Southern District of Texas
Press releases recorded for this federal judicial district.
McAllen Area Doctor’s Assistant Convicted in Illegal Kickback SchemeRead the Press Release
McALLEN, Texas ‐ Argentina Cavazos, 57, has pleaded guilty to illegal remunerations for her role in a scheme to solicit and obtain illegal kickbacks in exchange for patient referrals, announced U.S. Attorney Kenneth Magidson.
Cavazos, a doctor’s assistant for a McAllen area physician, admitted to engaging in a kickback scheme by exchanging referrals of Medicare beneficiaries for money. From Nov. 15, 2010, to July 9, 2012, Cavazos received 11 illegal kickback checks in exchange for referrals of Medicare beneficiaries, whose information was used by home health care companies to bill Medicare. Cavazos admitted to using her position as a doctor’s assistant to gain access to patient information. Cavazos provided the patient information to another person who then compensated Cavazos with checks of various amounts.
U.S. District Judge Randy Crane accepted the plea today and has set sentencing for Oct. 15, 2015. At that time, Cavazos faces up to five years in federal prison and a possible $25,000 fine.
The investigation leading to the charges was conducted by the Department of Health and Human Services‐Office of Inspector General and the FBI. Assistant U.S. Attorney Michael Day is prosecuting the case.
Houston Woman Arrested for Adoption FraudRead the Press Release
HOUSTON – The owner of a child placement agency in Houston has been charged and arrested in a four-count indictment alleging an adoption fraud scheme, announced United States Attorney Kenneth Magidson. Simone Swenson, 40, of Houston, owned and operated Sans Pareil Center for Children and Family Services LLC, which was licensed to operate as both a foster care and child placement agency.
The indictment was returned under seal July 29, 2015, and unsealed today upon her arrest. She is expected to make her initial appearance before a U.S. magistrate judge at 10:00 a.m. Monday, Aug. 3, 2015.
Sans Pareil catered to adoptive families that desired to participate in domestic private (non-CPS) adoption program. According to the allegations in the indictment, from on or about January 2013 to on or about January 2014, Swenson defrauded numerous prospective adoptive families with the same birth mother, a scheme known as double matching. As part of the scheme, she allegedly obtained money and property by means or materially false and fraudulent pretenses, representations and promises.
The indictment alleges Swenson double matched birth mothers who expected to have only one baby to multiple adoptive families. Once money was wired and/or mailed into her account from those families, the charges allege that she would find a way, through lies and misrepresentations, to get out of the agreements.
According to the allegations, Swenson would contact prospective families about birth mothers but would not proceed until agency fees and expenses were paid up front. Swenson would allegedly make promises for a successful adoption. In reliance upon those representations, the indictment alleges prospective adoptive families hired attorneys and other adoption agencies, purchased airline tickets, booked hotel rooms, prepared and purchased items for the expected child’s nursery and transportation and incurred other expenses related to the prospective adoption.
The indictment alleges Swenson would and did charge fees without explanation, and the fees did not apply equally to all adoptive families as required by regulations.
According to the indictment, Swenson was always available and responsive to prospective adoptive families prior to receiving agency fees. However, once she received monies from adoptive families, she would become unavailable and would not return phone calls for long periods of time, if at all, according to the indictment. When she did have contact with the adoptive families, she would allegedly be brief, inconsiderate and provide vague information regarding the birth mothers and their delivery status.
In addition, Swenson rarely provided invoices or receipts to the adoptive families for their paid fees and expenses, according to the allegations. When adoptive families would ask Swenson for proof of payment, Swenson allegedly did not respond unless there was money to be collected from them.
According to the indictment, Swenson illegally collected $111,000 as part of the scheme.
In August 2012, Sans Pareil’s foster care license was revoked after regulators discovered money intended for foster families was used to pay mortgage payments and for visits to the nail salon.
Swenson is charged with two counts of mail fraud and two counts of mail fraud, each of which carries a possible 20-year prison term as well as a $250,00 maximum fine, upon conviction.
The investigation leading to the arrest was conducted by the FBI. Assistant U.S. Attorney Tina Ansari is prosecuting this case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.United Kingdom Man Sentenced to Prison for Two Separate Fraud ConspiraciesRead the Press Release
HOUSTON - Marc T. Duchesne, 53, of London, was sentenced today to 97 months in federal prison on federal charges stemming from separate schemes involving financial fraud in Texas and the District of Columbia, announced Kenneth Magidson, U.S. Attorney for the Southern District of Texas, and Vincent H. Cohen Jr., Acting U.S. Attorney for the District of Columbia.
Duchesne pleaded guilty May 11, 2015, to one count of conspiracy to commit wire fraud in the in Texas case and one count of conspiracy to commit securities fraud and wire fraud in the unrelated case that had originated District of Columbia. Duchesne entered both pleas before the Honorable Reggie B. Walton in the U.S. District Court for the District of Columbia.
The plea, which was contingent upon the court’s approval, called for a prison sentence of 91 to 97 months. Judge Walton accepted the plea and sentenced Duchesne accordingly. In addition, as part of the plea agreement, Duchesne is to pay a total of $4,543,261 ($2,455,531 and $2,087,730 in the Texas and District of Columbia cases, respectively).
According to the government’s evidence in the Texas case, Duchesne and his co-conspirators engaged in a scheme from 2000 to 2005 that involved the selling of fraudulent liability insurance policies to apartment complexes, condominium associations, bars, restaurants and other businesses throughout the United States and Caribbean. One company that purchased the insurance was Shoreline Cruises Inc. which operated a 40-foot tour boat called the Ethan Allen on Lake George, N.Y. The tour boat operator discovered its insurance policy was fictitious after the Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 elderly tourists. The total loss was $2,455,531.
Four others have also been convicted in that case. Christopher Purser pleaded guilty to conspiracy to commit wire fraud, while Edmund Benton, Malchus Irvin Boncamper and Robert Steve Mills pleaded to conspiracy to launder money. Purser received a sentence of 188 months, while Boncamper is serving a 97-month-term. Benton and Mills were both ordered to serve 120 months of federal imprisonment.
In the District of Columbia case, Duchesne engaged in a conspiracy from May 2002 through October 2002 to defraud investors by fraudulently creating Nationwide Capital Corporation (publicly traded as NCCN), and then artificially driving up its stock price. Unbeknownst to the U.S. Securities and Exchange Commission (SEC) or investors, Duchesne and his co-conspirators owned and controlled vast amounts of the stock. They employed tactics such as bid manipulation, false SEC filings and false press releases to effectuate their scheme. The National Association of Securities Dealers estimated losses to investors to be in excess of $2 million.
The case in Texas was investigated by Internal Revenue Service - Criminal Investigation with assistance from Homeland Security Investigations and the Texas, New York and California Departments of Insurance. During this four-year investigation, the U.S. government also received extensive and valuable assistance from the governments of St. Kitts and Nevis and also St. Vincent and the Grenadines. Investigators also received valuable assistance from the governments of The Bahamas, Nicaragua, The Philippines and Australia. Assistant U.S. Attorneys John Lewis and Belinda Beek prosecuted the case.
The case in the District of Columbia was investigated by the FBI’s Washington Field Office and the SEC. Assistant U.S. Attorneys Mervin A. Bourne Jr. and Lionel André prosecuted that case. Assistance was provided by Paralegal Specialists Corinne Kleinman and Krishawn Graham.
Thirteen U.S. Soldiers Sentenced for Roles in Fraudulent Military Recruiting Bonus SchemeRead the Press Release
HOUSTON - Thirteen members of the U.S. National Guard Bureau have received their sentences for their roles in wide-ranging bribery and fraud schemes that caused more than $170,000 in losses to the United States. Seven of those members were sentenced this past week in Houston.
U.S. Attorney Kenneth Magidson of the Southern District of Texas and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement.
- Jammie Martin, 38, of Katy, and Michelle Davis, 34, of Houston, were convicted in February of this year after a five-day trial of conspiracy, bribery, wire fraud and aggravated identity theft. Martin was sentenced to serve 102 months in prison, while Davis received 57 months.
- Vanessa Phillips, 37, of Houston, pleaded guilty to one count of conspiracy and one count of bribery and was sentenced to three years of probation.
- Zaunmine “Orlando” Duncan, 39, of Douglasville, Georgia, pleaded guilty to one count of conspiracy, one count of bribery and one count of aggravated identity theft. He was sentenced to serve 70 months in prison.
- Annika Chambers, 29, of Houston, and Lashae Hawkins, 29, of San Antonio, pleaded guilty to one count of conspiracy and one count of bribery. Chambers was sentenced to serve six months in prison. Hawkins received one year and one day in prison.
- Christopher Renfro, 27, of Houston, pleaded guilty to one count of conspiracy, one count of bribery, one count of aggravated identity theft and two counts of wire fraud. He was sentenced to serve 36 months in prison.
In June, six other members of the National Guard were sentenced for their roles in the scheme.
- Michael Rambaran, 52, of Pearland, pleaded guilty to one count of conspiracy, one count of bribery and one count of aggravated identity theft. He was sentenced to serve 60 months in prison.
- Edia Antoine, 29, and Ernest A. Millien III, 51, both of Houston, and Melanie Moraida, 35, of Pearland, pleaded guilty to one count of conspiracy and one count of bribery. Each received 12 months and one day in prison.
- Elisha Ceja, 28, of Barboursville, West Virginia, and Kimberly Hartgraves, 30, of League City, pleaded guilty to one count of conspiracy and one count of bribery. Ceja was sentenced to serve nine months in prison and Hartgraves received probation.
U.S. District Judge Lee H. Rosenthal in the Southern District of Texas imposed the prison terms and also ordered all 13 defendants to pay restitution. One remaining defendant, Danielle Applin 29, of Harker Heights, who previously pleaded guilty to one count of conspiracy and one count of bribery, is scheduled to be sentenced on Sept. 2, 2015, in Houston.
In approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer the Guard Recruiting Assistance Program (G-RAP). Through this program, a participating soldier, known as a recruiting assistant, could receive bonus payments for referring another individual to join the National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, recruiting assistants were required to create online accounts.
According to the evidence presented at trial and in connection with various guilty pleas, Phillips and Davis, both of whom participated in the G-RAP as recruiting assistants, conspired with Martin, a recruiter, to defraud the program by falsely claiming that they were responsible for referring potential soldiers to join the National Guard. The trial evidence showed that Martin used his position to obtain the names and Social Security numbers of potential soldiers which he provided to recruiting assistants so that they could use the information to obtain fraudulent recruiting referral bonuses. The evidence at trial showed that, in exchange for the information, Martin, who organized and led the scheme, personally received approximately $15,000 in payments from the recruiting assistants. This scheme resulted in more than $30,000 in losses to the National Guard Bureau.
In a separate scheme that resulted in an additional $70,000 in losses, recruiting assistants Antoine, Millien, Moraida and Renfro admitted to paying Rambaran, a recruiter who organized and led the scheme, for the personal information of potential soldiers. They then used that information to obtain fraudulent bonuses by falsely claiming they referred those individuals to join the National Guard. Rambaran admitted that, in exchange for the recruit information, he personally received a total of approximately $29,000 in payments from the recruiting assistants.
In connection with his guilty plea in a scheme he organized and led, Duncan, a recruiter, admitted he personally received approximately $24,000 in payments from recruiting assistants in exchange for personal information of potential soldiers. Those recruiting assistants – Ceja, Chambers, Hartgraves and Hawkins – admitted to paying Duncan for the information and using it to obtain fraudulent bonuses by falsely claiming they referred those individuals to join the National Guard. This scheme resulted in another $70,000 in losses to the National Guard Bureau.
The cases were investigated by the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. These cases are being prosecuted by Assistant U.S. Attorney John Pearson of the Southern District of Texas and Trial Attorneys Sean F. Mulryne, Heidi Boutros Gesch and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section.
- Jammie Martin, 38, of Katy, and Michelle Davis, 34, of Houston, were convicted in February of this year after a five-day trial of conspiracy, bribery, wire fraud and aggravated identity theft. Martin was sentenced to serve 102 months in prison, while Davis received 57 months.
Pair Heads to Federal Prison for Importing, Trafficking MethamphetamineRead the Press Release
LAREDO, Texas - A Laredoan and a Mexican national have been ordered to federal prison following their pleas of guilty to possession with intent to distribute nearly 50 pounds of methamphetamine, announced U.S. Attorney Kenneth Magidson.
Gilberto Jorge Rodriguez, 48, of Laredo, and Andres Villarreal-Parades, 28, of Nuevo Laredo, Mexico, pleaded guilty Dec. 15, 2015, and April 13, 2015, respectively.
Today, U.S. District Judge Marina Garcia Marmolejo, who accepted both pleas, ordered Villarreal-Parades to serve a total of 168 months in federal prison and is expected to face deportation proceedings immediately thereafter. Rodriguez was sentenced to 78 months to be followed by three years of supervised release.
