentenced yesterday, by U.S. District Judge Jane J. Boyle, to 20 years in federal prison to be followed by a 10-year term of supervised release. Less than a week prior to the start of his trial last summer, Gieseke pleaded guilty to one count of receipt of child pornography. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to the factual resume filed in the case, Gieseke admitted that on a date, sometime between September 1, 2010, and June 7, 2012, while at his Garland, Texas, residence, used a camera to produce images of Jane Doe 3 and/or Jane Doe 4 engaging in sexually explicit conduct while one or both was naked in the shower. He further admitted that he knew they were minors. He further admitted that he downloaded the images and viewed them on his laptop computer.
Gieseke also admitted that he produced, or attempted to produce, images and/or video of two other minor girls.
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 Garland Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) conducted the investigation. Assistant U.S. Attorneys Lisa J. Miller and Leigha Simonton prosecuted.
Dallas County Man Admits Role in $5 Million Staged Accident Fraud SchemeRead the Press Release
DALLAS — Leroy Nelson, 61, of DeSoto, Texas, appeared this morning before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to his role in a $5 million staged accident fraud scheme, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically, Nelson pleaded guilty to one count of mail fraud and one count of engaging in illegal monetary transactions. He faces a maximum statutory penalty of 20 years in federal prison on the mail fraud count and 10 years in federal prison on the illegal monetary transactions count. In addition, each count carries a fine of up to $250,000, and restitution could be ordered. Sentencing is set for July 7, 2014, before U.S. District Judge Sam A. Lindsay.
According to the plea agreement filed in the case, Nelson agrees to forfeit several vehicles, a motor home, a boat and trailer and real estate in Duncanville and Cooper, Texas.
According to the factual resume filed in the case, beginning in 2005 and continuing through 2012, Nelson engaged in a scheme to defraud automobile insurance companies by fabricating and submitting false and fraudulent claims for damage to technical equipment damaged in fictitious road accidents.
As part of the scheme, Nelson promised cash payments to individuals he recruited for them to falsely report to their automobile insurance company that, while driving, they inadvertently damaged a piece of equipment. Typically, the individual would falsely report that while driving, he or she had either rear-ended a trailer pulling equipment, or swerved to avoid something in the road and collided with equipment on the side of the road. Nelson would instruct the individual on how to make the telephone call to the insurance company.
Nelson then prepared and submitted the claims for property damage in the name of a “DBA” he created. The claim would include a photo of the equipment and a fictitious repair estimate that Nelson prepared. The damaged equipment was described as very technical in nature, such as: a “Remote Aircraft Landing Marker,” a “chemical Pipeline Examiner” or a “Seismographic Probe.” The claimed repair expenses would usually be from $16,000 to $19,000.
Nelson opened private mailboxes in states including Minnesota, Missouri, Washington, Arizona, Connecticut and Louisiana to receive the insurance checks. The mailboxes were opened under an assumed business name that Nelson used as the owner of the damaged equipment in the claims. Nelson also used the addresses of two warehouses on Explorer Street in Dallas, and directed that mail received at the private mailboxes be forwarded to one of those two addresses.
The cumulative total of the insurance claims prepared and submitted to insurance companies by Nelson from 2005 to 2012 totaled approximately $5 million.
This investigation was brought to the attention of federal law enforcement by the National Insurance Crime Bureau (NICB) and Farmers Insurance Group, Special Investigations. The FBI, Internal Revenue Service Criminal Investigation and U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
University Park Woman Sentenced to 14 Years in Federal Prison for Transporting and Shipping Child PornographyRead the Press Release
DALLAS — Erika Susan Perdue, 43, of University Park, Texas, was sentenced today by U.S. District Judge Sam A. Lindsay to 168 months (14 years) in federal prison and an eight-year term of supervised release following her guilty plea in September 2013 to one count of transporting and shipping child pornography. In addition, Judge Lindsay ordered Perdue to pay a $10,000 fine and $5,000 in restitution to one of the victims identified by the National Center for Missing and Exploited Children as “Vicky.” The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
A federal grand jury returned a four-count indictment in May 2012 charging Perdue with two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography. Purdue has been in custody since June 2012 when the court found that she had violated its conditions.
On January 4, 2012, a special agent with the FBI, and on January 5, 2012, an FBI Task Force Officer with the Plano Police Department, each acting online in an undercover capacity and assuming someone else’s identity, launched publicly-available peer-to-peer file-sharing programs and discovered that an individual, using the username, “Classybitch,” later identified as Perdue, was logged on to the network. They observed that the individual’s shared folder contained numerous files, many with names consistent with child pornography. They downloaded files, directly from this individual’s computer, and several did contain child pornography, including one video of a man and a woman engaged in sexually explicit conduct with a minor child. That video is described in Count One of the indictment for which Perdue is pleading guilty.
A search warrant was executed at Perdue’s resident on April 10, 2012. She admitted that one of her screen names was “Classybitch,” and that she traded child pornography while her husband was at work.
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 investigation was conducted by the FBI and the Plano Police Department. Assistant U.S. Attorney Camille Sparks prosecuted.
Physician Sentenced to 57 Months in Federal Prison on Health Care Fraud ConvictionRead the Press Release
Co-defendants Who Were Convicted at Trial are Awaiting Sentencing
on Conspiracy and Health Care Fraud ConvictionsDALLAS — Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, was sentenced this morning by U.S. District Judge David C. Godbey to 57 months in federal prison and ordered to pay $9,484,111 in restitution to the Centers for Medicare and Medicaid Services (CMS). Dr. Padron pleaded guilty in September 2013 to one count of count of conspiracy to commit health care fraud stemming from his role as medical director of a physician house-call company, A Medical House Calls (A Medical). Dr. Padron has been in custody since his arrest in June 2012. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Two co-defendants in the case, Lawrence Dale St. John, 67, and his son, Jeffrey Dale St. John, 42, both of Grand Prairie, Texas, were each convicted at trial in October 2013 on one count of conspiracy to commit health care fraud and 13 counts of health care fraud related to their operation of A Medical, which they owned and operated. Each count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine. Restitution could also be ordered. Both are in custody and sentencing hearings are scheduled for March 31, 2014.
Dr. Padron joined A Medical as its medical director in December 2009. A Medical, which was also known as A+ Medical House Calls and ANM Physician House Calls, provided physician visits to Medicare beneficiaries in their homes, rather than at a doctor’s office. A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas. Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.
Once A Medical established a Medicare beneficiary for physician home-visit services, it would submit billing for fraudulent care plan oversight claims. The company did not provide primary care physician services to Medicare beneficiaries.
From May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program. A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit. The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.
In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all. Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.
In a separate case, Dr. Padron entered a guilty plea to one count of conspiracy to distribute a controlled substance stemming from his operation of Padron Wellness Clinic, a “pill-mill,” that he operated in Dallas. A sentencing date has not been set in this case.
The investigation was conducted by U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are in charge of the prosecution.
