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21 November 2023
Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
Acting United States Attorney Susan Lehr announced that Santiago Montes-Osorio, 30, a Mexican citizen most recently living in Omaha, Nebraska, was sentenced on November 21, 2023, in federal court in Omaha for conspiracy to distribute methamphetamine. United States Chief District Judge Robert F. Rossiter, Jr. sentenced Montes-Osorio to 114 months’ imprisonment. There is no parole in the federal system. After Montes-Osorio’s release from prison, he will begin a 5-year term of supervised release.
On July 21, 2022, law enforcement conducted a traffic stop of Montes-Osorio’s vehicle in Omaha and found approximately 872 grams of meth. A search of Montes-Osorio’s residence in Omaha uncovered approximately 2,437 grams of meth and $19,451 cash. A search of a storage unit in Council Bluffs, Iowa, that Montes-Osorio had access to uncovered another 21.9 kilograms of meth.
The $19,451 cash was forfeited as proceeds of illegal narcotics sales.
This case was investigated by multiple agencies, including the Drug Enforcement Administration, the Omaha Police Department, the Sarpy County Sheriff’s Department, and the Southwest Iowa Narcotics Task Force.
Man Sentenced to 6 ½ Years for Distributing Child PornographyRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Rajiiv Isree, 32, a Jamaican citizen who was living in Baraboo, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 78 months in prison for distributing child pornography. Isree is likely to be deported following his release from prison, but if he is not, the prison term will be followed by 10 years of supervised release. Isree pleaded guilty to this charge on August 7, 2023.
On July 2, 2022, a 15-year-old girl reported that she had been sexually assaulted by Isree. Further investigation showed that the defendant filmed the assault and sent her a video of it. Law enforcement found additional videos of the defendant engaged in sexual activity with the minor sexually the girl on the defendant’s phone.
At sentencing, Judge Peterson said that the defendant took advantage of a vulnerable girl when he engaged in sexual conduct with her and that videoing the conduct amplified the harm to the victim.
The charge against Isree was the result of an investigation conducted by the Lake Delton Police Department. Assistant U.S. Attorney Elizabeth Altman prosecuted this case.
Man Charged for 2019 Double Murder in Taos PuebloRead the Press Release
ALBUQUERQUE – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Raul Bujanda, Special Agent in Charge of the FBI’s Albuquerque Field Office, announced that Joshua Gonzales made an initial appearance in federal court on an indictment charging him with two counts of first-degree murder. Gonzales, 37, will remain in custody pending a detention hearing scheduled for Friday, November 24, 2023.
According to court records, Gonzales and his girlfriend had been staying at the home of John Doe 1. On May 30, 2019, Gonzales assaulted his girlfriend while they were near the home. Gonzales’ girlfriend told John Doe 1 about the assault and left the home, leaving Gonzales and John Doe 1 alone. When John Doe 1 questioned Gonzales about the assault, Gonzales attacked John Doe 1. During that assault, Gonzales bludgeoned John Doe 1’s body and head, brutally killing him.
Moments later, John Doe 2 arrived at John Doe 1’s house. John Doe 1 had previously called John Doe 2, likely seeking help, which is what prompted John Doe 2 to go over to the residence. Gonzales exited John Doe 1’s house and proceeded to beat John Doe 2, who was only days into recovery from a hip surgery, in the driveway, also brutally killing him. Defendant then took John Doe 2’s body inside and stacked both men’s bodies in John Doe 1’s house, then placed a roll of metal fence on top of the bodies. Gonzales then left the home and locked the door behind him with a padlock on the exterior of the doors.
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Gonzales faces life in prison.
The FBI Albuquerque Field Office investigated this case with the assistance of the Taos Pueblo Department of Public Safety and New Mexico State Police. Assistant U.S. Attorneys Alexander F. Flores and Matthew J. McGinley are prosecuting the case.
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Louisiana Man Sentenced to 17 Years in Prison for Conspiracy to Possess with Intent to Distribute Two Pounds of MethamphetamineRead the Press Release
Gulfport, Miss. – A Louisiana man was sentenced to 204 months in federal prison for conspiracy to possess with intent to distribute two pounds of methamphetamine.