On July 28, 2014, Rodriguez was arrested following a routine traffic stop in Freer when a narcotics canine alerted to the presence of drugs in the trunk of his car. Law enforcement officers then searched the vehicle and found eight bundles containing 20.7 kilograms of methamphetamine hidden in the spare tire.
During today’s hearing, Judge Marmolejo heard evidence demonstrating that Villareal-Parades had recruited Rodriguez on at least three occasions to deliver methamphetamine that he had hidden in spare tires to various cities in Texas. After each trip to deliver the drugs, Rodriguez would return to Laredo and deliver the proceeds from the methamphetamine to Villareal-Paredes, at which time he paid Rodriguez $10,000.
The charges were the result of an investigation conducted by Homeland Security Investigations. Assistant U.S. Attorneys Mike Eaton and Sanjeev Bhasker prosecuted the case.
Corpus Christi Man Pleads Guilty to Distributing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – James Parrott, 31, of Corpus Christi, has pleaded guilty to distribution of child pornography, announced U.S. Attorney Kenneth Magidson.
The court heard today that detectives with the Corpus Christi Police Department, while using peer-to-peer software, were able to successfully download various files containing child pornography from an IP address that was associated with Parrott. As a result of this information, the FBI office in Corpus Christi was contacted to assist in the investigation.
In January 2015, agents executed a search warrant at Parrott’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 1,000 images and more than 120 videos of child pornography. Parrott admitted to using the peer-to-peer software to download child pornography.
Senior U.S. District Judge John D. Rainey accepted the guilty plea today and set sentencing for Oct. 19, 2015. At that time, Parrott faces a minimum of five and up to 20 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Hernandez 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.
Parrott was arrested on the federal charges in June 2015 and has been in custody since that time where he will remain pending his sentencing hearing.
The FBI investigated with the assistance of the Corpus Christi 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."
McAllen Man Sentenced for Using Government Vehicle to Deliver CocaineRead the Press Release
McALLEN, Texas ‐ Mario Guadalupe Saenz, 28, of McAllen, has been ordered to federal prison following his conviction of attempting to possess with intent to distribute approximately nine kilograms of cocaine, announced U.S. Attorney Kenneth Magidson. Saenz pleaded guilty Jan. 28, 2015.
Today, U.S. District Judge Randy Crane, who accepted the guilty plea, handed Saenz a 135-month sentence to be immediately followed by five years of supervised release. The sentence was enhanced because the defendant possessed a dangerous weapon in the course of committing the offense and because he used Facebook to advertise he could use a vehicle with U.S. government license plates to bring drugs north of the border fence.
On Oct. 9, 2014, Saenz was observed driving a white Dodge Ram registered to the U.S. Department of Agriculture (USDA). He drove through an opening in the border fence and retrieved a bag from the brush near the Rio Grande River in Hidalgo County. He then used the government vehicle to transport the bag to a business parking lot in McAllen where Saenz bragged to an undercover officer that he had waived at the Border Patrol agents during the transport.
Saenz was subsequently arrested as investigators discovered the bag contained approximately 9.39 kilograms of a suspected controlled substance, 1.1 kilograms of which tested positive for the properties of cocaine.
Saenz 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 charges was conducted by Homeland Security Investigations, USDA-Office of Inspector General and the McAllen Police Department. Assistant U.S. Attorney Kristen Rees prosecuted the case.
Telemarketer Sent to Federal Prison in Timeshare Resale FraudRead the Press Release
HOUSTON – The lead defendant in connection with a telemarketing fraud and money laundering scheme spanning nearly five years has been ordered to federal prison following his convictions of conspiracies to commit wire/mail/telemarketing fraud, announced U.S. Attorney Kenneth Magidson. James Assi Jariv, 64, of Las Vegas, Nevada, pleaded guilty May 18, 2015.
Today, U.S. District Judge Lynn H. Hughes ordered Jariv to serve a total of 120 months in federal prison to be immediately followed by three years of supervised release.
Jariv’s son Alexander, 28, his wife Jiwon, 36, his ex-wife Varda, 74, all of Las Vegas, and four others - Ronald Frank Muise, 53, his son Michael Derek Muise, 30, and Thresa Lloyd, 45, all also of Las Vegas, and Leon Avedikian, 46, of Los Angeles, California – have also been convicted for their roles in the scheme. With the exception of Varda Jariv, who was ordered to serve a five-year-term of probation and ordered to pay $439,911 in restitution, all are pending sentencing at later dates.
As a result of all the guilty pleas, the U.S. has recovered more than $2,250,000 in restitution for the nearly 1000 victims, many of whom are more than 55 years of age. Money judgments in both the civil forfeiture action and the criminal cases have been obtained to assist the government in recovering the balance of the nearly $5 million in restitution owed to the victims.
Between December 2007 and Feb. 24, 2012, the defendants victimized approximately 1000 people living in Canada and throughout the United States, including the Southern District of Texas.
The Jarivs and the others used a number of different named companies to conduct their telemarketing timeshare resale scheme in Houston, Las Vegas, Chicago and Los Angeles, which targeted timeshare owners throughout the United States and Canada. The timeshare owners were solicited to pay advance fees in exchange for the promise that The Jariv Companies had willing buyers for the timeshare properties or points. However, The Jariv Companies did not have buyers for the timeshare owners’ interests and did not market or sell the property.
The Jariv companies were registered in various states, including Texas, Nevada, California, Illinois and Washington and conducted business at multiple addresses in Houston, Las Vegas, Los Angeles, Chicago and Seattle.
The defendants used mailing addresses or “virtual office suites” in Las Vegas, Houston, Chicago and Seattle for receiving monies from timeshare owners via U.S. Mail or commercial interstate carriers like Fed Ex, all the while maintaining call center offices in Las Vegas, Houston, Chicago and the greater Los Angeles-area from which the defendants, using telephones and email, contacted and communicated with timeshare owners in a scheme to defraud the timeshare owners of money.
The defendants and their employees falsely represented that they had buyers for the timeshare owners interests (either timeshare weeks or points) and solicited fees, ranging from hundreds of dollars to several thousand dollars from each timeshare owner. The defendants falsely represented that the fees were fully refundable at closing and were used to secure the owners’ place in an acquisition involving corporate buyers, as well as to pay for legal expenses such as title searches, estoppel letters and closing costs.
However, closings were not scheduled, purported sales did not occur and no payments were made to timeshare owners for the sale of their property, nor have there been payments by corporations (or other buyers) to The Jariv companies for the purchase of timeshare properties.
The defendants and employees of the Jariv companies did not devote their resources to marketing the timeshare owners’ properties and simply pocketed the advanced fees paid by the timeshare owners with a sizeable percentage of the money used to pay telemarketers. Jariv and his family members kept the balance of advance fees to be deposited into bank accounts controlled by them and frequently transferred it to personal bank accounts or other unrelated corporate bank accounts.
Between Feb. 1, 2011, and Jan. 31, 2012, the defendants deposited into eight bank accounts approximately $6,925,137.04 in fraudulently-obtained timeshare owner funds. Some victims reversed the charges or withdrawals, leaving approximately $5,945,433.04 in victim funds in possession of, and subsequently transferred into, other accounts controlled by the defendants. The funds in the eight victim deposit accounts were all traceable to payments received from victims. In the earlier years of the conspiracy, agents identified another nearly $6 million in victim funds that were deposited in accounts controlled by the Jariv family.
Originally on bond, James Jariv was previously taken into custody following an arrest in January 2014 for an unrelated fraud scheme in Nevada. He will remain in federal custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The convictions are the result of an investigation conducted by the Houston Division of U.S. Secret Service (USSS) and Internal Revenue Service – Criminal Investigation with assistance by Las Vegas USSS, FBI and San Francisco Environmental Protection Agency. Assistant U.S. Attorneys Martha Minnis and Katherine Haden are prosecuting the case.
Final Defendants Head to Prison for Stolen Identity Refund Fraud SchemeRead the Press Release
HOUSTON – A 35-year-old Spring resident and a Brooklyn, New York, man have been sentenced for their roles in a scheme to use stolen identities and file fraudulent federal tax returns, announced U.S. Attorney Kenneth Magidson. Jason Maclaskey, of Spring, and Omar Butt, 31, a resident of Brooklyn, New York, previously pleaded guilty to the respective charges.
Today, U.S. District Court Judge Kenneth M. Hoyt today sentenced Maclaskey to five years for conspiracy to defraud the United States. He had also been convicted of possession of a stolen firearm for which he received another five years. The 10-year-sentence will be immediately followed by three years of supervised release. Butt was ordered to serve 40 months in prison. A third defendant - Heather Dale, 25, a resident of Grant, Alabama – was previously sentenced to 24 months. The court also ordered them to pay restitution in the amount of $314,868.
The defendants – led by Maclaskey – unlawfully obtained the names, dates of birth and Social Security numbers from 371 taxpayers and used this information to file false tax returns in their names in 2009. The defendants used this information to also set up fraudulent bank accounts at Inter National Bank and through NetSpend debit cards in these taxpayers’ names where the tax refunds would be directed. The defendants then withdrew this money using the NetSpend debit card at ATMs and by making purchases at various retail stores. Through this conspiracy, the defendants claimed a total of more than $1.4 million in false tax refunds, succeeded in withdrawing approximately more than $300,000 before the scheme was uncovered.
In addition, Maclaskey admitted he possessed 10 firearms and 2,000 rounds of ammunition on Nov. 1, 2011, when law enforcement agents executed a search warrant on his home in Spring. As part of his guilty plea, Maclaskey also admitted he knew one of these weapons was stolen.
Butt was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future. Maclaskey will remain in custody.
The investigation leading to the charges was conducted by Internal Revenue Service – Criminal Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Sharad S. Khandelwal is prosecuting the case.
Director of Operations of Retail Clothing Business Heads to Federal Prison for Failing to Pay Federal Tax WithholdingsRead the Press Release
HOUSTON - William John Shoemaker has been ordered to prison following his conviction on one count of willfully failing to truthfully account for and to pay federal tax withholdings to the Internal Revenue Service (IRS), announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of IRS - Criminal Investigation (CI). Shoemaker pleaded guilty March 2, 2015.
Today, U.S. District Court Judge Kenneth Hoyt ordered Shoemaker to serve #41months in prison and pay $1,830,324.78 in restitution to the IRS.
According to the plea agreement filed in the public record of the case, Shoemaker failed to truthfully account for and to pay over the trust fund portion of the employment taxes owed by AA Concepts Inc., for the fourth quarter of 2012.
The plea agreement also states that at all times relevant to the case, Shoemaker conducted a retail clothing business through AA Concepts Inc., which operated its retail clothing business under various trade names. Shoemaker held the title of director of operations of AA Concepts and had the duty to truthfully account for and to pay over the federal income taxes and FICA withheld from the wages of the employees of the corporation, according to court records.
According the plea agreement, Shoemaker also willfully failed to pay approximately $2.198 million in federal income tax withholdings and FICA withholdings for 22 quarters, from the third quarter of 2007 through the fourth quarter of 2012. The plea agreement also indicates that Shoemaker agreed that the relevant conduct, the intended tax loss, for purposes of sentencing is between $2.5 million and $7 million.
Shoemaker was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by IRS-CI and is being prosecuted by Assistant U.S. Attorney Charles J. Escher.
Austin Doctor Heads to Prison for Health Care FraudRead the Press Release
HOUSTON – Dr. Dennis B. Barson Jr., 42, has been ordered to federal prison following his convictions related to a conspiracy to defraud Medicare of $2.1 million in less than two months, announced U.S. Attorney Kenneth Magidson. A federal jury convicted Barson and his medical clinic administrator, Dario Juarez, 55, on Nov. 5, 2014, of all 20 counts charged. Co-defendant Edgar Shakbazyan entered a guilty plea to the 21-count indictment on Oct. 27, 2014.
Today, U.S. District Judge Melinda Harmon, who presided over the trial, handed Barson, of Austin, a total sentence of 120 months in prison to be immediately followed by three years of supervised release. He was further ordered to pay restitution of approximately $1.2 million.
Shakbazyan, of Glendale, California, was sentenced to 97 months in prison, while Juarez, of Beeville, received 130 months. Both will also serve three years of supervised release.
At trial, prosecutors proved the fraudulent billing was for rectal sensation tests and electromyogram (EMG) studies of the anal or urethral sphincter which were never performed. Barson, Juarez and Shakbazyan were convicted of health care fraud for filing false claims with Medicare for medical procedures which were never performed. Shakbazyan was additionally charged, and convicted, of conspiracy to pay kickbacks for payments made to recruiters and beneficiaries.
According to the testimony at trial, Barson was the only doctor affiliated with the medical clinic located at 8470 Gulf Freeway in Houston. It was Juarez, however, who represented himself to be a doctor and was the one who actually saw patients, according to the trial testimony. Barson, Juarez and Shakbazyan caused Medicare to be billed for procedures on 429 patients in just two months. The three men also billed Medicare for seeing more than 100 patients on 13 different days, including a high of 156 patients on July 13, 2009.