Dallas Man Sentenced to 10 Years in Federal Prison on Methamphetamine ConvictionRead the Press Release
DALLAS — Angel Medina, Jr., aka “June Bug,” of Dallas, was sentenced this morning by U.S. District Judge David C. Godbey to 120 months in federal prison following his guilty plea in October 2013 to one count of possession of methamphetamine with intent to distribute. Medina, 27, has been in custody since his arrest in May 2013. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
On May 7, 2013, a federal grand jury sitting in the Northern District of Texas returned a five-count indictment against Medina, Jr., alleging that he sold methamphetamine and cocaine base (crack cocaine) on multiple occasions. According to documents filed in the case and evidence presented in court, Medina sold narcotics to an undercover officer with the Dallas Police Department. In October 2013, Medina pleaded guilty to Count Five of that indictment, admitting that he knowingly sold an ounce of methamphetamine on June 24, 2012, to what turned out to be an undercover officer.
The case was investigated by the Dallas Police Department; it was prosecuted by Assistant U.S. Attorney Jason D. Schall.
Dallas County Man Sentenced to 70 Months in Federal Prison in Investor Fraud CaseRead the Press Release
Defendant Sold “Salad Bowl” Franchises in California and Texas
DALLAS — A Irving, Texas, man who pleaded guilty in April 2013 to one count of wire fraud stemming from his role as registered agent, director and incorporator of The Salad Bowl Franchise Corporation, was sentenced this morning by U.S. District Judge David C. Godbey.
Michael David Carroll, 38, was sentenced to 70 months in federal prison and ordered to pay $1,437,040 in restitution. Judge Godbey ordered that Carroll surrender to the Bureau of Prisons by May 16, 2014. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.
According to documents filed in the case, as well as testimony at today’s sentencing hearing, from November 2008 through September 2010, Carroll ran a scheme to defraud potential investors, and to obtain money and property under false and fraudulent pretenses, by fraudulently inducing investors to purchase a “Salad Bowl” franchise from him.
As part of the scheme to defraud, Carroll obtained funds from several investors by selling “Salad Bowl” franchises to investors in California and Texas. He provided false financial data to investors including inflated daily and monthly sales figures at some franchise locations. He also falsely represented to some investors that investment funds would be used only to fund franchise construction expenses and to purchase franchise restaurant equipment related to that investor. Carroll, however, admitted that he co-mingled investor funds into his operating account and then used investor funds for his own personal use.
Carroll falsely represented to some investors that some franchise equipment at particular franchise store locations would be fully owned by the investor as part of a “turnkey operation,” when in fact, Carroll had only leased some of the franchise equipment. He also fraudulently altered financial statements to represent falsely inflated sales to deceive potential investors about income generated by retail sales at franchise store locations.
Carroll admitted that he forged his business partner’s signature on a $23,000 loan secured by account receivables on a “Salad Bowl” restaurant. He also admitted concealing his bankruptcy filings from several potential investors in order to deceive them about his true financial condition and history.
The FBI investigated the case and Assistant U.S. Attorney David L. Jarvis prosecuted.
Grand Jury Indicts Wife of Former Executive at Collin Street Bakery on Conspiracy, Money Laundering and False Statement Felony OffensesRead the Press Release
Defendant Sandy Jenkins Allegedly Embezzled More than $16 Million from Corsicana Business, Which Sandy and Kay Jenkins Used on a Lavish Lifestyle
DALLAS — A federal grand jury returned a 22-count superseding indictment today charging Sandy Jenkins, 65, and his wife, Kay Jenkins, 63, both of Corsicana, Texas, with various felony offenses stemming from Sandy Jenkins’s alleged embezzlement of approximately $16 million from his former employer, the Collin Street Bakery (Bakery) in Corsicana, which was used by Sandy and Kay Jenkins to maintain an extensive and lavish lifestyle. This indictment supersedes a 10-count indictment, returned in September 2013 that charged Sandy Jenkins with 10 counts of mail fraud stemming from the alleged embezzlement. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.
Jenkins served as the Corporate Controller for the Bakery from February 1998 to June 21, 2013. On June 21, 2013, Jenkins was terminated after the Bakery discovered the alleged fraud. He has been in custody since his arrest in August 2013 on related charges outlined in a criminal complaint. Kay Jenkins is expected to self-surrender and make her initial appearance on Tuesday, March 18, 2014. Sandy Jenkins will appear in court at date to be determined.
This superseding indictment charges Sandy Jenkins with 10 counts of mail fraud and three counts of money laundering. In addition, Sandy and Kay Jenkins are also each charged with one count of conspiracy to commit money laundering; six counts of money laundering and aiding and abetting; and two counts of making a false statement to a financial institution.
This indictment alleges that from December 2004 until June 21, 2013, Sandy Jenkins schemed to embezzle funds from the bakery for his and Kay’s self-enrichment. Between 2005 and 2013, Sandy Jenkins allegedly caused approximately 888 fraudulent checks to be written on the Bakery’s account and mailed to his personal creditors, resulting in losses to the Bakery of approximately $16,649,786.
Starting in at least December 2004 and continuing through approximately August 12, 2013, Sandy and Kay Jenkins conspired together to maintain an extensive and lavish lifestyle through expenditures of the money embezzled from the Bakery. During this time, Sandy and Kay Jenkins maintained a vacation home in Santa Fe, New Mexico, a multi-million dollar watch and jewelry collection, luxury automobiles, and took numerous trips on private jets, among other things, funded with money Sandy Jenkins stole from the Bakery.
During that time, Sandy and Key Jenkins incurred more than $11 million in charges on American Express credit cards, which were subsequently paid with monies embezzled from the Bakery. Those charges included, among other things, approximately $3.3 million in payments for approximately 223 trips on private jets contracted through North Dallas Aviation to various locations including Santa Fe; Napa, California; and Aspen, Colorado. The Jenkins also used funds Sandy Jenkins embezzled to deposit into their joint bank accounts, purchase a 2010 Mercedes-Benz, a 2013 GMC Yukon Denali, and a $25,000 men’s Patek Philippe 18 karat rose gold watch.
The indictment further alleges that Sandy and Kay Jenkins knowingly made false statements, i.e., overstating their monthly income, to financial institutions in connection with their applications for a mortgage loan to purchase a residence in Santa Fe.
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 maximum statutory penalties, per count, are: mail fraud – 20 years in federal prison and a $250,000 fine; conspiracy to commit money laundering and money laundering – 10 years in federal prison and a $250,000 fine, or alternatively, not more than twice the amount of the criminally derived property involved in the transaction; and making false statements to a financial institution – 30 years in federal prison and a $1 million fine.
The indictment also includes a forfeiture allegation that would require Sandy and Kay Jenkins to forfeit not only the total proceeds derived from the offense ($16,649,786), but also property including: real estate in Corsicana and Santa Fe; vehicles, including a Mercedes, a Lexus, a GMC Denali and a BMW; more than $440,000 in currency seized or surrendered to date; one Steinway piano; electronic equipment; six firearms; furs, jewelry, precious gems and metals, watches, handbags, luggage, shoes, crystal and miscellaneous collectables; a wine and liquor collection; artwork seized from the residence in Santa Fe; and two watches seized from deBoulle Diamond & Jewelry, Inc.
The FBI is conducting the investigation. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.
