Western District of Virginia
Press releases recorded for this federal judicial district.
Seven Defendants Plead Guilty to Drug Trafficking and Firearms OffensesRead the Press Release
Abingdon, VIRGINIA – Seven individuals who conspired to distribute crystal methamphetamine in Southwest Virginia from sources in Tennessee and Kentucky have pleaded guilty to federal drug trafficking and firearms charges in the United States District Court in Abingdon, United States Attorney Rick A. Mountcastle and Virginia Attorney General Mark R. Herring announced.
Jeremy Rick Sturgill, 41, of Jonesville, Virginia, pleaded guilty January 24, 2018, to conspiring to distribute more than 50 grams of methamphetamine; maintaining a place for the purpose of manufacturing, distributing, and using methamphetamine; and possessing a firearm in furtherance of a drug trafficking offense. Tony Lynn Ketron, 27, of Church Hill, Tennessee, pleaded guilty January 24, 2018, to conspiring to distribute more than 50 grams of methamphetamine, two counts of distributing methamphetamine, possessing a firearm in furtherance of a drug trafficking offense, and possessing a firearm while being a prohibited person.
In addition, a number of co-conspirators have previously pleaded guilty as part of the case. Todd Houston Conyer, 29, of Pennington Gap, Virginia, pleaded guilty to conspiring to distribute more than 5 grams of methamphetamine. Leslie Ann Clasby, 42, of Jonesville, Virginia, pleaded guilty to conspiring to distribute more than 5 grams of methamphetamine. Jason Dale Moore, 36, of Jonesville, Virginia, pleaded guilty to conspiring to distribute more than 5 grams of methamphetamine. William Benjamin Brewer, 36, of Jonesville, Virginia, pleaded to conspiring to distribute more than 5 grams of methamphetamine. Kristina Karen Burton, 44, of Jonesville, Virginia, pleaded guilty to conspiring to distribute more than 5 grams of methamphetamine.
According to evidence presented at various plea hearings by Virginia Assistant Attorney General and Special Assistant United States Attorney Suzanne Kerney-Quillen, and in court documents, the defendants engaged in a conspiracy to distribute and possess with the intent to distribute crystal ice methamphetamine from April 1, 2016 - November 7, 2016. Evidence presented during the guilty plea hearings demonstrated that the conspiracy involved over 50 grams of crystal ice methamphetamine, acquired from multiple sources in Tennessee and Kentucky, and several firearms. Numerous undercover purchases of crystal ice were conducted by the Southwest Virginia Drug Task Force at Sturgill’s residence in Jonesville, Virginia, where much of the activity concerning the conspiracy occurred.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Lee County Sheriff’s Office, the Scott County Sheriff’s Office, the Virginia State Police, the Jonesville Police Department, and the Southwest Virginia Drug Task Force investigated the case. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States involving Leslie Ann Clasby. Special Assistant United States Attorney M. Suzanne Kerney-Quillen, a Virginia Assistant Attorney General assigned to the Attorney General’s Major Crimes and Emerging Threats Section, prosecuted the case for the United States involving all other defendants.
U.S. Attorney’s Office Hosts Roundtable on Sexual Harassment in HousingRead the Press Release
Roanoke, VIRGINIA – The United States Attorney’s Office for the Western District of Virginia and the Justice Department’s Civil Rights Division hosted a roundtable in Roanoke today for community organizations, United States Attorney Rick A. Mountcastle announced.
The event included representatives from legal aid offices, fair housing organizations, shelters, transitional housing providers, and local law enforcement agencies. Each organization was asked to attend because they often work with Roanoke’s vulnerable populations, clients of whom often become victims of sexual harassment in housing.
“The goal of today’s roundtable was to open a dialogue about sexual harassment in housing. This form of harassment, while not discussed as much as sexual harassment in the work place, can be just as pervasive and damaging to its victims,” U.S. Attorney Mountcastle said today. “We are proud to be one of the first districts in the country to hold this type of event and look forward to working with our community partners toward making progress in the future.”
While most people are familiar with the problem of sexual harassment in the workplace, harassment also occurs in the housing context, and the Fair Housing Act prohibits it. Sexual harassment by landlords, property managers, maintenance workers, and others with power over housing often affects the most vulnerable populations – single mothers, women who are financially unstable, and women who have suffered sexual violence in their past. And the victims often do not know where to turn for help.
The Justice Department brings cases each year involving egregious conduct, including allegations that defendants have exposed themselves sexually to current or prospective tenants, requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures.
In 2017, the Justice Department recovered for harassment victims more than $1 million in damages. Many instances of sexual harassment in housing continue to go unreported. The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities.
The Justice Department’s initiative seeks to identify barriers to reporting sexual harassment in housing, increase awareness of its enforcement efforts – both among victims and those they may report to – and collaborate with federal, state, and local partners to increase reporting and help women quickly and easily connect with federal resources. The Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Division by calling (844) 380-6178 or emailing: [email protected].
Manassas Man Indicted on Sex Trafficking, Drug ChargesRead the Press Release
Harrisonburg, VIRGINIA – A Virginia man has been charged in a six-count federal indictment with sex trafficking, interstate prostitution and distribution of fentanyl that led to two overdoses after a grand jury sitting in the U.S. District Court in Harrisonburg returned a superseding indictment January 16, 2018, United States Attorney Rick A. Mountcastle announced.
Kendall Demarko Wysinger, 41, of Manassas, Virginia is charged with one count of conspiracy to commit sex trafficking, one count of interstate transportation for prostitution, one count of possession with the intent to distribute fentanyl which caused the death of another, one count of possession with the intent to distribute fentanyl which caused the serious bodily injury of another, one count of evidence tampering, and one count of witness tampering.
The investigation of this case was conducted by the Federal Bureau of Investigation’s I-81 Human Trafficking Task Force (I-81 HTTF), the Drug Enforcement Administration, and the Northwest Virginia Regional Drug and Gang Task Force (NWRDGTF).
The I-81 HTTF is a collaborative effort of law enforcement and community partners focused on identifying instances of human trafficking along the I-81 corridor in the northern Shenandoah Valley of Virginia, West Virginia, and Maryland; prosecuting those responsible; and, providing assistance to the victims impacted by these crimes. The I-81 HTTF includes law enforcement from the counties of Frederick, Clarke, and Shenandoah as well as the cities and towns of Front Royal, Hagerstown, MD, Lord Fairfax Community College, and the Virginia State Police.
The NWRDGTF uses the combined efforts of local, state, and federal agencies to actively pursue those groups or individuals who manufacture, distribute, or sell illegal narcotics. The NWRDGTF is comprised of the Virginia State Police, the Winchester Police Department, the Front Royal Police Department, the Strasburg Police Department, the Frederick County Sheriff’s Office, the Page County Sheriff’s Office, the Warren County Sheriff’s Office, the Shenandoah County Sheriff’s Office, and the Clarke County Sheriff’s Office.
Assistant United States Attorney Erin M. Kulpa will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Former Madison County Detective Sentenced for Sexually Exploiting MinorsRead the Press Release
Charlottesville, VIRGINIA – – A former detective with the Madison County Sheriff’s Office, who was most recently assigned to the Internet Crimes Against Children Task Force, was sentenced yesterday in the United States District Court for the Western District of Virginia in Charlottesville on multiple charges of sexually exploiting minors, United States Attorney Rick A. Mountcastle announced.
Bruce Arlie Harvey, 42, of Reva, Va., was sentenced yesterday to 23 years in prison and a lifetime of supervised release thereafter. In addition, Harvey will be required to register as a sex offender upon his release from prison. Harvey pleaded guilty on August 14, 2017 to three counts of transporting a minor across state lines with the intent to engage in criminal sexual acts, three counts of interstate travel with minors with the intent to engage in illicit sexual conduct, and one count of possession of child pornography. The charges involved two separate minor victims and occurred in approximately 1998 or 1999 and between 2004-2007.
“Bruce Harvey abused his positions of trust as a law enforcement officer and a karate instructor to sexually exploit two of his female karate students. I commend the teamwork of the FBI and the Virginia State Police for bringing this defendant to justice and for giving the victims justice and a chance to find closure,” United States Attorney Mountcastle said today. “We sincerely hope that today’s sentence will be a step toward healing, restoration, and renewal for the victims.”
“As I said before, Harvey was every parent's worst nightmare. He used his positions of trust in the community - law enforcement officer, youth karate instructor - to access the children who became his victims. Just despicable,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division. “I hope Harvey's sentence sends a message to the victimizers of the innocent; we will find you and bring you to justice. I want to thank the heroes at the Western District of Virginia's United States Attorney's Office who expertly prosecuted the case, and I want to especially thank the brave victims who came forward.”
According to the information presented during previous hearings, Harvey, while a law enforcement officer and a karate instructor at the Virginia Tong Leong School of Karate in Madison, victimized the two young karate students when they took private karate lessons from him and traveled with him to competitions and other events at various out-of-state locations.
At the time of his arrest on May 3, 2017, investigators recovered a Sony microcassette in a bedroom closet of Harvey’s home that contained a film clip dated February 14, 2007, showing one of the victims performing a sexual act with Harvey.
The Federal Bureau of Investigation and the Virginia State Police investigated this case. Assistant United States Attorney Nancy S. Healey and Department of Justice- Child Exploitation and Obscenity Section Trial Attorney Lauren S. Kupersmith prosecuted it.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, 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 http://www.justice.gov/psc.
Former Virginia Detective Sentenced to 23 Years in Prison for Sexually Exploiting MinorsRead the Press Release
A former Virginia detective with the Madison County Sheriff’s Office, who was most recently assigned to the Internet Crimes Against Children Task Force, was sentenced today in the U.S. District Court for the Western District of Virginia in Charlottesville for multiple charges of sexually exploiting minors, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Rick A. Mountcastle for the Western District of Virginia announced.
Bruce Arlie Harvey, 42, of Reva, Virginia, pleaded guilty on Aug. 14, 2017, and was sentenced on Jan. 25, to 276 months in prison for three counts of transporting a minor across state lines with the intent to engage in criminal sexual acts, three counts of interstate travel with minors with the intent to engage in illicit sexual conduct and one count of possession of child pornography.
According to the information presented during the guilty plea and during the sentencing hearing, Harvey, while a karate instructor at the Virginia Tong Leong School of Karate in Madison, Virginia, began making sexual advances toward the two minor female victims in this case while they were students at the karate school. Harvey engaged in illegal sexual acts with these children after he began giving them private karate lessons and began traveling with each of them to karate competitions and other events at various out-of-state locations, including California and Maryland. This conduct took place between 1998 and 2007.
Additional evidence presented during the guilty plea revealed that at the time of his arrest on May 3, 2017, investigators recovered a Sony microcassette in a bedroom closet that contained a film clip dated Feb. 14, 2007, that showed one of the victims performing a sexual act with Harvey in his Madison County home.
The FBI and the Virginia State Police investigated this case. Assistant U.S. Attorney Nancy S. Healey and Trial Attorney Lauren S. Kupersmith of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, 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 http://www.justice.gov/psc.
Roanoke Valley Opioid/Heroin Task Force to Present A Community Conversation about Opioid Pain Killer and Heroin Addiction: A National, State and Local CrisisRead the Press Release
Roanoke, VIRGINIA – On August 10, 2017, the President declared the opioid crisis to be a national emergency. Just yesterday, Attorney General Sessions stated, “With one American dying of a drug overdose every nine minutes, we are facing the deadliest drug crisis in American history.”
According to United States Attorney Rick Mountcastle, “Our community must work together to solve this crisis using a three-pronged approach: provide access to treatment and recovery for family, friends, and neighbors suffering from the disease of opioid and heroin addiction; prevention programs to raise awareness about the dangers of opioids; and targeted law enforcement.”
In the coming weeks, United States Attorney Mountcastle will attend four community conversations about opioid and heroin abuse hosted by the Roanoke Valley Opioid and Heroin Task Force in collaboration with the Prevention Council of Roanoke County. These events will include law enforcement updates, personal stories about the impact of opioids and heroin, and other important information, and will be an opportunity to join together to combat this crisis.