Barson’s defense attempted to convince the jury that he was a victim of identity theft and was not the perpetrator of the crimes. They did not believe his story and found him guilty as charged.
Barson and Shakbazyan were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future. Juarez remains in the custody of the U.S. Marshal on unrelated criminal charges.
The criminal charges are the result of a joint investigation conducted by agents of the FBI, Department of Health and Human Services-Office of Inspector General and the Medicaid Fraud Control Unit of the Texas Attorney General's Office. Assistant U.S. Attorneys Al Balboni and Adrienne Frazior prosecuted the case.
Corpus Christi Firefighter Charged with Production of Child PornographyRead the Press Release
Corpus Christi Firefighter Charged with Production of Child Pornography
CORPUS CHRISTI, Texas – Justin Ryan Serna, 28, of Corpus Christi, has been arrested following the return of an indictment alleging he produced child pornography, announced U.S. Attorney Kenneth Magidson.
Serna was taken into custody today and is expected to make his initial appearance before U.S. Magistrate Judge Janice Ellington at 2:00 p.m.
The indictment, returned yesterday, alleges authorities discovered electronic images on a notebook computer of a juvenile female engaged in a sexual act. After further investigation, law enforcement learned Serna allegedly enticed the juvenile female to engage in the sexually explicit conduct with the purpose of producing a visual depiction of the activities, according to the indictment.
If convicted, he faces a minimum of 15 and up to 30 years in federal prison as well as possible $250,000 fine.
The charges are the result of the investigative efforts of the Homeland Security Investigations and the Corpus Christi 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."
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Houston Woman Gets 17 Years for Multiple Child Pornography ConvictionsRead the Press Release
HOUSTON – A 21-year-old female resident of Houston has been ordered to federal prison for a total of 204 months following her convictions of production, distribution and possession of child pornography involving a toddler, announced U.S. Attorney Kenneth Magidson. Julia Michelle Morris pleaded guilty to the charges on April 27, 2015, admitting she exploited a 19-month-old child to produce pornography for an unidentified third party for financial gain.
Just moments ago, U.S. District Judge Vanessa Gilmore handed Morris the sentence taking into consideration all the facts and circumstances, specifically that Morris committed the crime for financial gain and sexually exploited the child even though there is no indication Morris is a sexual predator. Morris will also have to serve 10 years of supervised release following completion of that prison term. In handing down the sentence, Judge Gilmore noted that her sentence took into consideration that Morris will be incarcerated past the victim’s 18th birthday.
Morris came to the attention of law enforcement after her boyfriend discovered her activities. He had been looking through her cell phone and saw child pornography images and messages in a social media application. He was so horrified by what he saw that he contacted law enforcement and turned her phone over to them. Authorities then obtained and executed a federal search warrant on the device.
In the images, Morris is seen holding the child while spreading the child’s legs to expose her genitalia in a lewd and lascivious manner. Another image depicts Morris with her face in between the child’s legs appearing to be performing oral sex on the child.
Morris admitted to victimizing a child under the age of two and sending the images to an unknown third party. She expected to receive $8,000 for the images but was unable to collect the money since the phone was intercepted by her boyfriend.
The charges against Morris are the result of an investigation conducted by members of the Innocent Images Unit of the Houston FBI, including members of the Harris County Sheriff’s Office, which focuses its attention on investigating offenses involving the exploitation of children via the Internet.
This case, prosecuted by Assistant U.S. Attorney Sherri L. 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. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Former HPD Officer Guilty of Aiding and Abetting Possession with the Intent to Distribute CocaineRead the Press Release
HOUSTON – Jasmine Bonner, 27, a former officer with the Houston Police Department (HPD), has been convicted of aiding and abetting possession with the intent to distribute cocaine, announced U.S. Attorney Kenneth Magidson.
Bonner is the final of eight defendants now convicted on charges stemming from a seven-count narcotics conspiracy indictment returned in 2014.
Bonner admitted today that while employed as an HPD officer, she aided Derryck Collins, who had been identified during a federal investigation as a major source of supply for narcotics in the Huntsville area. At the time of the offense, Collins was Bonner’s boyfriend.
A confidential source had been working with officers and negotiated an arrangement to provide cocaine to Collins. He, in turn, informed the source that his girlfriend would meet them during the transaction and she would transport the narcotics.
During the operation, the confidential source entered Bonner’s car and sat in the front passenger seat. Bonner sat in the driver’s seat, while Collins sat in the back seat immediately behind Bonner. The source withdrew a kilogram of cocaine from a bag he carried with him and passed it to the backseat to Collins. Shortly after the transaction, Collins and Bonner left the parking lot driving in tandem and were subsequently arrested.
U.S. District Judge Nancy F. Atlas, who accepted the guilty plea, has set sentencing for Oct. 6, 2015. At that time, she faces a minimum of five and up to 40 years in federal prison and a possible $5 million fine. Bonner will remain in custody pending her sentencing.
Others convicted and also awaiting sentencing in the case include:
Collins, 34, of Huntsville, David Choate, 52, Michael Kelly, 24, and Roddrick Collins, 30, all of Huntsville; and Jarvis Lovelady, 34, Javier Gomez Aguirre, 39, and Carlos Montemayor, 39, all of Houston.
The charges are the result of an investigation by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Huntsville Police Department and the Montgomery County Sheriff’s Office with the assistance of the Walker County Sheriff’s Office. Assistant U.S. Attorneys John Jocher and Bryan Best are prosecuting the case.
Former Houston Charter School Officials Charged with Bilking School out of MillionsRead the Press Release
HOUSTON – A federal grand jury has returned a 19-count indictment against the founding superintendent of The Varnett Public School and her husband alleging charges of conspiracy, mail fraud, tax evasion and obstruction of justice, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Perrye K. Turner of the FBI, Special Agent in Charge Lucy Cruz of Internal Revenue Service - Criminal Investigation (IRS-CI) and Special Agent in Charge Neil Sanchez of the U.S. Department of Education - Office of Inspector General.
Marian Annette Cluff and Alsie Cluff Jr. are expected to surrender to authorities and make their initial appearance before U.S. Magistrate Judge Nancy Johnson later this week.
The indictment was returned late yesterday.
Annette Cluff was the founding superintendent of The Varnett Public School and her husband Alsie Cluff Jr. was the facilities and operations manager of the three campus charter schools located in Northeast and Southwest Houston. The Indictment alleges the couple embezzled in excess of $2.6 million in funds intended for the operation and function of the charter school and its programs.
“We take allegations such as these very seriously,” said Magidson. “If proven guilty, those found to have taken funds intended for the benefit of students for their personal benefit will be held accountable for their actions.”
“Those in positions of public trust must and will be held to higher standards,” said Turner. “The FBI and our law enforcement partners take all allegations seriously and are committed to fighting corruption at all levels.”
The Cluffs are also charged with tax evasion of approximately $851,845 which does not include interest and penalties owed to the IRS. According to the indictment, the Cluffs did not pay income taxes on the money they received as a result of the scheme.
“IRS-CI enforces the nation's tax laws, but also takes particular interest in cases in which someone appears to have taken what belongs to others for their own personal benefit,” said Cruz. “This indictment alleges these two not only betrayed the public’s trust by diverting funds intended for the benefit of underprivileged students for their own personal gain, but also allegedly conspired to defraud the IRS and evade paying their taxes. IRS-CI is committed to identifying and holding accountable those that seek to enhance their lives by misappropriating funds intended to educate our children.”
The indictment alleges that the Cluffs used their positions of trust and authority to embezzle money from the charter school by opening four “off-books” accounts (bank accounts not directly tied to the financial operation of the charter school) in a name similar to The Varnett Public School. The Cluffs were the signatories of the accounts, according to the allegations, and only used the off-books accounts for the purpose of diverting money intended for the charter school for their own personal use and benefit. Annette and Alsie Cluff allegedly concealed the off-books accounts from the charter school office manager, the school’s external accountant and their income tax preparer.
“Today’s indictment alleges that these school officials abused their positions of trust to steal funds from the very ones they promised to serve – the children who attended the Varnett Public School,” said Sanchez. “As the law enforcement arm of the U.S. Department of Education, we are committed to ensuring that Federal education dollars reach the intended recipients. That’s why we will continue to aggressively pursue those who seek to enrich themselves at the expense of students. America’s students, their families and taxpayers deserve nothing less.”
According to the indictment, the Cluffs embezzled more than $1 million from “money orders” submitted by parents of the students to pay for school field trips and student fundraisers, such as chocolate sales, book fairs, school carnivals and other school related activities. Additionally, the Cluffs also allegedly diverted and concealed money received from vendors of the school, insurance companies and federal agencies into the off-books accounts.
In a separate false invoicing scheme also charged in the indictment, Annette Cluff directed the charter school’s building maintenance and landscaping contractor to submit false invoices to the school for payment on work that was never actually done. The indictment alleges the charter school paid invoices totaling more than $115,000. Mrs. Cluff allegedly instructed the contractor to return the money by writing checks from the contractor to her personally, which she deposited into her personal bank account. Later, she told the contractor to make a false statement to the FBI that the money was for a “loan” and that she paid the contractor back in cash, according to the allegations.
If convicted of either mail fraud or obstruction of justice, each defendant faces up to 20 years imprisonment, while the conspiracy and tax evasion charges carry a possible five-year federal prison sentence. All charges could also result in a possible $250,000 fine, upon conviction.
The charges are the result of the investigative efforts of the FBI, IRS-CI and the U.S. Department of Education-OIG. Assistant U.S. Attorneys Quincy L. Ollison and Cedric L. Joubert 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.TDCJ Parole Officer and Boyfriend Charged with Production of Child PornographyRead the Press Release
VICTORIA, Texas – Saralyn Ann Proschko, 46, of Victoria, and David Ray McGee, 47, of Wallis, have been charged in a criminal complaint with production of child pornography, announced U.S. Attorney Kenneth Magidson.
Both are currently in custody. Proschko will make her initial appearance before U.S. Magistrate Judge B. Janice Ellington at 2:00 p.m. today, at which time the government expects to request her continued detention pending further criminal proceedings. McGee is in state custody on related charges and is expected to be transferred to federal authorities and make an initial appearance before a U.S. magistrate judge in Houston in the near future.
According to the allegations, authorities with the Victoria Police Department (VPD) responded to the Texas Department of Criminal Justice (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, according to the complaint. Further investigation led to the discovery and charging of Proschko’s boyfriend - McGee - in relation to the allegations.
If convicted, both face a minimum of 15 and up to 30 years in federal prison as well as a possible $250,00 fine.
The charges are the result of the investigative efforts of Homeland Security Investigations, Texas Attorney General’s Office - ICAC (Internet Crimes Against Children), 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."
Hostage Taking Sends Three Men to Federal PrisonRead the Press Release
McALLEN, Texas ‐ Two Mexican nationals and a local resident have been handed significant sentences as a result of their convictions for conspiracy to commit hostage taking, announced U.S. Attorney Kenneth Magidson. Julio Vargas-Hernandez, 39, and Gustavo Morales-Manriquez, 32, pleaded guilty April 17, 2014, while Osiris Bulos-Gonzalez, 23, entered his plea on Oct. 29, 2014.
Today, U.S. District Judge Randy Crane sentenced all three men to a sentence of 262 months in federal prison. Bulos-Gonzalez will serve a three-year-term of supervised release following his sentence, while Vargas-Hernandez and Morales-Manriquez are expected to face deportation proceedings following completion of their prison terms. The sentences today were enhanced as the court took into consideration the fact that a firearm was used and a ransom demand was made. The court further found that the victims, who were citizens of Mexico, were particularly susceptible to this type of offense and took that into consideration when handing down the sentences.
On Feb. 9, 2014, law enforcement received a 911 call from an illegal alien claiming he and a group of other undocumented aliens were being held against their will at a stash house in Pharr. Upon their rescue, these individuals told law enforcement they were kidnapped at gunpoint from a stash house by the defendants and taken to the stash house where they were made to call their families and request money to be paid for their release. They were threatened with death if the money was not paid.
All three defendants have been and 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 charges was conducted by Homeland Security Investigations, Border Patrol and Pharr Police Department. Former Assistant U.S. Attorney (AUSA) Juan Villescas prosecuted the case. AUSA Leo J. Leo III handled the sentencing hearing today.
Truck Driver Sentenced to Max in Child Pornography CaseRead the Press Release
LAREDO, Texas – A truck driver, initially attempting to transport illegal aliens through the Border Patrol (BP) checkpoint, has been ordered to federal prison after authorities found child pornography on his cell phone, announced U.S. Attorney Kenneth Magidson.
Timothy Glenn Williams, 50, of Carl Junction, Missouri, pleaded guilty to one count of possession of child pornography on Nov. 12, 2014.