(Download Factual Basis)
Federal Jury Convicts Dallas Man on Child Pornography ChargesRead the Press Release
Defendant Faces Up to 70 Years in Federal Prison
DALLAS — Following a two-day trial before U.S. District Judge Barbara M. G. Lynn, and less than one hour of deliberation, a federal jury has convicted a 43-year-old Dallas man on various child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Ted Lynn Snider was convicted on two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography. Each of the transporting and shipping child pornography counts, as well as the receipt of child pornography count, carries a statutory penalty of not less than five years or more than 20 years in federal prison and a $250,000 fine. The possession count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine. Sentencing is set for June 27, 2014.
The government presented evidence that in May 2013, the FBI discovered a particular individual, later identified as Snider, was online sharing images and videos of young children engaged in vile and graphic sexual acts. On May 29, 2013, the FBI executed a search warrant at Snider’s residence, and while at the residence, agents spoke with him. Snider admitted he had been using a file sharing program to trade files depicting child pornography and that he maintained a categorized, child pornography collection on his computer and external hard drives. The FBI seized electronic evidence that contained hundreds of images and videos of child pornography.
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 FBI investigated. Assistant U.S. Attorney Camille Sparks and Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay prosecuted.
Lubbock Man Sentenced to 210 Months in Federal Prison for Producing Child PornographyRead the Press Release
LUBBOCK, Texas — Nicholas Lee Blair, 31, was sentenced today by U.S. District Judge Sam R. Cummings to 210 months in federal prison and a lifetime of supervised release, following his guilty plea in November 2013 to an indictment charging one count of production of child pornography. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the documents filed in the case, on or about December 25, 2012, when he resided in Lubbock, Texas, Blair persuaded a minor female, “Jane Doe,” to engage in sexually explicit conduct while he used his cellphone camera, aimed at her while she was in the bathroom of his home, to record a video of her.
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 Lubbock Police Department and the FBI investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Collin County, Texas, Man Sentenced to 51 Months in Federal Prison for Embezzling Approximately $1 Million from Employer, Hudson Advisors, LLC, in Wire Fraud SchemeRead the Press Release
DALLAS — Steven Chen Yu, 40, of Allen, Texas, was sentenced today by U.S. District Judge Jane J. Boyle to 51 months in federal prison, following his guilty plea in July 2013 to an information charging wire fraud in connection with his attempt to embezzle approximately $1 million from his employer, Hudson Advisors, LLC and its global subsidiaries (Hudson). Judge Boyle also ordered that Yu pay approximately $365,000 in restitution and surrender to the Bureau of Prisons on April 9, 2014. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
Hudson was a globally integrated asset management company that performed due diligence and analysis, asset management and other support services for Lone Star Funds, a leading private equity firm that invested globally in distressed assets. Hudson employed approximately 800 professionals in the U.S. and had affiliate offices in Europe, Canada and Japan. Hudson’s main offices were in Dallas.
Hudson maintained a private client department that employed several private client managers. It was responsible for providing accounting and bill payment services for Hudson owner J.G. As part of his duties, Yu was authorized by Hudson to access all of J.G.’s personal financial information.
From September 2009 through March 2012, Yu engaged in several fraudulent acts which enabled him to embezzle substantial funds belonging to J.G. For example, from September through October 2009, Yu fraudulently re-submitted duplicate invoices for legitimate repair work that had been done on J.G.’s boat, knowing that the invoices had already been paid. Yu substituted his own personal bank account information, and in this manner, was able to fraudulently divert and embezzle $150,572 from J.G.’s accounts.
In another scheme, and in a similar manner, on December 1, 2009, Yu defrauded J.G. by also using duplicate invoices for landscaping work that had previously been done on J.G.’s personal residence in Massachusetts. Yu was able to fraudulently divert and embezzle more than $69,000 in funds from one of J.G.’s trust accounts for duplicate payment on the landscaping work. However, later in December 2009, Yu fraudulently caused the more than $69,000 to be deposited back into the account from which they had been diverted prior to Hudson becoming aware of any of Yu’s unlawful activities in connection with the fraudulent diversion or embezzlement of funds.
As part of a larger scheme, beginning in 2009 and continuing through March 2012, Yu fraudulently used and diverted J.G.’s funds which Yu used to make advance “estimated tax payments” for Yu’s benefit in connection with his own future state income taxes due in Massachusetts. When Yu filed his personal income tax returns with Massachusetts, he claimed that he owed no taxes and requested Massachusetts pay him a complete refund of all the estimated tax payments he had made to the state with funds he had stolen from J.G.
During the period from about 2009 through March 2012, as part of his scheme to defraud, Yu attempted to steal and embezzle a total of approximately $1,292,000 from Hudson owner J.G.
The FBI conducted the investigation; Assistant U.S. Attorney David L. Jarvis prosecuted.
Dallas Man Sentenced to Serve A Total of 25 Years in Federal Prison on Federal Child Pornography Convictions Involving Prepubescent MinorRead the Press Release
DALLAS — Ulises Sandoval, 27, of Dallas, was sentenced today by U.S. District Judge Ed Kinkeade to serve a total of 300 months (25 years) in federal prison following his guilty plea in November 2013 to one count of production of child pornography and one count of possession of prepubescent child pornography. Specifically, Judge Kinkeade sentenced him to 300 months on the production conviction and 240 months on the possession conviction, to run concurrently. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the factual resume filed in the case, special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) received information that a person, later identified as Sandoval, was trading images of child pornography over email. They executed a search warrant at his home on September 25, 2013, and arrested him.
Sandoval admitted using his email address to join a website for the purpose of trading images and videos of child pornography, and he also admitted using email to meet individuals with a similar interest in child pornography to trade child pornography with them. He admitted taking photographs of “Jane Doe,” who was less than seven years old at the time, while he engaged in sexually explicit conduct with her, and then sharing those images with others.
Forensic analysis located images of child pornography on Sandoval’s laptop computer. Sandoval admitted that he had more than 2500 child pornography images and videos on his hard drive and some of those depicted sadistic and or violent conduct; 21 of the files depicted infants and toddlers.
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.”
ICE HSI investigated. Assistant U.S. Attorney Camille Sparks prosecuted.
Wichita Falls Man Sentenced to 25 Years in Federal Prison for Role in Major Methamphetamine Distribution ConspiracyRead the Press Release
WICHITA FALLS, Texas— A Wichita Falls, Texas, man, David Calandreli, 27, who pleaded guilty in November 2013 to one count of conspiring to possess with intent to distribute and to distribute methamphetamine, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 300 months (25 years) in federal prison. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, Calandreli admitted that on multiple occasions between November 2011 and July 2012, he transported and distributed quantities of methamphetamine, which he had obtained from co-conspirator Steve Ysasaga, to individuals in the Wichita Falls area. In addition, on more than one occasion, Calandreli obtained quantities of more than one-quarter pound of methamphetamine from Ysasaga. Ysasaga, 41, of Arlington, Texas, was sentenced in late February 2014 to 240 months in federal prison.
Calandreli also admitted that on December 7, 2011, he sold approximately 7.6 grams of methamphetamine to an undercover federal law enforcement officer in the parking lot of a grocery store in Wichita Falls.
To date, all 39 defendants charged in this conspiracy have entered guilty pleas; 38 have been sentenced.
This Organized Crime and Drug Enforcement Task Force (OCDETF) case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas DPS; and the Wichita Falls Police Department. Assistant U.S. Attorney Mary F. Walters is in charge of the prosecution.