According to court records, in January 2022, a confidential source informed Homeland Security Investigators that Deandrea Keion Malbrough, 30, was sending methamphetamine to the Southern District of Mississippi. This source then connected undercover agents with Malbrough who went on to mail two pounds of methamphetamine to agents at an address in Gulfport.
A federal grand jury indicted Malbrough on February 22, 2023, and he pled guilty on July 17, 2023.
U.S. Attorney Todd W. Gee and Special Agent in Charge Eric DeLaune of Homeland Security Investigations made the announcement.
The case was investigated by Homeland Security Investigations.
The case was prosecuted by Assistant U.S. Attorney Erica Rose.
Lawrence Woman Pleads Guilty in Conspiracy to Use Stolen Identities to Fraudulently Purchase VehiclesRead the Press Release
BOSTON – A Lawrence woman pleaded guilty yesterday to her role in a scheme to use the stolen identities of United States citizens from Puerto Rico to fraudulently purchase vehicles.
Wanda Sanchez, 39, pleaded guilty to conspiracy to commit wire fraud, wire fraud and false representation of a Social Security number. U.S. District Court Judge Patti B. Saris scheduled sentencing for March 12, 2024. The defendant and multiple co-defendants were charged by criminal complaint in September 2020 and subsequently indicted by a federal grand jury in October 2020. All six defendants charged in the indictment have now pleaded guilty.
According to charging documents, in January 2019, Sanchez visited a Massachusetts car dealership to purchase a late-model vehicle and applied for 100% financing. In support of the application, Sanchez provided stolen biographical information of a real United States citizen, a fraudulent Puerto Rico driver’s license and a Social Security card in that identity as proof of identification.
The charges of wire fraud and conspiracy to commit wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense. The charge of false representation of a Social Security number provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting United States Attorney Joshua S. Levy; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; John E. Mawn Jr., Interim Colonel of the Massachusetts State Police; and Brockton Police Chief Brenda Perez made the announcement today. Valuable assistance was provided by the Lowell, Lawrence, Methuen, Haverhill, Woburn and Dartmouth Police Departments. Assistant U.S. Attorneys Elianna J. Nuzum and Adam W. Deitch of the Criminal Division prosecuted the case.
The investigation was conducted by Homeland Security Investigation’s Document and Benefit Fraud Task Force (DBFTF), a specialized investigative group comprising personnel from various state, local, and federal agencies with expertise in detecting, deterring, and disrupting organizations and individuals involved in various types of document, identity and benefit fraud schemes.
Kansas Woman Sentenced for Witness Retaliation PlotRead the Press Release
Acting United States Attorney Susan Lehr announced that Juanita Gibson, age 38, originally of Hillsboro, Kansas, was sentenced on November 21, 2023, in federal Court in Omaha, Nebraska, for conspiracy to assault a witness and attempted assault of a witness. Chief United States District Court Judge Robert F. Rossiter sentenced Gibson to 24 months’ imprisonment. There is no parole in the federal system. After Gibson’s release from prison, she will begin a 3-year term of supervised release.
In the fall of 2021, Johnny Dolph (hereinafter “Dolph”) was being investigated by the United States Secret Service for financial crimes to include crimes involving counterfeit currency and checks. Dolph claims to be a “shot caller” in the Irish Mob Gang, a street gang that originated in Oklahoma. In September 2021, Victim 1’s husband was arrested in Nebraska for forgery counts. Victim 1’s husband was coming to Nebraska to assist Dolph in his forgery activities. Following Victim 1’s husband’s arrest, Dolph and Jennifer Norwood A/K/A Jennifer Dolph (hereinafter “Norwood”) began contacting Victim 1 in attempts to prevent her from cooperating with law enforcement. Dolph believed Victim 1 and Victim 1’s husband were cooperating with law enforcement. As a result, Dolph put a “green light” on Victim 1 and her husband.
In October 2021, a search warrant was obtained through the United States District Court for the District of Nebraska for Dolph’s apartment in Omaha. This search warrant was signed by Magistrate Judge Susan Bazis and the affiant for the warrant was a Special Agent with the United States Secret Service.
Following the execution of the search warrant, Dolph and Norwood began researching the affiant agent and magistrate judge listed on the search warrant. Dolph and Norwood also reached out to individuals outside of Nebraska providing information about Victim 1, where Victim 1 resides, and where family members of Victim 1 lived.