As part of the sentencing which concluded at a hearing this afternoon, U.S. District Judge Marina Garcia Marmolejo heard additional evidence regarding Williams’ contact list from his cell phone which included 83 underage females he claimed to have met online. Although their birthdates clearly appeared on his phone, Williams attempted to convince the court that he did not realize all of the girls were underage and that he did not know he had befriended so many young females online. Judge Marmolejo ultimately handed Williams a sentence of 120 months, the statutory maximum, in federal prison to be immediately followed by 25 years of supervised release. He will also be ordered to register as a sex offender.
On May 8, 2012, Williams was arrested at the BP station located on Interstate 35, north of Laredo, for transporting illegal aliens within the U.S. for profit. A BP canine had alerted to the tractor and he was driving which led authorities to conduct further inspection. A total of 15 aliens were subsequently discovered within the trailer. Upon further investigation by Homeland Security Investigations (HSI) agents, they found suspected images of child pornography on Williams’ cell phone. Forensic analysis ultimately led to the discovery of 297 images of child pornography in his possession. Williams also admitted to HSI agents that he had downloaded the child pornography from the Internet.
Williams has been in custody since his arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI investigated with the assistance of BP. Assistant U.S. Attorney Sonah Lee is prosecuting the case.
Two Doctors and Four Others Arrested in $12 Million Health Care Fraud ConspiracyRead the Press Release
HOUSTON – Six Houstonians are in custody on wide-ranging charges involving a $12 million conspiracy to commit health care fraud and to pay kickbacks, announced U.S. Attorney Kenneth Magidson. The arrests were made in conjunction with a search warrant executed at a downtown office building where several clinics and a blood testing laboratory were located.
The 25-count indictment was returned July 1, 2015, and unsealed today. Those charged and arrested today include the owner and operator of the clinics and lab - Mktrich “Mike” Yepremian, 58, Dr. Harding Ross, 61, Dr. Faiz Ahmed, 63, Michael Wayne Wilson, 46, and Eric Johnson, 61, all of Houston. A sixth defendant - Jermaine Doleman, 38, also of Houston, was already in custody in another health care fraud scheme charged in this district over allegedly similar conduct.
They are expected to make their initial appearances before U.S. Magistrate Judge Frances Stacy at 2:00 p.m. today.
The indictment alleges Yepremian paid Doleman, Wilson and Johnson to bring Medicare and Medicaid patients to his clinics in order for him to bill for multiple, medically unnecessary diagnostic and blood tests. In turn, Doleman, Wilson and Johnson would then allegedly pay the patients to attend the clinics.
According to the indictment, the scheme began in 2006. The indictment alleges Yepremian controlled all funds from the false billing, but the clinics were allegedly held in the names of “straw owners.” The clinics involved included Crawford Medical Services, Mid City Healthcare and Care Family Practice all in Houston; Arca Medical Clinic formerly in Conroe and now in Houston, as well as a lab called Empire Clinical Laboratory in Houston.
Yepremian is also charged with money laundering for allegedly funneling money to relatives.
The statutory maximum penalty upon conviction of either the conspiracy, money laundering or any of the substantive counts of health care fraud is up to 10 years in federal prison and a possible $250,000 maximum fine. If convicted of a violation of the anti-kickback statute, Yepremian, Wilson and Johnson also face up to five years imprisonment as well as a possible $250,000 maximum fine.
The charges are the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Control Unit and the FBI. Special Assistant U.S. Attorney Suzanne Bradley and Assistant U.S. Attorney Tina Ansari are prosecuting the case.
Transporter Guilty of Moving Huge Cocaine LoadRead the Press Release
LAREDO, Texas – A Laredo man has entered a guilty plea to possessing with the intent to deliver 58 kilograms of cocaine, announced U.S. Attorney Kenneth Magidson.
Heriberto Benavides Jr., 26, pleaded guilty before U.S. Magistrate Judge Guillermo R. Garcia. At the hearing, Benavides admitted that on May 4, 2015, he drove a green Jeep Liberty he knew was loaded with 40 bundles of containing cocaine from Laredo, intending to take the drugs across the country to New York City.
As he attempted to cross through the Border Patrol checkpoint on I-35, a canine alerted to the presence of drugs hidden somewhere in the vehicle. Authorities soon discovered the bundles which were found to weigh 128 pounds. Benavides them admitted to Homeland Security Investigations (HSI) agents that he was transporting he drugs in order to avoid paying for a prior incident when he had unsuccessfully attempted to transport another drug load.
Benavides has been in custody since his arrest on May 4, 2015, where he will remain pending sentencing, which will be set in the near future. At sentencing, Benavides faces a minimum sentence of 10 years in federal prison and a possible $10 million fine.
The investigation leading to the charges was conducted by Border Patrol and HSI. Assistant U.S. Attorney Jose Homero Ramirez is prosecuting the case.Owners and Chiropractor Indicted in Alleged Nationwide Worker’s Compensation Fraud SchemeRead the Press Release
HOUSTON – The owners and others associated with Team Work Ready (TWR) have been charged in a conspiracy involving health care fraud and money laundering, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Max Eamiguel, U.S. Postal Service - Office of Inspector General (USPS-OIG), Southern Area Field Office, Special Agent in Charge David C. Wickersham, U.S. Department of Labor - Office of Inspector General (DOL-OIG), Office of Labor Racketeering and Fraud Investigations and Special Agent in Charge Lucy Cruz of IRS - Criminal Investigation (IRS-CI). TWR has 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 20-count indictment was returned June 30, 2015, and unsealed as chief financial officer Pam Rose, 53, and rehabilitation director chiropractor Hugo Jaime, 42, made their initial appearances before U.S. Magistrate Judge Frances Stacy this afternoon. CEO Jeff Rose, 52, and vice president of operations Frankie Sanders, 53, are expected to turn themselves in to authorities tomorrow and to make their initial appearances before Judge Stacy. All of the defendants reside in Houston.
“Today’s arrests should send a clear message to all health care providers that workers’ compensation fraud is a federal crime that carries serious consequences and will not be tolerated,” said Eamiguel. “The USPS-OIG, along with our law enforcement partners, will continue to aggressively investigate those who engage in fraudulent activities intended to defraud federal benefit programs and the Postal Service.”
According to the indictment, Jeffrey Rose, Sanders and Jamie conspired to submit false and fraudulent claims for health care benefits to the Federal Employees Compensation Act, through the Department of Labor - Office of Worker’s Compensation (OWCP). The defendants allegedly submitted claims for one-on-one physical therapy when patients were playing a Nintendo Wii™ game, sitting in an electronic massage chair, independently using treadmills and bicycles, playing water volley ball and watching television. The indictment further alleges the defendants received payments for sending patients to physicians, including a surgeon with unsteady hands, and providers of diagnostic services.
“The Office of Inspector General will continue to work cooperatively with our law enforcement partners to investigate these types of allegations,” said Wickersham.
The indictment alleges that between January 2011 and June 2015, TWR submitted at least $6,787,058 in false and fraudulent claims to the OWCP and received $5,656,778 as payment for the claims. Within the same indictment, it is also alleged that Jeffrey Rose and Pamela Rose conspired to conceal and disguise approximately $700,000 in payments from OWCP when federal search warrants were executed on TWR clinics in July 2013.
“The IRS will continue to focus efforts on financial investigations that involve egregious victimization of the health care system,” said Cruz.
Conspiracy to commit health care fraud, health care fraud and engaging in a monetary transaction in criminally derived property carries a possible sentence of up to 10 years in federal prison and a possible $250,000 fine. The sentence for a conviction of money laundering is up to 20 years in prison and a fine of either $500,000 or twice the value of the property involved in the money laundering.
This case was the result of a joint investigation with USPS-OIG, DOL-OIG, IRS-CI, Department of Veterans Affairs – OIG and Department of Homeland Security - Office of Inspector General. Assistant United States Attorney Julie Redlinger is prosecuting the case.
Missouri City Woman Admits to Stealing More Than $1 Million from Former EmployerRead the Press Release
HOUSTON - Michelle Robyn Freytag, 47, of Missouri City, has pleaded guilty to defrauding her former employer - a Houston businessman - of more than $1.3 million, announced U.S. Attorney Kenneth Magidson.
Freytag was hired in April 2009 to be her employer’s executive assistant. As part of her guilty plea today, she has admitted that as early as August 2009, she began misusing her position and her access to his credit card and banking information. She arranged for credit cards to be assigned in her name but under her employer’s various accounts at Whitney National Bank. As the executive assistant, Freytag was able to arrange for her personal expenditures to be satisfied with monies from bank accounts assigned to her employer or his other companies.
Over the next four years, Freytag repeated this process and obtained, without authorization from her employer, at least four additional Whitney Bank credit cards in his name, his spouse’s name and in the name of two of his other companies. Freytag obtained these credit cards by falsely representing to Whitney Bank that her employer had authorized the issuance of these cards or by falsely representing that certain previously issued credit cards had allegedly been lost and that replacements were requested by her employer or his spouse. Freytag used these credit cards to take cash advances and to make personal expenditures. She would then cause these cash advances and personal expenditures to be satisfied with monies from bank accounts assigned to her employer or his other businesses.
According to the plea agreement, Freytag’s unauthorized cash advances and personal expenditures between August 2009 and January 2014, when her scheme was discovered, totaled approximately $1.3 million.
U.S. District Judge Keith P. Ellison accepted the guilty plea on one count of wire fraud today and has set sentencing for Sept. 29, 2015. At that time, Freytag faces up to 20 years in federal prison and a possible $250,000 maximum fine.
The investigation was conducted by the FBI. Assistant U.S. Attorney Jason Varnado is prosecuting the case.
Methamphetamine and Heroin Traffickers Ordered to PrisonRead the Press Release
LAREDO, Texas – A total of four drug traffickers have been sentenced for their convictions related to a drug trafficking conspiracy involving methamphetamine and heroin, announced U.S. Attorney Kenneth Magidson.
Santos Arturo Ortiz, 28, Armando Bautista Jr., 30, Kenneth John Swisher, 56, and Alan Salinas, 28, all of Laredo, all previously pleaded guilty for their criminal conduct as did Juan Uxmal Villegas, 36, of San Antonio.
Today, U.S. District Judge Marina Garcia Marmolejo handed Ortiz a sentence of 168 months in federal prison to be followed by five years of supervised release. Bautista and Salinas were also sentenced today to respective sentences of 120 and 124 months imprisonment and five years of supervised release. Swisher was sentenced earlier this week to a 120-month-term of imprisonment for his role in the conspiracy. Villegas will be sentenced Monday, July 13, 2015.
At the hearing, one of the defendants stated that “it was easy money.” In response, Judge Marmolejo noted “I hope that you come to the point in your life that you never consider transporting narcotics easy money.”
Ortiz would receive methamphetamine and heroin from an employee at a downtown Laredo fast food restaurant. The drugs would then be transported by co-conspirators to San Antonio where Villegas would distribute the narcotics in the local area.
Swisher was permitted to remain on bond, while the remaining defendants are in custody.
The case was investigated by the Drug Enforcement Administration. Assistant U.S. Attorney (AUSA) Christopher S. Coker and former AUSA Elizabeth Rabe prosecuted the case.
Four Convicted in Violent March 2015 Humble Bank RobberyRead the Press Release
HOUSTON – With the guilty pleas of two more men today, four people now stand convicted for the take-over robbery of the Shell Federal Credit Union that occurred March 19, 2015, announced U.S. Attorney Kenneth Magidson.
Derrick Devon Malone, 24, and Christopher Parker, 28, both of Houston, pleaded guilty this morning before U.S. District Judge Alfred H. Bennett to a two-count indictment for bank robbery and possessing a firearm during the commission of a crime of violence. Two others - Shaterrika Monique West-Malone, 27, and Crystal Gail McCain-Sims, 25, also of Houston, previously pleaded guilty in a related case to a one-count criminal information charging them with bank robbery.
On March 19, 2015, the four defendants robbed the Shell Federal Credit Union located at 4787 Wilson Road in Humble.
McCain-Sims drove the group to the bank and served as the getaway driver after the robbery, while West-Malone was the lookout. West-Malone entered the bank shortly before the robbery and notified Malone and Parker via text message that there was no security guard in the premises. She then rejoined McCain-Sims in the getaway vehicle, while the male accomplices entered and robbed the bank.
Malone and Parker entered the bank through the main entrance at approximately 10:59 a.m. During their entry, Malone, who was armed with a pistol, grabbed a departing bank customer with his free hand and threw her back inside and onto the floor. Parker then confronted a bank employee and yelled, “Give me the money b***h,” grabbed one customer’s cash and identification cards from the counter and jumped onto the tellers’ counter where he joined Malone, who was pointing his pistol at the heads and bodies of the tellers. Malone was screaming such things as “Hurry we will shoot you b***h, give me the money b***h, all the money b***h.” Parker also shouted “We want money, I’ll shoot you.”