Federal Jury Convicts Dallas County Man on Drug and Firearm OffensesRead the Press Release
DALLAS — Following a three-day jury trial before U.S. District Judge Jorge A. Solis, a federal jury has convicted Victor Chapa, 32, of Irving, Texas, on one count of conspiracy to possess with intent to distribute more than 100 kilograms of marijuana and one count of possession of a firearm in furtherance of a drug trafficking crime. Today’s announcement was made by U.S. Attorney R. Saldana.
Chapa’s five co-defendants have pleaded guilty to their respective roles in the conspiracy and are awaiting sentencing. Chapa faces a mandatory minimum statutory penalty of five years and a maximum of forty years in prison on the conspiracy conviction and a mandatory minimum statutory penalty of five years and a maximum penalty of life in prison on the firearm conviction, which must be consecutive to the conspiracy conviction. A sentencing date was not set.
The government presented evidence at trial that the conspirators used a residence and outbuilding containing an apartment on Harlan Street in Irving to store, repackage for distribution and distribute quantities of marijuana. When a search warrant was executed at the site, officers recovered handwritten notes on spiral notebooks and on loose pieces of paper that reflected marijuana sales, identified customers and noted amounts of money owed for marijuana, along with firearms in the main residence. In the detached apartment, law enforcement located wrappings, also known as marijuana “skins,” that previously contained approximately 528 pounds of marijuana, loose marijuana on the floor, cellophane wrapping, zip lock bags, digital scales, several loaded firearms and additional ammunition.
The North Texas High Intensity Drug Trafficking Area (HIDTA) Task Force and the Irving, Fort Worth and Dallas Police Departments investigated. Assistant U.S. Attorney Mary Walters prosecuted.
Two Receive Lengthy Federal Prison Sentences for Roles in Methamphetamine Trafficking RingRead the Press Release
LUBBOCK, Texas — Members of a three-person methamphetamine trafficking ring that operated in Lubbock, Texas, were sentenced this morning in federal court by U.S. District Judge Sam R. Cummings. Two of the defendants, Michael Armenta, 19, and Fernando Valenzuela-Ceballos, 26, received lengthy federal prison sentences of 210 months and 262 months, respectively. Armenta’s wife, Kutleza Aurora Rodriguez, 19, was sentenced to 27 months in federal prison. Armenta and Valenzuela-Ceballos will also be deported after they have served their federal sentence. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Armenta, aka “Alex,” and Valenzuela-Ceballos, aka “Gordo,” each pleaded guilty in November 2013 to one count of possession with intent to distribute 500 grams or more of methamphetamine and aiding and abetting. Rodriguez pleaded guilty at the same time to one count of misprision of a felony, admitting she allowed them to use her bag to conceal methamphetamine.
On September 2, 2013, officers with the Lubbock Police Department, who were investigating Armenta and Valenzuela-Ceballos for methamphetamine trafficking, executed a search warrant at a residence on 47th Street in Lubbock where they, along with Rodriguez, lived. Rodriguez was home at the time of the search. During the execution of the warrant, law enforcement found seven pounds of methamphetamine, 13 empty one-pound wrappings that appeared to have contained pound quantities of methamphetamine, drug ledgers, packaging materials, scales, approximately $16,000 in cash and two firearms.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lubbock Police Department and the Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorney Justin Cunningham prosecuted.
Regional Director of Califco, LLC, A Property Management Company, Is Sentenced to 12 Months and 1 Day in Federal Prison for Violating the EPA’s Clean Air ActRead the Press Release
Defendants Ordered to Pay for Medical Monitoring for Victim-Workers
in the Asbestos Removal ProjectDALLAS — Jonathan Isaac Shokrian, 29, who served as a Regional Director at Califco, LLC, with oversight of the company’s business operations in Texas, was sentenced yesterday afternoon on a felony conviction related to an asbestos removal project. Chief U.S. District Judge Sidney A. Fitzwater sentenced Shokrian to 12 months and 1 day in federal prison and ordered him to pay a $25,000 fine following his guilty plea in June 2013 to one count of failure to notify under the Clean Air Act. His father, Elias Shokrian, Califco’s President and CEO, appeared today on behalf of the corporation, which has paid a $500,000 fine, for the same offense. Both defendants were ordered to pay for medical monitoring for victim-workers. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
During the pronouncement of sentencing, Chief Judge Sidney A. Fitzwater acknowledged the danger to the public health from asbestos exposure and the importance of adherence to EPA standards for its proper removal.
“This office is committed to holding those accountable who willfully violate federal laws designed to protect us from exposure to toxic materials,” said U.S. Attorney Saldaña.
Califco is a property management company headquartered in Beverly Hills, California; it has a regional office located on North Story Road in Irving, Texas. Califco owns and operates several commercial properties in the Dallas area, including Plymouth Park Shopping Center on North Story Road in Irving and Crest Plaza Shopping Center on South Lancaster Road in Dallas.
The Clean Air Act authorizes the U.S. Environmental Protection Agency (EPA) to establish standards to prevent or limit the emission of hazardous air pollutants into the atmosphere. The EPA has enacted regulations under the Clean Air Act that control the removal, handling and disposal of asbestos.
“There is no safe level of exposure to asbestos,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Texas. “Asbestos can cause cancer and other serious respiratory diseases and it must be handled legally and safely. The defendants ordered their workers to remove asbestos-containing materials illegally, putting them at great risk. This case should serve notice that EPA and its partner agencies will prosecute anyone who ‘cuts corners’ by avoiding the costs of handling or disposing of asbestos properly.”
In 2008, Califco and Jonathan Shokrian contracted with a specialized asbestos abatement contractor to remove asbestos from an old movie theater in the Crest Plaza Shopping Center. That abatement was conducted in compliance with all federal, state and local regulations and was completed in October 2008.
Approximately one month later, Jonathan Shokrian decided to conduct a renovation of the abandoned former Fazio’s department store in the Plymouth Park Shopping Center. Rather than hiring a professional asbestos abatement contractor, as Califco had done on its Crest Plaza Project, Shokrian attempted to save money by employing two day laborers to remove ceiling tile and floor tile and mastic from the Fazio’s building, even though he knew these materials contained asbestos.
While Califco provided the day laborers with masks, respirators and other tools to facilitate the removal of the asbestos-containing material, the masks and respirators were not adequate to protect the workers from the asbestos fiber. Shokrian did not inform the day laborers on the site, or the Califco-employed maintenance worker, that there was asbestos in the tile and mastic being removed. Neither Shokrian nor any other Califco employee notified any of the other commercial tenants of the Plymouth Park Shopping Center that asbestos-containing materials were being removed from the Fazio’s building.
In mid to late February 2009, day laborers, under Shokrian’s supervision, began using large amounts of gasoline to remove the remaining asbestos-containing floor tile mastic in the Fazio’s building. On February 27, 2009, after responding to a call regarding the overwhelming smell of gasoline in the area around the Plymouth Park Shopping Center, the Irving Fire Department ordered the evacuation of the shopping center and a portion of a nearby residential neighborhood because of the concentration of gasoline fumes in the Fazio’s building.
The EPA and the Texas Department of State Health Services conducted the investigation. Assistant U.S. Attorney Errin Martin prosecuted and Assistant U.S. Attorney Melissa Childs coordinated the fine collection.