The schedule for these free events is as follows:
- January 18 at 6:00 p.m. – Northside High School Auditorium
- January 22 at 6:00 p.m. – Cave Spring High School Auditorium
- January 25 at 6:30 p.m. – William Fleming High School
- February 15 at 6:30 p.m. – Patrick Henry High School
Danville Man Sentenced to 61 Months in Prison for Student Loan FraudRead the Press Release
Danville, VIRGINIA – A Danville man, who obtained the identities of individuals in the Danville and Martinsville regions in order to apply for fraudulent student loans in their names to steal money from lenders, was sentenced yesterday in the United States District Court in Danville for a variety of federal charges, United States Attorney Rick A. Mountcastle announced.
James Willie Waller Jr., 29, was sentenced yesterday in District Court to 61 months in prison and ordered to pay $117,000 in restitution. Waller previously pleaded guilty to one count of student loan fraud, one count of wire fraud and two counts of aggravated identity theft.
According to evidence presented at previous hearings by Assistant United States Attorney Donald R. Wolthuis and Special Assistant United States Attorney Kari Munro, Waller devised a scheme in which he obtained the personally identifying information (PII) of individuals in the Danville and Martinsville regions of Virginia. The defendant used the obtained PII to apply for student loans to online colleges and universities, without the consent of those whose information he obtained.
Waller fraudulently applied for student financially aide and enrolled in online courses using the PII he procured. The U.S. Department of Education then sent grant and loan monies to the online schools to cover tuition and living expenses. The schools, in turn, caused debit cards to be issued in the names of the fictitious students. The debit cards were directed to a variety of mailing addresses throughout Danville and Martinsville, as orchestrated by Waller. Waller then used the cards for his own personal use.
In all, Waller received more than $117,000 in money to which he was not entitled.
The investigation of the case was conducted by Virginia State Police, The Department of Education – Office of the Inspector General and the United States Postal Inspection Service. Assistant United States Attorney Donald R. Wolthuis and Special Assistant United States Attorney Kari Munro prosecuted the case for the United States.
Six Plead Guilty to Federal Heroin ChargesRead the Press Release
Charlottesville, VIRGINIA – Six Individuals who conspired to distribute heroin in and around Culpeper have pleaded guilty in the United States District Court for the Western District of Virginia in Charlottesville to a variety of federal drug and other offenses, United States Attorney Rick A. Mountcastle announced.
In all, six members of the conspiracy have pleaded guilty over the past several weeks, with the final two defendants pleading guilty this morning in federal court in Charlottesville. The group sold at least 100 grams of heroin in the Culpeper region beginning in 2016 and continuing through 2017.
Rondale Montrel Faulkner, 31, of Culpeper Va., pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute at least 100 grams of heroin and one count of being a previously convicted felon illegally in possession of a firearm. According to evidence presented during Faulkner’s guilty plea hearing, the defendant sold heroin to a confidential source working with the Blue Ridge Narcotics and Gang Task Force on several occasions. On one occasion, co-defendant George Faulkner drove the vehicle in which the undercover transaction took place. In addition, the confidential source purchased a .357 H. Weiharauch revolver from Faulkner. Faulkner is prohibited from possessing a firearm due to a previous criminal conviction.
George Christopher Faulkner, 29, of Culpeper Va., pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute at least 100 grams of heroin.
April Christine Sherman, 34, of the Tidewater region Va., pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute at least 100 grams of heroin and one count of possession of a firearm in furtherance of a drug trafficking crime. According to evidence presented during her guilty plea hearing, Sherman sold heroin to an undercover law enforcement officer working with the Blue Ridge Narcotics and Gang Task Force. Following the transaction, the vehicle Sherman and co-defendant, David Allen Frazier Jr., were traveling in was stopped by police and a Taurus .38 automatic pistol was located in the glovebox.
David Allen Frazier Jr., 30, of the Tidewater region Va., pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute at least 100 grams of heroin and one count of being a previously convicted felon illegally in possession of a firearm.
David Lee Boyce, 38, of Culpeper Va., pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute at least 100 grams of heroin and one count of possession of a firearm in furtherance of a drug trafficking crime. According to evidence presented at the defendant’s guilty plea hearing, the defendant sold heroin to a confidential source working with the Blue Ridge Narcotics and Gang Task Force on several occasions. On one occasion, when the source attempted to arrange a purchase of heroin, Boyce had the source contact co-defendant Rebecca Backe, who was selling heroin on his behalf. Backe was able to sell the source heroin.
Rebecca Rae Backe, 38, of Culpeper Va., pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute at least 100 grams of heroin.
The investigation of the case was conducted by the Drug Enforcement Administration and the Virginia State Police Blue Ridge Narcotics and Gang Task Force with Assistance from the Culpeper County Commonwealth’s Attorney. Assistant United States Attorney Ronald M. Huber and Special Assistant United States Attorney Rachel Swartz are prosecuting the case for the United States.
Danville Doctor Sentenced on Healthcare Fraud, Tax Evasion ChargesRead the Press Release
Danville, VIRGINIA – A Danville doctor, who billed various insurers for services he never administered to patients, even after he was warned about the practice, was sentenced today in the United States District Court for the Western District of Virginia in Danville on healthcare fraud and tax evasion charges, United States Attorney Rick A. Mountcastle announced.
Edwin L. Fuentes, 55, was sentenced today to 24 months in prison. Fuentes previously pleaded guilty to one count of healthcare fraud and one count of willfully evading taxes. The defendant was also ordered to pay $1,739,194. In addition, Fuentes was ordered to repay $125,789 in investigative costs.
"Fraud against healthcare benefit programs and the federal government must be severely punished,” United States Attorney Mountcastle said today. “I commend the Virginia Attorney General's Medicaid Fraud Control Unit, the Department of Health and Human Services Office of the Inspector General, the Internal Revenue Service-Criminal Investigations, the Danville Police Department, and the Virginia Department of Motor Vehicles-Law Enforcement Division for working together to bring the defendant to justice.”
“Doctors who overcharge insurance plans for their services, place false notes in patient files, then hide the stolen money will be held responsible for their crimes,” said Special Agent in Charge Nick DiGiulio of the United States Department of Health and Human Services, Office of the Inspector General. “We will continue to work with our law enforcement partners to bring justice to those who steal our health care dollars.”
“Healthcare fraud hurts taxpayers and patients who rely on stable insurance programs, whether they are private plans, Medicare, or Medicaid,” said Attorney General Mark Herring. “I really appreciate the hard work and collaboration between local, state, and federal partners that has put an end to this significant fraud.”
“Mr. Fuentes chose to use the government healthcare programs as a personal piggy bank and today he is being held accountable,” said Kimberly A. Lappin, Special Agent in Charge of the IRS-Criminal Investigation, Washington D.C. Field Office. “Mr. Fuentes’ sentence serves as a reminder that IRS Criminal Investigation is committed to maintaining the integrity of our tax system and will continuously direct its efforts to those who willfully choose to evade their tax obligations.”
According to evidence presented at previous hearings by Assistant United States Attorney Heather L. Carlton, at trial the government’s evidence would have shown that as early as January 2012 and continuing through December 2014, Fuentes owned and operated Morning Star Family Medicine in Danville. During this time, he knowingly and willfully executed a scheme to defraud a number of health care benefit programs, including Optima, Virginia Premier, Aetna, Anthem, Medicare, and Medicaid, by causing his medical practice to bill for services he did not provide. Fuentes’ scheme included double-billing the same patient visits under two different billing codes and then attempting to conceal the scheme by falsifying notes in patient records. As a result, the health care programs overpaid more than $990,000 to Fuentes and Morning Star. In addition, Fuentes failed to report this income on his tax returns.
The investigation of the case was conducted by the Virginia Office of the Attorney General- Medicaid Fraud Control Unit, U.S. Department of Health and Human Services Office of the Inspector General and the Internal Revenue Service - Criminal Investigations. The Danville Police Department and the Virginia Department of Motor Vehicles-Law Enforcement Division provided assistance to the investigation. Assistant United States Attorney Heather L. Carlton and Special Assistant United States Attorney Kari Munro prosecuted the case for the United States.
Carroll County Business Owner Sentenced on Federal Tax ChargesRead the Press Release
Abingdon, VIRGINIA – A Carroll County business owner, who paid some of his employees in cash to avoid paying taxes to the Internal Revenue Service and later lied in a bankruptcy proceeding, was sentenced today in federal court in Abingdon, United States Attorney Rick A. Mountcastle announced.
Jones Keith Andrews, 62, of Galax, Va., was sentenced today to imprisonment for a term of 24 months and was ordered to pay the Internal Revenue Service restitution in the amount of $609,604. Andrews previously pleaded guilty without the benefit of a plea agreement to one count of conspiracy to defraud the United States by impeding, impairing, obstructing and defeating the lawful function of the Internal Revenue Service, 17 counts of failure to pay or collect tax, and one count of bankruptcy fraud.
Between 2009 and March 2015, Andrews, and others, executed a scheme in which a portion of the wages paid to employees of Andrews Farming was paid via paycheck and the remainder was paid in cash. For each quarter from 2009 through 2014, the conspirators caused IRS Forms 941 to be sent to the United States Government that falsely underreported the wages paid to employees of Andrews Farming. The Forms 941 only listed the wages paid to employees via paycheck and did not include the amounts paid via cash.
In addition, for each year from 2009 through 2014, the conspirators caused Forms W2 to be sent to the United States Government that falsely underreported the wages paid to employees of Andrews Farming. The Forms W2 listed only wages paid via paycheck and not the wages paid in cash.
The cash paid to employees was obtained by cashing of personal and company checks. Over $1 million in cash was obtained by the cashing of those checks.
In addition, Andrews knowingly made a false statement, under oath, during a bankruptcy hearing in May 2016. Andrews claimed at a May 5, 2016, bankruptcy hearing that Andrews Farming had lost approximately $1.3 million due to “embezzlement of employee, Robert Donald Morgan, III,” when in fact Andrews knew that was not true and correct. Andrews knew that a significant portion of the amounts he attributed to embezzlement by Morgan were, in fact, used to pay cash wages.
Robert Donald “Donnie” Morgan previously pleaded guilty for his role in the criminal activity and was sentenced to imprisonment for a term of six months on March 29, 2016.
The investigation of the case was conducted by the Internal Revenue Service – Criminal Investigation and the United States Secret Service. The Blacksburg, Virginia, Police Department provided valuable assistance in forensically analyzing the computers seized in the case. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Bristol, Virginia Man Pleads Guilty to Federal Drug ChargeRead the Press Release
Abingdon, VIRGINIA – A Bristol man who maintained a residence used for drug distribution and was the sight of at least two acts of violence, pleaded guilty last week in federal court in Abingdon to related federal charges, United States Attorney Rick A. Mountcastle announced.
John James Lapis, 39, waived his right to be indicted last week and pleaded guilty on Friday, January 5, 2018 to a one-count Information charging him with maintaining a place for the distribution of controlled substances. At sentencing, scheduled for April 9, 2018, at 2:30 p.m., Lapis faces a maximum statutory penalty of up to 20 years in prison and/or a fine up to $500,000.
Lapis admitted to being a drug user who maintained a residence on Safari Drive in Bristol, Virginia for the purpose of allowing others to buy and sell controlled substances. In exchange for use of the residence, Lapis received drugs for his own use.
According to information presented at the guilty plea hearing by Assistant United Attorney Randy Ramseyer, between January 2016 and June 2017, the Washington County Sheriff’s Office responded to over 50 complaints at the residence, including over 100 calls/texts concerning activity at the residence. These calls and texts included complaints of heavy traffic in and out of the residence. In response, law enforcement conducted traffic stops of vehicles leaving the Safari Drive residence. During some of these stops, narcotics were found. During one attempted traffic stop, a driver did not follow the officers’ directions and a police chase took place. After apprehending the driver, officers found a large amount of methamphetamine and a firearm in the vehicle. In June 2017, a search warrant was executed at the residence, and a small amount of methamphetamine was found.
