Southern District of Texas
Press releases recorded for this federal judicial district.
Two Ordered to Federal Prison for Involvement in Romance Scam ConspiracyRead the Press Release
HOUSTON – Two Nigerian citizens have been ordered to prison for their role in a $2 million romance scam conspiracy, announced U.S. Attorney Kenneth Magidson. Kunle Mutiu Amoo, 49, and Lanre Sunday Adeoba, 62, both citizens of Nigeria, each pleaded guilty to one count of conspiring to commit wire fraud on July 15, 2016.
Today, U.S. District Judge Alfred H. Bennett sentenced both defendants to 36 months in prison. They were further ordered to pay $86,581.15 in restitution. In handing down the sentence, Judge Bennett noted that as a result of the offense, the victim had suffered substantial financial hardship and that the defendants had abused a position of trust by falsely representing themselves as diplomats from South Africa. Not U.S. citizens, they are expected to face deportation proceedings following their release from prison.
The romance scam involved a scheme to defraud victims of money using false romantic overtures and false promises that the victims would be repaid. In this conspiracy, a member of the conspiracy posed as the manager of a construction company doing business in South Africa who needed the victim’s financial assistance to move $42 million in construction project proceeds from South Africa to the United States. The defendants posed as South African diplomats who were responsible for transporting the money into the United States and who also needed the victim’s financial assistance in order to transport the money.
As part of their pleas, Amoo and Adeoba admitted they agreed and attempted to defraud this victim of $506,000.
The overall conspiracy caused the victim a loss of $2 million.
Amoo and Adeoba will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
According to the FBI, romance scams, also classified as confidence frauds, result in the highest amount of financial losses when compared to other Internet-enabled crimes. In 2015, victims of confidence frauds reported financial losses of nearly $200 million to the FBI's Internet Crime Complaint Center. If you think you've been victimized by a dating or other online scam, report it to www.ic3.gov.
The FBI conducted the investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.
McAllen Man Sentenced for Attempting to Entice an Individual he Believed was a MinorRead the Press Release
McALLEN, Texas – A 25-year-old McAllen man has been ordered to federal prison for 10 years following his conviction of attempted enticement of a minor, announced U.S. Attorney Kenneth Magidson. Timinson Erin Jackson pleaded guilty Sept. 30, 2016.
Today, U.S. District Judge Randy Crane ordered he serve 120 months in prison to be immediately followed by five years of supervised during which time during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
From May 25, 2016, to June 3, 2016, Jackson engaged in online communications with a person he thought was a 12-year-old minor female. That individual was actually an undercover agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). During these conversations, which were mostly carried out via text messaging, Jackson attempted to persuade, induce and entice this “minor” into having sex with him.
On June 3, 2016, Jackson arranged to meet the individual at a park in McAllen. He was arrested upon his arrival. At that time, Jackson admitted he intended to have sex with an individual whom he believed was a 12-year old minor female.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility.
HSI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Alex Benavides, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Man Sentenced for Trafficking Huge Amount of MethRead the Press Release
CORPUS CHRISTI, Texas – A California man has been ordered to prison following his conviction for his part in a conspiracy to traffic 132 kilograms of methamphetamine through South Texas, announced U.S. Attorney Kenneth Magidson. Deandre Bennett, 57, pleaded guilty March 29, 2016.
Today, Senior U.S. District Judge Hayden Head sentenced Bennett to 135 months in federal prison to be immediately followed by four years of supervised release.
Members of the Kingsville Specialized Crimes and Narcotics Task Force encountered Bennett on Dec. 2, 2015 while he was travelling Northbound on U.S. Highway 77. A search of the tractor-trailer he was operating revealed more than 132 kilograms of methamphetamine hidden inside wooden pallets. Bennett admitted the drugs were headed to Corpus Christi.
The charges were the result of a joint investigation by Immigration and Customs Enforcement’s Homeland Security Investigations, Texas Department of Public Safety, Kingsville Specialized Crimes and Narcotics Task Force, Kleberg County District Attorney’s Office, Customs and Border Protection and the U.S. Marshals Service.
Assistant U.S. Attorney Brittany Jensen is prosecuting the case.
Corpus Christi Gang Member Sentenced for Producing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A 31-year-old Corpus Christi man has been handed a significant sentence following his conviction of production of child pornography, announced U.S. Attorney Kenneth Magidson. Jesus Villalobos pleaded guilty Sept. 27, 2016, admitting he enticed an 11-year-old victim into sending him sexually explicit photographs.
Today, Senior U.S. District Judge Hayden Head ordered Villalobos to serve 300 months in prison. In handing down the sentence, Judge Head noted that the defendant has a career of criminal activity which includes violence. Additional information was also presented today including the testimony of an agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) who stated that Villalobos is a documented member of the Texas Syndicate prison gang. The agent also testified that cellular telephone data showed Villalobos made arrangements to attempt to meet the victim and traveled to a park near the victim’s house for that purpose. Villalobos was further ordered to pay $10,000 in restitution to the victim and will serve 25 years of supervised release following completion of her prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
In February 2016, authorities learned Villalobos had been communicating via cellular telephone text messages and a social media application with an 11-year-old female. During those communications, Villalobos enticed the victim into sending him sexually explicit photographs of herself.
In April 2016, law enforcement executed a search warrant at the Villalobos residence and seized various electronic devices. A forensic analysis on those devices led to the discovery of several photographs of the child that were sexually explicit in nature.
Villalobos will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI conducted the investigation with the assistance of the Corpus Christi Police Department—Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Postal Employee Arrested for Soliciting BribesRead the Press Release
McALLEN, Texas – A Mission man and employee of the U.S. Postal Service (USPS) has been taken into custody on charges he accepted more than $1,000 in bribes, announced U.S. Attorney Kenneth Magidson.
Noe Olvera, 43, was arrested today upon his arrival at work at the USPS facility in McAllen. He is expected to make an initial appearance before U.S. Magistrate Peter E. Ormsby Monday morning.
A federal grand jury returned the indictment under seal Dec. 7, 2016, which was unsealed today upon his arrest.
The indictment charges Olvera with accepting a bribe on two separate occasions in October 2014 totaling $1,200. As a USPS employee, requesting and receiving these bribe payments are in violation of Olvera’s official duty. Olvera allegedly sought and accepted these bribes from another individual in exchange for providing lists of postal customer names and addresses.
The USPS – Office of Inspector General investigated the case with assistance from the FBI. Assistant U.S. Attorneys David A. Lindenmuth and Roberto Lopez Jr. are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Ambulance Company Owner and Brother Convicted in $6 Million Health Care Fraud ConspiracyRead the Press Release
HOUSTON – Two brothers have been convicted on charges of conspiracy to commit health care fraud, health care fraud and money laundering, announced U.S. Attorney Kenneth Magidson.
Kevin Olufemi Davies, 29, and his brother Melvin Olusola Davies, 28, owned and operated KMD Healthcare Services Inc. (KMD) from their home in a gated townhouse community in Houston. As part of their guilty pleas, they admitted they used stand-in emergency medical technicians (EMT) who were not employees or affiliated with KMD to pass the state inspection necessary for enrollment in the Medicare program.
Medicare and Medicaid only pay for medically necessary ambulance services in vehicles designed and equipped to respond to medical emergencies and for patients who cannot be safely transported by any other means of transportation. Medicare also requires two individuals to staff ambulance transports, including at least one licensed EMT.
The brothers admitted that KMD transported Medicare beneficiaries in private passenger vans and that only one EMT was present. The EMTs wrote up ambulance “run sheets” even though the Medicare beneficiaries did not travel by ambulance and did not need ambulance services. The individuals transported were not bed bound, could walk and routinely used non-ambulance transport in their daily activities. One patient even walked to her own therapy session, but KMD billed Medicare $51,952 for her ambulance transportation.
The brothers admitted they paid a Houston physician $500 per medical necessity order in order to bill Medicare.
KMD billed Medicare, Medicaid and Tricare (another government health program) approximately $6,293,108 in false and fraudulent claims for ambulance services that were not provided and not medically necessary. They received at least $2,201,137 from Medicare, $219,924 from Medicaid and $16,735.29 from Tricare as payment for those claims.
The brothers have agreed to forfeit vehicles they purchased with the fraudulent health care proceeds, including a 2010 Porsche Panamera and a 2012 Mercedes Benz CLS. They have also agreed to pay full restitution to the health care programs.
U.S. District Judge Lynn Hughes accepted the pleas today and has set sentencing for March 13, 2017. At that time, the Davies face up to 10 years in federal prison on each count of conviction as well as a possible $250,000 fine. Both defendants have been in federal custody since their arrest on May 25, 2016, where they will remain pending that hearing.
The FBI, IRS – Criminal Investigation, Texas Office of the Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorney Julie Redlinger is prosecuting the case.
Two Head to Prison for Firearms TraffickingRead the Press Release
McALLEN, Texas – Two McAllen men have been sentenced to federal prison for their roles in the trafficking of firearms, announced U.S. Attorney Kenneth Magidson.
Dimas Rodriguez, 44, pleaded guilty June 29, 2016, admitting to being a felon in possession of a firearm, while Jose Gertrudis Partida, 71, pleaded guilty Aug. 31, 2016, admitting he transferred a firearm to a felon.
Following a hearing this morning, U.S. District Judge Micaela Alvarez ordered Rodriguez and Partida to serve 70 and 30 months in prison, respectively. During the hearing, Partida asked the court for a lower sentence due to his elderly age, lack of criminal record and his prior military service, which included the awarding of a Bronze Star. However, the government argued that a strong sentence was warranted due to his involvement in providing multiple firearms to individuals who either actually exported or represented to export firearms into Mexico for use by the Gulf Cartel and his involvement in drug trafficking-related activities.
In handing down the sentence, the court noted the troublesome connection with an offense involving both drugs and guns and stated that Partida’s sentence would also serve as a deterrent to those, whether young or old, who are contemplating such criminal actions. Partida will also serve two years of supervised release following his prison term and will be required to pay a $30,000 fine.
On Dec. 2, 2015, Partida provided Rodriguez with three semi-automatic firearms. Rodriquez then sold them to an individual who planned to provide the weapons to Gulf Cartel members. At the time Partida transferred the firearms to Rodriguez, he knew Rodriguez had been convicted of the felony offense of possession with intent to deliver a controlled substance and, therefore, prohibited from possessing firearms.
Rodriguez has been and remains in federal custody. Partida was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined at a later date.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Hidalgo County High Intensity Drug Trafficking Area Task Force. Assistant U.S. Attorney Roberto Lopez Jr. prosecuted the case.
Extradited Drug Smuggler Gets Nearly 30 Years in Federal PrisonRead the Press Release
LAREDO, Texas – A 32-year-old man extradited to the U.S. and later convicted of conspiracy to possess with intent to distribute methamphetamine cocaine and heroin has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Fernando Arturo Flores-Fang, 32, of Torreon, Coahuila, Mexico, pleaded guilty May 1, 2015.
Today, U.S. District Judge Diana Saldaña sentenced him to 340 months in federal prison. He is expected to face deportation proceedings following his release from prison.
Between August 2009 and March 13, 2012, Flores-Fang participated in a conspiracy to smuggle methamphetamine, cocaine and heroin into Laredo. During the investigation, authorities seized more than 35 kilograms of cocaine on April 8, 2011; more than 43 kilograms of methamphetamine and more than one kilogram of heroin on May 3, 2011; and 894 grams of methamphetamine on July 31, 2011. Flores-Fang was also held accountable for 47 kilograms of methamphetamine shipped to Dallas on April 16, 2011.
An arrest warrant was issued for Flores-Fang on March 13, 2012. He was later taken into custody by Mexican authorities and then extradited to the United States on Oct. 24, 2014.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Nine others have been convicted as part of the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Nemesis”. Each of those defendants received sentences ranging from 108 to 327 months in federal prison.
The Drug Enforcement Administration led the two-year investigation. Assistant U.S. Attorneys, James Hepburn and José Angel Moreno prosecuted the case.
Conroe Man Arrested for Bank Fraud and Stealing from EmployerRead the Press Release
HOUSTON – A 45-year-old man who resides in Conroe has been taken into custody following the return of an indictment alleging he stole more than $484,000 from his former employer, announced U.S. Attorney Kenneth Magidson.
On Nov. 30, 2016, a grand jury returned a 12-count indictment under seal against Kiran Andhavarapu. The indictment was unsealed today upon his arrest by federal authorities. He is expected to make his initial appearance before U.S. Magistrate Judge Dena Palermo this morning.
The indictment alleges Andhavarapu executed a scheme to steal money from his employer, Weatherford, and its subsidiary, EProduction Solutions, L.L.C. Andhavarapu allegedly opened bank accounts in the name of “EProduction Solutions” and listed himself as the owner and sole proprietor of the business. According to the indictment, he then stole refund checks made out to and belonging to his employer and fraudulently deposited those checks in the accounts he had created.
The indictment alleges Andhavarapu stole a total of $484,873.95.