On November 19, 2021, Dolph contacted Kate Ruth A/K/A Kate Winter A/K/A Kate Hill (hereinafter “Ruth”) and requested that she travel from Kansas to Omaha, Nebraska to attempt to carry out his “green light” on Victim 1. Dolph instructed Ruth to go to Greyhound and attempt to pick up a ticket that had been purchased in a third party’s name. Ruth was instead driven to Nebraska from Kansas by Gibson. Gibson obtained a red pickup truck to drive she and Ruth to Omaha. During the drive to Nebraska, Dolph sent Gibson and Ruth money for gas over CashApp, inquired to the status of their travel, and provided directions on where to park once they arrived at his apartment.
Dolph and Norwood let Gibson and Ruth stay at their apartment in Omaha. While there, Dolph, Norwood, Gibson, and Ruth researched Victim 1.
On September 2, 2022, Gibson was interviewed by the United States Secret Service and admitted to coming to Nebraska with Ruth at Dolph’s request. Gibson admitted that the purpose of the trip was to find a female that Dolph was looking for.
The individual from Kansas was sentenced in 2022 to time-served after serving a nine-month sentence for possession of counterfeit currency and possession of a document making implement or authentication feature and is currently serving a five-year term of supervised release. On August 17, 2023, Dolph was sentenced to a total of 150 months’ imprisonment for felon in possession of a firearm; possession of a firearm following a misdemeanor crime of domestic violence; 2 counts of false statement during the purchase of a firearm; conspiracy to tamper with documents or proceedings; tampering with documents or proceedings; 2 counts of conspiracy to assault a witness; and 2 counts for attempted assault of a witness. On November 14, 2023, Norwood pleaded guilty to making false statements during the purchase of a firearm, conspiracy to destroy evidence, and conspiracy to assault a witness. Ruth is currently pending trial and are presumed innocent unless and until she is proven guilty.
This case was investigated by the Federal Bureau of Investigation, the United States Secret Service, the Omaha Police Department, and the Richardson County Sheriff’s Office with assistance from the Kansas Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Kanawha County Man Pleads Guilty to COVID-19 Relief Fraud SchemeRead the Press Release
CHARLESTON, W.Va. – Sean Patrick Boyd Jr., 26, of Dunbar, pleaded guilty today to receipt of stolen money. Boyd admitted to a scheme to defraud the Paycheck Protection Program (PPP) of $20,832 in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
According to court documents and statements made in court, on April 18, 2021, Boyd applied for a PPP loan on behalf of his purported business, “Sean Boyd.” Boyd falsely stated in his application that “Sean Boyd” was in operation on February 15, 2020, which was a requirement to qualify for a PPP loan. Boyd admitted that “Sean Boyd” was fictitious and was not a registered business entity in West Virginia at the time he applied for the loan. Businesses applying for PPP loans were also required to provide documentation showing their prior gross income from either 2019 or 2020. Boyd admitted that he submitted a false IRS Form 1040, Schedule C, stating that “Sean Boyd” had earned $99,996 in gross income during 2019.
Boyd submitted the loan application electronically from West Virginia and it was uploaded to servers in Nebraska for processing. Boyd’s loan application was approved and $20,832 was electronically transferred to his personal bank account in West Virginia. Boyd admitted that before he received the fraudulent loan, his bank account balance was $12.47. On May 24, 2021, Boyd withdrew $10,000 of the fraudulent loan proceeds from his bank’s branch in Nitro.
The CARES Act, enacted in March 2020, offered emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. This assistance included forgivable loans to small businesses for job retention and certain other expenses through the PPP.
Boyd is scheduled to be sentenced on February 7, 2024, and faces a maximum penalty of 10 years in prison, three years of supervised release, and a $250,000 fine. Boyd also owes $23,817.79 in restitution.
United States Attorney Will Thompson made the announcement and commended the investigative work of the United States Secret Service, the West Virginia State Police – Bureau of Criminal Investigation (BCI), and the West Virginia State Auditor’s Office (WVSAO) Public Integrity and Fraud Unit (PIFU).
Senior United States District Judge John T. Copenhaver Jr. presided over the hearing. Assistant United States Attorney Jonathan T. Storage is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:23-cr-123.