In October 2016, a drug trafficker was shot and killed at the residence. Through numerous interviews by law enforcement, it was determined that the victim was killed, at least in part, due to a drug debt. In February 2017, another shooting took place at the residence, over a drug debt.
The investigation of the case was conducted by the Town of Abingdon Police Department, Bristol Police Department, Washington County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Former BB&T Bank Employee Sentenced for Stealing over $500,000Read the Press Release
Abingdon, VIRGINIA – A former BB&T employee, who over a period of approximately four years embezzled over a half-million dollar, was sentenced to more than 30 months in federal prison yesterday, United States Attorney Rick A. Mountcastle announced.
Anna B. Holt, 48, of Staffordsville, Va., was sentenced yesterday to 33 months in prison and ordered to pay $400,868 in restitution. She previously pleaded guilty to embezzlement by a bank employee of moneys of the bank or entrusted to the custody of the bank.
Holt worked for BB&T Bank as a branch banker at the New River Branch in Pearisburg, Virginia. The defendant admitted that from around 2013 to August 2017, while being employed at the bank, she embezzled a total of $584,805 from 15 separate accounts. Holt used various methods to embezzle the money, including making withdrawals from customer accounts, cashing customers’ bonds and keeping the proceeds, and creating fake credit accounts in the names of relatives and withdrawing the loan proceeds. Some of the money embezzled was used to repay accounts from which Holt had previously stolen money.
The investigation of the case was conducted by the United States Secret Service. Assistant United States Attorney Randy Ramseyer was prosecuted the case for the United States.
Columbus, Ohio Woman Pleads Guilty to Lying to Federal Grand JuryRead the Press Release
Abingdon, VIRGINIA – An Ohio woman admitted this week to lying in a proceeding before a federal grand jury by making several false declarations in relation to her illegal sale of prescription drugs, United States Attorney Rick A. Mountcastle announced.
Shannon Kovaleski, 41, of Columbus, Ohio, pleaded guilty this week to one count of making a false declaration while under oath in a proceeding before a grand jury of the United States. The defendant faces a maximum statutory penalty of up to five year in prison and/or a fine of up to $250,000 when she is sentenced on March 22, 2018.
According to evidence presented at this week’s guilty plea hearing by Assistant United States Attorney Randy Ramseyer, Kovaleski was a witness in a federal grand jury proceeding and was asked about pills that were prescribed to her. Kovaleski told the grand jury she took the pills as prescribed and never sold them to anyone. However, in fact, she only took a pill when necessary to test positive for the drug and sold nearly all her pills to another person, earning approximately $1,000 per month.
The investigation of the case was conducted by the Drug Enforcement Administration. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.
Owner of North Carolina Waste Disposal Company Pleads Guilty to Filing Fraudulent Tax ReturnRead the Press Release
A Greensboro, North Carolina, business owner pleaded guilty today in U.S. District Court for the Western District of Virginia to filing a fraudulent tax return, announced Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division and Acting U.S. Attorney Rick A. Mountcastle for the Western District of Virginia.
According to documents and information provided to the court, David A. Crowley, 57, owned and operated Southern Logistics and Environmental LLC (SLE), a waste management and disposal company. From 2006 through 2013, SLE contracted with a television retail company to dispose of cosmetic products that were returned by its customers. Instead of destroying and disposing of the number of products as required under the contract, Crowley provided the returned cosmetics to other individuals, who then sold the products through online marketplaces. In exchange for supplying the merchandise, Crowley received a portion of the sales. Crowley did not report the proceeds he received from the returned cosmetic product sales on his income tax returns for 2006 through 2013; for 2011 he did not file an income tax return at all. For these tax years, Crowley received and did not report $3,331,341 from the returned cosmetic product sales, causing a tax loss to the Internal Revenue Service (IRS) of $895,654.
A sentencing date has not yet been scheduled. Crowley faces a statutory maximum sentence of three years in prison, a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and Acting U.S. Attorney Mountcastle commended special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Charlene Day and Trial Attorney Daniel McGraw of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Dillwyn Couple Indicted on Federal Health Care Fraud ChargesRead the Press Release
Charlottesville, VIRGINIA – A federal grand jury, sitting in the United States District Court for the Western District of Virginia in Charlottesville, have indicted a husband and wife and charged them with a variety of crimes related to health care fraud, United States Attorney Rick A. Mountcastle announced.
The grand jury has charged Dennis Lewis Gowin, 66, of Dillwyn, Va., with one count of conspiracy to commit health care fraud, twelve counts of making false statements relating to health care matters, twenty-eight counts of wrongful disclosure of individually identifiable health information, four counts of aggravated identity theft and one count of being a previously convicted felon illegally in possession of a firearm.
In addition, the grand jury has charged Cheryl Gowin, 65, of Dillwyn, with one count of conspiracy to commit health care fraud, two counts of making false statements relating to health care matters, twenty-eight counts of wrongful disclosure of individually identifiable health information and three counts of aggravated identify theft. Both defendants were charged in an indictment returned last week and made their initial court appearances today in federal court.
According to the indictment, it was the goal of the defendants to unlawfully enrich themselves by submitting false and fraudulent claims to Virginia Medicaid. They allegedly attempted to accomplish this goal by filing and attempting to file multiple false applications with employers and Medicaid providers.
The indictment alleges that during these application processes, the defendants conspired to provide false information about their backgrounds to gain employment. Once employed, the defendants fraudulently billed Medicaid. Upon termination of their employment, both defendants took possession of personal health information of patients, without their consent.
The investigation of the case was conducted by the Office of the Virginia Attorney General – Medicaid Fraud Control Unit, United States Department of Health and Human Services – Office of Inspector General, Virginia State Police and the United States Postal Inspection Service. Assistant United States Attorney Ronald M. Huber and Special Assistant United States Attorney Maureen Riordan will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Norton Doctor Sentenced on Federal Drug ChargeRead the Press Release
Abingdon, VIRGINIA – A Norton, Virginia physician who specialized in urology was sentenced this morning in the United States District Court for the Western District of Virginia in Abingdon on a federal drug distribution charge, United States Attorney Rick A. Mountcastle and Virginia Attorney General Mark Herring announced.
Felix Eugene Shepard, Jr., 57, was sentenced today to six months in federal prison. Shepard Jr. previously pleaded guilty to one count of distributing oxycodone, a Schedule II controlled substance.
According to evidence presented to the court by Special Assistant United States Attorney and Assistant Attorney General Suzanne Kerney-Quillen, Shepard admitted to writing 47 prescriptions for oxycodone to a person he was involved with in a sexual relationship. Over the course of two years, Shepard issued prescriptions for over 2,000 dose units of oxycodone to the person and later admitted to investigators that he had concerns the person was either addicted to or diverting the pills.
Shepard admitted to the Virginia Board of Medicine that the narcotic prescriptions were written to the person outside of a bona fide doctor-patient relationship and with whom he had a sexual relationship. Shepard continuously prescribed narcotic medications to the person without performing physical examinations, evaluations, or diagnostic testing, for conditions that were outside the scope of his urological practice. In statements Shepard made to the Virginia Board of Medicine, he expressed concern regarding the amount of oxycodone he had prescribed the person and said the amounts were indicative of addiction. However, Shepard took no action to address the person’s possible addiction and/or diversion of the oxycodone he prescribed.
The investigation of the case was conducted by the Drug Enforcement Administration-Tactical Diversion Squad. Special Assistant United States Attorney Suzanne Kerney-Quillen, a Virginia Assistant Attorney General assigned to the Attorney General’s Major Crimes and Emerging Threats Section, prosecuted the case for the United States.
Roanoke Man Sentenced for Theft of Social Security Administration FundsRead the Press Release
Roanoke, VIRGINIA – A Roanoke man, who stole more than $100,000 of Social Security Administration funds intended for his deceased wife after he failed to report her death to that agency, was sentenced today in federal court, United States Attorney Rick A. Mountcastle announced.
Walter J. Doran, 77, was sentenced today to six months in prison, three years supervised release and ordered to pay restitution in the amount of $108,787. Doran previously pleaded guilty to one count of with theft of government money, willfully and knowingly steal and convert for his own use money of the Social Security Administration.
According to evidence presented at a previous hearing by Assistant United States Attorney Charlene R. Day, Doran failed to report his wife’s death to the Social Security Administration in 2009. The defendant continued to receive his late wife’s Social Security Retirement benefits from 2009 through April 2016 and use the funds for his own use. In all, Doran received $108,787 in Social Security Administration benefits to which he was not entitled.
The investigation of the case was conducted by the Social Security Administration. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
Owner of Beverly’s Gun Archery and Pawn Shop Pleads Guilty to Federal ChargeRead the Press Release
Abingdon, VIRGINIA – The owner of a local gun archery and pawn shop, who failed to maintain proper records, will have to give up his federal firearms license after he pleaded guilty and was sentenced yesterday in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney Rick A. Mountcastle announced.
Bruce Alva Beverly, 64, of Coeburn Virginia, pleaded guilty yesterday to one count of failing to maintain proper records as a federal firearms licensed dealer, a misdemeanor. During the same hearing, Beverly was also sentenced yesterday. The defendant will serve a period of probation of one year, pay a fine of $5,500, be required to relinquish his federal firearms license, and agree to never again become a federal firearms licensee and never work in a business that has a federal firearms license.
Beverly, through his work with Beverly’s Gun Archery & Pawn Shop in Coeburn failed to maintain records concerning the acquisition and/or sale of multiple firearms.
This case was investigated by the Bristol Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Wise County Woman Sentenced to Prison for Making False StatementsRead the Press Release
Abingdon, VIRGINIA – A Wise County woman, who was previously convicted of making false statements in a matter within the jurisdiction of the federal government, namely an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, was sentenced yesterday in the United States District Court for the Western District in Abingdon, United States Attorney Rick A. Mountcastle announced.
Tina Sartin, 38, was sentenced yesterday to 18 months in prison. She previously pleaded guilty to one count of making false statements in a matter within the jurisdiction of the federal government, namely an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
According to evidence presented at the sentencing and guilty plea hearings by Assistant United States Attorney Zachary T. Lee, Sartin provided false information to agents with the ATF in connection to an investigation involving Michael Todd Lintz, the City of Norton’s former Parks & Recreation Maintenance Supervisor, who was previously convicted of civil rights and perjury violations. Sartin provided the agents with fabricated text messages and falsely stated that she had been threatened in connection with her cooperation with the ATF.
The investigation of the case was conducted by the Southwest Virginia Drug Task Force, the Virginia State Police, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Fifteen Convicted or Charged in Amherst County Methamphetamine ConspiracyRead the Press Release
Lynchburg, VIRGINIA – An investigation into the distribution of methamphetamine in and around Amherst County, Virginia has resulted in more than a dozen arrests and convictions, United States Attorney Rick A. Mountcastle announced.
The investigation led to multiple kilo-level seizures of methamphetamine, as well as the seizure of numerous firearms, and tens of thousands of dollars in drug proceeds. To date, more than a dozen individuals have been arrested, charged and/or convicted in federal court on charges resulting from this investigation.
Those individuals charged/convicted in federal court are:
- George Christopher Mays, 43, of Wingina, Virginia.
- David Campos-Luebano, 26, of Chatham, Virginia.
- Graciano Ochoa-Bermudez, 40, a citizen of Mexico
- Isabel Gonzalez, 56, of Concord, North Carolina.
- Irineo Perez-Aguirre, 42, a citizen of Mexico.
- Jeffrey Dean-Dickinson, 51, of Fredericksburg, Virginia.
- Lance Dereck Hicks, 28, of Lynchburg, Virginia.
- Jonathan Wayne Angus, 29, of Gladstone, Virginia.
- Timothy Edgar Bryant, 36, of Gladstone, Virginia.
- Edgar Estrada Ruiz, 33, of Burke, Virginia.
- Cynthia D. Baird, 33, of Earlysville, Virginia.