Each count of bank fraud carries a possible sentence of 30 years in federal prison, upon conviction.
The FBI conducted the investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Houston Men Charged in Attempted Heist of Armored CarRead the Press Release
HOUSTON – A total of four men have been taken into custody and charged in relation to the attempted robbery of an armored car at an Amegy Bank today in Houston, announced U.S. Attorney Kenneth Magidson.
The Houston Police Department (HPD) conducted a law enforcement operation today that resulted in the arrest of Marc Anthony Hill, 46, Trayvees Duncan-Bush, 29, and Nelson Alexander Polk, 37. A fourth man - John Edward Scott, 40 – fled, but was later apprehended. They are expected to make their initial appearances before U.S. Magistrate Judge Dena Palermo tomorrow at 10:00 a.m.
The federal criminal complaint filed today alleges the men conspired for weeks and planned the robbery of the armored car that was scheduled to service the Amegy Bank located at 400 North Sam Houston Tollway East in Houston. The defendants also allegedly planned an attempted murder of the armored car courier.
With the exception of Scott, all were taken into custody at the location. During the enforcement action, another suspect fired at officers as they attempted his arrest. He was shot and later died as a result of his injuries.
The defendants are charged with conspiracy to commit interference with commerce by robbery and aiding and abetting the use of a firearm during a crime of violence. If convicted, they face up to 20 years in federal prison for the robbery and a mandatory minimum five-year-term of imprisonment for the firearm charge.
The FBI and HPD conducted the investigation with assistance by the Harris County District Attorney’s Office. Assistant U.S. Attorneys Richard Hanes and Heather Winter are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Former TDCJ Parole Officer Sentenced to 24 years for Producing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A former parole officer with the Texas Department of Criminal Justice (TDCJ) has been ordered to federal prison following her conviction of sexual exploitation of a child, announced U.S. Attorney Kenneth Magidson. Saralyn Ann Proschko, 48, of Victoria, pleaded guilty June 7, 2016.
Today, U.S. District Judge John D. Rainey ordered her to serve 288 months in prison. In handing down the sentence, Judge Rainey noted that the crime was terrible and shouldn’t have happened, further mentioning it was one of the most difficult cases to address as a judge, defense attorney and as a prosecutor. Proschko was further ordered to pay $2,537 in restitution to the victim and will serve five years of supervised release following completion of her prison term, during which times she will have to comply with numerous requirements designed to restrict her access to children and the Internet. She will also be ordered to register as a sex offender.
Her boyfriend - David Ray McGee, 49, of Wallis – was also convicted and later sentenced to 27 years in federal prison.
In July 2015, authorities with the Victoria Police Department (VPD) responded to the TDCJ - District Parole Office in Victoria in reference to allegations of possession of child pornography. Officers met with Proschko and discovered an electronic video on her cellular telephone of a juvenile female engaged in a sexual act. Further investigation led to the discovery and charging of McGee in relation to the allegations.
The court heard that McGee had met Proshko on a dating website. During their conversations, he had indicated he had a sexually fantasy. Soon after, Proschko began texting him photos of herself penetrating a young girl with various sexual objects. Eventually, that led to him sexually assaulting the young girl who had begged him to stop during the attack. In at least one instance, Procshko had actually held the toddler down while McGee assaulted her.
Proschko will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of the investigative efforts of Homeland Security Investigations, Texas Attorney General’s Office - Internet Crimes Against Children (ICAC), Houston-Metro ICAC Task Force and the Victoria Police Department.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Two Sentenced for Trafficking in Counterfeit Viagra and CialisRead the Press Release
HOUSTON – Two men have been sentenced to federal prison following convictions of conspiring to traffic in counterfeit Viagra and Cialis and introducing adulterated and misbranded prescription drugs into interstate commerce, announced U.S. Attorney Kenneth Magidson. Martez Alando Gurley, 41, and Victor Lamar Coates, 47, admitted they each trafficked more than 10,000 counterfeit tablets.
Today, U.S. District Judge David Hittner sentenced Gurley to 75 months in federal prison and ordered him to pay $410,508 in restitution to Pfizer Inc. and Eli Lilly and Company - the licensed patent trademark holders of Viagra and Cialis. Coates received a sentence of 46 months and must pay $314,565 in restitution. Each defendant must also serve three years of supervised release following completion of their prison terms.
“The Food and Drug Administration (FDA) is charged with ensuring that prescription drugs distributed to U.S. consumers are safe and effective. When criminals introduce prescription drugs into the U.S. that are not FDA-approved, they jeopardize the public’s health,” said Special Agent in Charge Spencer E. Morrison of the FDA - Office of Criminal Investigations’ (OCI) Kansas City Field Office. “Our office will continue to pursue and bring to justice those whose quest for profits places the public’s health at risk through the distribution of illegitimate drugs.”
Gurley was convicted of trafficking at least 12,960 counterfeit Viagra and counterfeit Cialis tablets from his home in Napa, California, while Coates was convicted of trafficking at least 10,288 counterfeit Viagra and counterfeit Cialis tablets from his home in Philadelphia, Pennsylvania. Both defendants sold the counterfeit drugs to individuals in the Houston area for further distribution to unsuspecting customers. Gurley and Coates illegally imported the counterfeit into the United States from sources in China.
Testing on samples of the counterfeit Viagra revealed the drugs contained less than the 100 mg of active pharmaceutical ingredient (API) listed on the labels, while testing on the counterfeit Cialis revealed small quantities of the Viagra API and none of the Cialis API. In addition, some of the counterfeit Viagra tablets were found to contain the unrelated compound 2-MBT. The counterfeit Viagra and Cialis tablets looked like the authentic products and included labels and packaging that closely resembled the registered trademarks of Eli Lilly and Company, and Pfizer Inc.
In arriving at the sentences, Judge Hittner considered the fact that the illegally imported counterfeit drugs did not contain the correct medication indicated on the labelling and could cause harm to unsuspecting consumers of the pills.
Gurley was immediately taken into custody following the hearing pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future, while Coates was permitted to remain on bond and voluntarily surrender at a later date.
The FDA - OCI and Homeland Security Investigations conducted the investigations. Assistant U.S. Attorney Julie Redlinger prosecuted the case.
Local Tax Preparer Convicted of Using Aliases to Continue False Tax Return Preparation after Pleading GuiltyRead the Press Release
HOUSTON – A local tax return preparer has entered a guilty plea to preparing false tax returns and obstructing the IRS in the enforcement of federal income tax laws, announced U.S. Attorney Kenneth Magidson along with D. Richard Goss, special agent in charge of Internal Revenue Service-Criminal Investigation (CI).
According to the factual basis in support of the plea, Oliphant was previously charged and convicted of preparing dozens of false 2006-08 client tax returns though Oliphant Tax Services in Huntsville. He was released on bond in that case under a condition that he have no involvement in the preparation of tax returns other than his own. However, Oliphant resumed tax return preparation and continued to claim the same false deductions for unsuspecting clients while awaiting sentencing in the earlier case.
As part of his continuation of the scheme, Oliphant changed the name of his business to “Tax Services” to make it appear he had stopped preparing client tax returns and that someone else was the owner of his tax preparation business. Oliphant allegedly attributed the fees to the nominal owner of his tax office but manipulated those tax returns to make it appear the tax office had produced almost no taxable income.
Oliphant established a series of bank accounts in the names of others - including minors with custodians other than himself - so the fees could first be deposited to accounts in the names of the nominal owner of his tax office and others. He then transferred those fees through these intermediate accounts to accounts in his own name. This scheme enabled Oliphant to conceal his personal use of the fees generated by the business during the course of the prosecution on the first case according to the plea agreement.
While operating his tax preparation business under other names, Oliphant generated $2 million in fees and a total loss to the IRS of another $400,000. The losses from the false tax returns prosecuted in the earlier case exceeded $325,000.
U.S. District Judge Keith Ellison, who accepted the guilty plea, has set a sentencing date of Feb. 22, 2017, at which time Oliphant faces up to three years in federal prison and a possible $250,000 fine as a result of today’s conviction.
Oliphant was sentenced to 33 months on the earlier case and was released Aug. 26, 2016. He was denied bond upon his arrest in the current case on Sept. 2, 2016, and remains in custody until his sentencing hearing.
Oliphant’s plea agreement requires that he surrender more than $200,000 in bank accounts linked to the scheme, his personal residence and two Mercedes Benz automobiles as restitution to the IRS in both cases.
The investigation leading to these charges was conducted by IRS-CI. Assistant U.S. Attorney Jimmy Sledge Jr. has prosecuted both cases.
Last Defendant Sentenced in Brazen UH Armored Car RobberyRead the Press Release
HOUSTON – The final defendant in the notable armored car robbery that occurred on the University of Houston (UH) Central Campus exactly three years ago today has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Allen Bernard Roundtree, 31, of Houston, pleaded guilty Aug. 6, 2014, to one count of conspiracy to interfere with commerce by robbery and one count of aiding and abetting interference with commerce by robbery.
Today, U.S. District Judge Keith P. Ellison sentenced Roundtree to a total of 108 months in federal prison to be immediately followed by three years of supervised release. He was also ordered to pay a $17,500 fine.
Also convicted were James Van-Gerald Johnson, 33, and Ronald Dean Richards, 26, both of Houston, who pleaded guilty in February and August 2014, respectively. Dezmond Lacraig Edwards, 26, also of Houston, proceeded to trial and was convicted Dec. 11, 2015. All were sentenced earlier this month. Johnson received a sentence of 125 months for his two counts of conviction - aiding and abetting interference with commerce by robbery and brandishing a firearm during and in relation to a crime of violence, while Richards had pleaded to one count of aiding and abetting interference with commerce by robbery and was ordered to serve 60 months in federal prison. Judge Ellison sentenced Edwards to a 130-month-term for conspiracy to interfere with commerce by robbery and one count of aiding and abetting interference with commerce by robbery.
Edwards was a Loomis guard who previously had driven the UH route and had provided inside information about the armored car and the route to Johnson, Richards and Roundtree. Some of the information included the facts that the side door of the armored car was broken and unlatched, making it easy to enter and that the driver was pregnant and would be unarmed.
The robbery occurred exactly three years ago – Dec. 6, 2013 - while students were attending completing final exams. On that day, Roundtree had dropped Johnson off at the campus. While the armored car’s courier was servicing an ATM machine, Johnson entered the armored car, stuck his pistol into the driver’s side and ordered her out of the vehicle. He then jumped in the driver’s seat and drove away. Roundtree followed in a truck. The driver had yelled and alerted the courier who then responded by pursuing the armored car on foot. The courier discharged his weapon, aiming for the armored car’s tire in an attempt to disable it. The armored car did not slow down and was driven to a UH parking garage on campus, where Richards met them in another vehicle to transfer the stolen money. The armored car was abandoned in the UH garage.
The FBI conducted the investigation along with UH police, Texas Rangers and the Houston Police Department.
Assistant U.S. Attorneys Joe Porto, Jennie Basile and Andrew Gould prosecuted the case.
Laredo Judge Sentences Lake Jackson Man for Sexual Enticement of a MinorRead the Press Release
LAREDO, Texas – A 40-year-old man has been ordered to federal prison following his conviction of attempting to entice a minor to engage in unlawful sexual activity, announced U.S. Attorney Kenneth Magidson. Michael James Corsten, of Lake Jackson, pleaded guilty Dec. 15, 2015.
Today, U.S. District Judge Marina Garcia-Marmolejo ordered he serve 180 months in prison. Corsten will also serve 20 years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
Corsten had posted a Craigslist ad for individuals interested in “family fun.” Soon after, he began a conversation with someone he thought had a 14-year-old daughter. Numerous times, Corsten mentioned sexual acts he wanted to perform on the fictional daughter. He also sent sexually explicit pictures of his private parts asking for them to be shown to the girl and stated he wanted the child to help him groom other children so that he could sexually assault them.
He soon made arrangements to travel to Laredo for the purposes of having sex with the 14-year-old child. He was arrested Oct. 9, 2015, upon his arrival.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) conducted the investigation. Assistant U.S. Attorney Alfredo De La Rosa prosecuted the case.
Authorities Make Multiple Arrests on Grenade ChargesRead the Press Release
McALLEN, Texas – A total of six individuals are in custody following the filing of a criminal complaint alleging the illegal receipt or possession of destructive devices that were not registered in the National Firearms Registration and Transfer Record, annouced U.S. Attorney Kenneth Magidson.
Those arrested include Celin Javier Montoya, 23, Anthony Ozuna, 20, Alfredo Rivera, 24, and Pedro Vega, 40, all of Edinburg; Noe Gonzalez, 19, of San Juan; and Jonathan Sanchez-Torres, 19, a Mexican undocumented alien who was residing in Pharr.
Vega made his initial appearance today, at which time he was ordered into custody pending detention hearing set for Dec. 9. Montoya, who was arrested in Ingleside, will appear before U.S. Magistrate B. Janice Ellington in Corpus Christi, while the remaining defendants are expected in court tomorrow morning before U.S. Magistrate Judge Peter E. Ormsby.