Plano Man Sentenced to 46 Months in Federal Prison and Ordered to Pay $118,139 in Restitution on Conspiracy ConvictionRead the Press Release
DALLAS — A Plano, Texas, man was sentenced this morning by U.S. District Judge Ed Kinkeade to 46 months in federal prison, and ordered to pay $118,139 in restitution on a conspiracy conviction stemming from his role in a tax refund fraud scheme, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Cephas Msipa pleaded guilty to a one-count superseding information in August 2013 charging one count of conspiracy. He has been in federal custody since his arrest on an indictment in November 2012. In today’s hearing, Judge Kinkeade stated that Msipa will be deported back to Zimbabwe after he serves his prison sentence.
According to the factual resume filed in Msipa’s case, Msipa admitted that from January 5, 2012, until June 2012, he was involved in a conspiracy to obtain tax refunds that were generated through the submission of fraudulent tax returns. For his part in the conspiracy, Msipa opened bank accounts, using a false name, in order to receive the refunds from the fraudulently filed tax returns.
Msipa used a forged United Kingdom passport to establish a private mail box at a postal store on Preston Road in Dallas. Thereafter, according to the factual resume, Msipa used this false name, and the address of the mail box, to open three accounts at Bank of America and two accounts at Chase Bank.
The factual resume further states that during this time frame, co-conspirators electronically filed approximately 105 fraudulent tax returns using stolen identities and false income information that directed the Internal Revenue Service (IRS) to deposit a total of $118,139 in refunds into accounts Msipa opened.
In a related case, defendant Elijah Meskano, pleaded guilty to the same offense in May 2013. Meskano, according to the factual resume filed in his case, from December 22, 2011, through November 29, 2012, also opened bank accounts using a false name to receive refunds from fraudulently filed tax returns. According to a complaint filed in Meskano’s case, he and Msipa were roommates and lived in Plano, Texas. Meskano is scheduled to be sentenced on April 3, 2014.
The investigation was conducted by IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Christopher Stokes prosecuted.
Dallas Man Faces up to Life in Federal Prison After Pleading Guilty to Sex Trafficking of ChildrenRead the Press Release
DALLAS — Keith Williams, aka “Chucky Blood,” 24, of Dallas, appeared in federal court yesterday and pleaded guilty, before U.S. Magistrate Judge Paul D. Stickney, to one count of sex trafficking of children. He faces a maximum statutory penalty of not less than 10 years and up to life in federal prison and a $250,000 fine. He is scheduled to be sentenced by U.S. District Judge David C. Godbey on June 9, 2014. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Williams’ co-defendant in the case, Erin Patton, 25, also of Dallas, is set for trial for June 2, 2014, on an indictment charging her with the same offense. Both Williams and Patton are in custody.
According to documents filed in the case, in September 2012, after she ran away from home, 14-year-old “Jane Doe” met Erin Patton. Patton let Jane Doe stay with her, and Patton facilitated Jane Doe’s engaging in commercial sex acts by driving her to locations where the acts occurred and providing her a cell phone so she could post her services on “Mocospace” and Backpage.com. Jane Doe gave Patton money she earned from engaging in the sex acts.
Again, in November 2012, after she again ran away from home, Jane Doe contacted Patton. This time, both Patton and Williams picked up Jane Doe and posted her availability to engage in commercial sex acts on Backpage.com. While Williams went to serve a jail sentence shortly thereafter, Patton continued facilitating Jane Doe’s commercial sex acts. Jane Doe eventually left.
In April 2013, Jane Doe again contacted Patton and told her she was still in school, but wanted to leave and wanted Patton to pick her up. Patton and Williams agreed to let Jane Doe stay with them, but they told her she was going to have to engage in commercial sex acts, as she had done in the past, to pay for her expenses. Williams and/or Patton drove Jane Doe to meet with customers and Jane Doe gave all the money she earned to Williams and Patton.
On May 4, 2013, officers with the Dallas Police Department (DPD) encountered now 15-year-old Jane Doe, in a car parked in an area known for prostitution. Williams came by shortly thereafter. He admitted knowing she was 15, driving her to meet with customer and collecting proceeds from her “dates.”
DPD led the investigation, with assistance from the FBI. Assistant U.S. Attorney Cara Foos Pierce is prosecuting.
Co-Defendant in Cocaine Distribution Conspiracy Case Involving Former NFL Player Sam Hurd Is SentencedRead the Press Release
DALLAS — The last defendant convicted in the cocaine distribution conspiracy case that involved former NFL player Sam Hurd, III, was sentenced this afternoon in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña, of the Northern District of Texas.
Toby Lujan, 28, of Dallas, was sentenced by U.S. District Judge Jorge A. Solis, to 41 months in federal prison. He was ordered to surrender to the Bureau of Prisons on April 2, 2014. Lujan pleaded guilty in September 2012 to one count of possession with intent to distribute cocaine.
Hurd was sentenced in November 2013 to serve 15 years in federal prison. He pleaded guilty in April 2013 to conspiring to possess with the intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. In addition, in June 2012, Hurd, while on pretrial release, attempted to possess with intent to distribute five kilograms or more of cocaine and at least 50 kilograms, but less than 100 kilograms, of marijuana.
Hurd’s cousin, Jesse Tyrone Chavful, of San Antonio, Texas, was sentenced in October 2013 to serve a total of 127 months in federal prison. He pleaded guilty in October 2012 to one count of conspiracy to possess with the intent to distribute five kilograms or more of cocaine. Since he committed this offense while he was on supervision for a federal drug-related firearm offense, the Court revoked his supervision and ordered that he serve 30 months in custody, consecutive to the 97-month sentence that he received for the instant offense.
Lujan and Chavful agreed to help Hurd with his illicit drug venture which he ran while he played professional football for the Dallas Cowboys and then later after he began playing football for the Chicago Bears.
For instance, on July 27, 2011, Hurd provided $88,000 to Lujan to purchase several kilograms of cocaine for him, and Hurd also loaned Lujan his Cadillac Escalade to conduct the drug transaction. Law enforcement officers stopped Lujan driving Hurd’s Cadillac and seized the $88,000 from a canvas bag containing marijuana residue. Lujan continued to try to acquire cocaine for Hurd, at Hurd’s request, which ultimately led to the December 14, 2011, meeting at a Chicago steakhouse in which Hurd agreed to buy multiple kilograms of cocaine from an undercover officer posing as a drug trafficker, on a weekly basis, for $25,000 per kilogram. Hurd was arrested as he left that steakhouse with a gift bag containing a one-kilogram sample of cocaine the “drug trafficker” gave him.
During fall 2011, while Hurd was playing football for Chicago, he contacted Chavful and asked him to find 10 kilograms of cocaine. Chavful then met with witnesses at his T-shirt shop in San Antonio and negotiated the sale for Hurd. On November 10, 2011, Chavful and a witness discussed drug loads going north, that is, to Hurd in Chicago. Chavful advised the witness not to worry about the payment because Hurd had money. Chavful also cautioned that Hurd could not be present when the drugs were delivered because of media concerns.