- John Bernard Goolsby, 45, of Shipman, Virginia.
- Wayne Thomas Burnley, 43, of Wingina, Virginia.
- Stephanie Hurst, 32, of Lewisburg, North Carolina
- Kenneth Cordova, 32, of North Carolina
This investigation originated with the Amherst County Sheriff’s Office Narcotics Unit. Due to the quantity of drugs, operational costs, and the expansiveness of drug activity across multiple jurisdictions, the Drug Enforcement Administration was contacted for assistance. Investigative efforts uncovered a vast trafficking network and lead to the designation of an Organized Crime Drug Enforcement Task Force (OCEDTF) case.
The investigation, which remains ongoing, is being conducted by the Amherst County Sheriff’s Office and the Drug Enforcement Administration with substantial assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, the Virginia State Police, the Lynchburg Police Department, the Waynesboro Police Department, the Pittsylvania County Sheriff’s Office, the Appomattox County Sherriff’s Office, the Nelson County Sheriff’s Office, the Buckingham County Sheriff’s Office, the Bedford County Sheriff’s Office, the Stafford County Sheriff’s Office, the Rockbridge County Sheriff’s Office, the Jefferson Area Drug Task Force, the Campbell County Sheriff’s Office, the Guilford County Sheriff’s Office, the South Carolina Law Enforcement Division [SLED] and the South Boston Police Department.
Assistant United States Attorney Andrew Bassford is prosecuting the cases for the United States. A Grand Jury Indictment is only a charge and not evidence of guilt. The defendants are entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Twenty-One Defendants Plead Guilty to Drug and Firearms ChargesRead the Press Release
Abingdon, VIRGINIA – United States Attorney Rick A. Mountcastle announced today that Operation Rolling Thunder, an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and local law enforcement, has resulted in twenty-one defendants entering guilty pleas related to the distribution of methamphetamine and firearms possession in Southwest Virginia and North Carolina.
According to evidence presented at numerous hearings by Assistant United States Attorney Zachary T. Lee, the individuals involved in this drug trafficking organization were responsible for the transportation of large quantities of methamphetamine from the Greensboro, North Carolina area to be distributed in Galax, Virginia, Grayson County, Virginia, Carroll County, Virginia, and Surry County, North Carolina. Additionally, many of the members of the organization possessed and used firearms to further their drug trafficking activities. The following defendants entered guilty pleas to the following offenses:
- Amy Hoyt, 46, of Mt. Airy, North Carolina: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment; Possess a firearm in furtherance of a drug trafficking offense – maximum sentence of life imprisonment and a fine of $250,000.00, with a mandatory minimum sentence of five years imprisonment.
- Grandy Nester, 33, of Pilot Mt., North Carolina: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment; Possess a firearm in furtherance of a drug trafficking offense – maximum sentence of life imprisonment and a fine of $250,000.00, with a mandatory minimum sentence of five years imprisonment.
- Amber Bilyeu, a.k.a. “Rose”, 32, of Mt. Airy, North Carolina: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00 fine with a mandatory minimum term of ten years imprisonment.
- Karen Hawks, 45, of Low Gap, North Carolina: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Walter “Butch” Sexton, 64, of Galax, Virginia: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Brittany Cochran, 28, of Fries, Virginia: Conspiracy to distribute methamphetamine – maximum sentence of twenty years imprisonment and a fine of $1,000,000.00.
- Timothy Bowman, 46, of Cana, Virginia: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment; Possess a firearm in furtherance of a drug trafficking offense – maximum sentence of life imprisonment and a fine of $250,000.00, with a mandatory minimum sentence of five years imprisonment.
- Annette Freeman, 32, of Cana, Virginia: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Brad Hunley, 29, of Galax, Virginia: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Shawanna Phipps, 37, of Independence, Virginia: Conspiracy to distribute 50 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $8,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Brian Graff, 33, of Independence, Virginia: Conspiracy to distribute 50 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $8,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Riley Alley, 26, of Cana, Virginia: Conspiracy to distribute methamphetamine – maximum sentence of twenty years imprisonment and a fine of $1,000,000.00
- Calvin Jermaine Maxwell, 34, of Galax, Virginia: Conspiracy to distribute methamphetamine – maximum sentence of twenty years imprisonment and a fine of $1,000,000.00.
- David Norman, 29, of Galax, Virginia: Conspiracy to distribute methamphetamine – maximum sentence of twenty years imprisonment and a fine of $1,000,000.00.
- Jonathan Choate, 34, of Independence, Virginia: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of twenty years imprisonment.
- Kevin Humphries, 38, of Cana, Virginia: Conspiracy to distribute 50 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $8,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Jackie Christopher Parsons, 39, of Mouth of Wilson, Virginia: Conspiracy to distribute 50 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $8,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
- Jessilyn Jones, 26, of Independence, Virginia: Conspiracy to distribute methamphetamine – maximum sentence of twenty years imprisonment and a fine of $1,000,000.00.
- Vickie Grose, 48, of Galax, Virginia: Conspiracy to distribute methamphetamine - twenty years imprisonment and a fine of $1,000,000.00.
- Stacey Jerome Sawyers, 30, of Galax, Virginia: Conspiracy to distribute methamphetamine – maximum sentence of twenty years imprisonment and a fine of $1,000,000.00.
- Travis Brian Anders, 35, of Sugar Grove, Virginia: Conspiracy to distribute 500 grams or more of methamphetamine – maximum sentence of life imprisonment and a fine of $10,000,000.00, with a mandatory minimum sentence of ten years imprisonment.
The investigation of the case was conducted by the Grayson County Sheriff’s Office, Carroll County Sheriff’s Office, Surry County Sheriff’s Office, Virginia State Police, North Carolina State Bureau of Investigation, Galax Police Department, Bureau of Alcohol, Tobacco, Firearms, and Explosives, United States Marshals Service, United States Secret Service. Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.
Citizen of Mexico Pleads Guilty to Illegally Reentering the United StatesRead the Press Release
Roanoke, VIRGINIA – A Mexican citizen, who had previously been deported from the United States on two occasions, pleaded guilty earlier this week to illegally reentering the United States, United States Attorney Rick A. Mountcastle announced.
Edi Jose Manuel, 37, a.k.a. “Edy Manuel,” “Edi Jose-Martinez,” “Edy Manuel Jose,” “Jose Manuel Ramos,” “Jose Manuel,” “Manuel Rams,” “Manuel Perez-Perez,” pleaded guilty this week to being a convicted felon who illegally reentered the United States after being previously deported.
According to evidence presented at Manuel’s guilty plea hearing, the defendant was convicted in 2004 in the Circuit Court of Franklin County for four counts of forging public documents. Manuel was sentenced to prison time and was deported following his prison sentence.
At an unknown time after being deported in 2008, Manuel illegally reentered the United States a second time. On or about August 31, 2017, while incarcerated in the Martinsville City Jail on a driving while intoxicated charge, a fingerprint card for the defendant was submitted and revealed the prior convictions for the defendant. Martinsville Jail officials contacted officials with Immigration and Customs Enforcement to alert them of the defendant’s presence in the jail.
The investigation of the case was conducted by the United States Immigration and Customs Enforcement, Homeland Security Investigations. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
North Carolina Woman Pleads Guilty to Tax ChargeRead the Press Release
Roanoke, VIRGINIA – A woman who participated in a fraudulent cosmetics sales scheme was sentenced this afternoon on federal tax charges, United States Attorney Rick A. Mountcastle announced.
Charon Ray, a.k.a. “Charon Crowely,” 47, of High Point, North Carolina, was sentenced today to three years’ probation, nine months of which must be spent on home confinement. In addition, Ray was ordered to pay a fine of $40,000. She previously pleaded guilty to one count of filing a false tax return.
According to evidence presented during the guilty plea hearing, Ray operated an online cosmetic sales business out of her residence during the years 2009, 2010, 2011, 2012, 2013 and 2014. Ray obtained cosmetics from a disposal company and then repurposed them for sale through electronic sales channels such as eBay. The Internal Revenue Service examined Ray’s financial records for the relevant time period. There is a substantial known tax loss that RAY caused, $455,109, by not reporting $1,625,389 of income received by selling used and returned cosmetic products.
As part of her plea agreement in this case, in 2017 Ray filed amended tax returns for each of tax years 2009 through 2014, included in returns were payment of taxes and other amounts due. The defendant paid $590,019 for the tax periods 2009 through 2014.
The investigation of the case was conducted by the Internal Revenue Service. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
Former Judge Sentenced on Federal Contempt ChargeRead the Press Release
Abingdon, VIRGINIA – A former juvenile and domestic relations judge was sentenced this week to prison time on federal contempt of court charges related to his wife’s federal trial on public corruption charges, United States Attorney Rick A. Mountcastle announced.
Kurt Pomrenke, 64, of Bristol, Virginia, was sentenced this week to two months in prison and ordered to pay a fine of $1,000. He was previously found guilty of one count of contempt of court.
According to evidence presented at previous hearings by Assistant United States Attorney Zachary T. Lee, Pomrenke, who was removed by the Virginia State Supreme Court from the bench in a ruling earlier this week, violated a federal judge’s order in regards to the disclosure of discovery materials associated with his wife’s public corruption trial. His wife, Stacey Pomrenke, was a former executive with BVU who was ultimately convicted of federal charges. An investigation into Kurt Pomrenke’s actions during his wife’s trial also proved that he contacted at least two witnesses in an attempt to influence their testimony. In one instance, Kurt Pomrenke included his business card identifying himself as a judge with a handwritten note that he mailed to the potential witness.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Beam Bros. Trucking, Inc., Beam Bros. Holding Company and Executives Sentenced on Federal Conspiracy ChargesRead the Press Release
Harrisonburg, VIRGINIA – A Mount Crawford based trucking company that formerly hauled United States mail and it holding company, as well as four of its most senior officers, the President, Vice-President, Chief Financial Officer and Chief Operating Officer, were all sentenced this week in the United States District Court for the Western District of Virginia in Harrisonburg for conspiring to commit Federal crimes, United States Attorney Rick A. Mountcastle announced.
Beam Bros. Trucking, Inc. (Beam Trucking) and Beam Bros. Holding Corporation (Beam Holding) were jointly sentenced by the court to forfeit to the government $2,000,000 of fraudulently obtained proceeds. They were also sentenced to pay approximately $1,000,000 in restitution to drivers who were defrauded of their pay. In addition, these companies were sentenced to serve 3 years of corporate probation and to pay a fine of $250,000 to the government.
Beam Holding previously pled guilty to conspiracy to commit wire fraud in that the company knowingly and willfully defrauded its driver employees of almost $1,000,000 dollars of their pay. In specific, Beam Holding caused their driver employees to falsify their time sheets so that they would report fewer hours worked than they actually worked in direct violation of the Fair Labor Standards Act and the McNamara-O’Hara Service Contract Act.
Beam Trucking previously pled guilty to conspiracy to falsify safety records and pay records in that the company falsely reported the hours their truck driver employees worked and were on duty with intent to obstruct the government’s investigation. In specific, Beam Trucking conspired to falsify drivers’ records of duty status and their time sheets.
Beam Trucking and Beam Holding President, Gerald Wayne Beam and Vice President, Garland Crawford Beam were each sentenced to serve six months of home confinement followed by two years of supervised release. Beam Trucking Chief Operations Officer, Shaun Crawford Beam and Chief Financial Officer, Nickolas Gene Kozel were each sentenced to serve three months of home confinement followed by two years of supervised release. Each of these officers previously pled guilty to conspiring to commit an offense against the United States in that they knowingly violated the Federal Motor Carrier Safety Administration (FMCSA) highway safety regulations. The FMCSA highway safety regulations are designed to protect the driving public and truck drivers from injury or death caused by truck crashes resulting from driver fatigue.