The criminal complaint, filed Dec. 5, 2016, and unsealed today upon the arrests, alleges Ozuna and Rivera were attempting to broker the sale of improvised hand grenades or improvised explosive devices (IEDs). The two men were allegedly acting on behalf of Montoya and Vega. According to the charges, from Nov. 5-11, 2016, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) conducted undercover operations and bought all of the hand grenades Montoya and Vega had available.
During the course of the investigation, ATF and HSI agents discovered Montoya and Vega allegedly obtained the grenades from Gonzalez and Sanchez-Torres. The complaint also alleges that for approximately six months, Gonzalez purchased all of the components necessary to construct dozens of improvised hand grenades, including grenade hulls, spring kits, fuses and black powder, from a combination of online merchants and local stores. The assembled “live” hand grenades were then turned over to Sanchez-Torres to be distributed, according to the allegations.
Each of the defendants is charged with the illegal receipt or possession of a destructive device that is not registered in the National Firearms Registration and Transfer Record. If convicted, they each face up to 10 years in federal prison and a possible $250,000 maximum fine.
ATF and HSI investigated with the assistance of Texas Department of Public Safety, police departments in McAllen and Mission, Customs and Border Protection and Drug Enforcement Administration. Assistant U.S. Attorneys David Paxton and Linda Requenez are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Three Convicted in Alien Smuggling Case that Resulted in a DeathRead the Press Release
McALLEN, Texas – Three individuals have entered guilty pleas for their roles in a conspiracy to transport illegal aliens within the United States, announced U.S. Attorney Kenneth Magidson.
Antonio Arredondo Jr.,41, of Alamo; and Carlos Valentin Avendano-Lucio, 35, and Nancy Yadira Moreno-Ruiz, 34, both of Mexico, knew that individuals had illegally come to the U.S. and conspired to transport them further within the country. During and in relation to the crime, a female undocumented alien was killed.
The investigation revealed the female victim had been smuggled with a group of undocumented aliens discovered near the Pharr port of entry on Aug. 4, 2014. A foot guide had provided instructions to the group as to how to walk along the bridge and then scale down the bridge. In the process of crossing the bridge, the woman fell off the bridge and sustained severe injuries before being left behind by the group. On Aug. 5, 2014, authorities located a deceased female on the levee near the same port of entry and identified her as the woman who fell off the bridge.
The foot guide, Victor Moreno-Ruiz, 33, of Mexico, previously pleaded guilty and was sentenced on Nov. 23, 2015, to 150 months in prison.
During his guilty plea, Arredondo admitted that on Aug. 4, 2014, he was involved in the conspiracy. His role was to coordinate the smuggling arrangements for at least two of those undocumented aliens, including the deceased woman. Avendano-Lucio admitted he participated in the conspiracy by driving a van loaded with the group of undocumented aliens from Reynosa, Mexico, into Pharr. Nancy Yadira Moreno-Ruiz admitted to participating in the conspiracy by recruiting her husband, Avendano-Lucio, to drive the group of undocumented aliens from Mexico and into the United States.
U.S. District Judge Ricardo Hinojosa accepted the pleas and set sentencing for Feb. 23, 2017. At that time, each faces up to life in prison and a possible $250,000 fine.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with assistance by Border Patrol, Pharr Police Department and Hidalgo County Sheriff’s Office. Assistant U.S. Attorney Alex Benavides is prosecuting the case.
McAllen Man Convicted of Receiving Child Pornography VideosRead the Press Release
McALLEN, Texas – A 27-year old resident of McAllen has entered a guilty plea to one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson.
Jesus Salvador Lara-Perez came to the attention of law enforcement following an investigation which began on Nov. 8, 2015, into persons using the Internet to traffic in child pornography. A special agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) was able to locate and identify a computer as offering to participate in the receipt of child pornography videos through the peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located at a residence in McAllen.
On June 28, 2016, authorities executed a federal search warrant at that residence, during which time they seized a laptop computer. A forensic examination on the computer revealed 198 videos and 109 images of child pornography involving clearly young children engaged in sexually explicit conduct. These videos included children under the age of 12 involved in sadistic conduct, bondage and other depictions of violence. Some of the videos are of known victims as identified through the National Center for Missing and Exploited Children.
Lara-Perez admitted he downloaded and viewed child pornography from the Internet, thereby receiving the child pornography found on his laptop computer. He admitted he had been downloading child pornography for approximately three years.
U.S. District Judge Ricardo Hinojosa, who accepted the guilty plea today, has set sentencing for Feb. 23, 2017. At that time, Lara-Perez faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
HSI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Alex Benavides, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Houston Man Sentenced in Stolen Identity Refund Fraud SchemeRead the Press Release
HOUSTON – A 35-year-old Houston resident has been ordered to federal prison for his role in a sophisticated tax fraud/identity theft scheme involving more than 800 victims, announced U.S. Attorney Kenneth Magidson. Antolin Julio Nazario, 35, pleaded guilty April 27, 2015, to conspiracy to commit mail fraud and aggravated identity theft. His wife - Thalia Diaz Camareno, 30 - was also convicted in the case, pleading guilty Oct. 5, 2015, to conspiracy to commit mail fraud.
Today, U.S. District Judge Kenneth Hoyt handed Nazario a total sentence of 92 months in prison to be immediately followed by three years of supervised release. He was further ordered to pay a $807,096 in restitution.
Camareno is set for sentencing next week.
Both admitted that from approximately June 2010 to January 2012, they engaged in a scheme that involved the filing of hundreds of fraudulent tax returns, commonly referred to as Stolen Identity Refund Fraud. The Houston couple used stolen and unlawfully obtained personal identity information, including the names and Social Security numbers, of true persons to prepare fraudulent U.S. income tax returns.
Nazario aka Robinson Gomez Churon and Camareno aka Irene Carrero Echevarria mailed the fraudulent federal income tax returns through the U.S. Postal Service in order to generate and obtain tax refunds from the IRS to which they were not entitled and directed the fraudulently obtained tax refunds be disbursed as U.S. Treasury checks. The refunds were then used to obtain cash and goods for their own benefit.
The current fraudulent tax refund filings attributed to this couple have resulted in $4,095,959 potential loss, an excess of $800,000 paid out by the IRS and involves more than 800 victims whose identities were stolen to conduct the scheme.
Nazario will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. His wife is on bond pending her sentencing hearing.
IRS-Criminal Investigation, U.S. Postal Inspection Service and the Secret Service conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.
Former Pearland Physician Sentenced on Child Pornography ChargesRead the Press Release
GALVESTON, Texas – A former pediatric oncologist at The University of Texas M.D. Anderson Cancer Center has been ordered to federal prison following his conviction of receipt, access with intent to view and possession of child pornography charges, announced U.S. Attorney Kenneth Magidson. Dennis Patrick Meehan Hughes, 50, of Pearland, pleaded guilty March 22, 2016.
At the time of his arrest in June 2015, Hughes worked at M.D. Anderson, but he is no longer employed there.
Today, U.S. District Judge George C. Hanks Jr. handed Hughes a sentence of 84 months in federal prison on each count of conviction. The sentences will run concurrently. In handing down the sentence, the court noted the horrific nature of the crimes and that they facilitated the abuse of children. Hughes must register as a sex offender and was further ordered to serve 10 years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. The court also imposed a $5,000 special assessment under the Justice for Victims Trafficking Act of 2015.
This case was initiated pursuant to a nationwide investigation which targeted users of a TOR network child pornography website whose primary purpose was to advertise and distribute child pornography. Following the February 2015 arrest of the primary site administrator, law enforcement was able to identify more than 1,000 U.S.-based user IP addresses. One of those addresses resolved back to the residence of Hughes.
Law enforcement executed a federal search warrant at his residence on June 5, 2015, at which time they arrested Hughes and seized his computers and other items.
Hughes admitted he received and possessed numerous images of child pornography, to include prepubescent girls with their genitals lasciviously displayed. Some of the images also depicted young girls being penetrated, both orally and vaginally. The government also offered evidence that images of child pornography were found on his work computer as well.
In total, law enforcement discovered 329 videos and 2,693 unique images attributable to Hughes.
Hughes was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation along with the Pearland Police Department, Texas Department of Public Safety and the University of Texas Police Department.
This case, prosecuted by Assistant U.S. Attorney Sherri Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
McAllen Man Convicted of Receiving Child Pornography VideosRead the Press Release
McALLEN, Texas – A 26-year old resident of McAllen has entered a guilty plea to one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson.
Daniel Ramirez-Tobias came to the attention of law enforcement following an investigation which began on Aug. 1, 2016, into persons using the Internet to traffic in child pornography. A special agent with HSI was able to locate and identify a computer as offering to participate in the receipt of child pornography videos through the peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located at a residence in McAllen.
On Oct. 6, 2016, authorities executed a federal search warrant at that residence, during which time they seized a desktop computer. A forensic examination on the computer revealed video files of child pornography involving clearly young children engaged in sexually explicit conduct. These videos include children under the age of 12 involved in sadistic conduct such as bondage, bestiality and other depictions of violence. Some of the videos are of known victims as identified through the National Center for Missing and Exploited Children.
Ramirez-Tobias admitted he downloaded and viewed child pornography from the Internet, thereby receiving the child pornography found on his computer. He further admitted to downloading and subsequently deleting approximately 100 videos of child pornography.
U.S. District Judge Randy Crane, who accepted the guilty plea today, has set sentencing for Feb. 9, 2017. At that time, Ramirez-Tobias faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He was permitted to remain on bond pending that hearing.
HSI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Alex Benavides, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Houston Couple Pleads Guilty in the Midst of Stolen Identity Tax Fraud TrialRead the Press Release
HOUSTON – A 31-year-old legal permanent resident from Nigeria and his 30-year-old Houston girlfriend have entered guilty pleas in a stolen identity tax fraud scheme after four days of trial and hearing the testimony of 21 witnesses, announced U.S. Attorney Kenneth Magidson.
Tom Emasealu pleaded guilty yesterday to all charges contained in the indictment - conspiracy, possession of at least 15 unauthorized access devices, access device fraud, wire fraud and aggravated identity theft. This morning, his co-defendant and girlfriend, Krystal Prophet, pleaded guilty to conspiracy, access device fraud, wire fraud and aggravated identity theft.
According to witness testimony and the evidence admitted during trial, the conspiracy began in January 2014 and continued through May 2015. Emasealu and Prophet conspired and worked together to obtain the identities of approximately 50,000 victims located nationwide which they used to apply for debit and credit cards with various banking institutions.
The evidence showed that Emasealu and Prophet applied for and obtained approximately 230 debit cards using identities of other individuals. These identities were then used to apply for fraudulent tax refunds. The monies were deposited onto the debit cards that were previously created using victim identities.
In total, the defendants attempted to obtain approximately $1.9 million in fraudulent tax refunds. The IRS was able to stop the majority of the transactions, but Emasealu and Prophet still managed to obtain approximately $250,000 in a four-month period.
The conspiracy conviction carries up to five years imprisonment, while the possession of 15 or more unauthorized access devices and trafficking in unauthorized access devices both carry possible maximum sentences of 10 years. They also face another possible 20 years for the conviction of wire fraud. Each count of aggravated identity theft carries a mandatory two-year-term of imprisonment which ust be served consecutively to any other sentence imposed.
U.S. District Judge Vanessa Gilmore accepted the pleas and set sentencing for March 6, 2017. Emasealu will remain in custody while Prophet was permitted to remain on bond pending that hearing.
The U.S. Postal Inspection Service, Secret Service and IRS – Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Julie Searle and Douglas Davis prosecuted the case.
Edinburg Man Convicted of Multiple Child Pornography ChargesRead the Press Release
McALLEN, Texas – A 28-year-old Edinburg man has pleaded guilty to a three-count indictment charging him with production, receipt and distribution of child pornography, announced U.S. Attorney Kenneth Magidson.
Carlos Benjamin Martinez admitted to downloading and receiving child pornography and to sending emails which contained child pornography. He also admitted to performing a sexual act on a minor child while recording the incident with his cellular phone.
In March 2015, authorities were investigating an individual suspected of possessing child pornography in Massachusetts. During that time, authorities discovered that Martinez had emailed several images of child pornography to that suspect. The FBI executed a federal search warrant at the Martinez residence in September 2015 and seized various electronic devices. A search warrant was also executed on an email account belonging to Martinez. A forensic analysis on those devices and email account led to the discovery of thousands of images and multiple videos of child pornography involving clearly young children engaged in sexually explicit conduct.
A subsequent search of his cell phone revealed a video of Martinez performing sexual intercourse on a minor child approximately 12 years of age.
U.S. District Judge Randy Crane, who accepted the guilty plea today, has set sentencing for February 9, 2017. At that time, Martinez faces a minimum of 15 and up to 30 years for the production of child pornography. As to the counts of receipt and distribution of child pornography, Martinez faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The FBI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorneys Alex Benavides and Kimberly Ann Leo, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Border Patrol Agent Arrested on Child Pornography ChargesRead the Press Release
LAREDO, Texas – A 50-year-old senior Border Patrol agent stationed in Del Rio has been taken into custody on charges of distribution of child pornography and attempting to entice a minor to engage in sexual activity, announced U.S. Attorney Kenneth Magidson.