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Justice Department Files Statement of Interest in Religious Land Use Case Involving Oregon Church That Feeds People Who are Homeless or HungryRead the Press Release
The Justice Department filed a statement of interest today in the U.S. District Court for the District of Oregon explaining that a city’s decision to restrict a church’s distribution of meals to people who are homeless or hungry may have substantially burdened religious exercise under the Religious Land Use and Institutionalized Persons Act (RLUIPA).
The statement of interest was filed in St. Timothy’s Church v. City of Brookings, Or., a lawsuit alleging that the City of Brookings imposed a substantial burden on the religious exercise of St. Timothy’s, an Episcopalian church, with a recently enacted ordinance that prohibits the church from serving free meals to persons in need more than two days per week, subject to a discretionary permit.
“Many churches and faith-based organizations across the country are on the front lines serving the critical needs of people experiencing hunger and homelessness,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Discriminatory zoning restrictions that burden and limit religious organizations’ use of their land violate federal antidiscrimination laws. The Justice Department is committed to enforcing federal civil rights laws to ensure that all religious groups can freely exercise their religious beliefs.”
For over a decade before this ordinance was enacted, St. Timothy’s had been providing meal service up to four days per week, and as many as six days per week, including during the Covid-19 pandemic, based on community need. The church has even testified that it feels a religious duty to provide food to those in need.
The city argued in part that RLUIPA did not apply to the city’s actions against St. Timothy’s and that the ordinance did not substantially burden St. Timothy’s religious exercise. The department is refuting the city’s claims. Specifically, it asserts that RLUIPA’s protections apply in this context, that St. Timothy’s provision of meals to people in need is protected religious exercise and that the city’s attempt to restrict St. Timothy’s meal service may have substantially burdened the church’s religious exercise by forcing it to violate its beliefs in order to comply with local land use laws.
RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. More information is available at www.justice.gov/crt/placetoworship.
As part of this initiative, the department has filed statements of interest in other RLUIPA cases involving faith-based services to persons in need, including in Micah’s Way v. City of Santa Ana (Civil Rights Division | Statement of Interest in Micah’s Way v. City of Santa Ana (C.D. Cal.) | United States Department of Justice). Additionally, the department recently hosted an outreach forum with religious leaders at Seton Hall Law School in Newark, New Jersey, on combating religious discrimination under RLUIPA, and plans to hold additional outreach events in California and Michigan.
Individuals who believe they have been subjected to discrimination in land use or zoning decisions may contact the U.S. Attorney’s Office Civil Division’s Civil Rights Section at (213) 894-2879 or the Civil Rights Division’s Housing and Civil Enforcement Section at (833) 591-0291 or may submit a complaint through the complaint portal on the Place to Worship Initiative website. More information about RLUIPA, including questions and answers about the law and other documents, can be found at www.justice.gov/crt/about/hce/rluipaexplain.php.
st._timothy_soi_file_stamped.pdfIngredion to Spend $8 Million in Settlement over Violations Involving Emissions of Particulate Matter at Indianapolis Corn Wet MillRead the Press Release
Plant-based ingredient maker Ingredion Incorporated today agreed to a settlement with the Justice Department and Environmental Protection Agency (EPA), along with the Indiana Department of Environmental Management (IDEM) and the Indiana Attorney General’s Office, to settle claims that it violated the Clean Air Act (CAA) at its corn wet milling facility in Indianapolis. Ingredion will pay a civil penalty of $1,139,600 and implement measures at a cost of nearly $7 million to reduce and offset unpermitted emissions of particulate matter (PM) and to comply with lower future PM limits.
A complaint filed with the consent decree states that Ingredion violated CAA permit limits on PM emissions, including inhalable PMs with a diameter of 10 microns or less, and volatile organic compounds. The complaint also states that Ingredion did not operate and monitor certain equipment as required to minimize air emissions.
“Today’s settlement will not just bring Ingredion back into compliance with the Clean Air Act, it will hold it to more stringent air pollution standards going forward,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “This settlement will result in cleaner air for the residents of Indianapolis, particularly those who live in the overburdened community near the Ingredion facility.”
“This settlement requires Ingredion to both lower its future emissions of particulate matter and take additional steps to offset the excess emissions it has released in prior years,” said Assistant Administrator David M. Uhlmann of EPA’s Office of Enforcement and Compliance Assurance. “To help ensure the Company’s future compliance, the settlement also requires Ingredion to implement a compliance management system that is subject to an independent audit program.”