According to evidence presented during the sentencing hearings by Assistant United States Attorneys Stephen J. Pfleger and Christopher Kavanaugh, between 1999 and 2017 the leaders of the conspiracy, Gerald Wayne Beam, Garland Crawford Beam and Shaun Crawford Beam created routes and then instructed Beam Trucking drivers to drive routes that were grossly illegal. Beam Trucking drivers were instructed to drive routes that were so long that they barely got any sleep between trips for weeks at a time over a course of years. Drivers became so fatigued that they could hardly stay awake. On a number of occasions, Beam Bros. drivers were so fatigued that they barely avoided crashes when they momentarily fell asleep while driving trucks on public highways. One driver was so fatigued that he took drugs (“Bath Salts”) every few hours to stay awake. After three months of taking drugs, the driver found during one of his trips that he could no longer physically drive a truck and had to call for a medical rescue.
The investigation of the case was conducted by Special Agents Sean Baer and Art Stevens, from the U.S. Postal Service, Office of the Inspector General, Special Agent Amanda Yarborough from the Department of Transportation-Office of the Inspector General, Special Agent Joseph Harrilla from the Department of Labor-Office of the Inspector General and Special Agent James D. Havrilla from the Internal Revenue Service-Criminal Investigations. Assistant United States Attorney Stephen J. Pfleger and Christopher Kavanaugh prosecuted the case for the United States with the assistance of legal assistants Gina Palmero, Kathleen Mensinger, Diane Fitzgerald, Susan Bentley and litigation specialist, Mary Vogt.
Pair of USP Lee Inmates Sentenced for EscapeRead the Press Release
Abingdon, VIRGINIA – A pair of inmates serving time at United States Penitentiary Lee County in Jonesville, Virginia, who escaped in May 2017, were sentenced to additional prison time yesterday in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney Rick A. Mountcastle announced.
Salah Mohamed, 36, was sentenced yesterday to 60 months in prison. He previously pleaded guilty to one count of conspiracy to escape or attempt to escape a correctional facility and one count of escape from a correctional facility. Kamal Qazah, 38, was also sentenced yesterday to 60 months in prison. He previously pleaded guilty to one count of conspiracy to escape or attempt to escape a correctional facility and one count of escape from a correctional facility.
According to evidence presented at previous hearings by Assistant United States Attorney Zachary T. Lee, Mohamed and Qazah were inmates serving prison time at USP Lee prison camp. Mohamed was serving 172 months and Qazah was serving 216 months when in May 2017 they failed to show-up for the 5:00 p.m. inmate count. USP officials discovered that Mohamad and Qazah had walked away from the camp and were likely picked-up by another person on a nearby road outside of the grounds of USP Lee. Nineteen days later the United States Marshals Service was able to locate Mohamed and Qazah in Mexico City, Mexico and take them into custody. Found in their possession were forged Yemeni passports and United States currency.
The investigation of the case was conducted by the United States Marshals Service. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Knoxville Man Sentenced for Conspiring to Defraud the FDARead the Press Release
Abingdon, VIRGINIA – A Tennessee man, who operated a business that unlawfully distributed prescription animal drugs to evade existing Food and Drug Administration laws, was sentenced today in the United States District Court for the Western District of Virginia in Abingdon to a federal felony conspiracy charge, United States Attorney Rick A. Mountcastle announced.
Billy K. Groce, 65, of Knoxville, was sentenced today to imprisonment for a term of four months. Groce previously pleaded guilty to one count of conspiracy to defraud the United States by impeding, impairing obstructing and defeating the lawful functions of the Food and Drug Administration.
Groce operated a business that was created for the purpose of illegally circumventing the FDA’s regulation of the interstate shipment and labeling of veterinary drugs. Groce’s business illegally obtained, stored, sold and caused to be shipped, drugs from veterinary drug manufacturers and distributers. Groce’s business was not a licensed wholesaler, a licensed pharmacy or a veterinary clinic.
Federal regulation of prescription veterinary drugs are not primarily to protect animals from the potential harms of prescription drugs, but are to protect the human food supply from unsafe drug residues in the edible tissues of animals sold for slaughter. Accordingly, veterinary prescription drugs must stay within the controlled chain of distribution to ensure the drugs’ safety and efficacy.
Groce illegally sold the drugs throughout Tennessee and Southwest Virginia. In addition, Groce shipped drugs to co-conspirator Marlin Webb, who was the store manager at a farm supply business in Carroll County, Virginia. Webb illegally sold the veterinary prescription drugs to customers in Southwest Virginia. Webb previously pleaded guilty to a felony charge of conspiracy to defraud the FDA and was sentenced to one year of probation. He paid $125,000 in forfeiture and other payments at the time of his guilty plea.
The investigation of the case was conducted by the U.S. Food and Drug Administration – Office of Criminal Investigations and the Virginia Department of Health Professions. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Former Virginia Tech Professor Charged in Federal IndictmentRead the Press Release
Roanoke, VIRGINIA – A federal grand jury sitting in the United States District Court for the Western District of Virginia in Roanoke has charged a former engineering professor at Virginia Tech in an indictment returned yesterday, United States Attorney Rick A. Mountcastle announced.
Yiheng Percival Zhang, 46, of Blacksburg, Va., is charged with one count of conspiring to defraud the United States, three counts of making false statements within the jurisdiction of the United States, and three counts of making false claims to the United States.
Zhang, a former professor of Biological Systems Engineering at Virginia Tech, was also the Chief Scientific Officer of Cell-Free Bioinnovations (CFB). According to the indictment, CFB applied for grant funding available through the National Science Foundation (NSF) under the premise that the money would be used for research on certain projects. However, it is alleged that Zhang intended for the grant funds to be used for other purposes.
The indictment alleges that Zhang, in an email to a CFB employee, stated:
“What we expect here is to get this free money and use half of money to do what you want do to do – make sweeteners. Another half will be used to pay VT graduate students to finish this project.”
The grants that are the subject of the indictment total $600,000.
The case is being investigated by the National Science Foundation – Office of Inspector General, the Department of Energy- Office of Inspector General and the Federal Bureau of Investigation. The Blacksburg Police Department and the Virginia Tech Police Department provided assistance in the execution of search warrants. The case is being prosecuted by Assistant United States Attorney Randy Ramseyer
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Former IRS Employee Sentenced on Health Care Fraud ChargeRead the Press Release
Lynchburg, VIRGINIA – A former employee of the Internal Revenue Service was sentenced yesterday in the United States District Court for the Western District of Virginia in Lynchburg on a federal health care fraud charge related to his misuse of government health insurance benefits, United States Attorney Rick A. Mountcastle announced.
Ronald Lewis Hooper, 69, of Lynchburg, was sentenced yesterday to 20 months in federal prison to be followed by three years of supervised release. He was also ordered to pay $549,607 in restitution. Hooper previously pleaded guilty to one count of health care fraud.
According to evidence presented at a previous hearing by Assistant United States Attorney Jennie L. M. Waering, should this case have gone to trial, the United States would have proven that Hooper misused his government health benefits to seek opiate drugs such as Nubian, Phenergan, and others, at various emergency departments. The United States would have proven that Hopper began seeking these drugs at various emergency departments only after his primary physician began to restrict the number of injections he would provide to Hooper to two per week. Hooper sought additional injections at emergency departments at hospital facilities throughout Virginia, West Virginia, North Carolina, South Carolina, Georgia and Florida.
Between December 2002 and December 2012, Hooper received services at hospitals and emergency rooms on approximately 1,700 separate occasions seeking injections of Nubian and Phenergan, incurring more than $824,000 in fraudulent medical payments.
The investigation of the case was conducted by the Office of Personnel Management, the Federal Bureau of Investigation and the Blue Cross Blue Shield Special Investigations Unit. Assistant United States Attorney Jennie L. M. Waering prosecuted the case for the United States.
Lynchburg Man Sentenced on Federal Securities Fraud ChargeRead the Press Release
Lynchburg, VIRGINIA – A Lynchburg man convicted of securities fraud was sentenced last week in the United States District Court for the Western District of Virginia in Lynchburg, United States Attorney Rick A. Mountcastle announced.
Robert Scott Mattingley, 54, was sentenced last week to 50 months in federal prison and three years of supervised release after the Court heard evidence that he defrauded more than 80 victims out of $847,000 in connection with a commercial loan fraud scheme. Mattingley previously pleaded guilty in this case to one count of securities fraud.
According to evidence presented at previous hearings by Special Assistant United States Attorney Kari Munro, between 2008 and 2012, Mattingley owned and operated Virginia Commercial Capital Corporation, based in Lynchburg. Through this company, Mattingley held himself out as a commercial broker who could obtain favorable rates on loans for commercial projects provided his customers could make one or, in some cases, several, cash deposits toward their loans.
Mattingely failed to obtain commercial loans on behalf of his customers as agreed and kept their deposits, using them for personal expenses. In all, he obtained more than $845,000 from as many as 80 individuals located throughout the United States.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Virginia State Police. Special Assistant United States Attorney Kari Munro and Department of Justice, Tax Division Trial Attorney Sean Beaty prosecuted the case for the United States.
Jury Convicts Four Defendants of Conspiracy Charges Related to Drug TraffickingRead the Press Release
Abingdon, VIRGINIA – United States Attorney Rick Mountcastle announced today that following a seven day trial, a jury sitting in Abingdon, Virginia convicted four defendants of multiple charges related to the large scale distribution of methamphetamine, oxycodone, and buprenorphine. Richard Kayian, 55, Las Vegas, Nevada, and Tracy Callihan, 48, Glade Spring, Virginia, were both convicted of one count of conspiracy to distribute 500 grams or more of methamphetamine and oxycodone and to use a communication facility to facilitate a drug trafficking offense, and one count of conspiracy to commit money laundering. John Williams, 50, Glade Spring, Virginia, was convicted of one count of conspiracy to use a communication facility to facilitate a drug trafficking offense. Rebecca Williams, 51, Abingdon, Virginia, was convicted of one count of conspiracy to distribute methamphetamine, oxycodone, and buprenorphine, and to use a communication facility to facilitate a drug trafficking offense.
In late 2016, law enforcement agencies, led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Drug Enforcement Administration, and assisted by agencies from across southwest Virginia and Las Vegas, Nevada, charged 32 individuals with conspiring to distribute methamphetamine, oxycodone, and buprenorphine. The investigation, Operation Leaving Las Vegas, accused 32 individuals of trafficking methamphetamine, oxycodone, and buprenorphine from Las Vegas into Southwest Virginia, Eastern Kentucky and elsewhere. Evidence presented at the trial demonstrated that Kayian was responsible for sending large quantities of methamphetamine and oxycodone via UPS and Federal Express to numerous locations in Abingdon, Virginia and Glade Spring, Virginia. These drugs were then distributed throughout the area and in Eastern Kentucky by Tracy Callihan, Rebecca Williams, and others. Evidence also showed that John Williams, formerly employed as a delivery driver for UPS, assisted the organization by ensuring that packages of methamphetamine and oxycodone were safely delivered to Tracy Callihan in Glade Springs and were not intercepted by law enforcement. Additionally, evidence at the trial demonstrated that more than $1,000,000 in proceeds from the drug sales in the Abingdon area were sent via wire transfers and bank deposits to Kayian and others in Las Vegas, Nevada.
Sentencing hearings for Richard Kayian and Tracy Callihan have been set for February 27, 2018. Kayian and Callihan each face punishment of up to life imprisonment and $12,000,000.00 in fines. The sentencing hearing for Rebecca Williams has been set for February 28, 2018 and she faces punishment of up to twenty years imprisonment and fines of up to $1,000,000. The sentencing hearing for John Williams has been set for February 12, 2018, and he faces punishment of up to four years imprisonment and fines of up to $250,000.00.