After seizing a significant amount of cash from the bank as well as a customer, Malone and Parker ran out the door, climbed into the getaway vehicle and fled the scene with their female accomplices.
Malone was captured approximately 30 minutes after the robbery, while Parker was apprehended shortly thereafter.
Bank cameras had captured images of the vehicle which allowed law enforcement to promptly identify the perpetrators. West-Malone was also taken into custody that day as an officer witnessed her exit the getaway vehicle and enter her apartment. McCain-Sims was apprehended the next day following her identification as the owner of the vehicle. Customers and employees inside the credit union later positively identified the two men as the violent robbers.
McCain-Sims was permitted to remain on bond, while the three others are in custody pending their sentencing hearings. McCain-Sims and West-Malone are set for Aug. 27, 2015, at which time they face up to 20 years in prison for bank robbery. Their male accomplices will be sentenced Sept. 17, 2015, at which time they each face up 25 years for the bank robbery as well as a mandatory seven years for the firearms charges which must be served consecutively to the other prison term imposed.
The charges are the result of an investigation by the FBI’s Bank Robbery Task Force which included the Harris County Sherriff’s Office. Assistant U.S. Attorney Michael Kusin is prosecuting the case.
Former Ft. Hood Soldier Sentenced for Alien SmugglingRead the Press Release
BROWNSVILLE, Texas - Christopher David Wix, a former active duty U.S. Army soldier based at Fort Hood in Killeen, has been sentenced on alien smuggling charges, announced U.S. Attorney Kenneth Magidson. Wix, 21, of Abilene, entered a plea to conspiracy to transport and harbor undocumented aliens Oct. 30, 2014.
Today, U.S. District Judge Hilda Tagle ordered Wix to 12 months and one day in federal prison to be immediately followed by two years of supervised release. At the hearing, additional evidence was presented to include that Wix attempted to use his military identification to facilitate his passing through the immigration checkpoint. In handing down the sentences, Judge Tagle noted Wix’s youthful age and his relatively low rank within the smuggling conspiracy compared to the other defendants as factors for imposing the sentence.
WIx was charged along with Eric Alexander Rodriguez, 20, of Odem, Brandon Troy Robbins, 20, from San Antonio, both also former soldiers based at Ft. Hood; and Arnoldo Gracia, 45, of Harlingen, in a seven-count indictment with the smuggling of undocumented aliens through the immigration checkpoint located at Sarita. Rodriguez, Robbins and Gracia have also entered pleas of guilty and are scheduled for sentencing Aug. 4, 2015.
On Sept. 11, 2014, Rodriguez arrived at the immigration checkpoint in Sarita driving a truck that was registered to Gracia. Customs and Border Protection (CBP) agents looked in the rear floorboard and seat areas and observed his military jacket, a bed sheet and other clothing covering the area. A further inspection revealed two undocumented individuals hiding under the items.
The continuing investigation by Homeland Security Investigations (HSI) revealed two earlier incidents involving Army soldiers stationed at Ft. Hood occurring at the Sarita checkpoint. Agents determined that on April 13, 2014, Robbins had also arrived at the same immigration checkpoint and stated he was soldier going to Fort Hood. In a routine check of his vehicle, agents discovered two undocumented individuals hiding under a blanket. Agents also learned that on June 21, 2014, Wix had arrived at the same checkpoint, driving a car registered to Rodriguez and presented his military identification. Agents conducted a routine check of the vehicle and discovered two undocumented individuals hiding under his military gear. Further investigation revealed Gracia as the person supplying the aliens to the Wix and the others.
Wix was permitted to remain on bond and surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI conducted the investigation with the assistance of CBP. Assistant U. S. Attorney Oscar Ponce is prosecuting the case.
Defendants and Charges added to Stolen Identity Tax Refund Fraud Scheme IndictmentRead the Press Release
HOUSTON – A Houston federal grand Jury has added three defendants and additional conspiracy charges to a November 2014 Stolen Identity Refund Fraud (SIRF) indictment, announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service - Criminal Investigation (IRS-CI). The prosecution is part of a national Stolen Identity Refund Fraud initiative that has resulted in a number of prosecutions throughout the United States in recent months.
The original 22-count indictment charged Ronald Dewayne Hadley with the filing of 22 of stolen identity income tax refund claims. The 29-count superseding indictment returned July 1, 2015, adds defendants Lyndell Leroy Price, Leondray Demond Garrison aka “Dre” and Ryan Duron Clay aka “Clayday” and charges all three with conspiracy and additional false tax refund claims totaling approximately $135,555.
The defendants are expected to make their initial appearances tomorrow at 10:00 a.m. before U.S. Magistrate Judge Frances Stacy. The case is presently assigned to U.S. District Judge Melinda Harmon and set for trial July 20, 2015.
The superseding indictment alleges these defendants conspired to obtain identity information. They then allegedly used that information to file 28 false tax returns indicating all of the taxpayers were “barbers” with only “dividend income” who were entitled to a full refund of a fictitious amount of withholding taxes ranging from $4,977 to $6,733. According to the superseding indictment, the defendants conspired to have the IRS deposit the fraudulent refunds to debit cards which were then emptied and shared. The indictment further alleges that in a few instances, the debit cards were used to make purchases directly from local merchants.
The defendants face up to ten years in federal prison on the conspiracy charge and up to five years in federal prison on each of the 28 false claim charges. The face a fine of up to $250,000 fine on each count of conviction.
The case, investigated by IRS-CI, is being prosecuted by Assistant U.S. Attorney Jimmy Sledge Jr.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Conroe Family Handed Federal Prison SentencesRead the Press Release
HOUSTON – The final member of the Irsan family charged in relation to a conspiracy to defraud the United States has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Ali Irsan, 58, a former citizen of Jordan and naturalized U.S. citizen residing in Conroe, pleaded guilty April 3, 2015.
Today, U.S. District Judge Lynn H. Hughes ordered Irsan to serve a total of 45 months in federal prison for the conspiracy. He was further ordered to pay $290,651 in restitution. His wife, Shmou Ali Al Rawabdeh, 38, and daughter, Nadia Irsan, 31, were convicted of providing false statements in association with the fraud scheme and were each previously sentenced to 24 months imprisonment.
Ali Irsan and members of his family received Supplemental Security Income (SSI), which is needs-based benefit provided by the Social Security Administration (SSA). SSI pays monthly benefits to the disabled, who do not have resources (no more than $2,000 if single and $3,000 if married). An individual with resources, excluding a home and a car, is ineligible for SSI.
On or about September 2002, Ali Irsan applied for SSI benefits claiming he was disabled and had been unable to work since 1990. His wife also claimed a disability and began receiving benefits in 2005. However, the Irsan family failed to report that Ali Irsan maintained a bank account in Jordan with a balance that fluctuated from approximately $4,000 to $16,000. Also, in January 2010, Ali Irsan received a settlement check for $75,000, which he failed to report to the SSA.
Irsan’s wife and daughter falsified documents in order to aid the fraud scheme involving the disability benefits. Nadia Irsan, who was unemployed, had a checking account with deposits of more than $250,000.
All are currently in custody and are also facing unrelated charges in Harris County. They are expected to be transferred to a U.S. Bureau of Prisons facility upon resolution of those alleged offenses.
The fraud investigation was a combined effort by SSA - Office of Inspector General, FBI, Homeland Security Investigations, Montgomery County Sheriff’s Office with assistance from several other state and federal agencies. Assistant U.S. Attorneys Jim McAlister and Mark McIntyre prosecuted the federal case.
15 Sentenced in Investigation Initially Targeting Street GangRead the Press Release
HOUSTON – With the sentencing of two more defendants today, 15 criminals have now been brought to justice for their respective roles in either a cocaine trafficking conspiracy or an alien smuggling/marijuana trafficking conspiracy, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Brian M. Moskowitz of Homeland Security Investigations (HSI) in Houston.
Aldo Teyes-Sanchez, a 32-year-old from El Salvador, and Antonio Rivas-Vargas, a 31-year-old Mexican national, pleaded guilty Aug. 30, 2013, and Sept. 5, 2014, respectively. They were charged in a conspiracy to traffic cocaine.
Today, U.S. District Judge Melinda Harmon ordered Teyes-Sanchez to serve a total of 70 months in federal prison, while Rivas-Vargas will serve a 41-month-term. Not U.S. citizens, both are expected to face deportation proceedings following their release from prison. During sentencing, Judge Harmon noted that each defendant was part of a group of individuals who sold multi-ounce quantities of cocaine over a period of several years and that they distributed drugs for the Southwest Cholos gang, Glenmont clique. The group was also involved in the sale and use of firearms as a part of their drug trade.
“Those who come to this country and choose the lifestyle of a criminal street gang member should understand that they will be investigated, prosecuted, and as in this case, convicted and sentenced to federal prison,” said Moskowitz. “ICE is committed to working with our partners to disrupt the myriad of illicit activities that criminal street gangs thrive on as a way to make our communities safer for all.”
With the exception of one defendant - Eulogio Alanis - who has not yet been sentenced, today’s proceedings bring a conclusion to an operation conducted by HSI which initially targeted the Southwest Cholo street gang. Although not all were involved in gang activity, the resulting investigation led to indictments against 16 defendants. Four were charged with a cocaine conspiracy, while the other 12 faced marijuana and alien smuggling charges.
Those involved in alien smuggling would smuggle undocumented aliens across the United States-Mexico border. The illegal aliens were required to pay a fee or transport narcotics into the country to satisfy their smuggling debt. To date, all 16 defendants have been convicted and 15 are now headed to or are in federal prison.
HSI investigated along with the Houston Police Department. Assistant United States Attorney Mark E. Donnelly prosecuted the cases.
Authorities Arrest Six in Alleged Cocaine Trafficking RingRead the Press Release
HOUSTON – A total of six people have been taken into custody on allegations related to a cocaine conspiracy dating back to April 2011, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Joseph M. Arabit of the Drug Enforcement Administration (DEA).
The charges are the result of a multi-year investigation and the return of a six-count sealed indictment April 29, 2015. The indictment was unsealed following the appearance of Isaac Heron, 37, and Douglas Ramirez, 32, both of Houston; and Leroy Greer, 51, of Missouri City, in federal court this morning. At that hearing, U.S. Magistrate Judge Mary Milloy ordered they remain temporarily in custody. They will appear in court again tomorrow at 2:00 p.m. for a counsel determination hearing.
Juan Banda, 42, Kevin Biggurs, 24, and Victor Oliva, 33, were also taken into custody today and are expected to make their initial appearances before Judge Milloy at 10:00 a.m. tomorrow.
Two more defendants - Eddie Bejar, 30, and Jean Lucio, 31, both also of Houston - are charged but not as yet in custody. They are considered fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact the DEA at 713-693-3000.
With the exception of Greer, all are charged with conspiracy to possess with the intent to distribute cocaine and aiding and abetting possession with intent to distribute cocaine. If convicted, they face a minimum of 10 years and up to life in federal prison as well as a possible $10 million fine. Greer is charged solely with two counts of structuring financial transactions and faces up to five years imprisonment and a possible $250,000 fine.
The case was result of an Organized Crime Drug Enforcement Task Force investigation led by the DEA with the assistance of Internal Revenue Service - Criminal Investigation and police departments in Pasadena and Houston. Assistant U.S. Attorney Mark E. Donnelly 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.Alice Man Sentenced for Possession of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Jon Michael Charles, 26, of Alice, has been ordered to federal prison following his conviction of possessing child pornography, announced U.S. Attorney Kenneth Magidson.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced Charles to 60 months in federal prison. Charles was further ordered to serve 10 years of supervised release following completion of his prison term and must register as a sex offender.
At the time of his plea, the court heard that FBI agents in Corpus Christi office received a cyber-tip from the National Center for Missing and Exploited Children about an individual using an email address to upload several images of child pornography to a file storage service provided by Google.
Agents learned the email address was associated with Charles and in July 2014, executed a search warrant at his residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 300 images and 10 videos of child pornography.
Charles has remained in custody since his arrest and will remain there pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. The charges against him were the result of an investigation conducted by the FBI and the Corpus Christi Police Department’s 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."
Texas Man Pleads Guilty to Federal Hate Crime for Assaulting an Elderly African-American ManRead the Press Release
A man from Katy, Texas, has entered a guilty plea to a federal hate crime related to the racially-motivated assault of an 81-year-old African-American man, announced Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Conrad Alvin Barrett, 29, was charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. On Nov. 24, 2013, he attacked the elderly African-American man because of the man’s race and color in what Barrett called a “knockout.”
At the hearing today, evidence revealed that Barrett recorded himself on his cell phone attacking the African-American man. In the recording, Barrett questions whether there would be national attention if he attacked a person of color. Barrett also claimed he would not hit “defenseless people” just moments before punching the elderly man in the face and with such force that the victim immediately fell to the ground. Barrett then laughed and said “knockout,” as he ran to his vehicle and fled. The victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.