“IDEM is happy to be a part of this resolution that ensures responsible operations in compliance with the Clean Air Act,” said IDEM Commissioner Brian Rockensuess. “Good air quality is a shared resource that requires partnership between government entities, the public and industry. This settlement will benefit residents in Marion County and Hoosiers across Indiana.”
PM is composed of microscopic solids or liquid droplets. It can get deep into the lungs and cause serious health problems including coughing, aggravated asthma, chronic bronchitis and premature death in people with heart or lung disease.
The settlement requires Ingredion to install and operate new equipment to meet PM limits that are lower than the plant’s current permitted limits. The company completed installation and testing of the new system in advance of today’s filing. The settlement also requires Ingredion to implement a modernized compliance management system to address repeated operation and monitoring failures at the facility, and hire an independent auditor to verify the effectiveness of the system.
Under today’s settlement, Ingredion committed to mitigating the harm associated with past excess PM emissions by paving onsite unpaved and partially paved roads and parking areas to reduce PM emissions generated by vehicle traffic, which Ingredion completed in advance of today’s filing. The company will also replace aging railway locomotives at the facility with two modern locomotives that meet emissions standards.
As a state supplemental environmental project, the settlement requires Ingredion to contribute $560,400 to the State of Indiana to support Brownfields redevelopment in and around Marion County, Indiana.
The EPA and IDEM are investigating the case.
Attorneys from ENRD’s Environmental Enforcement Section and the Indiana Attorney General’s Office are handling the case.
The consent decree, lodged in the U.S. District Court for the Southern District of Indiana, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at www.justice.gov/enrd/consent-decrees.
Former major of the Franklin County Sheriff’s Office convicted of abusive sexual contact with a minorRead the Press Release
MIAMI – On Nov. 17, a federal jury convicted the former major of the Franklin County Sheriff’s Office in Virginia, of abusive sexual contact with a minor under 12 years old.
The conviction comes after a five-day jury trial before U.S. Senior District Judge Donald L. Graham in Miami.
In May 2023, Justin Dale Sigmon, 47, while on a cruise that departed from the Port of Miami, repeatedly put his hands up the skirt of a nine-year-old, rubbing her inner thighs and private area, despite her repeatedly pushing his hands away on multiple occasions. Two good Samaritans, who were seated next to Sigmon in the cruise ship dining room, noticed his behavior, recorded it, and reported it to cruise ship security. The cruise ship’s surveillance cameras also captured Sigmon’s actions. When cruise security officials confronted him about his conduct, Sigmon identified himself as a law enforcement officer.
Sentencing is set for Jan. 12, 2024, at 1:30 p.m. in Miami. Sigmon faces up to life in prison.
U.S. Attorney Markenzy Lapointe for the Southern District of Florida and Special Agent in Charge Jeffrey B. Veltri of the FBI, Miami Filed Office, announced the guilty verdict.
FBI Miami investigated the case with assistance from the U.S. Customs and Border Protection (CBP) and Carnival Cruise Line security. Assistant U.S. Attorneys Jessica Kahn Obenauf and Lacee Elizabeth Monk 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 the U.S. Attorney’s Offices and the Criminal Divisions Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate better, 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.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 23-cr-20294.
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Former Virginia Ambulance Service Owner Found Guilty of Tax Evasion, Filing False Returns and Obstructing the IRSRead the Press Release
A federal jury convicted a Virginia man today of evading the payment of employment taxes, filing false tax returns and obstructing the IRS.
According to court documents and evidence presented at trial, from January 2008 through December 2009, James C. Jones Jr., of Christiansburg, owned and operated Lifeline Ambulance Service Inc. and was responsible for paying to the IRS approximately $200,000 in federal income and Social Security and Medicare taxes withheld from Lifeline’s employees’ wages. However, he did not pay those withholdings to the IRS. As a result, in December 2009, the IRS assessed the unpaid employment taxes against Jones personally. To obstruct IRS efforts to collect those taxes, Jones misrepresented that he did not have sufficient funds and assets to pay when, in fact, Jones owned multiple apartments and bank accounts in the Caribbean and a classic “muscle car” collection. Jones continued to obstruct IRS collection efforts by filing false tax returns for 2013 through 2018 that did not report the rental income from his Caribbean properties and claimed false deductions. Jones also falsely represented to the Justice Department that he did not have records responsive to a subpoena ordering him to produce foreign bank records, when in fact, he possessed these records as the director and owner of multiple foreign holding companies.