To date, 30 of the 32 charged have been convicted of federal drug conspiracy and money laundering charges and 23 defendants have been sentenced. The cases for the remaining defendants are working their way through the federal court system. Throughout the course of the investigation, more than $60,000.00 has been forfeited. Those previously sentenced are:
- Brandon Lee Stone, 33, Abingdon, Virginia – 300 months imprisonment
- Misael Reyes Tajimaroa, 32, Spokane, Washington – 192 months imprisonment
- Bradley Lee Chapman, 28, Bristol, Virginia - 135 months imprisonment
- Heather Michelle Sullins, 27, Abingdon, Virginia – 30 months imprisonment
- Alex Michael Kayian, 23, Bristol, Virginia - 72 months imprisonment
- Kaitlynn Elizabeth Chapman, 24, Bristol, Virginia - 72 months imprisonment
- Ralph Stewart Dingus, 27, Abingdon, Virginia - 37 months imprisonment
- John Dewayne Farmer, 32, Abingdon, Virginia - 240 months imprisonment
- Lola Virginia Farmer, 52, Abingdon, Virginia - 87 months imprisonment
- Shauna Nicole Chafin, 36, Abingdon, Virginia - 97 months imprisonment
- William Wesley Fleenor, 29, Abingdon, Virginia - 79 months imprisonment
- Jeffrey Nathaniel Gobble, 25, Abingdon, Virginia - 46 months imprisonment
- Preston Kyle Lawson, 21, Abingdon, Virginia - 46 months imprisonment
- Gary Ginn, 47, Clay City, Kentucky - 151 months imprisonment
- Daniel Corey Cantrell, 25, Abingdon, Virginia - 37 months imprisonment
- Tanner Morris Curd, 23, Meadowview, Virginia - 84 months imprisonment
- Amy Lorene Moser, 52, Abingdon, Virginia -100 months imprisonment
- Steven Salyer, 27, Abingdon, Virginia - 87 months imprisonment
- Brandon Cody Trivett, 23, Abingdon, Virginia - 30 months imprisonment
- Brian Edward Widener, 30, Abingdon, Virginia – 46 months imprisonment
- Justin Lowe, 24, Abingdon, Virginia – 41 months imprisonment
- Lamar Skipper, 27, Chilhowie, Virginia - four years probation
- Gary Brandon Childress, 25, Abingdon, Virginia - three years probation.
The investigation of the case was conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Internal Revenue Service Criminal Investigations, United States Marshals Service, Virginia State Police, Washington County, Virginia Sheriff’s Office, Abingdon Police Department, Marion Police Department, Smyth County, Virginia Sheriff’s Office and Las Vegas Metropolitan Police Department. Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.
U.S. Attorney Mountcastle Delivers Remarks to Ethics Committee of Virginia State BarRead the Press Release
Roanoke, VIRGINIA – United States Attorney for the Western District of Virginia Rick A. Mountcastle, Assistant United States Attorney and Professional Responsibility Officer Michael Moore from the Eastern District of Virginia, and a delegation from the Virginia Association of Commonwealth’s Attorneys, consisting of Greensville County/City of Emporia Commonwealth’s Attorney Patricia T. Watson, Virginia Beach Commonwealth’s Attorney Colin Stolle, Arlington County/City of Falls Church Commonwealth’s Attorney Theophani K. Stamos, and Suffolk City Commonwealth’s Attorney C. Phillips Ferguson appeared before the ethics committee of the Virginia State Bar this morning to deliver remarks in opposition of the proposed VSB Legal Ethics Opinion 1888 [VSB LEO 1888].
U.S. Attorney Mountcastle’s remarks as prepared for delivery:
Good morning ladies and gentlemen. My name is Rick Mountcastle and I’m the United States Attorney for the Western District of Virginia. I’m here with my colleague from the United States Attorney’s Office for the Eastern District of Virginia Assistant United States Attorney and Professional Responsibility Officer Mike Moore. It’s my privilege to address you this morning on behalf of the United States Department of Justice and the two United States Attorney’s Office’s in Virginia about proposed Legal Ethics Opinion 1888.
After a careful review of the hypothetical facts, the analysis, and the proposed Opinion, as well as the applicable legal authorities, we respectfully request that you withdraw the proposed Opinion for the reasons set forth in our November 2, 2017 letter, as well as the many other reasons articulated by the Virginia Association of Commonwealth’s Attorneys and others. I don’t want to repeat our written comments and I’m certain the Bar will give those comments careful consideration.
I do want to emphasize a couple of points this morning. First, the Department of Justice and the United States Attorney’s Offices take very seriously the requirement that our prosecutors comply with their discovery and disclosure obligations. We expend considerable resources to ensure compliance with the Department’s mandate that we make broad disclosures of potentially exculpatory and impeaching material as required by the statutes, rules, and case law. Further, we agree that prosecutors must not willfully and intentionally attempt to conceal exculpatory and impeaching evidence by hiding it within voluminous materials.
The proposed Opinion, however, does not provide clear guidance about this requirement but, instead, creates confusion. As discussed in our written comments, the underlying hypothetical facts are so oversimplified that the proposed Opinion will apply to virtually none of the cases actually handled by federal and state prosecutors on a daily basis. Every case will be different because every one of them will have more factual context than the facts set forth in the proposed Opinion. We’ve listed some of the important factual context at page two of our letter and I’d like to add another very important factor to that list: the tone of voice and inflexion of the defendant and the victim during the phone call. As described in our letter, the factual context of each case is critical to a determination of whether a piece of evidence like the nine-word phone call “tends to negate guilt” as opposed to being inculpatory or merely ambiguous; it’s critical to a determination of whether the prosecutor “knows” that it “tends to negate guilt” when an equally fair reading based on all of the facts is that it’s inculpatory or ambiguous, and only defense counsel knows what material falls within the defense theory of the case; and it’s critical to a determination of whether producing it as a part of 200 hours of calls constitutes knowing and intentional concealment when the law only requires disclosure and the defendant knows about it or it’s readily identifiable from an index.
The substantial disparity between the hypothetical facts underlying the proposed Opinion, and the facts of the cases we actually prosecute will inevitably create the type of confusion described in our comments and in the comments of the Commonwealth’s Attorneys. In our view, the proposed Opinion provides no meaningful guidance to the prosecutor because every case he or she prosecutes will be significantly different from the bare bones facts of the hypothetical. At the same time, it’s likely that defense counsel, in zealously representing their clients, will argue that the proposed Opinion should apply to cases that have no factual similarity. As a result, the proposed Opinion, while providing no meaningful guidance, will simply cause collateral litigation distracting the courts and litigants from administering justice in criminal cases.
For these reasons and the other reasons stated in our letter, we respectfully request that the proposed Opinion be withdrawn. Thank you for this morning’s opportunity to provide additional comment.
End of Prepared Remarks
In addition to the remarks delivered this morning, the United States Attorneys and the Virginia Association of Commonwealth’s Attorneys previously sent the ethics committee letters objecting to VSB LEO 1888.
lettertovsb.pdf vacaletter.pdfChief Judge Administers Oath of Office to United States Attorney Rick A. MountcastleRead the Press Release
Roanoke, VIRGINIA – On November 15, 2017, Chief Judge Michael F. Urbanski of the United States District Court for the Western District of Virginia administered the oath of office to Rick A. Mountcastle to serve as United States Attorney for the Western District of Virginia, pursuant to his appointment by United States Attorney General Jefferson B. Sessions. Mr. Mountcastle has served as the Acting United States Attorney since January 7, 2017. He has been a federal prosecutor for more than thirty years, first with the Department of Justice and, for the last twenty-two years, with the United States Attorney’s Office. During his tenure with the United States Attorney’s Office, he has served as First Assistant United States Attorney and, before that, as Civil Chief. By law, the appointment is for 120 days or until the Senate confirms a United States Attorney nominated by President Donald J. Trump.
Roanoke Man Pleads Guilty to Child Pornography ChargesRead the Press Release
Roanoke, VIRGINIA – A Roanoke man, who investigators with the Southern Virginia Internet Crimes Against Children (ICAC) task force identified as someone who received at least 144 files containing child pornography, pleaded guilty today in the United States District Court for the Western District of Virginia in Roanoke, Acting United States Attorney Rick A. Mountcastle announced.
Richard B. Morgan, 67, waived his right to be indicted and pleaded guilty today to an Information charging him with one count of receipt of child pornography. A sentencing hearing has been scheduled for February 16, 2018 at 9:30 a.m.
According to information presented at today’s guilty plea hearing by Assistant United States Attorney Charlene R. Day, In June 2015, an investigator with the Southern Virginia ICAC identified the IP address attached to the home address of the defendant as one associated with an IP address downloading files containing child pornography. Investigators successfully downloaded images of child pornography from the defendant via peer-to-peer, file-sharing software often used by those who trade in child pornography.
A search warrant was obtained for Morgan’s home address. During the search, Morgan told officers, “I know why you are here.” Morgan admitted to officers that he downloaded child pornography and was the only person with access to the computer in his apartment. Morgan’s computer and an external hard drive were seized and forensically examined, revealing 1,849 images and 4,406 videos containing child pornography.
The investigation of the case was conducted by the Southern Virginia Internet Crimes Against Children Task Force, the Bedford County Sheriff’s Office and U.S. Customs Enforcement, Department of Homeland Security. Assistant United States Attorney Charlene R. Day is prosecuting the case for the United States.
Former Correctional Officer at Southwest Virginia Regional Jail in Abingdon SentencedRead the Press Release
Abingdon, VIRGINIA – A correctional officer at Southwest Virginia Regional Jail in Abingdon, who agreed to smuggle contraband items into the facility, was sentenced today in the United States District Court for the Western District of Virginia in Abingdon, Acting United States Attorney Rick A. Mountcastle announced.
Justin Andrew Brown, 23, of Lebanon, Va., was sentenced today to six months in prison and six months house arrest, followed by three years of supervised release. He was forfeited $6,500. Brown previously pleaded guilty to one count of accepting a bribe as a public official, and one count of conspiring to accept a bribe as a public official.
Robert Lewis Jones, 25, also previously pleaded guilty to one count of conspiring to accept a bribe as a public official. Jones will be sentenced on November 29, 2017.
According to evidence presented at a previous hearing by Assistant United States Attorney Zachary T. Lee, Brown was a correctional officer at Southwest Virginia Regional Jail in Abingdon. In the summer of 2015, an inmate approached Brown about smuggling contraband, specifically tobacco, controlled substances and nude pictures into the jail. Following numerous discussions with the inmate, Brown agreed to smuggle controlled substances, tobacco and nude pictures into Southwest Virginia Regional Jail in exchange for $10,000 in United States currency. Law enforcement agents became aware of Brown’s plan in March of 2016. With the assistance of a cooperating witness, law enforcement arranged for a meeting between Brown and the cooperating witness at which Brown believed he would be receiving $10,000 in United States currency and various contraband items that he was to smuggle into the Southwest Virginia Regional Jail. Brown offered Jones $2,000 to “watch his back” during the meeting.
The meeting between Brown, Jones, and the cooperating witness occurred on March 22, 2016, at a restaurant in Abingdon. At the meeting, Jones and Brown took possession of the contraband items and a quantity of United States currency and Brown agreed to smuggle the contraband items into the Southwest Virginia Regional Jail facility. Shortly thereafter, law enforcement arrested both Brown and Jones.
The investigation of the case was conducted by Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Abingdon Police Department, and the Washington County Sheriff’s Department. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Coeburn Doctor Pleads Guilty to Health Care Fraud, Distributing RitalinRead the Press Release
Abingdon, VIRGINIA – A Coeburn, Virginia doctor, who prescribed Ritalin and hydrocodone to an undercover investigator without a legitimate medical purpose, pleaded guilty today to federal health care fraud and drug distribution charges, Acting United States Attorney Rick A. Mountcastle and Virginia Attorney General Mark Herring announced.
Gurcharan Singh Kanwal, 78, of Wise, Va., pleaded guilty this afternoon to one count of health care fraud and one count of distributing Ritalin and hydrocodone. As part of his plea agreement, Kanwal has also agreed to surrender his medical license and never reapply for a medical license. In addition, he has agreed to pay $472,500 in restitution to the Virginia Medicaid program.
According to evidence presented at today’s guilty plea hearing by Special Assistant United States Attorney and Assistant Attorney General M. Suzanne Kerney-Quillen, between September 19, 2016 and February 22, 2017, the defendant knowingly distributed Ritalin and hydrocodone, without a legitimate medical purpose and beyond the bounds of medical practice to an undercover investigator. Kanwal also fraudulently billed Virginia Medicaid for services provided to the investigator, which were not medically necessary or not actually received.