“This was a senseless and heinous act of violence that was committed simply because the victim was African American,” said Principal Deputy Assistant Attorney General Gupta. “The Department of Justice will continue to use every tool in our arsenal to vindicate the rights of victims of violent crimes.”
“The defendant’s admissions today resolve any question as to his guilt and are consistent with what we had planned to present at trial,” said U.S. Attorney Magidson. “We do not take criminal civil rights violations lightly and are now prepared to move forward at sentencing to fully advocate for the appropriate punishment in this case.”
The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act was passed on Oct. 22, 2009, and signed into law by President Barack Obama six days later. Shepard was a gay student who was tortured and murdered in 1998 near Laramie, Wyoming. Byrd was an African-American man who was tied to a truck by two white supremacists, dragged behind it and decapitated in Jasper, Texas, in 1998.
U.S. District Judge Gray Miller of the Southern District of Texas accepted Barrett’s plea today and has set sentencing for September 18, 2015. At that time, he faces up to 10 years in federal prison and a $250,000 fine.
The charges are the result of an investigation conducted by the FBI in cooperation with the Fulshear, Texas, and Katy Police Departments as well as the Drug Enforcement Administration. Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel are prosecuting the case along with Assistant U.S. Attorneys Ruben R. Perez and Joe Magliolo of the Southern District of Texas, in cooperation with District Attorney John Healey of Ft. Bend County, Texas.
Katy Man Convicted of Federal Hate Crime for Assaulting Elderly African-American ManRead the Press Release
HOUSTON – A man from Katy has entered a guilty plea to a federal hate crime related to the racially-motivated assault of an 81-year-old African-American man, announced U.S. Attorney Kenneth Magidson and Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.
Conrad Alvin Barrett, 29, was charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. On Nov. 24, 2013, he attacked the elderly African-American man because of the man’s race and color in what Barrett called a “knockout.”
“The defendant’s admissions today resolve any question as to his guilt and are consistent with what we had planned to present at trial,” said Magidson. “We do not take criminal civil rights violations lightly and are now prepared to move forward at sentencing to fully advocate for the appropriate punishment in this case.”
At the hearing today, evidence revealed that Barrett recorded himself on his cell phone attacking the African-American man. In the recording, Barrett questions whether there would be national attention if he attacked a person of color. Barrett also claimed he would not hit “defenseless people” just moments before punching the elderly man in the face and with such force that the victim immediately fell to the ground. Barrett then laughed and said “knockout” as he ran to his vehicle and fled. The victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.
“This was a senseless and heinous act of violence that was committed simply because the victim was African American,” said Gupta. “The Department of Justice will continue to use every tool in our arsenal to vindicate the rights of victims of violent crimes.”
The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act was passed on Oct. 22, 2009, and signed into law by President Barack Obama six days later. Shepard was a gay student who was tortured and murdered in 1998 near Laramie, Wyoming. Byrd was an African American man who was tied to a truck by two white supremacists, dragged behind it and decapitated in Jasper in 1998.
U.S. District Judge Gray Miller accepted Barrett’s plea today and has set sentencing for Sept. 18, 2015. At that time, he faces up to 10 years in federal prison and a $250,000 fine.
The charges are the result of an investigation conducted by the FBI in cooperation with the Fulshear and Katy Police Departments as well as the Drug Enforcement Administration. Assistant U.S. Attorneys Ruben R. Perez and Joe Magliolo are prosecuting the case along with Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel in cooperation with Ft. Bend County District Attorney John Healey.
Houston Mother and Son Sent to Prison for Smuggling of MethamphetamineRead the Press Release
HOUSTON – Larry Maurice Favorite, 33, and Juanita Eva Velasquez, 63, both of Houston, have been ordered to federal prison for possession with intent to distribute nearly nine kilograms of a mixture or substance containing methamphetamine and conspiracy to do the same, announced U.S. Attorney Kenneth Magidson. Favorite was convicted by a federal jury Feb. 10, 2015, following a two-day trial, while his mother had entered a guilty plea to her role in the methamphetamine trafficking conspiracy the week prior.
Today, U.S. District Judge Gray Miller handed Velasquez a sentence of 262 months in federal prison to be immediately followed by 10 years of supervised release. Even though she had pleaded guilty to the charge, at the hearing today, Velasquez alternatively claimed she was forced to traffic the drugs against her will and that she did not know she was trafficking drugs. As a result of her claims today, Judge Miller denied a potential reduction in her sentence for accepting responsibility for her criminal conduct. In handing down the sentence, the court also noted her criminal history to include a prior 120-month federal sentence for trafficking cocaine.
On May 21, 2015, Judge Miller handed Favorite a total sentence of 210 months in federal prison. He will also serve five years of supervised release following completion of the prison term.
At trial, the jury heard that on June 22, 2012, Favorite drove a Honda minivan from Laredo to the Border Patrol immigration checkpoint on Highway 59, approximately 16 miles west of Freer. His mother was riding as a front seat passenger. A law enforcement canine alerted to the van in primary inspection, at which time agents sent the van and occupants to secondary inspection. A search was conducted which revealed three unmarked glass bottles in a bag located near the front passenger seat of the van. The bottles contained a brown liquid that appeared to be thicker than water.
Agents then found six more identical looking bottles behind the center console area. The nine bottles held a total of approximately nine liters of liquid, which agents field tested positive for methamphetamine.
Velasquez and Favorite were immediately arrested and agents with the Drug Enforcement Administration (DEA) conducted further investigation. Favorite initially told agents he did not know there were any bottles in the van and that he and his mother had driven down from Houston.
However, when agents asked if the bottles belonged to his mother, Favorite then claimed they were only his. He stated he received them previously from a Hispanic male, but would not elaborate.
The bottles were sent to the DEA laboratory for more thorough testing. The laboratory confirmed the liquid contained methamphetamine having a net weight of 8.966 kilograms with a purity level of 48.4%. The total amount of actual methamphetamine in the bottles was 4.339 kilograms and it had been imported from Mexico.
At the time of Velasquez’s plea, she admitted to having driven from Houston with her son to pick up the bottles containing the drugs and driving them back to Houston for an expected payment of $600 per bottle. She admitted she knew the bottles contained drugs and that she was in fact taking them to Houston for financial compensation.
Previously released on bond, Velasquez was taken into custody following the sentencing today where she will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. Favorite has been and will remain in custody.
The investigation leading to the charges in this case was conducted by DEA and Border Patrol. Assistant U.S. Attorneys Arthur R. Jones and Anibal Alaniz prosecuted the case.
Former Energy Company Executives Arrested for Embezzling more than $1 Million from EmployerRead the Press Release
HOUSTON - Federal charges have been filed against the former CEO and former President of Chase Power Development alleging conspiracy to commit mail and wire fraud, mail fraud and wire fraud, announced U.S. Attorney Kenneth Magidson announced today.
John Upchurch, of Spring, was taken into custody yesterday and made his initial appearance before U.S. Magistrate Judge Mary Milloy, at which time he released upon posting $20,000 bond. Kathleen Smith, of Austin, surrendered to authorities this morning and will make her initial appearance before Judge Milloy at 10 a.m.
The 18-count indictment charges Upchurch, 52, and Smith, 46, with one count of conspiracy to commit mail and wire fraud, five counts of mail fraud and 12 counts of wire fraud.
According to the allegations in the indictment, from approximately June 2008 to June 2 012, Upchurch and Smith embezzled approximately $1,325,306.92 from Chase Power Development LLC. Chase Power was an oil and gas project created by Houston-based Quintana Capital Group in order to head start an oil and gas project in Corpus Christi.
In July 2008, Upchurch and Smith were hired as CEO and president, respectively, of the Chase Power Development project.
Throughout their employment, the defendants allegedly submitted false invoices for fake projects in order to receive company funds for their own personal expenses to include personal travel, hotels, country club memberships, personal car restoration, fishing equipment and a hunting trip. According to the allegations, Smith and Upchurch either mailed the company checks upon issuance or personally took the checks to the merchants.
In addition, the defendants allegedly used their company American Express credit cards for their own personal purchases. The indictment alleges Upchurch and Smith would segregate their illegitimate American Express expense account summaries and self-approve them for payment on personal items and expenditures.
If convicted of conspiracy to commit mail and wire fraud, they face up to 20 years in federal prison. Each conviction of either mail or wire fraud also carries up to 20 years of imprisonment. Upon conviction, the charges also carry a maximum possible $250,000 fine.
The FBI conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady 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.Corpus Christi Man Gets 10 Years for Distributing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Kevin Justin Esquivel, 24, of Corpus Christi, has been ordered to federal prison following his conviction of distribution of child pornography, announced U.S. Attorney Kenneth Magidson. Esquivel pleaded guilty March 12, 2015.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced Esquivel to 120 months in federal prison to be followed by 10 years of supervised release. He will also be ordered to register as a sex offender.
At the time he entered his plea before U.S. Magistrate Judge Jason B. Libby, the court heard that agents with the FBI Dallas Child Exploitation Task Force, while using peer-to-peer software, were able to successfully download of various files containing child pornography from an IP address that was associated with Esquivel. As a result of this information, the FBI office in Corpus Christi was contacted to assist in the investigation.
In August 2014, agents executed a search warrant at Esquivel’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 4,000 images and more than 900 videos of child pornography. Esquivel admitted having an sexual interest in children between the ages of 10 and 13 years of age and having downloaded child pornography.
Esquivel was arrested on the federal charges in August 2014 and has been in custody since that time where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. The charges against Esquivel were the result of an investigation conducted by the FBI and the Corpus Christi Police Department’s 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."
Trafficker Guilty of Distributing Dangerous Counterfeit Viagra® and Cialis®Read the Press Release
HOUSTON – Martez Alando Gurley, 40, of Napa, California, has entered a guilty plea to conspiracy to traffic in counterfeit Viagra® and Cialis® and introducing misbranded prescription drugs into interstate commerce, announced U.S. Attorney Kenneth Magidson, along with Special Agent in Charge Brian M. Moskowitz of Homeland Security Investigations (HSI) in Houston and Special Agent in Charge Katherine A. Hermsen of the Food and Drug Administration - Office of Criminal Investigations (FDA-OCI), Kansas City Field Office.
Gurley admitted at his re-arraignment hearing today that he purchased 15,000 – 18,000 counterfeit Viagra® and counterfeit Cialis® tablets from an individual in China he knew as “Alice,” as well as an additional 3,600 – 4,800 tablets from another individual within the U.S. He admitted he knew the drugs were prescription medications and that he could not legally distribute them. He also said he knew the drugs were counterfeit.
“The introduction of counterfeit drugs into the market should be of concern to every consumer of these products,” said Moskowitz. “The best defense against unknowingly buying these untested items of unknown origin is to purchase them from legitimate authorized sources."
Gurley sold the counterfeit drugs to at least 11 individuals across the country for between $40 and $50 a bottle. Testing on samples of the counterfeit Viagra® revealed the drugs contained less than the 100 mg of active pharmaceutical ingredient (API), while the 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.
“Counterfeit prescription drugs pose a risk to the public health and undermine the public’s confidence in the safety and effectiveness of prescription drugs, which the FDA oversees,” said Hermsen. “We will continue to protect the public’s health by working to remove counterfeit drugs from the marketplace and bring counterfeiters to justice.”
U.S. District Judge David Hittner accepted the plea today and has set sentencing for Sept. 22, 2015. At that time, Gurley faces up to five years in federal prison and a possible $250,000 fine.
This charges are the result of a joint investigation with the FDA-OCI and HSI. Assistant U.S. Attorney Julie Redlinger is prosecuting the case.
Houston Man Heads to Federal Prison for Sex Trafficking of ChildrenRead the Press Release
HOUSTON – Pierre Johnson, 40, has been handed a significant sentence following his conviction of conspiring to traffic children under 18 for commercial sex, announced U.S. Attorney Kenneth Magidson. Johnson pleaded guilty July 10, 2014.
Today, U.S. District Judge Keith Ellison handed Johnson a sentence of 168 months in federal prison to be immediately followed by 10 years of supervised release. He will also be required to register as a sex offender. In imposing the sentence, Judge Ellison noted the serious nature of the crimes Johnson committed.
Johnson admitted that during parts of 2013, he used force, fraud or coercion to cause at least three minor girls under 18 to engage in commercial sex acts. Johnson trafficked underage children across three states, including Texas, Louisiana and Colorado. All of the victims were photographed in online ads that were posted for prostitution. In the ads, the minors were falsely advertised as being adults. Johnson provided the children with drugs and alcohol and kept all of the monies the girls earned. Johnson would also transport the minors by car across state lines so they could perform commercial sex acts in response to the on-line ads he posted.
Johnson has been in custody since his arrest in March 2014. He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Pierre Johnson’s co-conspirator, Dominqiue Howard, 25, was sentenced earlier this month also to 168 months.