Salvador Contreras was arrested today in Cotulla. He is expected to appear in Laredo federal court Monday morning.
According to the criminal complaint, Contreras allegedly sent numerous images depicting child pornography to an individual whom he believed was the mother of an eight-year-old girl. During those communications, he allegedly expressed his desire to engage in sexual conduct with the child and made arrangements to travel to Cotulla to do so.
Authorities arrested Contreras after he arrived there this morning.
Contreras faces a minimum of 10 years and up to life in federal prison if convicted of the enticement as well as a minimum of five and up to 20 years for the distribution of child pornography.
Customs and Border Protection - Office of Inspector General and Homeland Security Investigations conducted the investigation with the assistance of the United States Attorney’s Office for the Western District of Texas. Assistant U.S. Attorney Alfredo de la Rosa is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law
Jury Finds Allied Home Mortgage Entities and CEO Liable for Civil Mortgage Fraud - Awards $92 Million in DamagesRead the Press Release
HOUSTON – A federal jury has found the entities formerly known as Allied Home Mortgage Capital Corporation (Allied Capital) and Allied Home Mortgage Corporation (Allied Corporation) as well as president and CEO Jim C. Hodge liable in connection with more than a decade of fraudulent misconduct related to Allied’s participation in the Federal Housing Administration (FHA) mortgage insurance program. The jury returned the verdicts late yesterday following a five-week trial, finding Allied and Hodge violated the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).
U.S. Attorney Kenneth Magidson of the Southern District of Texas and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement along with Julián Castro, Secretary of the Department of Housing and Urban Development (HUD), and HUD Inspector General David A. Montoya.
The jury awarded the United States a total of $92,982,775 in damages, including $7,370,132 against Hodge specifically. Pursuant to the FCA, the damages in this case are subject to trebling. In addition, the court must impose a mandatory penalty of $5,500 to $11,000 for each violation. Separately, FIRREA also provides for a penalty for each statutory violation. U.S. District Judge George C. Hanks Jr., who presided over the trial, will determine the total penalties and damages at a later date.
“The excellent coordination between personnel from our two U.S. Attorney’s Offices and with HUD investigators has resulted in a tremendous win for the government,” said Magidson. “Working together, we ensured a successful outcome following a lengthy trial and investigation against Allied and its CEO. We will continue to apply our resources whenever and wherever we can to ensure those that perpetuate such egregious fraud against the United States are held accountable for their actions.”
“For years, Hodge and Allied repeatedly lied to HUD in order to fraudulently reap profits from the FHA mortgage insurance program,” said Bharara. “After a month-long public trial where all their misconduct was exposed, a jury has held Hodge and Allied responsible for their lies and has made them pay for losses the United States suffered on loans that would never have been insured by HUD absent their lies. This case represents yet another recovery by the United States – this time after a trial – for fraud perpetrated against HUD by participants in the Direct Endorsement Lender program.”
“The heart of our mission is to weed out actors such as these that are intent on defrauding federal housing programs,” said Montoya. “This should serve as a notice to all those determined to engage in illegal schemes such as these that they are not beyond the reach of the federal law enforcement community.”
FHA mortgage insurance makes home ownership possible for millions of American families by protecting lenders against mortgage defaults. FHA mortgage insurance also makes mortgage loans valuable in the resale market. To protect the continued availability of FHA mortgage insurance funds, HUD must accurately assess the risk of default on the loans it insures. To accomplish this task, HUD relies on assurances by lenders that they, and the loans they submit for insurance, comply with program requirements.
As a HUD-approved loan correspondent, Allied Capital originated FHA-insured mortgage loans and was required to seek HUD approval for each branch office from which it originated such loans. Allied Capital did not comply. Instead, with Hodge’s approval, Allied Capital operated more than 100 “shadow” branch offices that originated FHA loans without HUD authorization. As part of its scheme to deceive HUD, the jury heard that Allied Capital submitted loans originated by those branches to HUD using the ID numbers of approved branches. Allied Capital’s undisclosed shadow branches were not subject to HUD oversight and their default rates were disguised by the default rates of branches whose IDs they were using. This fraudulent misconduct resulted in $7,370,132 in losses to HUD when some of those loans defaulted.
The jury also heard that Allied Corporation, as a participant in HUD’s Direct Endorsement Lender program, underwrote FHA-insured mortgage loans. For each FHA-insured mortgage loan, Allied Corporation was required to certify to HUD that the loan was underwritten according to HUD’s guidelines. Those guidelines ensure that FHA-insured loans are made only to borrowers who can repay them, thereby seeking to avoid losses to HUD’s FHA insurance fund and foreclosures on borrowers’ homes. Allied Corporation, however, recklessly underwrote and certified at least 1,192 loans for FHA insurance under HUD’s guidelines. This fraudulent misconduct resulted in losses to HUD of $85,612,643 when those loans defaulted.
To compound matters, Allied Capital and Allied Corporation (Allied) and Hodge operated a dysfunctional quality control program and lied to HUD about it. HUD requires lenders participating in its programs to timely perform quality control audits of their FHA loans to identify and correct systemic problems, including underwriting problems. Allied only employed a handful of quality control employees to review loans from as many as 600 branch offices. Further, many of those employees were unqualified to audit FHA-insured loans. In addition, Hodge personally directed his employees to falsify quality control reports to give the impression that required reviews had been performed, when in fact they had not. When HUD auditors later asked for those quality control reports, Allied provided the falsified reports. Allied and Hodge also falsely certified to HUD on an annual basis that Allied was in compliance with HUD’s quality control requirements.
The case was pending as a qui tam whistleblower lawsuit in the Southern District of New York (SDNY) when the United States filed a complaint-in-intervention in November 2011. The following year, the case was transferred to the Southern District of Texas (SDTX). SDNY attorneys Jeannette A. Vargas, Joseph N. Cordaro, Jean-David Barnea, Caleb Hayes-Deats and Stephen Cha-Kim handled the matter and were designated as Special Assistant U.S. Attorneys for SDTX.
Bharara and Magidson thanked HUD’s Office of General Counsel and HUD-Office of Inspector General for their extraordinary assistance with this case.
Two Sentenced for Firearms TraffickingRead the Press Release
LAREDO, Texas – A Laredo man and a female Mexican national have been ordered to federal prison for their roles in the trafficking of firearms, announced U.S. Attorney Kenneth Magidson.
Claudia Raquel Herrera-Ibarra, 35, of Nuevo Laredo, Mexico, and Jonathan James Ruiz, 24, of Laredo, pleaded guilty July 14, 2016. Herrera-Ibarra admitted to possession of firearms by an illegal alien, while Ruiz entered a plea to making false statements in connection with the purchase of firearms.
Following a hearing late yesterday, U.S. District Judge Marina Garcia Marmolejo ordered Ruiz and Herrera-Ibarra to serve 60 and 84 months in prison, respectively. At the hearing, Herrera-Ibarra asked the court for a lower sentence, claiming she was a minor participant who took orders from cartel members in Mexico. Judge Marmolejo noted that Herrera-Ibarra had recruited others to buy firearms for her and demonstrated a high level of sophistication in her operation. The court further commented that the acts of both defendants directly affected the citizens of Mexico as well as the people of the United States. Ruiz will also serve three years of supervised release following his prison term, while Herrera-Ibarra is expected to face deportation proceedings following her sentence.
Both defendants had previously admitted to unlawfully conspiring with each other and others to fraudulently and knowingly acquire assault rifles and pistols for illegal export from the United States to Mexico. Herrera-Ibarra hired Ruiz and others to purchase civilian versions of military assault rifles and pistols between Dec. 13, 2015, and March 19, 2016, from various firearms stores in Laredo. She then illegally smuggled or hired others to smuggle the firearms to associates in Mexico who solicited the firearms. These associates were primarily members of the Los Zetas criminal organization operating in Mexico.
Herrera-Ibarra paid Ruiz between $150 and $400 for buying each firearm. Ruiz admitted he ultimately bought 25 firearms for her and that he had falsely certified on each firearms form that he was the actual purchaser of the weapons.
Herrera-Ibarra was arrested April 1, 2015, in the parking lot of a sporting goods store in north Laredo after receiving two AR-15 semi-automatic rifles from an undercover agent whom she had hired and paid to buy the firearms. Herrera-Ibarra acquired at least 27 firearms which she exported illegally to Mexico. At least two firearms were intercepted during this investigation prior to being exported to Mexico.
Herrera-Ibarra has been and remains in federal custody. Ruiz was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined at a later date.
Omar Rolando Castillo, 30, another co-conspirator named in a separate indictment, has also pleaded guilty and is pending sentencing before U.S. District Judge Diana Saldaña.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Laredo Police Department and Webb County Sheriff’s Office. Several local officers and deputies have been cross-designated as task force officers working directly with federal agencies, assisting in the investigation of these and other crimes. Assistant U.S. Attorney Jose Homero Ramirez is prosecuting the cases.
Military Men Admit to Human SmugglingRead the Press Release
CORPUS CHRISTI, Texas – Two active duty Army soldiers have entered guilty pleas to smuggling two illegal aliens through a U.S. Border Patrol (BP) checkpoint, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Mark Dawson of Immigration and Customs Enforcement's Homeland Security Investigations (HSI).
Marco Antonio Nava Jr., 19, and Joseph Edmond Cleveland, 25, both of El Paso, admitted they smuggled two Illegal aliens through the BP checkpoint in Falfurrias. They claimed that they were approached by a man who offered to give them $1,500 if they came to the valley to drive two illegal aliens through the checkpoint. On June 19, 2016, the defendants approached the checkpoint with the two illegal aliens in the rear passenger seats of the vehicle. The BP agent asked one of the passengers if he had documents to be in the United States legally to which he said no. Both passengers were ultimately found to be aliens unlawfully present in the U.S. and taken into custody.
Upon questioning, the illegal aliens stated they crossed into the country eight days prior and had been moved to two different trailer homes. On the day of their arrest, they were told by a person in the trailer home that someone was going to come to pick them up and take them Houston. Nava was driving and told them to get into the vehicle. Once inside, the illegal aliens were told they were going to go through an immigration checkpoint and were coached as what to answer to the agent's questions at the checkpoint.
Nava and Cleveland face up to 10 years in federal prison. They were permitted to remain on bond pending sentencing, which is set for Feb. 9, 2017.
HSI conducted the investigation. Assistant U.S. Attorney Jeffrey S. Miller is prosecuting the case.
Houston Man Sentenced for USPS Letter Carrier RobberyRead the Press Release
HOUSTON – An 18-year-old Houston man has been ordered to federal prison following his conviction of brandishing a firearm during a crime of violence, announced U.S. Attorney Kenneth Magidson.
Sebastien Moore pleaded guilty July 8, 2016.
On Nov. 17, 2016, U.S. District Judge Sim Lake ordered Moore to serve 84 months in federal prison to be immediately followed by three years of supervised release.
Moore robbed a U.S. Postal Service (USPS) letter carrier at gunpoint on Feb. 6, 2016. The USPS worker was placing mail in the mailboxes of a Houston apartment complex when Moore approached. He soon pointed a firearm at the victim and demanded his wallet. The carrier complied.
Moore made several attempts to use the letter carrier’s personal credit card in which one transaction was approved. Moore was seen on surveillance camera, wearing the same clothing worn during the robbery, attempting to use the carrier’s credit card.
The U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Jennie Basile prosecuted the case.
Eight Charged in Federal Drug Trafficking ConspiracyRead the Press Release
GALVESTON, Texas – A total of eight people are set to appear in federal court today in relation to a drug trafficking conspiracy involving cocaine and methamphetamine, announced U.S. Attorney Kenneth Magidson
Those charged include Agusto Lazo-Aguirre, 39, Marco Antonio Duran-Millan, 29, Rafael Ortuno Carreno, 36, and Gabriel Santiago-Ochoa, 30, all of Houston; Tony Perez, 23, of Dickinson; and Carlos Chayane Morales, 26, Francisco Solano-Huerta, 58, and Juana Guadalupe Joya, 47, all of Galveston.
They are all set for a detention hearing today at 1:00 p.m. before U.S. Magistrate Judge John Froeschner in Galveston.
Authorities arrested Perez, Solano, Joya and Duran during an enforcement action late last week. The other four had already been in custody.
The eight-count indictment charges all of defendants with conspiring from July 1, 2015, to Feb. 22, 2016, to possess with intent to distribute more than 50 grams of methamphetamine or more than 500 grams of a mixture or substance containing methamphetamine and more than five kilograms of cocaine.
Carreno, Lazo-Aguirre and Duran-Millan are also charged as illegal aliens who unlawfully possessed one or more firearms.