An investigation into Kanwal and the Coeburn Medical Clinic began after agents received complaints that controlled substances were being diverted by employees and patients of Dr. Kanwal. Agents also learned that Kanwal was believed to prescribe controlled substances without a legitimate medical purpose and outside the course of his professional practice. During the summer of 2015, the Southwest Virginia Drug Task Force began an official investigation into Kanwal. During the course of the investigation, an undercover investigator visited Kanwal’s office as a patient and obtained prescriptions from Kanwal for Ritalin and hydrocodone, without a legitimate medical purpose and beyond the bounds of medical practice.
The investigation of the case was conducted by the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit and the Southwest Virginia Drug Task Force. Agencies that provided assistance during the execution of a search warrant in this case included the City of Norton Police Department, Big Stone Gap Police Department, Coeburn Police Department, Dickenson County Sheriff’s Office, Lee County Sheriff’s Office, Scott County Sheriff’s Office, Tazewell County Drug Task Force, Virginia Department of Alcoholic Beverage Control, Virginia State Police, Wise County Commonwealth’s Attorney’s Office, Wise County Sheriff’s Office, Wise Police Department, and the Drug Enforcement Administration. Special Assistant United States Attorney and Assistant Attorney General M. Suzanne Kerney-Quillen is prosecuting the case for the United States.
Patrick County Man Pleads Guilty to Theft of Government MoneyRead the Press Release
Danville, VIRGINIA – A Patrick County, Virginia man, who stole more than $230,000 from the Social Security Administration and the Department of Health and Human Services in disability benefits to which he was not entitled, pleaded guilty yesterday in the United States District Court for the Western District of Virginia in Danville, Acting United States Attorney Rick A. Mountcastle announced.
Mark S. Huffman, 46, waived his right to be indicted and pleaded guilty yesterday to a one-count Information charging him with theft of government monies. As part of his plea agreement, Huffman agreed to pay restitution for $234,134 to the Social Security Administration and the Department of Health and Human Services. In addition, the defendant faces a maximum term of incarceration of up to 10 years.
According to evidence presented at yesterday’s guilty plea hearing by Assistant United States Attorney’s Charlene R. Day, Huffman collected $234,134 in disability benefits from the government while also earning money working a full-time job, which he failed to report to the Social Security Administration or the Department of Health and Human Service, as required by law.
The investigation of the case was conducted by Department of Health and Human Services and the Social Security Administration. Assistant United States Attorney Charlene R. Day is prosecuting the case for the United States.
Rural Retreat Man Sentenced for Aiding Counterfeiting Scheme and for Firearm OffensesRead the Press Release
Abingdon, VIRGINIA – A Rural Retreat man, who aided another man with a counterfeiting scheme, provided a firearm to him, and possessed stolen firearms was sentenced yesterday in the United States District Court for the Western District of Virginia in Abingdon, announced Acting United States Attorney Rick A. Mountcastle.
Robert Louis Fowler, 38, was sentenced yesterday in federal court to 15 months in prison and three years of supervised release. He was also ordered to pay over $8,500 in restitution. Fowler previously pleaded guilty to one count of a principal and aider and abettor with intent to defraud, falsely making counter US currency, one count of knowingly possessing a stolen firearm and one count of knowingly and intentionally selling or disposing of a firearm to a convicted felon.
Fowler’s case relates to that of Chad Edward Harmon, 34, of Wytheville. Harmon previously pleaded guilty to one count of uttering counterfeit obligations and one count of being a previously convicted felon illegally in possession of a firearm. On May 30, 2017, Harmon was sentenced to 12 months and one-day of federal incarceration.
According to evidence presented at previous hearings by Assistant United States Attorney Jennifer R. Bockhorst, in November 2016, several businesses in Wythe County reported to the Wythe County Virginia Sheriff’s Office an influx of counterfeit money being passed. The Wythe County Sheriff’s Office contacted the United States Secret Service in Roanoke after arresting Harmon while trying to pass what was believed to be a counterfeit bill. While being held in custody, Harmon made a call from jail in which he told another individual that the police had missed some money hidden in a special compartment in his vehicle and they discussed a firearm he had removed prior to the search.
Agents with the United States Secret Service examined several of the counterfeit Federal Reserve Notes received by local banks and businesses in Wythe County, determined they were, in fact counterfeit, and had been produced by a scanner/printer/copier or commercial computer and printer that was recovered from Harmon’s home during the execution of a state search warrant.
Fowler later detailed for police how Harmon counterfeited money and admitted to giving Harmon the scanner/printer/copier. Fowler also admitted that he supplied Harmon, who he knew to be a convicted felon, with a 9 mm pistol.
Evidence also established that Fowler had possessed a firearm he knew to be stolen.
The investigation of the case was conducted by The United States Secret Service and the Wythe County Sheriff’s Office. Assistant United States Attorney Jennifer R. Bockhorst prosecuted the case for the United States.
Pair Sentenced on Federal Conspiracy ChargesRead the Press Release
Abingdon, VIRGINIA – A pair of men from India, who made cold calls to the United States for the purpose of selling versions of pharmaceutical drugs illegal in the United States, including controlled substances, were sentenced yesterday in the United States District Court in Abingdon to federal conspiracy charges, Acting United States Attorney Rick A. Mountcastle announced.
Alok Kailashnath Jaiswal, 32, of Azangarh, India, and Rahil Parvez Mir, 25, of Mumbai, India, previously waived their right to be indicted and pleaded guilty to one count of conspiracy to commit offenses against the United States: Specifically, to illegally distribute controlled substances, to fraudulently and knowingly import into the United States any merchandise contrary to law, and to introduce into interstate commerce a drug that was misbranded, with the intent to defraud and mislead.
Yesterday in Federal Court, Jaiswal and Mir were sentenced to time served and were ordered to be deported. The court also imposed a $30,000 forfeiture which was paid by the defendants.
Jaiswal and Mir made cold calls from India to individuals in the United States to solicit orders for versions of pharmaceutical drugs, including controlled substances, which were not approved for sale in the United States. The defendants then obtained payment, typically via wire transfer, from the United States purchasers and illegally shipped the drugs to recipients in the United States.
A law enforcement officer, working in an undercover capacity in the Western District of Virginia, made several purchases from Jaiswal and Mir. The substances shipped included acetaminophen with codeine (Schedule III), lorazepam (Schedule IV), human growth hormone, sildenafil and tadalafil.
The investigation of the case was conducted by the U.S. Food and Drug Administration – Office of Criminal Investigations with the assistance of the Drug Enforcement Administration’s Drug Diversion Office in New Delhi, India. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Tazewell Woman Sentenced on Federal Firearms ChargesRead the Press Release
Abingdon, VIRGINIA – A Tazewell woman, who illegally purchased and provided firearms to her son was sentenced last week in the United States District Court for the Western District of Virginia in Abingdon for a pair of federal charges, Acting United States Rick A. Mountcastle announced.
Glenna Elswick, 50, was sentenced last Friday to six months in prison. Previously, Elswick pleaded guilty to one count of making a false statement in connection with the acquisition of a firearm from a licensed dealer and one count of providing a firearm to a prohibited person.
According to evidence presented at a previous hearing by Assistant United States Attorney Zachary T. Lee, between October 2016 and February 2017, Elswick purchased at least seven firearms for her son, Matthew Elswick, who is prohibited from owning firearms due to his status as a previously convicted felon. In the process of purchasing the firearms, Elswick made false statements on ATF forms stating she was buying the firearms for her own use. The firearms included semi-automatic pistols and AR style semi-automatic rifles. Matthew Elswick’s previous convictions included burglary and arson and evidence at the sentencing demonstrated he had a long history of violence and involuntary commitments for mental health issues. Matthew Elswick was ultimately arrested with some of the firearms purchased by Glenna Elswick following an armed standoff with deputies of the Tazewell County Sheriff’s Office.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Tazewell County Sheriff’s Office. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Virginia Man Indicted for Production and Possession of Child PornographyRead the Press Release
A Virginia man was indicted today on child pornography charges, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney Rick A. Mountcastle of the Western District of Virginia.
Richard Alan Wellbeloved-Stone, 57, of Charlottesville, Virginia, was indicted in the U.S. District Court for the Western District of Virginia on three counts of production of child pornography and one count of possession of child pornography.
This case is being investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the Charlottesville Police Department, the Virginia State Police and the Albemarle County Police Department.
This case is being prosecuted by Trial Attorney Leslie Williams Fisher of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Nancy Healey.
The charges and allegations contained in an indictment are merely accusations. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who 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.
Roanoke Man Sentenced on Methamphetamine ChargesRead the Press Release
Roanoke, VIRGINIA – A Roanoke man, who trafficked large quantities of methamphetamine from Arizona into the Roanoke Valley for redistribution for resale, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke, Acting United States Attorney Rick A. Mountcastle announced.
Curtis Ronnie Hilton, 45, was sentenced today to a term of 220 months’ imprisonment. Hilton previously entered guilty pleas to one count of conspiracy to possess with the intent to distribute and to distribute 500 grams or more of methamphetamine and one count of being a previously convicted felon illegally in possession of a firearm. Moreover, Mr. Hilton was also found to be in violation of his supervised release. He was sentenced to an additional term of imprisonment of 60 months for that violation.
According to evidence presented at previous hearings by Assistant United States Attorney Ashley B. Neese, from at least April 2015 until June 2016, Hilton, and others, conspired to distribute methamphetamine in and around the Roanoke Valley. If this matter had gone to trial, the United States would have proven that Hilton had a source of supply in Arizona that was shipping methamphetamine to the defendant for redistribution throughout the Western District of Virginia.
Evidence would have also shown that Hilton was a large-scale distributor who directed numerous other co-conspirators to distribute the methamphetamine he was receiving upon its arrival in the Western District of Virginia. Several of them, including Brandi Doss and Joy Mason, among others, have been convicted of federal methamphetamine charges in a corresponding prosecution.
The investigation of the case was conducted by the Drug Enforcement Administration, the Virginia State Police, and the Roanoke City Police Department. Assistant United States Attorney Ashley B. Neese prosecuted the case for the United States.
Roanoke Man Sentenced for Stealing from the Railroad Retirement BoardRead the Press Release
Roanoke, VIRGINIA – A Roanoke man, who worked while receiving disability benefits from the Railroad Retirement Board, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke, Acting United States Attorney Rick A. Mountcastle announced.
James Sexton, 67, was sentenced today to six months home confinement, two years’ probation, 200 hours of community service, a $100,000 fine, a $100 special assessment and restitution in the amount of $454,645. Sexton previously pleaded guilty to one count of theft of government money. The defendant has already paid in full $454,645 in restitution prior to the sentencing hearing.
According to evidence presented at a previous hearing by Assistant United States Attorney Charlene R. Day, Sexton began receiving disability benefits from the Railroad Retirement Board in 1997 and acknowledged that he was required to report any work he performed or earnings to the government. However, he admitted yesterday that he received $454,645 in Railroad Retirement Board benefits earned while working with various financial companies. Sexton’s employment with those companies was not disclosed to the Railroad Retirement Board.
The investigation of the case was conducted by the Railroad Retirement Board, Office of the Inspector General. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
Charlottesville Man Indicted for Production and Possession of Child PornographyRead the Press Release
Charlottesville, VIRGINIA – A Charlottesville man was indicted today on child pornography charges, Acting United States Attorney Rick A. Mountcastle announced.
Richard Wellbeloved-Stone, 57, was indicted by a federal grand jury sitting in the United States District Court for the Western District of Virginia in Charlottesville on three counts of production of child pornography and one count of possession of child pornography.
The investigation of the case is ongoing and is being conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the Charlottesville Police Department, the Virginia State Police and the Albemarle County Police Department. Assistant United States Attorney Nancy S. Healey and Trial Attorney Leslie Williams Fisher of the Criminal Division’s Child Exploitation and Obscenity Section will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who 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.