An investigation by the Houston FBI Innocence Lost Task Force, which includes such agencies as the Houston Police Department, developed this case using statements from victims as well as on line advertisements for the victims’ services and hotel records from several hotels.
This case, prosecuted by Assistant United States Attorney Julie N. Searle and Sherri L. 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."
Houston Man Heads to Federal Prison for Defrauding Senior CitizensRead the Press Release
HOUSTON – Raymond Goffney, 38, has been ordered to federal prison for his convictions of conspiring to commit wire fraud and aggravated identity theft, announced U.S. Attorney Kenneth Magidson. Goffney pleaded guilty Jan. 26, 2015.
Today, U.S. District Judge Lynn Hughes handed Goffney a sentence of 69 months in federal prison. He was ordered to serve 33 months for the conspiracy in addition to 24 months for the identity theft which must be served consecutively. He was further sentenced to an additional 12 months for violating the terms of his supervised release for a prior federal charge in 2006 involving the possession and distribution of cocaine. In total, Goffney will serve 69 months in federal prison to be immediately followed by five years of supervised release.
Between Jan. 1, 2013, and Nov. 30, 2013, Goffney engaged in a wire fraud conspiracy to unlawfully obtain cash and defraud Compass Bank, a Federal Deposit Insurance Corporation - insured institution. Goffney and others unlawfully obtained, shared and busted out multiple cards for cash and shared the proceeds with each other. Goffney and his co-conspirators stole the identities of approximately 75 individuals, the vast majority of whom were senior citizens. These identities were then taken to apply for fraudulent credit cards with Compass Bank. Goffney used both legitimate and fake businesses, under his sole ownership and control, to run the fraudulent credit transactions.
Goffney and others stole a total of approximately $1.1 million during the conspiracy.
He 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 charges are the result of an investigation by U.S. Secret Service and the U.S. Postal Inspection Service. Assistant U.S. Attorney Julie Searle prosecuted the case.
Houston Woman Convicted for Sex Trafficking of a Minor in Two-Day Bench TrialRead the Press Release
HOUSTON – A bench trial concluded late yesterday ultimately convicting Luisa Vargas, 53, a legal permanent resident residing in Houston of sex trafficking of a minor and conspiracy to harbor illegal aliens, announced U.S. Attorney Kenneth Magidson.
The evidence at trial proved that in or about February 2012 until approximately May 2013, Vargas employed women and a girl less than age 18 as prostitutes in the Westview apartments used as a brothel. These women and young girl were instructed as to how much money to charge their clients for commercial sex. Approximately half of the proceeds were given to Vargas. As a general practice, the price paid was $40 for 15 minutes of sex. Vargas knew that most, if not all, of the ladies employed for the purpose of prostitution were aliens illegally within the United States.
United States District Judge Lynn N. Hughes handed down the conviction and set sentencing for Sept. 21, 2015. At that time, she faces at least 10 years and up to life in prison and a possible $250,000 maximum fine.
Co-defendants Dolores Vargas, Blasina Vargas and Ignacio Escandon pleaded guilty in March 2015 to conspiracy to engage in sex trafficking of minors and will be sentenced Oct. 19, 2015.
All will remain in custody pending their sentencing hearings.
The charges were the of an investigation by Homeland Security Investigations, FBI, Houston Police Department and Harris County Sheriff’s Office. Assistant U.S. Attorneys Doug Davis and Julie Searle prosecuted the case.
Former Tamaulipas Governor Indicted in Money Laundering Scheme with Brother-in-LawRead the Press Release
CORPUS CHRISTI, Texas – An indictment has been officially unsealed charging Eugenio Hernandez Flores, the former governor of Tamaulipas, Mexico, with conspiring to launder monetary instruments and aiding and abetting the operation of an unlicensed money transmitting business, announced U.S. Attorney Kenneth Magidson.
Hernandez Flores, 57, was indicted along with Oscar Gomez Guerra, 43, on May 27, 2015. Following a motion filed by the United States, the court officially unsealed that indictment late yesterday.
Hernandez Flores was the governor of the Mexican State of Tamaulipas from 2005 to 2010. Gomez Guerra is married to his sister.
The U.S. government intends to seek a personal money judgment from both men in the amount of $30 million. Also included in the indictment is a notice of criminal forfeiture regarding four real properties, three of which are located in McAllen and are valued at more than $2 million. The other property is located in Austin.
If convicted of the money laundering conspiracy, the two face up to 20 years in federal prison and a fine of up to $500,000 (or twice the value of the monetary instrument or funds involved in the transactions or both). They will also face up to five years in federal prison and a $250,000 maximum fine if convicted of operating an unlicensed money transmitting business.
Both men are considered fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact the Drug Enforcement Administration (DEA) at 713-693-3000.
The investigation leading to the indictment was conducted through OCDETF in Houston, San Antonio, Brownsville, Laredo, McAllen and Corpus Christi. The DEA, Internal Revenue Service - Criminal Investigation, Homeland Security Investigations, FBI, and the U.S. Marshals Service conducted the investigation. The case is being prosecuted by Assistant U.S. Attorneys Jesse Salazar and Julie K. Hampton.
Nine Sentenced for Funnel Account Conspiracy Relating to Conspiracy to Traffic MarijuanaRead the Press Release
CORPUS CHRISTI, Texas - Six men and three women have now been ordered to federal prison following the sentencing of two more today in a lengthy case which was the result of the efforts of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation dubbed “Operation Prototype,” announced U.S. Attorney Kenneth Magidson.
Those sentenced for crimes relating to this drug trafficking and money laundering conspiracy include Francisco R. Canchola, 39, Antonio Medina-Soto, 24, Efren Amescua, 39, Brenda Amescua, 19, Luz Medina, 36, Carlos Flores, 26, and Maria D. Amescua, 43, all of Mission; Prudencio Villalobos, 45, of Jackson, Ga., and Saul Villanueva-Garcia, 44, of Doraville, Ga.
Today, Canchola received a sentence of 168 months in federal prison, while Villanueva-Garcia was ordered to serve 262 months for their convictions of conspiracy to possess with intent to distribute more than 1000 kilograms of marijuana as well as conspiracy to launder monetary instruments. Both will also serve five years of supervised release.
Medina-Soto was also convicted of those same counts and was previously sentenced to 48 months in prison. The remaining defendants were convicted of conspiracy to launder monetary instruments. Efren Amescua, Medina, Flores, Maria Amescua, and Villalobos were ordered to serve 37, 18, 24, 24, and 36 months, respectively, while Brenda Amescua will serve 12 months and one day.
During the sentencing hearings, evidence was presented regarding the extent of this criminal organization. The was a marijuana and money laundering conspiracy operating between California, Chicago, Ill., Rio Grande Valley as well as Atlanta, Ga. Law enforcement agents identified at least six drug seizures in the United States for which this drug-trafficking organization is responsible. The organization employed the use of sophisticated hidden compartments to transport narcotics into the country. Further, this organization would create multiple fictitious identifications that members used to rent warehouses and residences to store the narcotics until they could be further transported north.
The investigation has revealed at least nine funnel bank accounts that were used by members of the drug trafficking organization to further their activities inside the country. A combined analysis of these accounts has revealed that they were used in a coordinated manner to funnel illicit bulk currency from throughout the country to South Texas. Specifically, between January 2010 and April 2014 more than $1.1 million in cash deposits were made to these bank accounts at locations in Alabama, Florida, North Carolina, Illinois, Indiana, Georgia, Pennsylvania and New York. These interstate U.S. currency deposits were followed by over-the-counter withdrawals and ATM withdrawals at multiple locations in Mission and McAllen.
The investigation leading to the criminal charges was conducted in Corpus Christi lead by the Drug Enforcement Administration, Internal Revenue Service - Criminal Investigation, Homeland Security Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives, Mission Police Department, U.S. Border Patrol, Customs and Border Protection and the U.S. Marshals Service. Assistant U.S. Attorney Julie K. Hampton is prosecuting the case.
Mexican Man Sentenced for Packing a Gun While Drug TraffickingRead the Press Release
McALLEN, Texas ‐ Jesus Correa-Gonzalez, 42, of Miguel Aleman, Tamaulipas, Mexico, has been ordered to federal prison following his conviction of possession with intent to distribute approximately 125 kilograms of marijuana and unlawfully carrying a firearm during a drug trafficking crime, announced U.S. Attorney Kenneth Magidson. Correa pleaded guilty April 2, 2015.
Today, U.S. District Judge Randy Crane, who accepted the guilty plea, handed Correa a 130-month sentence to be immediately followed by four years of supervised release.
In 2010, Correa maintained an apartment in Edinburg, out of which he sold marijuana. He kept a Taurus .45 caliber pistol for his protection and the protection of his drug business. On the evening of Oct. 28, 2010, individuals arrived at the apartment and stole some marijuana. They returned hours later to steal the remaining 125 kilograms. As they entered the apartment, shots were exchanged between Correa and the other individuals. In the gun fight, Correa’s brother was killed and other individuals were seriously injured.
Correa 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 charges was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Edinburg Police Department. Assistant U.S. Attorney Steven Schammel and Kristen Rees prosecuted the case.
Houston Couple Sentenced to Lengthy Prison Terms for Fraudulent SchemesRead the Press Release
HOUSTON – Gerard Montez-Easiley, 46, and Stacey Lair Lee-Easiley, 35, have been ordered to prison following their convictions in two corporate fraud schemes, announced U.S. Attorney Kenneth Magidson. The pleaded guilty to two separate fraud schemes which involved fraudulently obtaining credit in the names of various businesses, one of which was perpetrated while they were awaiting sentencing in the other.
U.S. District Judge Kenneth M. Hoyt sentenced Montez-Easiley and Montez-Easiley to respective terms of 188 and 135 months in federal prison.
In November 2012, the married couple was convicted of conspiring to commit mail and wire fraud. That scheme involved fraudulently obtaining credit on behalf of entities whose registration to conduct business in the State of Texas had been suspended or terminated (dormant entities). Although they had no legitimate relationship with the dormant entities, the defendants used fraudulent documents such as financial reports, among other means to falsely bolster the creditworthiness of the dormant entities. They also fraudulently obtained credit from banks, automobile dealerships and retailers in the dormant entities’ names. Using that fraudulently-obtained credit, the defendants obtained six luxury automobiles and more than $39,000 in computer equipment.
In June 2014, Montez-Easiley and Lee-Easiley also pleaded guilty to engaging in a separate fraud scheme while they were awaiting sentencing in the previous case. In that second scheme, the pair conspired with others to fraudulently obtain credit in the names of Black Pearl Media Group Inc. and Leeison Inc. In order to bolster the fraudulent credit applications of those entities, the defendants again used various fraudulent documents, including purported audited financial statements which had been plagiarized from the publicly-available financial statements of other companies. The defendants obtained four luxury cars and were responsible for more than $300,000 spent on credit cards that were fraudulently obtained in the name of Black Pearl Media Group.
In today’s consolidated sentencing, Judge Hoyt sentenced the defendants for their roles in both fraud schemes. Because they committed the second fraud scheme while released on bail in their initial case, they each faced additional prison time. Judge Hoyt further ordered Montez-Easiley and Lee-Easiley to pay restitution of $761,794.09 and $750,794.09, respectively.
The charges are the result of the investigative efforts of the U.S. Postal Inspection Service. Assistant U.S. Attorney Jason Smith is prosecuting the case.
Former Employee Sent to Prison for Scheme to Defraud Garden RidgeRead the Press Release
HOUSTON – Sandra Johnson, 48, of Katy, has been ordered to federal prison after admitting to receiving kickbacks in a money laundering conspiracy that targeted home décor retailer Garden Ridge Pottery, now known as At Home, announced U.S. Attorney Kenneth Magidson. Johnson pleaded guilty Feb. 17, 2015.
Today, U.S. District Judge Kenneth Hoyt, who accepted the guilty plea, handed Johnson a 87-month sentence to be immediately followed by three years of supervised release. She was further ordered to pay $2 million in restitution. At the hearing, additional evidence/testimony was presented including information about another fraud scheme for which Johnson had been convicted and previously sent to federal prison.
Johnson was employed as a claims manager at Garden Ridge. In that role, she was responsible for reviewing and approving payment on injury claims filed against the store by its customers, commonly referred to as “slip and fall” claims. Johnson and others conspired to submit fraudulent claims against Garden Ridge for injuries which were either faked or never occurred. Johnson’s sister - Natalie Jeng, 42, also of Katy - was employed as a claims adjuster at a third-party administrator hired by Garden Ridge to administer and investigate claims. Thus, many of the fraudulent claims that were allegedly reviewed by Johnson at Garden Ridge were then reviewed and approved by her sister. Jeng will be sentenced June 22, 2015.
In all, 26 false claims were filed against Garden Ridge which resulted in the issuance of $2,063,436 in settlement proceeds. The fraudulent settlement proceeds were split amongst the alleged injury victims and other co-conspirators, with most of the funds kicked back to Johnson. She admitted to laundering the kickbacks she received by having her co-conspirators pay her either in cash or with cashier’s checks which had been purchased under nominee names. Jeng also received a portion of some settlements for her role in the scheme.