Jones faces a maximum penalty of five years in prison for tax evasion, three years in prison for each false return count and three years in prison for obstructing the IRS. He also faces a period of supervised release and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Christopher Kavanaugh for the Western District of Virginia and Special Agent-in-Charge Kareem Carter of the IRS-Criminal Investigation (CI) Washington D.C. Field Office made the announcement.
IRS-CI is investigating the case.
Trial Attorneys Francesca Bartolomey, Todd Ellinwood and Brian Flanagan of the Tax Division and Assistant U.S. Attorney Charlene Day for the Western District of Virginia are prosecuting the case, with assistance from Assistant U.S. Attorney Kelly McGann for the Western District of Virginia.
Former New York City Correction Officer Sentenced to 29 Months in Prison for Smuggling Contraband into Rikers Island in Exchange for Nearly $10,000 in Bribe PaymentsRead the Press Release
Earlier today in federal court in Brooklyn, former New York City correction officer Krystle Burrell was sentenced by United States District Judge Kiyo A. Matsumoto to 29 months’ imprisonment for accepting nearly $10,000 in bribe payments in exchange for smuggling contraband into Rikers Island. Burrell was employed by the New York City Department of Corrections (DOC) and worked as a correction officer at Rikers Island.
Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI), Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Krystle Burrell put her own interests above the safety of incarcerated individuals and other correction officers at Rikers Island by accepting payments for drugs and smuggling cell phones into the jail she was supposed to protect,” stated United States Attorney Peace. “Public corruption is especially harmful when it affects the safety and security of our city’s jails and today’s sentence demonstrates that correction officers face serious consequences for smuggling contraband into Rikers Island.”
DOI Commissioner Jocelyn E. Strauber said, “New York City Correction Officers’ most significant responsibility is to maintain order and safety in our City’s jails. By accepting bribes and smuggling contraband onto Rikers Island, this defendant endangered both the persons in custody, and fellow officers, that she was entrusted to protect. Her prison sentence sends a strong message that officers who misuse their positions of trust will be held accountable. I thank the US Attorney’s Office for the Eastern District of New York for their partnership in our joint efforts to eradicate contraband smuggling in the City jail system.”
“Bringing contraband into a correctional facility undermines the security of the institution and threatens the residents and the officers tasked with keeping them safe,” stated NYPD Commissioner Caban. “Above all else, correction officers are public servants – the majority of whom honor their oaths and serve as stellar examples to the community and those under their care. Ms. Burrell, who blatantly abused her position of authority, was the exact opposite.”
According to court documents and facts presented at today’s sentencing proceeding, Burrell accepted nearly $10,000 in bribes from co-conspirators on behalf of co-defendant Terrae Hinds in exchange for Burrell smuggling contraband into the Anna M. Kross Center on Rikers Island for Hinds. Burrell also accepted payments on behalf of Hinds for narcotics and other contraband so that Hinds could resell the contraband on Rikers Island. After she pleaded guilty in federal court in September 2022 to bribery charges and while on bail pending sentencing, Burrell conspired with Hinds and others to smuggle contraband into the federal Metropolitan Detention Center in Brooklyn where Hinds had been transferred and was being held on federal charges. In March 2023, Burrell was charged with the additional crime of smuggling contraband into a federal prison. Burrell pleaded guilty to smuggling contraband into a federal detention facility and she was also sentenced today for this additional crime.
Hinds previously pleaded guilty to bribing Burrell and is currently awaiting sentencing.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Philip Pilmar is in charge of the prosecution.
The Defendants:
KRYSTLE BURRELL
Age: 36
Lawrence, NYE.D.N.Y. Docket Nos. 22-CR-196 (KAM); 23-CR-207 (KAM)
Former Enfield Resident Sentenced to 25 Months in Prison for Cocaine Trafficking OffenseRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that JUAN SANCHEZ-RAZON, also known as “Juanito,” 29, a citizen of Mexico last residing in Enfield, was sentenced today by U.S. District Judge Kari A. Dooley in Bridgeport to 25 months of imprisonment for trafficking cocaine.