During spring 2012, while on pre-trial release for pending federal drug offenses, Hurd met with Chavful at his San Antonio T-shirt shop and asked him to get him cocaine and marijuana. In late May, Chavful met with a witness and agreed to buy five kilograms of cocaine and 200 pounds of marijuana, and told the witness that Hurd, whom he described as the money, was in on the transaction and ready to move. On June 6, 2012, federal law enforcement officers arrested Chavful after the witness and an undercover officer delivered the drugs to Chavful. Chavful admitted that he had phoned Hurd that day, at the telephone number listed under Big Sam in his cell phone contacts, to let Hurd know about the drugs.
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated. Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay and Assistant U.S. Attorney John Kull prosecuted.
Dallas Man Sentenced to Two Years in Federal Prison and Ordered to Pay $168,920 in Restitution for Fraudulently Receiving Social Security BenefitsRead the Press Release
Defendant Collected His Deceased “Father’s” Benefits
DALLAS — A Dallas man, Jose Alfredo Rodriguez, was sentenced today by U.S. District Judge Sam A. Lindsay to two years in federal prison and ordered to pay $168,920 in restitution, following his conviction at trial in October 2013 on felony offenses related to his theft of his deceased father’s Social Security retirement benefits, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
The jury deliberated just two hours to convict Rodriguez, 54, on one count of theft of government funds and three counts of making false statements. At today’s sentencing hearing, Judge Lindsay ordered that Rodriguez surrender to the Bureau of Prisons on April 4, 2014.
The government presented evidence at trial that beginning in 1989, Fernando Loya began receiving Title II Retirement Insurance benefits from the Social Security Administration (SSA). The SSA determined that Mr. Loya required a representative payee to manage his benefits on his behalf, and appointed Rodriguez, who considered Mr. Loya his father, as Mr. Loya’s payee.
In early September 2, 2011, in response to a request from the SSA to bring Mr. Loya and his identification information to the SSA office in Dallas, Rodriguez appeared without Mr. Loya and informed a SSA employee that Mr. Loya lived in Mexico. On October 27, 2011, Rodriguez called the SSA and reported that Mr. Loya had passed away in Mexico on September 15, 2011.
An investigation ensued and when confronted, Rodriguez conceded that the last time he went to Mexico to give Mr. Loya his benefits, was in 1992 or 1994. Rodriguez also conceded that he did not know how or when Mr. Loya died, but believed it may have been in 1995, and that he sent no money to Mexico for his care after 1997.
The government presented further evidence at trial that on November 15, 2008, June 7, 2009 and May 20, 2011, Rodriguez made false statements or representations in documents used by the SSA to determine continued rights to Social Security benefits for Mr. Loya. On those dates, Rodriguez stated that he had spent, respectively, $13,160, $13,640 and $14,184 for food, housing, clothing, medical and dental expenses, recreation and personal expenses for Mr. Loya, when he well knew he did not use those funds for Mr. Loya.
The case was investigated by the SSA’s Office of Inspector General. Special Assistant U.S. Attorney Nicole Dana prosecuted.
Dallas-Area Lawyer Sentenced for Covering up Bank FraudRead the Press Release
DALLAS — An Allen, Texas, man, who pleaded guilty in April 2013 to one count of a misprision of a felony stemming from his involvement in a loan fraud scheme, was sentenced this morning by U.S. District Judge David C. Godbey, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Jerry Goh, 51, a lawyer with offices in the Dallas-Fort Worth metroplex, was sentenced to serve seven months in federal prison and surrender to the Bureau of Prisons on May 26, 2014, to begin serving that sentence. Judge Godbey also ordered that Goh serve the first seven months of a one-year term of supervised release on home confinement. Goh will also be ordered to pay more than $2.1 million in restitution.
Two defendants also charged in the case, Plano, Texas, residents Vathany Teng and Lina Ma, have pleaded guilty to their roles in the fraud and are scheduled to be sentenced next month. According to documents filed in the case, Goh, acting in his capacity as the escrow officer on the loan, and thus with control of the loan proceeds, concealed from the lender, Prosper Bank, the fraudulent release of $498,720 of loan proceeds to provide funds for a $431,000 down payment. Goh wired $498,720 of lender Prosper Bank’s funds from an escrow account, knowing that these seller proceeds funds would later be used as the source of borrower Lina Ma’s down payment on her loan from Prosper Bank.
This case was prosecuted in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
The case was investigated by the U.S. Small Business Administration – Office of Inspector General and the FBI. Assistant U.S. Attorney David L. Jarvis prosecuted.
Parker County Man Charged with Hate Crime for Assault Based on Victim's Sexual OrientationRead the Press Release
FORT WORTH, Texas – Brice Johnson, 19, of Springtown, Texas, has been charged in a federal criminal complaint with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person, the Justice Department’s Civil Rights Division, Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, and Diego Rodriguez, Special Agent in Charge of FBI Dallas Division announced.
The complaint was filed on Feb. 12, 2014, in U.S. District Court in Fort Worth, Texas. Johnson has been in state custody since his arrest on Sept. 10, 2013, and he made his initial appearance in federal court yesterday afternoon.
“Suspected crimes of this nature will simply not be tolerated,” said U.S. Attorney Saldaña. “With the assistance of all our partners, hate crimes will be prosecuted to the fullest extent of the law.”
“We will thoroughly investigate all suspected violations of the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act in our community,” said SAC Rodriguez.
According to the affidavit filed with the criminal complaint, in the early morning hours of Sept. 2, 2013, the adult male victim, identified as A.K., connected with Johnson through the cell phone application for MeetMe.com. A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s page indicated he was not gay. During their communications, Johnson said that he was interested in engaging in sexual activity with A.K. He invited A.K. to his home, gave A.K. his cell phone number and address and they exchanged text messages planning their sexual activity.
After A.K. showed up at the house, Johnson severely beat him, then put him into the trunk of A.K.’s car and drove him to a friend’s home. Based on ligature marks on A.K.’s wrists, it appears that he was bound with an electrical cord while he was in the trunk of the car. Individuals at the home told Johnson to take A.K. to the hospital or they would call the police, and Johnson eventually drove the victim to an Emergency Medical Services station in Springtown.
A.K. was hospitalized for 10 days in Fort Worth, and he was diagnosed and treated for multiple skull and facial fractures. The investigation revealed that on the night of the incident, Johnson saved A.K.’s cell phone number using a gay slur as a contact name and Johnson later stated that he was playing a prank on the victim because of his sexual orientation, again using a gay slur when referring to A.K. According to the affidavit, A.K. said that he had no physical contact with Johnson prior to the attack.
A federal complaint is a written statement of the essential facts of the offenses being charged and must be made under oath before a magistrate judge. The defendant is presumed innocent until proven guilty. However, the statutory maximum penalty upon conviction for the offense as charged is 10 years in federal prison and a $250,000 fine. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment, and an indictment could include other charges that increase the maximum penalty.
The investigation is being conducted by the FBI, the Springtown Police Department and the Parker County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.
(Download Factual Basis)
Gaines County Man Sentenced to 121 Months in Federal Prison for Possessing Prepubescent Child PornographyRead the Press Release
LUBBOCK, Texas — Jose Fidencio Perez, 40, of Seagraves, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 121 months in federal prison, following his guilty plea in October 2013 to one count of possession of prepubescent child pornography and aiding and abetting, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, Perez used a file sharing program on his computer to download child pornography. In the course of searching for depictions of sexually explicit conduct, Perez downloaded and viewed numerous videos depicting minors engaged 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.”