Darlene Drummer, 43, of Fresno, and Niesha Hall, 36, of Houston, have also pleaded guilty to their respective roles in the scheme. Drummer and Hall, in addition to filing false claims against Garden Ridge in their own names, recruited other complicit claimants into the scheme.
Johnson has previously pleaded guilty to mail fraud and money laundering charges stemming from a similar scheme when she was employed as a Claims Adjuster at The Hartford insurance company. In a 2007 plea agreement related to that scheme, Johnson admitted authorizing more than $1,700,000 in payments from The Hartford to various medical clinics in the Houston area for medical services that were never performed. The clinic owners then kicked back a portion of the payments to Johnson. She was sentenced in that case to serve 12 months and one day in prison.
Previously released on bond, Johnson was taken into custody following the sentencing today where she will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by Internal Revenue Service – Criminal Investigation and U.S. Postal Inspection Service. Assistant U.S. Attorney Jay Hileman is prosecuted the case.
Houston Man Sentenced After Using Counterfeit Cards in Nearly 400 Transactions at Sam’s ClubRead the Press Release
HOUSTON – Guang Fa Lin, 47, has been ordered to federal prison following his conviction of using counterfeit access devices, announced U.S. Attorney Kenneth Magidson. Lin pleaded guilty Jan. 26, 2015.
Today, U.S. District Judge Sim Lake, who accepted the guilty plea, handed Lin a 24-month sentence and further ordered he pay $206,236.92 in restitution. In handing down the sentence, Judge Lake noted that Lin was to not possess any credit cards without approval and engage in any employment involving a fiduciary role. Lin resided in Houston but has no legal status in the U.S. and is expected to face deportation proceedings following his release from prison.
At the time of his plea, Lin admitted that between 2012 and 2013, he used counterfeit credit cards, debit cards and credit and debit account numbers to obtain goods, services and other things of value. Lin used scores of credit and debit cards in approximately 395 transactions under various Sam’s Club Memberships bearing different identifying information to purchase items such as cigarettes, iPads, gum and gift cards.
The counterfeit cards bore account numbers banks and other financial institutions issued to account holders, many of whom reside outside of Texas. As a result, Lin caused more than $200,000 in losses.
He 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 an investigation by U.S. Secret Service. Former Assistant U.S. Attorney (AUSA) Stephen L. Corso prosecuted the case. AUSA Suzanne Elmilady handled the sentencing hearing today.
Former Captain of Texas Mexican Mafia Sentenced for Narcotics TraffickingRead the Press Release
McALLEN, Texas – An Edinburg man has been ordered to federal prison following his conviction of possession with intent to distribute more than one kilogram of Heroin, announced U.S. Attorney Kenneth Magidson. Jesus Rodriguez Barrientes, 49, pleaded guilty Sept. 5, 2012. Also sentenced today were Elizabeth Michele Barrientes, 40, of Edinburg, and Fermin Martinez-Luna, 43, of Reynosa, Tamaulipas, Mexico.
Today, Chief U.S. District Judge Ricardo H. Hinojosa ordered Jesus Barrientes serve a total of 262 months in federal prison to be immediately followed by five years of supervised release. At the hearing, additional testimony was presented showing that Barrientes directed at least five other subjects to assist with his drug trafficking activities and that some of the heroin purchases were performed at his residence. Evidence also showed he had an extensive criminal record and that he has been a member of the Texas Mexican Mafia for a significant amount of time.
Previous evidence presented to the court proved Rodriguez Barrientes was head of the Texas Mexican Mafia in the Rio Grande Valley and would supply heroin to other members in Texas.
At the time of his plea, Rodriguez Barrientes admitted he planned to receive two kilograms of heroin from a source of supply from Mexico. Martinez-Luna smuggled the heroin from Mexico to the United States and delivered it to a confidential informant. This heroin was to be delivered to Jesus Barrientes later that day.
Martinez-Luna previously pleaded guilty to possession with intent to distribute more than one kilogram of Heroin. He was also sentenced today to a 46-month-term of imprisonment.
Elizabeth Barrientes had pleaded guilty to misprision of felony and received a sentence today of two years probation. At the time of the offense, she was married to Jesus Barrientes and admitted to knowing of her husband’s gang affiliation and his narcotics trafficking activities. Evidence at the time of her plea showed that on one occasion she was present when her husband sold five ounces of heroin to an FBI confidential informant. She concealed the proceeds of the sale in order to prevent law enforcement from detecting the criminal transaction.
Jesus Barrientes and Martinez-Luna have been in custody since their arrest in August 2011 where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This prosecution was part of an investigation conducted FBI and the Texas Department of Public Safety. Assistant U.S. Attorney Robert Wells Jr. prosecuted the case.
Another South Texan Heads to Federal Prison in Large-Scale Drug-Trafficking ConspiracyRead the Press Release
CORPUS CHRISTI, Texas – Rodolfo Casares, 38, of Brownsville, has been ordered to federal prison following his convictions on one count of conspiracy to commit drug trafficking and two counts of possession with intent to distribute controlled substances - methamphetamine and cocaine, respectively, announced U.S. Attorney Kenneth Magidson. The jury deliberated for two hours and returned the guilty verdicts Jan. 22, 2015, following a two-day trial.
Today, U.S. District Judge Nelva Gonzales Ramos, who presided over the trial, handed Casares a total sentence of 25 years in federal prison to be immediately followed by five years of supervised release.
At trial, the jury heard from 10 government witnesses, which included testimony that Casares supplied heroin, methamphetamine and cocaine to a major drug trafficking organization headquartered in Mathis and lead by Ricardo Guerrero, 56, of Mathis. On March 18, 2014, Guerrero was convicted by a federal jury in Corpus Christi for being the leader of this conspiracy and was subsequently sentenced to life imprisonment on June 5, 2014.
Casares was involved in the conspiracy from 2009 through most of 2012 and utilized his connections in Mexico to obtain the illegal narcotics and had them crossed into the United States at Brownsville, McAllen or Laredo. Once here, the illegal narcotics were then transported to Guerrero and stored in numerous properties Guerrero owned in Mathis and in neighboring counties.
Guerrero then made the arrangements to sell the heroin, methamphetamine and cocaine throughout the Southern District of Texas and in San Antonio. On Aug. 20, 2011, three conspirators that Casares had hired were arrested at the U.S. Border Patrol Checkpoint at Hebbronville while attempting to transport methamphetamine and cocaine to Guerrero.
Trial testimony also provided that Guerrero’s criminal organization was moving kilogram amounts of methamphetamine, heroin and cocaine at least once or twice a month during the conspiracy.
Casares will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future
Those charged in relation to this case were identified through a long-term investigation conducted jointly by Homeland Security Investigations and Texas Department of Public Safety in coordination with the United States Attorney’s Office. Assistant U.S. Attorney Chad W. Cowan is prosecuting the case.
Medical Center Physician Appears in Court on Child Pornography ChargesRead the Press Release
GALVESTON, Texas - A pediatric oncologist at The University of Texas M.D. Anderson Cancer Center has been permitted release with several conditions following his arrest on charges of receipt and possession of child pornography, announced U.S. Attorney Kenneth Magidson.
Dennis Patrick Meehan Hughes, 49, of Pearland, appeared in federal court this afternoon for a detention and probable cause hearing before U.S. Magistrate Judge John Froeschner in Galveston. While the government moved for detention, the defense rebutted the presumption he be detained. Judge Froeschner found there was probable cause to believe Hughes committed the crimes alleged, but permitted his release, believing sufficient conditions could be imposed that would assure the safety of the community and his presence at all future court appearances. The court ordered Hughes to wear a GPS monitor at all times, not to access the Internet, surrender his passport, have no unsupervised contact with minors (except his children) and not be near places where children regularly congregate, such as schools and parks.
Law enforcement executed a federal search warrant at the residence of Hughes on June 5, 2015, after an investigation suggested he was accessing files from a website known to contain child pornography. At that time, his computers and other items were seized and he was arrested.
The criminal complaint alleges Hughes 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, according to the allegations. At the hearing today, the government also offered evidence that images of child pornography were found on his work computer as well.
Testimony revealed Hughes participated in numerous activities that gave him access to children. He has minor children of his own and has been an assistant coach for the Pearland Little League for the past several years. Further testimony revealed an incident in 2014 during which he pushed a child to the ground. As a result, Hughes was prohibited from being a head coach in 2015, according to testimony.
Additional information was also presented that Hughes regularly participates in childrens’ activities at St. Vincent de Paul Catholic School including the Lord’s Day Program in which he sings songs in a classroom with children. In addition, Hughes was allegedly scheduled to participate in their vacation bible school later this month. He was also a regular fixture at the children’s chapel and was known to take pictures of the children at the school.
While the facts presented in court demonstrated he had regular and frequent access to minor children through work, church and community activities, no evidence was presented today that suggested he had any inappropriate sexual contact with them.
If convicted, he faces up to 20 years for possession of child pornography and up to five years for the receipt as well as a possible $250,000 maximum fine. Upon conviction and completion of any prison term imposed, Hughes would also face a maximum of life on supervised release during which the court can impose a number of special conditions designed to protect the children and prohibit the use of the Internet. He would be required to register as a sex offender.
The allegations against Hughes are the result of an investigation conducted by members of the Houston FBI, 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."
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 Convicts Houston Man in Alien Smuggling ConspiracyRead the Press Release
CORPUS CHRISTI, Texas – A federal jury in Corpus Christi has returned a guilty verdict against a Houston man on one count of conspiracy to transport and harbor illegal aliens following a two-day trial, announced U.S. Attorney Kenneth Magidson. The jury deliberated for only 45 minutes before ultimately convicting Eduardo Luis Pompa, 26.
During the trial, which involved the testimony of 15 government witnesses, evidence established that Pompa served as a scout for an alien smuggling organization. In that role, he would drive ahead of or behind vehicles transporting illegal aliens to look for law enforcement. Pompa served in this capacity from early 2014 until July 14, 2014, when he was arrested with nine other conspirators transporting 57 aliens to Houston. Pompa and two others served as scouts, two served as brush guides and the remaining five transported the 57 aliens in vehicles. Pompa and other conspirators picked up the illegal aliens just north of the Border Patrol checkpoint near Falfurrias and were arrested near Mathis.
Additionally, evidence also established that this criminal organization transported multiple loads of illegal aliens on a weekly and even daily basis. On one occasion - April 23, 2014 - a load driver for the organization was arrested transporting five illegal aliens near Premont. That driver attempted to flee, traveling in excess of 100 miles per hour and finally crashing into a tree, causing serious bodily injuries to the aliens. The evidence established that Pompa was working as a scout that same day, but for another load of transported aliens.
The boss of the alien smuggling organization, Homero Gonzalez-Carranza, 30, also of Houston, pleaded guilty April 27, 2015. Gonzalez-Carranza oversaw the transportation of illegal aliens from the Rio Grande Valley to Houston. Illegal aliens would be harbored at stash houses in Houston until ultimately being transported to their final destinations within the United States. He is set for sentencing July 14, 2015.
Senior U.S. District Judge Hayden Head has set Pompa’s sentencing for Aug. 18, 2015, at which time he faces up to 10 years in prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The case was investigated by Homeland Security Investigations and Border Patrol as part of the South Texas Campaign. Assistant U.S. Attorney Chad W. Cowan is prosecuting the case.
Hidalgo Man Sentenced for Lasering a Texas Department of Public Safety HelicopterRead the Press Release
MCALLEN, Texas – A Hidalgo man has been ordered to federal prison following his conviction of pointing a laser at a Department of Public Safety (DPS) aircrew while they were piloting an aircraft, announced U.S. Attorney Kenneth Magidson. Jose Porfirio De Leon, 25, pleaded guilty Jan. 8, 2015.
Today, Chief U.S. District Judge Ricardo Hinojosa ordered De Leon to serve a total of 24 months in federal prison to be immediately followed by a one-year-term of supervised release.
On April 9, 2014, a DPS pilot and a tactical flight officer were operating an aircraft designated as DPS 118. They were conducting a law enforcement mission in support of the U.S. Border Patrol attempting to detain aliens who had illegally crossed into the United States. At approximately 9:45 p.m. west of Hidalgo, the aircrew was illuminated by a green laser beam several times.
Using night vision devices and onboard sensors, the aircrew was able to detect the source of the laser in the vicinity of the De Leon’s residence and directed law enforcement officers on the ground to the location. Subsequently, De Leon’s girlfriend brought the laser out of the residence and gave it to the officers. He later admitted to illuminating DPS 118 with a green laser.
De Leon will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the FBI and DPS. Assistant U.S. Attorney (AUSA) Steven Schammel prosecuted the case with AUSA Alexandro Benavides handling the sentencing today.