In addition, Morales is charged with three counts of possession with intent to distribute methamphetamine, while Lazo-Aguirre, Perez and Ochoa are each charged with one of these substantive counts.
If convicted of the drug conspiracy offense, the eight defendants face a minimum of 10 years and up to life in prison and a possible $10 million fine. Those charged in the substantive possession count face the dame penalties, while the illegal aliens in possession of firearms charges carry a possible 10-year-term of imprisonment.
The Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; FBI; Galveston Police Department; and the Galveston County Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Kenneth Cusick is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.
Marine Pilot Pleads Guilty to Possession of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A 44-year-old Corpus Christi man has admitted to possessing child pornography, announced U.S. Attorney Kenneth Magidson. Jason Michael Ehret, an active duty Marine Corps major serving as an aviation flight instructor, pleaded guilty today.
The court heard today that Corpus Christi Police Department detectives, while using peer-to-peer software, were able to successfully download various files containing child pornography from an IP address that was associated with Ehret.
In March 2016, agents executed a search warrant at Ehret’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 160 images and approximately four videos of child pornography.
Senior U.S. District Judge Janis Graham Jack accepted the guilty plea today and set sentencing for Jan. 25, 2017. At that time, Ehret faces up to 20 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Ehret also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
Ehret was arrested on the federal charges in September 2016 and has been in custody since that time where he will remain pending his sentencing.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Naval Criminal Investigative Service and the Corpus Christi Police Department—Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Non-Profit Head Ordered to Prison in Fraud SchemeRead the Press Release
HOUSTON – A local minister and head of several area non-profit organizations has been ordered to federal prison for fraud in connection with a natural disaster, announced U.S. Attorney Kenneth Magidson. Jesse Dunn, 58, of Houston, pleaded guilty March 17, 2016.
Today, U.S. District Judge Lynn Hughes, who accepted the guilty plea, handed Dunn a 66-month sentence. He was further ordered to pay $1,305,800 in restitution to the Small Business Administration (SBA). Dunn will also be required to serve a term of five years of supervised release following completion of the prison term.
From about September 2008 to about December 2010, Dunn falsified numerous documents to the SBA in order to receive disaster relief funds. Hurricane Ike made landfall on Sept. 13, 2008. Shortly thereafter, Dunn applied for an SBA loan on two of his properties for disaster relief funds for his non-profit organization the Aldine Community Care Center. The SBA disbursed a total of $1,300,800 to him in order to fix his properties. Several of those disbursements were based on fictitious documents and/or invoices that he had submitted. A great deal of the money was used for his own personal use, such as numerous gambling trips. To this day, the SBA is still owed the outstanding amount from Dunn.
Dunn was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The SBA and the FBI conducted the investigation. Assistant U.S. Attorneys Suzanne Elmilady and Andrew Leuchtmann are prosecuting the case.
Jury Convicts Home Health Agency Owner in $13 Million Medicare Fraud ConspiracyRead the Press Release
A federal jury in the Southern District of Texas convicted a Houston-based home-health agency owner for her role in a $13 million Medicare fraud scheme and money laundering.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge D. Richard Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office and Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office made the announcement.
Marie Neba, 52, of Sugarland, Texas, co-owner of Fiango Home Healthcare Inc. (Fiango) was convicted yesterday of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, one count of payment and receipt of health care kickbacks, one count of conspiracy to launder monetary instruments and one count of making false statements. A week into the trial, her co-owner and husband, Ebong Tilong, 52, also of Sugarland, pleaded guilty to one count of conspiracy to commit health care fraud, three counts of healthcare fraud, one count of conspiracy to pay and receive healthcare kickbacks, three counts of payment and receipt of healthcare kickbacks and one count of conspiracy to launder monetary instruments. Neba and Tilong are scheduled to be sentenced on Feb. 17, 2017.
According to the evidence presented at trial and admissions made in connection with Tilong’s plea, from February 2006 through June 2015, Neba, Tilong and others conspired to defraud Medicare by submitting over $13 million in false and fraudulent claims for home-health services to Medicare through Fiango. Neba and Tilong paid illegal kickbacks to physicians in exchange for authorizing medically unnecessary home-health services for Medicare beneficiaries. Using the money that Medicare paid for such fraudulent claims, Neba and Tilong paid illegal kickbacks to patient recruiters for referring Medicare beneficiaries for home-health services. Neba and Tilong also paid illegal kickbacks to Medicare beneficiaries for allowing them to bill Medicare using their Medicare information for home-health services that were not medically necessary or not provided. Neba and Tilong falsified medical records to make it appear as though the Medicare beneficiaries qualified for and received home-health services.
According to the evidence presented at trial and Tilong’s admissions, from February 2006 to June 2015, Neba and Tilong received more than $13 million from Medicare for home-health services that were not medically necessary or not provided to Medicare beneficiaries.
To date, three others have pleaded guilty in connection with the scheme: Nirmal Mazumdar, M.D., the former medical director of Fiango, pleaded guilty to a scheme to commit health care fraud; and Daisy Carter and Connie Ray Island, two patient recruiters for Fiango, pleaded guilty to conspiracy to commit health care fraud. Mazumdar, Carter and Island all await sentencing.
The IRS-CI, FBI and HHS-OIG investigated the case under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Texas. Trial Attorney William S.W. Chang and Senior Trial Attorney Jonathan T. Baum of the Fraud Section are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,900 defendants who have collectively billed the Medicare program for more than $10 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Authorities Make Multiple Arrests in Varying Indictments Involving Firearms and NarcoticsRead the Press Release
CORPUS CHRISTI, Texas - A total of 10 area men are now in custody as a result of a coordinated effort by federal, state and local law enforcement, announced U.S. Attorney Kenneth Magidson.
Tomas Perez, 30, David Lerma, 24, John Guerrero, 23, Omar Flores, 30, Dominic Suarez, 32, and Jesse Ramos, 29, all of Corpus Christi, are charged in separate indictments as being felons in possession of a firearm and ammunition.
Juan Sanchez, 24, of Corpus Christi, is charged with being a felon in possession of a firearm, while Smiley Rodriguez, 32, also of Corpus Christi, is charged with possession with intent to distribute crack cocaine.
In another separate indictment, Roy Valent Jr., 31, and Arnold Valent, 29, both of Corpus Christi, are charged with conspiracy to possess with intent to distribute a controlled substance and conspiracy to possess with intent to distribute a controlled substance analogue. Valent is also charged with being a felon in possession of firearms and ammunition.
Authorities arrested Flores, Suarez, Sanchez, Guerrero, Perez, Ramos and Valent during an enforcement action yesterday. Detention hearings have been set for Monday, Nov. 14.
Lerma and Rodriguez were previously in custody and are expected to appear in federal court in the near future.
Each charge involving a firearm carries a maximum penalty of 10 years in prison and a possible $250,000 fine. If convicted of the drug charges, those defendants face up to 20 years of imprisonment and a possible $1 million fine.
Operation City Shield is a coordinated effort by federal, state and local law enforcement to identify violent offenders, stop gun violence and protect the community.
The charges stem from investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; U.S. Marshals Service; Corpus Christi Police Department and the Texas Department of Public Safety.
Assistant U.S. Attorney Lance Watt is prosecuting the case.
Authorities Make Numerous Arrests in Poly-Drug and Money Laundering ConspiracyRead the Press Release
McALLEN, Texas - A total of 15 people are in custody following law enforcement actions in multiple cities that began on Friday involving a drug and money laundering conspiracy, announced U.S. Attorney Kenneth Magidson. The Organized Crime Drug Enforcement Task Force (OCDETF) investigation dubbed Operation Yeyo Express targeted Gulf Cartel infrastructure and transportation cells operating in South Texas and the distribution of multiple drugs throughout the United States and returning proceeds to Mexico.
Those arrested locally include Guillermo Morales aka Don Gio, 54; Erick Alan Torres Davila aka Cachorro, 30, Elizabeth Lopez-Perez, 30, all of Edinburg; David Martinez, 42, of Mercedes; Hector Hernandez Cardenas, 52, of San Juan; Jose Gonzalez aka Lalo, and Elmer Macario Ramos, 42, both of Weslaco; Armando Tanguma, 29, of Edcouch; Andrew Martinez, 38, and Heather Segura, 34, both of La Feria; and Amairani Flores aka Lizeth, 23, of Donna.
All have made their initial appearances in McAllen federal court, at which time the government requested they remain in custody. Detention hearings are set for Thursday, Nov. 10.
Jesus Remedios Manqueros, 40, of Dallas, was also taken into custody. He made his initial appearance in Dallas and is expected to be transported to McAllen in the near future.
Three defendants were already in custody on related charges. They include Anthony Ray Sanchez, 19, of Dallas; and Mario Gonzalez, 44, and Efrain Dimas-Lopez, 46, both of Edinburg.
All are in custody on a multi-count indictment charging conspiracy to possess with intent to distribute cocaine, methamphetamine and marijuana, as well as several substantive drug possession charges. The indictment alleges the conspiracy ran from February 2013 to Nov. 1, 2016. Each defendant faces no less than 10 years and up to life in federal prison, upon conviction. Morales is also charged with conspiracy to commit money laundering and faces another maximum 20-year-term of imprisonment.
In addition, the indictment gives notice of criminal forfeiture of three real properties located in Hidalgo County.
The OCDETF investigation and subsequent arrests were a combined effort by the DEA; Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas Army National Guard; Air National Guards in Arkansas, Mississippi and Texas; Customs and Border Protection; Border Patrol; Texas Department of Public Safety; police departments in Pharr, McAllen, Palmview, Mission, Weslaco, Dallas and San Juan; and the Hidalgo County High Intensity Drug Trafficking Area task force.
Assistant U.S. Attorney (AUSA) Pat Profit is prosecuting the case. AUSA Sarah Wilson is handling the forfeiture matters.
An indictment is a formal accusation of criminal conduct, not evidence.
Defendants are presumed innocent unless and until convicted through due process of law.
San Benito Man Convicted of Posing as Licensed Vocational NurseRead the Press Release
McALLEN, Texas ‐ A San Benito man has entered a guilty plea to falsely holding himself out as a Licensed Vocational Nurse, announced U.S. Attorney Kenneth Magidson.
In December 2014, Juan Manuel Perez, 35, obtained employment with Cleveland Health Care LLC in McAllen, claiming to be a Licensed Vocational Nurse (LVN). The license number presented by Perez, however, belonged to another individual of the same name. Perez is not licensed by the Texas Board of Nursing and is not an LVN.
Perez, posing as the LVN, conducted patient home visits and provided medical services from December 2015 through July 2016 while employed with Cleveland Health Care.
Perez pleaded guilty to aggravated identity theft which carries a mandatory two‐year prison term. He is scheduled for sentencing on Jan. 24, 2017.
The U.S. Department of Health and Human Services‐Office of Inspector General, FBI and the Health and Human Services Commission conducted the investigation. Assistant U.S. Attorneys Andrew Swartz and Michael Day are prosecuting the case.
Man Sentenced for Sugar Land Bank Robbery and Others in Multiple StatesRead the Press Release
HOUSTON – A 50-year-old Louisiana man has been ordered to federal prison in relation to the September 2015 robbery of BBVA Compass Bank in Sugar Land, announced U.S. Attorney Kenneth Magidson. Charles Wood, of Farmersville, Louisiana, pleaded guilty Aug. 12, 2016, admitting he robbed the local bank and banks in four other states.
Today, U.S. District Judge Sim Lake granted the government’s request for an upward departure and ordered Woods to serve a total of 84 months in prison. Woods will also be required to serve three years of supervised release following completion of the prison term.
On Sept. 14, 2015, Wood entered the BBVA Compass Bank located at 14121 North Southwest Freeway in Sugar Land. He pulled out a black BB gun from his jacket and displayed it to the teller, asking for a withdrawal of 20s, 50s and 100s. The teller complied.
A brief pursuit with law enforcement ensued which resulted in his apprehension a short distance from the bank.
At the time of the plea today, Wood also admitted to committing four additional bank robberies which occurred throughout the country. Those include the Feb. 18, 2015, robbery of U.S. Bank at 4140 John F. Kennedy Blvd. in Little Rock, Arkansas; the Aug. 11, 2015, robbery of Great Western Bank located at 3800 East 15th Street in Loveland, Colorado; the Aug. 15, 2015, robbery of American West Bank located at 1290 South West St. in Woods Cross, Utah; and the Aug. 27, 2015 robbery of Valley View Bank located at 8100 West 151st Street in Overland Park, Kansas.
Woods will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI’s Bank Robbery Task Force conducted the investigation. Assistant U.S. Attorney Julie Searle is prosecuting the case.
Jury Convicts Conroe Man of Trafficking Cocaine and Conspiring to Launder Drug MoneyRead the Press Release
HOUSTON – A federal jury in Houston has convicted a 44-year-old local man of conspiracy to possess with intent to distribute cocaine, possession with intent to distribute cocaine and conspiracy to launder money, announced U.S. Attorney Kenneth Magidson. The returned its verdict against Oscar Benitez, 44, of Conroe, following one day of deliberations and three days of trial.