The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Office of the Attorney General of New Mexico Investigations Division. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Defendants Sentenced to Lengthy Federal Prison Terms for Roles in Major Methamphetamine Distribution ConspiracyRead the Press Release
Defendants Obtained Meth from Supply Sources in the DFW Metroplex
and Distributed it to Customers in Wichita FallsDALLAS — Two defendants, who pleaded guilty in 2013 to their respective roles in a major methamphetamine distribution conspiracy operating in Wichita Falls, Texas, have been sentenced to lengthy prison terms, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Yesterday, in federal court in Dallas, U.S. District Judge Reed C. O’Connor sentenced Steve Ysasaga, 41, of Arlington, Texas, to 240 months in federal prison. Earlier this week, Judge O’Connor sentenced Roberto Macias, 34, of El Paso, Texas, to 180 months in federal custody.
According to documents filed in the case, on multiple occasions between mid-October 2010 and August 23, 2012, Ysasaga received multi-ounce quantities of methamphetamine from supply sources in the Dallas-Fort Worth (DFW) metroplex, which he then delivered and distributed to numerous customers in the Wichita Falls area. He also coordinated the manufacturing, or cooking, of the methamphetamine and supplied the individuals who cooked it with the chemical precursors, such as pseudoephedrine tablets, which were needed to manufacture it. Ysasaga admits that during the conspiracy, he possessed with intent to distribute and distributed more than one kilogram of methamphetamine.
On one occasion, in August 2012, when Ysasaga was transporting methamphetamine from his home to Wichita Falls, he was stopped by a Trooper with the Texas Department of Public Safety (DPS). After a drug-detection dog alerted on Ysasaga’s truck, a search resulted in DPS seizing nearly 530 grams of methamphetamine that was concealed in a Portable 12v power source.
Macias admitted that on multiple occasions between August 24, 2011 and February 29, 2012, he also received multi-ounce quantities from supply sources in the DFW metroplex and distributed quantities of the methamphetamine to numerous customers in the Wichita Falls area. He further admitted transporting and arranging for others to transport methamphetamine from the DFW area to Wichita Falls.
To date, all 39 defendants charged in this conspiracy have entered guilty pleas; all but two defendants have been sentenced.
This Organized Crime and Drug Enforcement Task Force (OCDETF) case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas DPS; and the Wichita Falls Police Department. Assistant U.S. Attorney Mary F. Walters is in charge of the prosecution.
Convicted Felon Sentenced to Serve A Total of 120 Months in Federal Prison on Firearm and Drug ConvictionsRead the Press Release
DALLAS — A convicted felon from Wichita Falls, Texas, was sentenced today by U.S. District Judge Reed C. O’Connor on firearm and drug convictions, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Juan Derrick Martinez, 32, was sentenced to 120 months in federal prison on each count of conviction, to run concurrently. He pleaded guilty in July 2013 to an indictment charging one count of being a felon in possession of a firearm and one count of possession with intent to distribute methamphetamine.
According to documents filed in the case, on June 1, 1012, a Wichita Falls Police officer initiated a traffic stop on a pickup truck after observing a traffic violation on Iowa Park Road in Wichita Falls. Martinez was the third passenger in the car, seated next to the passenger side door.
A narcotics detection canine alerted on the truck’s right front floorboard. A plastic bag containing three smaller plastic bags was located under the passenger seat. The contents of one plastic bag tested positive for cocaine while the contents of the other two bags tested positive for methamphetamine. Inside of a backpack, which was between Martinez’s legs when the truck was stopped, were several small plastic bags, a small plastic scale, and a loaded 9mm semi-automatic pistol.
This case was investigated by the Texas Department of Public Safety, the Wichita Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Mary F. Walters prosecuted.
Tax on the Run Owners and Others Sentenced for Roles in Tax Refund Scheme Involving Misuse of First-Time Home Buyer Tax CreditRead the Press Release
Impoverished Taxpayers Were Recruited to
Allow Their Names and SSNs to be Used in Filing Fraudulent ReturnsDALLAS — All six defendants convicted for their respective roles in a tax refund scheme involving the misuse of the First-Time Home Buyer Tax Credit, have now been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas
At a hearing yesterday afternoon, U.S. District Judge Jorge A. Solis sentenced Rickel Shine to 34 months in prison and ordered him to pay nearly $115,000 in restitution. Jarrod Phread Altman was sentenced to eight months’ home confinement as part of a three-year term of probation. Judge Solis will impose restitution as to Jarrod Phread Altman at a later date.
Three other defendants convicted in the case, Jason Phread Altman, Emanuel James Harrison and Fread Jamille Jenkins were each recently sentenced to 84 months in federal prison. Jason Altman, Harrison, and Jenkins were each ordered to pay restitution of more than $860,000. Billy Hamilton was sentenced to 13 months in federal prison and ordered to pay nearly $52,000 in restitution.
According to factual resumes filed in the case, Jason Altman and his brother, Jarrod Altman, and Emanuel James Harrison owned and operated a tax preparation business, Tax On the Run, located in Dallas. Jenkins worked as office manager for the business, while Shine and Hamilton worked as intermediaries and recruited clients on behalf of the owners.
Beginning in March 2009, Jason and Jarrod Altman, Jenkins, Harrison, Shine and Hamilton conspired to defraud the IRS, according to the factual resumes filed in the case. They used Tax On the Run to file false Forms 1040, in the names of numerous clients, which overstated and fabricated income and tax deductions on Schedule C and Forms 5405 by falsely representing that the taxpayers were entitled, under the provisions of the Housing and Economic Recovery Act of 2008, to claim a tax credit as a first-time homebuyer. As part of the scheme, according to factual resumes filed in their cases, Shine and Hamilton acted as intermediaries to recruit clients, and they were paid after they recruited impoverished taxpayers to allow their names and social security numbers to be used to file fraudulent tax returns. The fraudulent returns were routinely filed even though the tax preparers never met the taxpayers and with the full knowledge that none of the taxpayers qualified to claim the credit, according to the factual resumes.
Tax On the Run used Santa Barbara Bank and Trust (SBBT) to process refund anticipation loans based on the fraudulent returns filed. The factual resumes filed further state that after electronically filing the false tax returns, Tax On the Run would be notified by SBBT that the loan had been approved and a check could be printed and provided to the taxpayer. Once the check was printed, the taxpayer was transported to a local check cashing business and instructed to cash the refund check. After it was cashed, members of the conspiracy paid the taxpayer a small percentage of the refund and kept the remainder of the proceeds, according to the factual resume.
Defendant Jarrod Altman admitted, according to the factual resume filed in his case, that during tax year 2009, he failed to report approximately $71,133 in taxable income that was obtained from his business, Tax On the Run. Of that amount, Jarrod Altman admitted that he received $53,140 in the form of a payment by check from Jason Altman for a 2007 Mercedes Benz S550, which was purchased in June 2009, for Jarrod Altman’s use, with money from Tax On the Run. He further admitted that he falsely reported $57,207 in taxable income for tax year 2009 that did not include the $71,133 income described above, and as a result of his false statements regarding his taxable income, Jarrod Altman caused $20,135 in tax harm to the IRS.