According to court documents and statements made in court, in October 2021, the Drug Enforcement Administration’s Hartford Task Force began investigating a drug trafficking organization, with ties to a Mexican drug cartel, operating in the area of Enfield, Connecticut, and Springfield, Massachusetts. The investigation, which included court-authorized wiretaps and controlled purchases and seizures of narcotics, revealed that Sergio Horta-Molina, of Suffield, arranged the shipment of cocaine and other narcotics to Connecticut, and then distributed the drugs to other members of the organization who, in turn, sold the drugs to street-level traffickers and drug customers.
During the investigation, Horta-Molina arranged the shipment of a package from California to Sanchez-Razon’s residence in Enfield. On April 27, 2022, Sanchez-Razon delivered the package to another individual. Law enforcement subsequently stopped that individual as he was attempting to deliver the package to Horta-Molina. A search of the package revealed a kilogram of cocaine.
On May 5, 2022, a search of Sanchez-Razon’s residence revealed approximately 100 grams of cocaine and approximately $7,000 in cash.
Sanchez-Razon has been detained since his arrest on June 21, 2022. On March 3, 2023, he pleaded guilty to conspiracy to distribute and to possess with intent to distribute cocaine.
Sanchez-Razon faces immigration proceedings when he completes his prison term.
Horta-Molina pleaded guilty and, on June 6, 2023, he was sentenced to 94 months of imprisonment for both the offense and for violating the conditions of his supervised release from a prior federal narcotics trafficking conviction.
This investigation has been conducted by the DEA’s Hartford Task Force and the Enfield Police Department. The Task Force includes personnel from the DEA Hartford Resident Office, the Connecticut State Police, and the Bristol, Hartford, East Hartford, Enfield, Manchester, New Britain, Rocky Hill, Wethersfield, and Windsor Locks Police Departments.
This case is being prosecuted by Assistant U.S. Attorney A. Reed Durham through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Former College Track and Field Coach Pleads Guilty to Cyber Fraud Scheme to Obtain Explicit Photos of Innocent Women from Across the CountryRead the Press Release
BOSTON – A former college track and field coach pleaded guilty today in federal court in Boston in connection with a scheme to trick women across the country into sending him nude or semi-nude photos using more than a dozen sham social media and email accounts. The defendant cyberstalked one female student-athlete and orchestrated a scheme to gain unauthorized access to a victim’s Snapchat account.
Steve Waithe, 30, of Chicago, Ill., pleaded guilty 12 counts of wire fraud; one count of cyberstalking; one count of conspiracy to commit computer fraud; and one count of computer fraud, aiding and abetting. U.S District Court Judge Patti B. Saris scheduled sentencing for March 6, 2024. Waithe was arrested and charged by criminal complaint in April 2021 and subsequently indicted by a federal grand jury in December 2021.
“Mr. Waithe’s conduct is despicable. For almost a year, he manipulated, exploited and in one case stalked young women across the county hiding behind a web of anonymized social media accounts and fabricated personas he engineered. Mr. Waithe maliciously invaded the lives of dozens of innocent victims and inflicted real trauma. He now knows no one can hide from justice – even anonymously behind a keyboard. Protecting our communities is one of the highest priorities for this office and we will use every tool at our disposable to ensure predators like Mr. Waithe face the full consequences of their actions,” said Acting United States Attorney Joshua S. Levy.
“Today, this former coach finally admitted to using his position of trust to betray his students when he extorted them for his own sexual gratification. He even went as far as cyberstalking one of them. Make no mistake, predators come in many different forms, and Steve Waithe is no exception,” said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “Cyberstalking is a serious crime that can inflict lasting harm, and thankfully, the victims in this case did not let fear silence them. Many don’t report these types of crimes because they don’t think anything will be done to the perpetrator. We hope this case demonstrates otherwise.”
Waithe previously worked as a track and field coach at several academic institutions, including Northeastern University, Penn State University, Illinois Institute of Technology, University of Tennessee and Concordia University Chicago.
While a track coach at Northeastern, Waithe requested the cell phones of female student-athletes under the pretense of filming them at practice and at meets and covertly sent himself explicit photos of the victims that had previously been saved on their phones.