The jury heard that the investigation began in early 2011. At that time, agents with the Drug Enforcement Administration (DEA) in Philadelphia, Pennsylvania, seized approximately four kilograms of cocaine from a vehicle that had been driven there from the Houston area. The investigation revealed the vehicle had recently been sold by Bensol Auto Sales in Arcola, Texas - a used car dealership that Benitez owned.
Houston agents then realized one of their confidential sources (CS) had already been speaking to Benitez about trying to buy large amounts of cocaine from him and his drug supplier. Benitez subsequently had told the individual that he moved large amounts of cocaine (25-100 kilograms at a time) and that he had a very well-connected drug supplier who could make such large deals happen.
The jury heard that on June 16, 2011, a North Carolina Highway Patrol trooper pulled over a Ford F-150 pickup truck in Monroe for a traffic violation. Reuben Orozco-Garcia was driving with Juan Gonzalez-Bejar as a passenger. The truck contained 81 kilograms of cocaine. Testimony at trial revealed that Orozco-Garcia had made a deposit of $9,000 into a bank account belonging to Bensol Auto Sales and Benitez the day of the cocaine seizure. The jury also heard that Benitez was using this Bensol Auto Sales account to launder the drug trafficking proceeds and that he supplied vehicles from Bensol to his drug supplier to transport drugs to other parts of the United States.
Orozco-Garcia and Gonzalez-Bejar previously pleaded guilty.
The evidence at trial also showed that in the fall of 2013, an individual delivered approximately 20 kilograms of cocaine to Benitez on a ranch he owns in Conroe. This delivery happened in the early morning hours and was directed by Benitez’ drug supplier, who was then located in Mexico.
The jury convicted Benitez on all accounts as charged.
U.S. District Judge Vanessa Gilmore presided over the trial and set sentencing for Feb. 21, 2017. At that time. Benitez faces a minimum of 10 years and up to life in prison as well as a possible $10 million fine. He was permitted to remain on bond pending sentencing.
The DEA, Internal Revenue Service – Criminal Investigation and the North Carolina Department of Public Safety conducted this Organized Crime Drug Enforcement Task Force investigation. Assistant U.S. Attorneys Arthur R. Jones and Richard Magness are prosecuting the case.
Military Men Charged with Human SmugglingRead the Press Release
CORPUS CHRISTI, Texas – Two active duty Army soldiers have been charged with smuggling two illegal aliens through a Border Patrol (BP) checkpoint, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Mark Dawson of Immigration and Customs Enforcement's Homeland Security Investigations (HSI).
Marco Antonio Nava Jr., 19, and Joseph Edmond Cleveland, 25, both of El Paso, made their appearances today before U.S. Magistrate Judge B. Janice Ellington.
The indictment charges both men with one count of conspiring to transport aliens and one count of transporting an alien.
The indictment alleges Nava and Cleveland smuggled two Illegal aliens through the BP checkpoint in Falfurrias on June 19, 2016. On that date, at approximately 4:00 p.m., Nava drove a vehicle to the checkpoint with Cleveland as his passenger. A BP agent conducted an immigration inspection on the vehicle, at which time the agent discovered two additional passengers in the back. A brief investigation revealed those individuals were illegal aliens.
If convicted, Nava and Cleveland face up to 10 years in federal prison.
HSI conducted the investigation. Assistant U.S. Attorney Jeffrey S. Miller is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Mexican National Charged with Assaulting a Federal OfficerRead the Press Release
BROWNSVILLE, Texas – A 24-year-old Mexican female has been charged with physically assaulting a Border Patrol (BP) agent who was attempting to restrain her, announced U.S. Attorney Kenneth Magidson.
Maribel Tejeda-Fomperosa is set to make her initial appearance before U.S. Magistrate Judge Ignacio Torteya this morning.
“In the last few months, we have seen the amount of incidents of aggression against our agents rise,” said Chief Patrol Agent Manuel Padilla Jr. “Assaults against our agents are unacceptable and will not be tolerated. Our agency is working with state and federal prosecutors to ensure the safety our agents while in the field and in operational settings.”
According to the criminal complaint, Tejeda-Fomperosa physically assaulted a BP agent and also spit on a second agent. On Oct. 24, 2016, BP agents arrested Tejeda-Fromperosa after she allegedly made an illegal entry into the United States by wading across the Rio Grande River near Brownsville. The criminal complaint alleges Tejeda-Fromperosa became become physically and verbally aggressive after being placed in a holding cell following her arrest. As a result, she physically assaulted a BP agent attempting to restrain her and spat at a second agent.
If convicted, Tejeda-Fromperosa faces a possible sentence of up to eight years in federal prison and a possible $250,000 maximum fine.
The FBI conducted the investigation. Assistant U.S. Attorney Angel Castro is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Identity Thieves Arrested for Stealing Money from Bank Accounts and Filing False Tax ReturnsRead the Press Release
HOUSTON – Six people have been taken into custody following the return of a 32-count indictment alleging wire fraud and conspiracy to commit wire fraud, theft of public money and conspiracy to do so as well as aggravated identity theft, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Perrye Turner of the FBI and Special Agent in Charge D. Richard Goss of the IRS - Criminal Investigation (CI).
James Michael Curtis Johnson, 31, Donald Ray Perry, 26, Enitra Shante Pickett, 28, and D’angela Devonne Domio, 26, all of Houston; Joshua Jacquez Britton, 28, of Richmond; and Joseph Edward Johnson, 44, of Katy, were taken into custody today. They are expected to make their initial appearances before U.S. Magistrate Judge Nancy Johnson at 2:00 p.m. today.
A federal grand jury returned the indictment Oct. 26, 2016, which was unsealed upon the arrests today. That indictment alleges two schemes - a conspiracy to steal money from bank accounts and a conspiracy involving the filing of false tax returns and aggravated identity theft.
James Johnson, Joseph Johnson, Pickett and Joshua Britton allegedly conspired with themselves and others to steal money from bank accounts by posing as accountholders, creating fake bank accounts online and then transferring money from victim bank accounts or home equity lines of credit. According to the indictment, these four defendants stole money before the fraud could be detected and the funds frozen.
All six are charged with conspiring to file false tax returns and claiming refunds to which they were not entitled. The indictment alleges that once the fraudulent refunds were paid, the conspirators drained the money before it could be frozen. As part of this conspiracy, the indictment also alleges they each engaged in aggravated identity theft by using victims' identification without authorization to commit these offenses.
The charges of wire fraud and conspiracy to commit wire fraud each carries a maximum penalty of 20 years in federal prison, while a conviction for theft of public money is punishable by a maximum of 10 years imprisonment. Each defendant also faces a maximum of five years in federal prison upon conviction of the conspiracy. Each conviction also carries a possible $250,000 fine.
The FBI Houston Cyber Task Force and IRS-CI conducted the investigation with the assistance of the Houston Police Department and the U.S. Postal Inspection Service. Assistant U.S. Attorney Michael Chu is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
First of Five Sentenced to Federal Prison in Large Fraud SchemeRead the Press Release
HOUSTON – The first of five people from three different states has been ordered to federal prison following their convictions related to a $23 million nonexistent commercial accounts receivable scheme, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Rick Goss of IRS-Criminal Investigation (CI).
Stefano Guido Vitale, 40, of Scottsdale, Arizona, pleaded guilty March 21, 2016, while Alan Leschyshyn, 53, of Cave Creek, Arizona; Bree Ann Davis, 40, of Lakewood, Colorado, and Tammie Roth Hanania, 59, and Edward Peter Hanania, 64, both of Folsom, California, all had previously entered their respective pleas. All were convicted of conspiring to engage a scheme to defraud and conspiracy to commit money laundering. Vitale and Leschyshyn were also convicted of eight additional counts of wire fraud.
Today, U.S. District Judge Vanessa Gilmore ordered Leschyshyn to serve a total of 235 months in federal prison to be followed by five years of supervised release. He was also ordered to pay restitution in the amount of $6,477,451.85.
Tammie and Edward Hanania are set for sentencing later this month, while Davis and Vitale will be sentenced in January 2017.
“Today’s sentencing of Leschyshyn for his role in a $6 million fraud scheme is well deserved,” said Goss. “Leschyshyn abused his training and expertise by creating convincing false documents and information to support this massive fraud. The jail time handed down to Leschyshyn attests that no matter how sophisticated the fraud is, IRS-CI Agents will uncover the crimes and pursue those responsible.”
The scheme produced approximately $6.4 million in fraudulently obtained proceeds which the defendants agreed to launder through various bank accounts. They executed the scheme to defraud by using and establishing various business entities to sell, at a discount, nonexistent commercial accounts receivable. The defendants would approach factoring companies as sellers of customized gaming vault bundles and present fabricated invoices as evidence the defendants were owed a certain amount of money for goods provided to another one of their business entities. To establish creditworthiness of these companies and to convince the factoring company the credit risk was minimal, the defendants fabricated and/or altered documents and provided them to the factoring company.
The fraud conspiracy also proved that Vitale and Leschyshyn defrauded BOKF, NA, doing business as Bank of Arizona, when they applied for and received a $1 million line of credit secured by the Export Import Bank of the United States.
Leschyshyn was previously released on bond but ordered into custody following the hearing today. Vitale has been and remains in custody, while the remaining defendants are on bond pending their sentencing hearings.
The investigation leading to the charges was conducted by IRS - CI. Assistant U.S. Attorney Melissa Annis is prosecuting the case.
Authorities Make Multiple Arrests in Large Narcotics Trafficking and Money Laundering ConspiracyRead the Press Release
LAREDO, Texas – A total of 18 defendants have been taken into custody in Laredo, San Antonio and other areas of the country on charges involving cocaine, methamphetamine, heroin and fentanyl, announced U.S. Attorney Kenneth Magidson.
Those taken into custody include Antonio Romero Jr., 29, of Laredo, who has been identified as the head of the drug trafficking cell which operated out of Orlando, Florida. He was taken into custody in Orlando where he made his initial appearance and ordered detained pending further criminal proceedings in Laredo. His wife, Olinda Romero, 29, of Mexico, was also arrested in Orlando under on money laundering charges. Authorities also arrested Loreto Castaneda Macedo, 37, of Mexico, and Francisco Javier Salazar Diaz, 58, of Mexico, in Ft. Lauderdale, Florida.
In South Texas, authorities arrested 12 others who will make their initial appearances before U.S. Magistrate Judge Guillermo R. Garcia on Monday, Oct. 31, 2016. Those persons include Nora Arlette Romero, 37, Tito Garcia, 44, Oscar N. Mancillas, 26, Karina Mancillas-Rubio, 28, Jason Aguilar Blake, 29, Jesus Miguel Torres, 30, Daniel Laurel, 31, Hector Ortiz, 22, Stephanie Ozuna, 26, Maria Lilia Ozuna, 61, Oscar Mancillas Santos, 56, and Olga Calzado de Mancillas, 54.
Two others - Luis Felipe Santos Alejandro, 29, and Dennis Alvarez Boquin, 32, were arrested in Santa Monica, California, and Atlanta, Georgia, respectively.
The defendants are alleged members of a drug and money laundering organization and are charged with various to include engaging in a continuing criminal enterprise, conspiracy to possess with intent to distribute multi kilograms quantities of cocaine, methamphetamine, heroin and fentanyl, conspiracy to launder drug proceeds and numerous other money laundering violations.
The indictments charge the defendants with engaging in a conspiracy to distribute cocaine, methamphetamine, heroin and fentanyl through the use of the U.S. Postal Service or other means such as Federal Express. They allegedly used various U.S. bank accounts to transfer drug proceeds from U.S. distribution hub cities to U.S. cities along the Mexican border, including Laredo, and to places outside the United States, such as Mexico, Ecuador and Peru.
In addition to the criminal charges, the indictments seek to forfeit all property, real and personal, involved in the offenses and all property traceable to such property to include but not limited to approximately $5 million in U.S. currency. In conjunction with the arrests, authorities seized at least 28 vehicles as property derived from drug proceeds.
The charges are the culmination of a long term Organized Crime Drug Enforcement Task Force Investigation dubbed Tres Equis spearheaded by the Drug Enforcement Administration (DEA) with assistance of IRS – Criminal Investigation. Agencies also lending support to the investigation and arrests include the U.S. Marshals Service, Laredo Police Department, sheriff’s offices in Webb and Zapata Counties, Webb County District Attorney’s Office, U.S. Border Patrol and the Texas Department of Public Safety.
Assistant U.S. Attorney Graciela R. Lindberg is prosecuting the case.
An indictment is an accusation of criminal conduct, not evidence.
Defendants are presumed innocent unless and until convicted through due process of law.
Three Head to Federal Prison for Kidnapping ChildrenRead the Press Release
kidnapping two children from their Corpus Christi home, announced U.S. Attorney Kenneth Magidson. Georgia Michelle Gregg, 31, pleaded guilty July 6, 2016, while her sister - Jada Nicole Gregg-Warren, 32 - and her sister’s boyfriend - Ivan Francisco Alvarez-Benavente, 27, pleaded guilty June 30, 2016.