The investigation was conducted by IRS Criminal Investigation. Assistant U.S. Attorneys J. Nicholas Bunch, Brian Poe and Rick Calvert prosecuted.
North Richland Hills Man Sentenced to 80 Months in Federal Prison for Possessing Child PornographyRead the Press Release
FORT WORTH, Texas — A 57-year-old man from North Richland Hills, Texas, Joseph F. Greth, was sentenced this morning by U.S. District Judge John McBryde to 80 months in federal prison following his guilty plea in November 2013 to one count of possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed a search warrant at Greth’s home. Among the items seized were 45 compact disks (CD) containing child pornography. Greth admitted that he used his computer to search for images and videos of child pornography, downloaded them and burned them onto CDs and DVDs.
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 investigation was conducted by the Garland Police Department and ICE HSI. Assistant U.S. Attorney Aisha Saleem prosecuted.
Former Police Chief in Rising Star IndictedRead the Press Release
Federal Grand Jury Indicts William Kelcy on Theft of Government Property
and Firearm ChargesLUBBOCK, Texas — A federal grand jury in Lubbock has returned a two-count indictment against the former Chief of the Rising Star Police Department. William Jason Kelcy, 41, is charged with one count of theft of government property and aiding and abetting and one count of theft of a machine gun and aiding and abetting. Kelcy is expected to self-surrender in response to a summons and make an initial appearance before U.S. Magistrate Judge E. Scott Frost later this month. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Kelcy was employed as the Chief of Police of the Rising Star Police Department from June 11, 2009 to January 10, 2013. Rising Star, Texas, is located approximately 55 miles southeast of Abilene, Texas, in southwestern Eastland County.
Under the National Defense Authorization Act, the Defense Logistics Agency is authorized to transfer excess Department of Defense (DOD) property to federal and state law enforcement agencies under what is known as the “1033 Program.” The program was designed to increase the quality and quantity of equipment for law enforcement agencies by utilizing excess DOD property.
According to Count One of the indictment, during the time he served as police chief, Kelcy, by making false and fraudulent representations about the intended use and/or recipient(s) of equipment, sought and obtained more than $4 million worth of property and equipment from the 1033 Program. Kelcy fraudulently gave, sold, bartered, or otherwise disposed of the equipment to other law enforcement agencies, officers, and private citizens with no law enforcement responsibilities. In fact, Kelcy sold, traded, pawned or attempted to sell, trade, pawn, several high-value military surplus items that he fraudulently obtained through the 1033 Program.
Count Two of the indictment alleges that in late June 2012, Kelcy transferred and attempted to transfer a Thompson Ramo Wooldridge M14 machine gun.
An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty. However, upon conviction, each count of the indictment carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.
The Defense Criminal Investigative Service led the investigation with assistance from the City of Eastland, Texas and the Texas Department of Public Safety, which helps administer the 1033 Program throughout the state. Assistant U.S. Attorney Amanda R. Burch of the U.S. Attorney’s Office in Lubbock is in charge of the prosecution.
Former Mail Carrier from Fort Worth Sentenced to 30 Months in Federal Prison for Possessing Stolen MailRead the Press Release
FORT WORTH, Texas — A former carrier for the U.S. Postal Service, who pleaded guilty in October 2013 to one count of possession of stolen mail, was sentenced yesterday in federal court in Fort Worth, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Hubert Lavell McDonald, 42, of Fort Worth, was sentenced by U.S. District Judge Terry R. Means to 30 months in federal prison and ordered to pay more than $400,000 in restitution to Cash America International, Inc. (CAI). Judge Means ordered that McDonald surrender to the Bureau of Prisons on March 10, 2014.
According to documents filed in the case, from June 2011 and December 2012, McDonald stole jewelry items mailed from CAI to the company’s corporate address in Fort Worth.
On March 9, 2012, special agents with the U.S. Postal Service Office of Inspector General (OIG) executed a search warrant at McDonald’s residence. Agents found a gold Bulova watch belonging to CAI that McDonald admitted he had stolen from his mail route. Additionally, during the search, agents found one gold “Joe Rodeo” watch belonging to CAI and $8,000 in cash proceeds from the sale of other mail matter that had been stolen.
The case was investigated by the U.S. Postal Service OIG. Assistant U.S. Attorney Chris Wolfe prosecuted.
Convenience Store Owner and Manager Charged in Massive Food Stamp Fraud SchemeRead the Press Release
Scheme Allegedly Caused at Least $1.9 Million in Losses to SNAP Program
DALLAS, Texas — Two North Texas men have been indicted on various felony offenses related to a massive food stamp fraud scheme they ran that allegedly caused at least $1.9 million in losses to the Supplemental Nutrition Assistance Program (SNAP), announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Kamardeen Ogunleye, 52, of Arlington, Texas, and Robert Gordon, 31, of Balch Springs, Texas, are each charged with one count of conspiracy to commit food stamp fraud, five counts of food stamp fraud and aiding and abetting, and six counts of wire fraud. Ogunleye is also charged with two counts of structuring financial transactions.
Both Ogunleye and Gordon have made their initial appearances in federal court and have been released on bond. The indictment, returned by a federal grand jury in Dallas in late January 2014, was unsealed this afternoon.
The indictment alleges that beginning in March 2010 and continuing until September 2013, the defendants conspired together and with others to run a scheme to commit food stamp fraud and wire fraud, and then one of the defendants, Ogunleye, structured financial transactions to avoid reporting requirements related to the proceeds of the scheme.
Ogunleye owned and operated KSO Dollar Mart, located at 1918 Martin Luther King Jr. Boulevard in Dallas. Gordon managed the business for Ogunleye. Ogunleye’s and Gordon’s scheme was funneled through this storefront, which offered very few food and beverage items to its customers.
According to the indictment Ogunleye and Gordon conspired to purchase food stamp benefits, administered through the SNAP, from actual recipients in exchange for cash at an approximate 50 percent exchange rate, meaning Ogunleye and Gordon would pay recipients approximately one dollar in exchange for every two dollars’ worth of benefits. Recipients were then free to spend the exchanged-for cash without restrictions imposed on SNAP benefits. The full amount of SNAP benefits redeemed, in exchange for discounted cash amounts, were deposited into Ogunleye’s bank accounts.
As a result of the conspiracy and scheme, Ogunleye and Gordon obtained significant profits and caused losses of at least $1.9 million to the SNAP. Ogunleye structured financial transactions involving the scheme’s proceeds to avoid and evade reporting requirements in an effort to conceal the scheme so that he and Gordon could use the proceeds for their own personal enrichment.
An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence until or unless proven guilty. However, upon conviction, the charges carry the following maximum statutory penalties: conspiracy to commit food stamp fraud - five years in prison and a $250,000 fine; each of the food stamp fraud counts - 20 years in prison and a $250,000 fine; each of the wire fraud counts - 30 years in prison and a $1 million fine; and each of the structuring counts - 10 years in prison and a $250,000 fine.
The case is being investigated by the U.S. Department of Agriculture Office of Inspector General.
Assistant U.S. Attorney P. J. Meitl is in charge of the prosecution.