Virginia Tax Return Preparer Sentenced to Prison for Filing Fraudulent ReturnsRead the Press Release
Danville, VIRGINIA – A Danville, Virginia, resident was sentenced to 30 months in prison for aiding and assisting in the preparation of fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Rick A. Mountcastle for the Western District of Virginia.
According to documents filed with the court, Timothy Harris, 49, owned and operated TNA Tax Services and TNT Tax Services, which were located in Danville and Rocky Mount. Harris used these businesses to prepare false tax returns for clients that claimed bogus business losses in order to seek refunds to which his clients were not entitled. After the Internal Revenue Service (IRS) revoked Harris’s Electronic Filing Identification Number (EFIN) in December 2012, he used another person’s EFIN to continue filing tax returns. Harris admitted that his fraudulent conduct caused a tax loss of more than $250,000.
In addition to the term of prison imposed, Senior U.S. District Judge Jackson L. Kiser ordered Harris to serve one year of supervised release and to pay $335,389 in restitution to the IRS. Harris pleaded guilty in July 2017 to aiding and assisting in the preparation of a false tax return.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Mountcastle commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys William M. Montague and Michael C. Boteler of the Tax Division, who prosecuted the case.
Virginia Tax Return Preparer Sentenced to Prison for Filing Fraudulent ReturnsRead the Press Release
A Danville, Virginia, resident was sentenced to 30 months in prison for aiding and assisting in the preparation of fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Rick A. Mountcastle for the Western District of Virginia.
According to documents filed with the court, Timothy Harris, 49, owned and operated TNA Tax Services and TNT Tax Services, which were located in Danville and Rocky Mount. Harris used these businesses to prepare false tax returns for clients that claimed bogus business losses in order to seek refunds to which his clients were not entitled. After the Internal Revenue Service (IRS) revoked Harris’s Electronic Filing Identification Number (EFIN) in December 2012, he used another person’s EFIN to continue filing tax returns. Harris admitted that his fraudulent conduct caused a tax loss of more than $250,000.
In addition to the term of prison imposed, Senior U.S. District Judge Jackson L. Kiser ordered Harris to serve one year of supervised release and to pay $335,389 in restitution to the IRS. Harris pleaded guilty in July 2017 to aiding and assisting in the preparation of a false tax return.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Mountcastle commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys William M. Montague and Michael C. Boteler of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Former Owner of Inca’s Secret Restaurant Pleads Guilty to Federal ChargesRead the Press Release
Harrisonburg, VIRGINIA – A pair of Harrisonburg residents, who formerly owned and managed a Peruvian-themed restaurant in the city, pleaded guilty yesterday in the United States District Court for the Western District of Virginia in Harrisonburg to federal harboring charges, Acting United States Attorney Rick A. Mountcastle announced.
Maria Rosalba McTague Alvarado, 49, and her son, Felix Adriano Chujoy, 29, each pleaded guilty yesterday in federal court to charges related to the harboring and employment of undocumented immigrants.
Alvarado pleaded guilty yesterday to two counts of harboring undocumented immigrants and two counts of employing undocumented immigrants. Chujoy pleaded guilty to two counts of aiding and abetting the employment of undocumented immigrants. Both defendants will be sentenced on January 31, 2017.
According to evidence presented at yesterday’s guilty plea hearing by Assistant United States Attorney Heather L. Carlton, Alvarado and Chujoy, who are originally from Peru but have become naturalized United States citizens, owned and managed Inca’s Secret, a restaurant in Harrisonburg, Virginia. Alvarado admitted yesterday that during the time she owned Inca’s Secret, she allowed individuals whom she knew to be in the country illegally to work in the restaurant and live in her home.
Chujoy admitted yesterday that he aided and abetted Alvarado in hiring and employing individuals at Inca’s Secret who he knew to be undocumented immigrant.
The investigation of the case was conducted by U.S. Immigration and Custom Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigation. Assistant United States Attorneys Jeb Terrien and Heather L. Carlton prosecuted the case for the United States.
North Carolina Man Pleads Guilty to Fraud ChargesRead the Press Release
Harrisonburg, VIRGINIA – A North Carolina man, who previously lived in Frederick County, Virginia, pleaded guilty today to federal wire fraud conspiracy charges, Acting United States Attorney Rick A. Mountcastle announced.
Michael Dean Kent, a.k.a. “Michael Dean,” a.k.a. “Michael Scott,” age 57, most recently of Franklin County, North Carolina, and formerly of Frederick County, Virginia, waived his right to be indicted and pleaded guilty today to a one count Information charging him with conspiracy to commit wire fraud.
According to evidence presented at today’s hearing by Assistant United States Attorney Erin M. Kulpa, between 2014 and 2017, Kent and his co-conspirators targeted more than 500 victims across the United States who owned interests in timeshare properties and made false representations, by phone and by email, to convince the victims to sign property transfer contracts and to send currency under false pretenses to them, via mail.
During this time, Kent and his co-conspirators represented themselves to be employed at two different companies, The Holiday Property Group and Vacation Properties by Owner. Kent incorporated both entities, served as the principal of both, operated both and took significant steps to make both appear legitimate. Kent, and his coconspirators, established websites, paid for commercial post office boxes in various states, paid for memberships in business rating organizations such as the Better Business Bureau, applied for and received a federal tax identification number, and had corporate credit and debit cards in the names of the businesses.
After identifying timeshare owners (victims), Kent and his co-conspirators would introduce the victims to another coconspirator who posed as the “buyer” by assuming a false identity that included a different name and email address. The co-conspirator posing as the buyer communicated with the victim by phone and email would agree to purchase the victim’s property, often at the asking price, and would tell the victim they were going to use The Holiday Property Group/Vacation Properties by Owner [HPG/VPO] for the sale. The same “buyer” was in contact with multiple victims at one time.
Kent, and his co-conspirators, would then contact the victim to inform them they needed to send The Holiday Property Group/Vacation Properties by Owner money, typically between $500 and $1,500, to cover costs associated with the sale/transfer, such as “closing costs” or resort “transfer fee.” Kent represented that any fees would be held in escrow, and were refundable at any time. In fact, the fees received were not held in escrow, but instead were deposited into the accounts of HPG/VPO.
Throughout the course of this conspiracy, Kent and his coconspirators defrauded a total of over $550,000 from the victims he targeted. Kent usually immediately withdrew much of the money deposited from the victim payments to use for his own personal expenses, pay for expenses needed to continue the scheme, or to pay his coconspirators for their role in the criminal scheme.
The investigation of the case was conducted by the United States Postal Inspection Service, the Virginia Office of the Attorney General, and the Frederick County Sheriff’s Office. Assistant United States Attorney Erin M. Kulpa and Trial Attorney Andrew Tyler of the Department of Justice’s Fraud Section prosecuted the case for the United States.
Former Postal Employee Sentenced for Stealing Items from the MailRead the Press Release
Roanoke, VIRGINIA – A former employee of the United States Postal Service was sentenced yesterday in federal court for stealing items from the mail, including cash, Acting United States Attorney Rick A. Mountcastle announced.
Michelle Spinner, 56, of Big Island, Virginia, was sentenced yesterday to a period of probation of two years and ordered to pay $2,603 in restitution. Spinner previously pleaded guilty to a one count Information charging her with theft of mail matter by an officer or employee of the United States Postal Service.
According to evidence presented at previous hearings by Assistant United States Attorney Charlene R. Day, Spinner worked as a mail-processing clerk at the Roanoke Processing and Distribution Center. She began working for the USPS in 2005.
In January 2015, The United States Postal Service- Office of the Inspector General began an investigation into the handling of mail at the processing and distribution center after receiving complaints from customers about mail being “rifled.”
During the course of the investigation, video cameras captured Spinner working on a flat sorter on several occasions. While working on the flat sorter, Spinner could be seen pausing on certain pieces of mail and spending an extended period with her hands deep in a container. On occasion, video captured Spinner opening mail, removing cash and placing the cash in her pocket.
In all, Spinner stole a total of $2,603 in cash from mail at the processing center.
The investigation of the case was conducted by the United States Postal Service-Office of the Inspector General. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
Former Military Contractor Found Guilty of Fraud ChargesRead the Press Release
Danville, VIRGINIA – The former owner and chief executive officer of an armored vehicle company with offices in Danville and Canada, was found guilty yesterday evening in the United States District Court for the Western District of Virginia in Danville of all federal charges levied against him, Acting United States Attorney Rick A. Mountcastle announced.
William R. Whyte, 72, of Ontario, Canada, was found guilty yesterday following a two-week jury trial on three counts of major fraud against the United States, three counts of wire fraud and three counts of false claims.
“Today’s jury verdict was the result of the outstanding teamwork among the United States Attorney’s Office, the Department of Justice’s Fraud Section, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. It represents another step in the battle against fraud on the Department of Defense. The defendant put his personal financial interests ahead of the safety of our brave men and women in uniform who risked their lives serving in Iraq,” Acting United States Attorney Mountcastle said. “I commend the outstanding work of AUSA Carlton, Trial Attorney Cottingham, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation.”
“The Defense Criminal Investigative Service remains vigilant to detect and disrupt the contamination of the military supply chain with defective parts and equipment. The fraud perpetrated in this matter could have resulted in the death or injury of American service members, impacting military operations in Iraq. Along with our investigative partners, DCIS continues to aggressively pursue those who place our warfighters at risk,” said Special Agent in Charge Robert E. Craig, Jr, DCIS Mid-Atlantic Field Office
“Stealing from taxpayers by defrauding the government is bad enough. Doing it in a way that imperils our warfighters and delivers to them equipment which is faulty or insufficient - that's a special kind of despicable,” Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division said today. “Whyte exposed our heroes and knew his Armet Armored Vehicles weren't up to the task of protecting them. I hope this case sends a message to those who contract with the government to provide essential equipment to our troops in support of their critical mission; the FBI will be on your trail if you betray them this way and steal from the taxpayers who fund them. I want to thank our partners at DCIS, the Department of Justice, and the United States Attorney's Office for the Western District of Virginia for today's outcome in this case.”
According to evidence presented at trial by AUSA Heather L. Carlton and Trial Attorney Caitlin Cottingham, Whyte was the owner and chief executive officer of Armet Armed Vehicles, Inc. Armet entered into a $4.8 million contract in April 2006 to provide the Department of Defense with 24 armored vehicles for use in Iraq. In June 2006, Armet entered into a second contract, valued at $1.6 million, to deliver an additional eight armored vehicles. These vehicles were to be used as security vehicles to Iraqi “Tier 1” dignitaries, who were part of the then-newly elected government to replace Saddam Hussein and who regularly traveled by motorcade through a “hostile and dangerous environment.”
Both contracts included specific requirements for the armoring of the vehicles, including that each vehicle be reinforced to a standard at which an armor-piercing bullet could not penetrate the passenger compartment and ceiling. In addition, the contracts required the undercarriage of each armored truck have mine plating protection that could withstand explosions underneath the vehicles. Finally, the contracts required the armored vehicles to have run-flat tires, so they could continue to operate should their tires be shot out or otherwise damaged.
Despite the requirement in the contract that the first 24 armored gun trucks be delivered by July 31, 2006, Whyte and Armet failed to ship a single vehicle by that deadline. Armet ultimately supplied six armored vehicles after the contract deadline and was paid $ 2,019,454, including an approximately $824,000 progress payment requested by Whyte. The prosecutors also presented evidence that Whyte intentionally misrepresented other issues to United States military officers about the contracts and vehicles.
None of the armored trucks delivered by Armet and Whyte met the ballistic and blast protection requirements of the contracts, despite the defendant’s claims that the vehicles met the standards. Whyte knew that each of the six armored trucks failed to meet the required standards and that they were intentionally under armored.
The investigation of the case was conducted by the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, the Department of Justice’s Fraud Section, and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Heather L. Carlton and Department of Justice Fraud Section Trial Attorney Caitlin Cottingham.