Today, Senior U.S. District Judge Hayden Head sentenced Gregg-Warren to 120 months immediately followed by five years of supervised release. She also received a 12-month sentence on a bond revocation from a previous conviction of possession with the intent to distribute heroin. Gregg was sentenced to 108 months followed by three years of supervised release, while Alvarez-Benavente was ordered to serve 57 months. He is expected to face deportation proceedings following his release from prison.
Gregg and Gregg-Warren kidnapped the young children, ages five and four, from their residence on the night of Aug. 19, 2015. After the kidnapping, the two women travelled to McAllen with the children. Alvarez-Benavente followed them in a separate vehicle.
The Corpus Christi Police Department (CCPD) immediately disseminated an Amber Alert in pursuit of all three adults and the two children. As part of the alert, a Child Abduction Response Team was deployed with the assistance of the FBI and U.S. Marshals Service (USMS).
Authorities learned that Gregg returned to Corpus Christi while the couple and the children entered Mexico and stayed at a residence close to the Alvarez-Benavente family. Through a collaborative effort between the U.S. and Mexican authorities, the couple and the children were brought to the U.S. on Dec. 16, 2015, at which time Gregg-Warren and Alvarez-Benavente were arrested.
All three have been and will remain in custody pending their transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of the investigative efforts of the FBI, CCPD and the USMS. Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case.
Dozens of Individuals Indicted in Multimillion-Dollar Indian Call Center Scam Targeting U.S. VictimsRead the Press Release
Today, an indictment was unsealed charging a total of 61 individuals and entities for their alleged involvement in a transnational criminal organization that has victimized tens of thousands of persons in the United States through fraudulent schemes that have resulted in hundreds of millions of dollars in losses. In connection with the scheme, 20 individuals were arrested today in the United States and 32 individuals and five call centers in India were charged for their alleged involvement. An additional U.S.-based defendant is currently in the custody of immigration authorities.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS OIG) made the announcement today.
“The indictment we unsealed and the arrests we made today demonstrate the Justice Department’s commitment to identifying and prosecuting the individuals behind these impersonation and telefraud schemes, who seek to profit by exploiting some of the most vulnerable members of our communities,”said Assistant Attorney General Caldwell. “This is a transnational problem, and demonstrates that modern criminals target Americans both from inside our borders and from abroad. Only by working tirelessly to gather evidence, build cases and working closely with foreign law enforcement partners to ensure there are no safe havens can we effectively address these threats.”
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world that no one is safe from prosecution for participating in such pervasive transnational fraud schemes,” said U.S. Attorney Magidson. “We are extremely vigilant when the names of U.S. government agencies are used to perpetuate fraud for the purpose of victimizing so many innocent American citizens.”
“Today’s actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud,” said Executive Associate Director Edge. “To potential victims, our message today is simple: U.S. government agencies do not make these types of calls, and if you receive one, contact law enforcement to report the suspected scam before you make a payment.”
“All agencies involved in today’s announcement are to be congratulated and commended on their outstanding efforts,” said Inspector General George. “This indictment is the result of countless hours of solid investigative work and excellent cross-governmental collaboration concerning massive amounts of fraud that individuals have allegedly perpetrated on the American people.”
“This multi-agency, three year investigation illustrates the ability of federal, state and local agencies to successfully leverage resources, communicate and work together to achieve justice,” said Inspector General Roth. “We commend the victims for overcoming any possible embarrassment or fear and coming forward and report this to the authorities.”
The indictment was returned by a grand jury in the U.S. District Court for the Southern District of Texas on Oct. 19, 2016, and charges the defendants with conspiracy to commit identity theft, false personation of an officer of the United States, wire fraud and money laundering. One of the defendants is separately charged with passport fraud.
The indictment alleges that the defendants were involved in a sophisticated fraudulent scheme organized by conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators allegedly called potential victims while impersonating officials from the Internal Revenue Service (IRS) or U.S. Citizenship and Immigration Services. According to the indictment, the call center operators then threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government. If the victims agreed to pay, the call centers would then immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible by purchasing prepaid debit cards or through wire transfers. The prepaid debit cards were often registered using misappropriated personal identifying information of thousands of identity theft victims, and the wire transfers were directed by the criminal associates using fake names and fraudulent identifications.
The co-conspirators allegedly used “hawalas,” in which money is transferred internationally outside of the formal banking system, to direct the extorted funds to accounts belonging to U.S.-based individuals. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves.
According to the indictment, one of the call centers extorted $12,300 from an 85-year-old victim from San Diego, California, after threatening her with arrest if she did not pay fictitious tax violations. On the same day that she was extorted, one of the U.S.-based defendants allegedly used a reloadable debit card funded with the victim’s money to purchase money orders in Frisco, Texas.
The indictment also alleges that the defendants extorted $136,000 from a victim in Hayward, California, who they called multiple times over a period of 20 days, fraudulently purporting to be IRS agents and demanding payment for alleged tax violations. The victim was then directed to purchase 276 stored value cards which the defendants then transferred to reloadable debit cards. Some of the victim’s money ended up on cards which were activated using stolen personal identifying information from U.S.- based victims.
The conspirators would at times allegedly use alternative fraudulent schemes in which the call center operators would offer the victims small short-term loans or advise them that they were eligible for grants. The indictment alleges that the conspirators would then request a good-faith deposit to show the victims’ ability to pay back the loan, or payment of a fee to process the grant. The victims of the alleged scam never received any money after making the requested payment.
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
DHS OIG, HSI and TIGTA led the investigation. The Ft. Bend, Texas, County Sheriff’s Department; the Hoffman Estates, Illinois, Police Department; the Leonia, New Jersey, Police Department; the Naperville, Illinois, Police Department; the San Diego County District Attorney’s Office Family Protection/Elder Abuse Unit; the U.S. Secret Service; U.S. Small Business Administration Office of Inspector General; IOC-2; INTERPOL Washington; and the U.S. Attorney’s Offices of the Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey provided significant support in this case. The Federal Communications Commission’s Enforcement Bureau provided assistance in TIGTA’s investigation.
Senior Trial Attorney Hope Olds and Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section, Trial Attorney Robert Stapleton of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys S. Mark McIntyre and Craig Feazel of the Southern District of Texas are prosecuting the case.
A Department of Justice website has been established to provide information about the case to already identified and potential victims, and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the FTC via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
Dozens of Individuals Indicted in Multimillion-Dollar Indian Call Center Scam Targeting U.S. VictimsRead the Press Release
HOUSTON - Today, an indictment was unsealed charging a total of 61 individuals and entities for their alleged involvement in a transnational criminal organization that has victimized tens of thousands of persons in the United States through fraudulent schemes that have resulted in hundreds of millions of dollars in losses. In connection with the scheme, 20 individuals were arrested today in the United States and 32 individuals and five call centers in India were charged for their alleged involvement. An additional U.S.-based defendant is currently in the custody of immigration authorities.
U.S. Attorney Kenneth Magidson, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS OIG) made the announcement today.
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world that no one is safe from prosecution for participating in such pervasive transnational fraud schemes,” said Magidson. “We are extremely vigilant when the names of U.S. government agencies are used to perpetuate fraud for the purpose of victimizing so many innocent American citizens.”
“The indictment we unsealed and the arrests we made today demonstrate the Justice Department’s commitment to identifying and prosecuting the individuals behind these impersonation and telefraud schemes, who seek to profit by exploiting some of the most vulnerable members of our communities,” said Caldwell. “This is a transnational problem, and demonstrates that modern criminals target Americans both from inside our borders and from abroad. Only by working tirelessly to gather evidence, build cases, and working closely with foreign law enforcement partners to ensure there are no safe havens can we effectively address these threats.”
“Today’s actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud,” said Edge. “To potential victims, our message today is simple: U.S. government agencies do not make these types of calls, and if you receive one, contact law enforcement to report the suspected scam before you make a payment.”
“All agencies involved in today’s announcement are to be congratulated and commended on their outstanding efforts,” said George. “This indictment is the result of countless hours of solid investigative work and excellent cross-governmental collaboration concerning massive amounts of fraud that individuals have allegedly perpetrated on the American people.”
“This multi-agency, three year investigation illustrates the ability of federal, state and local agencies to successfully leverage resources, communicate and work together to achieve justice,” said Roth. “We commend the victims for overcoming any possible embarrassment or fear and coming forward and report this to the authorities.”
The indictment was returned by a grand jury in the U.S. District Court for the Southern District of Texas on Oct. 19, 2016, and charges the defendants with conspiracy to commit identity theft, false personation of an officer of the United States, wire fraud and money laundering. One of the defendants is separately charged with passport fraud.
The indictment alleges that the defendants were involved in a sophisticated fraudulent scheme organized by conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators allegedly called potential victims while impersonating officials from the Internal Revenue Service (IRS) or U.S. Citizenship and Immigration Services. According to the indictment, the call center operators then threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government. If the victims agreed to pay, the call centers would then immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible by purchasing prepaid debit cards or through wire transfers. The prepaid debit cards were often registered using misappropriated personal identifying information of thousands of identity theft victims, and the wire transfers were directed by the criminal associates using fake names and fraudulent identifications.
The co-conspirators allegedly used “hawalas,” in which money is transferred internationally outside of the formal banking system, to direct the extorted funds to accounts belonging to U.S.-based individuals. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves.
According to the indictment, one of the call centers extorted $12,300 from an 85-year-old victim from San Diego, California, after threatening her with arrest if she did not pay fictitious tax violations. On the same day that she was extorted, one of the U.S.-based defendants allegedly used a reloadable debit card funded with the victim’s money to purchase money orders in Frisco.
The indictment also alleges that the defendants extorted $136,000 from a victim in Hayward, California, who they called multiple times over a period of 20 days, fraudulently purporting to be IRS agents and demanding payment for alleged tax violations. The victim was then directed to purchase 276 stored value cards which the defendants then transferred to reloadable debit cards. Some of the victim’s money ended up on cards which were activated using stolen personal identifying information from U.S.- based victims.
The conspirators would at times allegedly use alternative fraudulent schemes in which the call center operators would offer the victims small short-term loans or advise them that they were eligible for grants. The indictment alleges that the conspirators would then request a good-faith deposit to show the victims’ ability to pay back the loan, or payment of a fee to process the grant. The victims of the alleged scam never received any money after making the requested payment.
DHS OIG, HSI and TIGTA led the investigation. The Ft. Bend, Texas, County Sheriff’s Department; the Hoffman Estates, Illinois, Police Department; the Leonia, New Jersey, Police Department; the Naperville, Illinois, Police Department; the San Diego County District Attorney’s Office Family Protection/Elder Abuse Unit; the U.S. Secret Service; U.S. Small Business Administration Office of Inspector General; IOC-2; INTERPOL Washington; and the U.S. Attorney’s Offices of the Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey provided significant support in this case. The Federal Communications Commission’s Enforcement Bureau provided assistance in TIGTA’s investigation.
Assistant U.S. Attorneys S. Mark McIntyre and Craig Feazel are prosecuting the case along with Senior Trial Attorney Hope Olds and Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Trial Attorney Robert Stapleton of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
A Department of Justice website has been established to provide information about the case to already identified and potential victims, and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the FTC via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Superseding IndictmentUS Attorney Magidson Names SDTX Election Officer for Upcoming ElectionRead the Press Release
HOUSTON - Assistant United States Attorney (AUSA) Ruben Perez will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day Program for the upcoming Nov. 8, 2016, general elections, announced U.S. Attorney Kenneth Magidson. AUSA Perez has been appointed to serve as the District Election Officer (DEO) for the Southern District of Texas, and in that capacity is responsible for overseeing the district’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department headquarters in Washington.
“Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud,” said Magidson. “The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on Nov. 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Magidson stated that AUSA/DEO Perez will be on duty in this district until at least 7:00 p.m. He can be reached by the public at 713-567-9344.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The Houston FBI field office can be reached by the public at 713-693-5000. For those in the South Texas area, the main number for the San Antonio FBI office is 210-225-6741.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC, by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
U.S. Attorney Magidson also said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office, the FBI or the Civil Rights Division.”
Sex Trafficker Heads to PrisonRead the Press Release
HOUSTON – A 45-year-old Honduran woman has been ordered to federal prison following her conviction of conspiracy to commit sex trafficking, announced U.S. Attorney Kenneth Magidson. Maria E. Gonzales Munoz aka “Merci,” co-owned numerous brothels, including Cocodrillos, that posed as bars in and around the Houston area which facilitated commercial sex. She pleaded guilty Jan. 21, 2016.
Today, U.S. District Judge Nancy Atlas, who accepted the guilty plea, handed Munoz a 151-month sentence. She was further ordered to pay a total of $2145 in restitution will be ordered to register as a sex offender.
The undercover operation revealed Munoz offered a female to as a prostitute at Cocodrillos. Even though the young female reported to be underage and had illegally entered the United States, Munoz still said she could work at Cocodrillos and even offered to provide living arrangements at her residence. Gonzales also informed the female that she could help her appear older through use of make-up and help her obtain a fraudulent identification card.
Munoz will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the filing of criminal charges was the result of an investigation conducted by members of the Human Trafficking Rescue Alliance (HTRA) in Houston, which includes the FBI, Harris County Sheriff’s Office, Immigration and Customs-Enforcement - Homeland Security Investigations, Texas Alcoholic and Beverage Commission, Department of State, Texas Department of Public Safety and the Houston Police Department.
Assistant United States Attorney Ruben R. Perez is prosecuting the case.
Houston Man Sentenced in Large-Scale Interstate Transportation of Stolen Goods OperationRead the Press Release
HOUSTON – A 37-year-old legal permanent resident from Lebanon who resides in Houston has been ordered to federal prison following his conviction of conspiracy to traffic in the interstate transportation of stolen goods, announced U.S. Attorney Kenneth Magidson. Wassim Hassan Elsaleh aka Sam Saleh pleaded guilty Feb. 11, 2016.
Today, U.S. District Judge Keith Ellison ordered him to serve 24 months in federal prison and must pay a $10,000 fine. Others charged in relation to the case have all also pleaded guilty and were sentenced previously.
Elsaleh was a “fence” in the Houston area that received stolen merchandise from “boosters” and sold to various businesses. A booster is a criminal who steals goods and merchandise not for personal use but for re-sale to a fence for a fraction of its retail value, while a fence is a person who receives stolen goods and merchandise from boosters and others. The fence then re-sells the stolen goods and merchandise to third parties for a profit. The goods often include, but are not limited to, over-the-counter medication (OTC) and infant formulas from retail stores. OTC is medicine that does not require a prescription and includes non-prescription personal hygiene products that can be readily sold in a secondary market as well as items such as Prilosec, Zantac, Claritin and Mucinex.
The conspiracy ran from on or about April 10, 2012, through May 31, 2014. During this time, the boosters would steal OTC and infant formulas from pharmacies and retail stores, such as Walmart, Walgreens, CVS, HEB and Kroger, among others. One or more conspirators would buy the stolen merchandise from several traveling booster crews that usually consisted of undocumented aliens from Mexico, Central and South America and then attempt to profit from their sale of stolen merchandise to others. Boosters were paid in cash in order to aid in concealing the nature of the alleged criminal activity.
Elsaleh was the owner and registered agent of Payless Wholesale and Discount Wholesale LLC and Titanium Trading LLC, respectively located at 3612 Mangum#106 and 2121 Brittmoore Road #1800 in Houston. Elsaleh used the Mangum and Brittmoore locations as the warehouses for storing, repackaging and shipping the stolen goods received from the boosters.
Once Elsaleh received the OTC and stolen infant formula, co-conspirators would remove the retailers’ security labels markings and stickers to disguise the true origin of the infant formulas so it would be easier to sell and more profitable for the business. When the merchandise was received at the warehouses, Elsaleh directed employees to sort, repackage and ship stolen infant formulas out-of-state wholesalers. Elsaleh sold the merchandise to co-conspirators and directed the payment to be made via wire transfer to bank accounts.
If discovered by law enforcement, Elsaleh would shut down the current working warehouse and re-open it at another location. On Feb. 14, 2013, Payless Wholesale shut down operations and Titanium Trading later opened in December 2013.
The FBI, Houston Police Department-Major Offenders Division and the Harris County Sheriff’s Office conducted the investigation with the cooperation of CVS, Walgreens, Wal-Mart, Kroger, Mead Johnson and Abbott Nutrition. Assistant U.S. Attorneys Suzanne Elmilady and Joe Magliolo prosecuted the case.
Katy Couple Enters Guilty Pleas in Nanny CaseRead the Press Release
HOUSTON – The Katy couple charged in relation to the enslavement of their nanny have been convicted, announced U.S. Attorney Kenneth Magidson. Sandra Nsobundu, 49, entered a plea to unlawful conduct with respect to documents in furtherance of forced labor, while her husband - Chudy Nsobundu, 57, pleaded to visa fraud.
According to testimony in a court hearing today, from on or about Sept. 29, 2013, and Oct. 10, 2015, the couple maintained a Nigerian woman to serve as a housemaid and nanny at their residence in Katy.
The immigration laws and regulations of the U.S. require citizens of certain foreign countries who seek admission to the U.S. to obtain a visa prior to entry. The application must contain true and accurate information and is submitted under oath. The defendants knowingly caused a false visa application for the victim to be submitted to the Department of State with numerous pieces of false information. These included the woman’s incorrect date of birth identifying her as 20 years older than she was, a false statement that she was married when she was not, a false statement indicating the purpose of travel was to attend a niece’s graduation and a written letter falsely stating that Chudy Nsobundu was her brother. Chudy Nsobundu knowingly made multiple material misrepresentations under oath on the visa application to increase the chances that the victim’s visa application would be accepted and to hide the fact that she would be working for the Nsobundu family as a housemaid and nanny under conditions not in compliance with U.S. labor laws. He submitted the application under oath, knowing the application contained these material misrepresentations.
Sandra Nsobundu aided and abetted in the submission of the fraudulently filed visa application her husband had submitted. In September 2013, Sandra Nsobundu took the woman to the U.S. Embassy in Lagos, Nigeria, to obtain her visa. Sandra Nsobundu gave her a letter to provide to the consular officials which indicated she did not speak English well and that she would be traveling to the U.S. for her niece’s graduation. Sandra Nsobundu gave the woman a picture of Chudy Nsobundu and the family and told her to tell the officials that he was her brother. The victim is not a relative of Chudy Nsobundu and is not married. The spouse listed on her visa application is the Nsobundus’ driver in Nigeria.
After obtaining the woman’s visa, the Nsobundus paid to transport the victim from Nigeria to the U.S. Once here, Sandra Nsobundu took the victim’s passport and copies of her bank statement. The defendants then concealed, removed and possessed the woman’s passport and visa with the intent to violate the forced labor statute. As part of the plea today, they intended to prevent and restrict, without lawful authority, the victim’s liberty and ability to move and travel in order to maintain her labor and services.
The couple knowingly unlawfully obtained the labor and services of this woman from on or about Sept. 29, 2013, to Oct. 10, 2015. Throughout the period she worked for defendants, the victim was not permitted to have her passport or visa. The Nsobundus knowingly enacted a scheme intended to cause the woman to believe that failure to perform the labor and services would result in serious harm to her. They also threatened abuse of law and the legal process. The scheme included not paying the victim and restricting her movement to the defendants’ residence or two short walks per day around the block with the children. They also frequently yelled at, scolded and berated the victim for moving too slowly or failing to care for the children in the manner they wanted. In addition, the Nsobundus threatened to send the woman back to Nigeria if she did not comply with their labor demands.
The U.S. Attorney’s Office is seeking restitution in the amount of $129,108 to the victim alleging the defendants owe that amount in back wages. The Nsobundus had previously agreed to pay the victim 20,000 Nigerian nairas-$100 U.S. per month. The Nsobundus never paid the victim for any of her work here in the United States.
The victim was rescued Oct. 10, 2015, after more than two years with Nsobundus in the U.S. following a tip to the National Human Trafficking Resource Center.
Sandra Nsobundu faces a maximum of five years in prison, while her husband faces up to 10 years imprisonment. Both could also face up to a $250,000 fine. They were permitted to remain on bond pending sentencing which has been set for Jan. 4, 2017.
Members of the Human Trafficking Rescue Alliance conducted the investigation, which included Immigration and Customs Enforcement’s Homeland Security Investigations, Fort Bend County Sheriff’s Office, Department of State-Diplomatic Security Service and the Department of Labor-Wage and Hour Division. Assistant U.S. Attorneys Ruben R. Perez and Julie N. Searle are prosecuting the case.
CEO, CFO and VP Convicted in Nationwide Worker's Compensation Fraud SchemeRead the Press Release
HOUSTON - Several officials with Team Work Ready (TWR) have been convicted of conspiracy, health care fraud, wire fraud and money laundering, announced U.S. Attorney Kenneth Magidson. TWR had clinics in five states including Federal Work Ready in Houston, Alamo Work Ready in San Antonio and Bayou Work Ready in New Orleans, Louisiana.
The federal jury deliberated for 14 hours following a 16-day trial before convicting CEO Jeffrey Eugene Rose Sr., 54, chief financial officer Pamela Annette Rose, 55, along with the clinic’s vice president of operations Frankie Lee Sanders, 55. The verdicts were returned late yesterday.
Today, the same jury heard evidence on forfeiture matters and returned a special verdict forfeiting $220,807, an annuity contract and real property.
During the criminal trial, the jury heard testimony from 38 witnesses including former patients of TWR clinics, former employees of TWR clinics, various experts and special agents from the U.S. Postal Service - Office of Inspector General (USPS-OIG) and IRS - Criminal Investigation (CI). According to testimony, TWR submitted approximately $9.6 million in false and fraudulent claims from four of its clinics for physical therapy services that were not provided. The claims were submitted under the Federal Employees Compensation Act (FECA) health care benefit program which is administered by the Department of Labor - Office of Worker’s Compensation Program (DOL-OWCP).
DOL-OWCP's chief fiscal officer explained to the jury at the start of the trial that FECA does not pay for professional services performed by unlicensed aides which is why DOL-OWCP requires the enrollment of all licensed professionals providing services to injured federal employees, including copies of professional licenses. He testified that the FECA program only considers chiropractors as physicians when they treat spinal subluxation. Otherwise, chiropractors are considered equivalent to physical therapists and may provide physical therapy under the direction of, and as prescribed by, a medical doctor. Specifically, in relation to this case, the DOL-OWCP would not have paid millions of dollars for the physical therapy services billed by TWR if they had known that the services were not provided as described in the claims submitted to DOL-OWCP.
The claims TWR submitted falsely and fraudulently described skilled one-on-one physical therapy services provided by a licensed chiropractor. Patients from four TWR clinics testified that they did not receive the one-on-one physical therapy services paid for by DOL-OWCP under FECA. Rather, they stated that they exercised independently on treadmills, bicycles and elliptical machines with the Nintendo Wii game and with other pieces of exercise equipment. The San Antonio clinic also had an electronic massage chair for patients. One patient from Houston testified that she felt that some of the exercises she was asked to do had nothing to do with her carpal tunnel wrist injury, specifically the treadmill. Another patient from the San Antonio clinic testified that unlicensed staff told him to do exercises on both of his arms, although he only injured his left elbow and to use the electronic massage chair and the treadmill for his injury.
The jury also heard testimony from 11 former TWR employees, including unlicensed therapy technicians from the Houston and New Orleans clinics, a case manager and two licensed chiropractors. The employees reported 30 – 60 patients a day at the Houston clinic and said there were times when they did not know what the patients were doing in the main treatment area because they were busy in the back doing massages, electrical stimulation treatments and ultrasound treatments. The employees testified that they did not perform all the one-on-one services documented on patient treatment notes and admitted they frequently completed the patient treatment notes at the end of the day by following a “cheat sheet” and asking each other and the patients what activities had been done. Patients at the New Orleans clinic were instructed to go back to the therapy room to begin doing exercises by themselves. Various individuals described the treatment as “like a gym.”
The jury also heard from two federal agents who went undercover as “injured federal employees” at the Houston and New Orleans clinics. The jury watched portions of video recordings covertly made by the undercover agents that showed patients independently exercising and receiving care from unlicensed and obviously untrained staff.
One of the licensed chiropractors testified that she began covertly recording meetings with the defendants in December 2012. The jury heard several of the recordings, including one in which the defendants tried to coerce the chiropractor to order medically unnecessary treatment so TWR could make a profit.
TWR's former chief operating officer (COO) testified about a phone call he received from CFO Rose on July 11, 2013 - the day federal agents executed search warrants at TWR clinics in Houston and New Orleans. The COO said CFO Rose instructed him to meet her and CEO Rose at a local Chase bank where they moved money out of the TWR accounts to hide it from the federal government. An IRS-CI special agent traced the $700,000 transferred out of TWR bank accounts, into a transportation company account owned by Mr. and Mrs. Rose and then out of that account via a cashier’s check in the name of two “shell” businesses not associated with TWR but also owned by Mr. and Mrs. Rose.
Sanders and Jeffrey Rose have been in custody where they will remain pending sentencing, set for January 2017. Pamela Rose was permitted to remain on bond.
The possible punishment for a conviction of conspiracy to commit health care fraud, health care fraud and engaging in a monetary transaction in criminally derived property is up to 10 years in federal prison and a $250,000 fine. They also face a maximum of 20 years in prison for the wire fraud and money laundering convictions.
This case was the result of a joint investigation with the USPS - OIG, DOL - OIG, IRS - CI, Department of Veterans Affairs - OIG, and Department of Homeland Security - OIG. Assistant United States Attorneys (AUSA) Julie Redlinger and Daniel Rodriguez prosecuted the case. AUSA Kristine Rollinson handled the forfeiture matters.