Starting at least as early as February 2020, Waithe began perpetrating an evolving scheme to dupe women into sending him nude or semi-nude photos of themselves. Specifically, Waithe used anonymized social media accounts with usernames like “anon.4887” and variations of the phrase “Privacy Protector” to contact prospective victims, claiming that he had found compromising photos of them online and offering to “help” get the photos removed from the internet. Waithe also requested additional nude or semi-nude photos from victims that he could purportedly use for “reverse image searches.”
Further, Waithe fabricated at least two female personas, “Katie Janovich” and “Kathryn Svoboda,” in an effort to obtain nude and/or semi-nude photos of women. Under the purported premise of an “athlete research” or “body development” study, Waithe emailed prospective victims pretending to be “Katie” or “Kathryn” with email accounts in their names. The emails described a phony study for athletes and requested information relating to height, weight, body fat and diet habits. The emails also included a request for the victims to send photos of themselves in order to “track their progress” and recommended that the photos show the women in a “uniform or bathing suit to show as much skin as possible.” The emails often included attachments of sample nude and semi-nude images to illustrate the types of photos that victims should send.
Investigators identified over a dozen sham social media accounts used by Waithe and hundreds of photos sent dozens of victims who thought they were emailing someone conducting a legitimate research study.
Waithe also cyberstalked one victim, from at least June 2020 to October 2020, through text messages and direct messages sent via social media, as well as by hacking into her Snapchat account. He texted and sent nude photos of the victim to the victim’s boyfriend, stating, “I wanted to make you aware that someone hacked your girlfriend’s snapchat account and will leak it soon. I need your help to assure this does not happen.” Over the course of those five months, Waithe sent harassing and intimidating messages to the victim and her boyfriend. The messages included explicit photos that Waithe had stolen from the victim’s phone when she was on the Track and Field team at Northeastern.
In October 2020, Waithe conspired with another individual to hack into Snapchat accounts, ultimately gaining access to at least one account and its private “My Eyes Only” folder that contained nude and/or semi-nude photos. In addition, Waithe provided his co-conspirator with the usernames and phone numbers for the Snapchat accounts of at least 15 women. Waithe and his co-conspirator then used this information to craft and send text messages purporting to be from the “Snapchat Support Team” and requesting security information, through which they gained access to at least one account.
The investigation revealed that Waithe’s internet browsing history included visits to webpages with titles like, “Can anyone trace my fake Instagram account back to me?” and “How to Hack Someones Snapchat the Easy Way.” Waithe’s search history also included searches for, among other things, “how to hack snapchat with a username and phone number.”
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274. Case information, including links to charging documents and victim resources, can be found here: https://www.justice.gov/usao-ma/victim-and-witness-assistance-program/us-v-steven-waithe
The charge of wire fraud provides for a sentence of up to 20 years in prison for each count, three years of supervised release and a fine of $250,000. The charge of cyberstalking provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charges of conspiracy to commit computer fraud and computer fraud, aiding and abetting, each provide for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting U.S. Attorney Levy and FBI SAC Cohen made the announcement today. The Northeastern University Police Department provided substantial assistance with the investigation; the Suffolk County District Attorney’s Office and the Chicago Police Department also provided valuable assistance. Assistant U.S. Attorney Adam W. Deitch of the Criminal Division is prosecuting the case.Former Cape Coral Resident Sentenced to Federal Prison for Mail Fraud and Aggravated Identity TheftRead the Press Release
Fort Myers, Florida – Senior U.S. District Judge Virginia Hernandez Covington today sentenced Devin Ryan Maresca (33, New Castle, PA) to three years in federal prison for mail fraud and aggravated identity theft. As part of his sentence, the court also entered an order of forfeiture in the amount of $74,700, which were the proceeds of Maresca’s mail fraud scheme. Maresca was found guilty following a three-day trial on August 23, 2023.
According to testimony and evidence presented at trial, while living in Cape Coral, Florida, Maresca filed more than 2,200 fraudulent indemnity claims to the United States Postal Service (USPS) claiming that Priority Mail packages that he had mailed or received were damaged. Maresca fraudulently used his mother, father, and brother’s name to submit most of the claims. Further, Maresca forged his family members’ signatures on the backs of USPS claims checks to deposit them into a bank account he controlled. The checks were mailed to UPS Store private mailboxes and Pak-Mail Store mailboxes that Maresca had opened in Fort Myers, Cape Coral, and Punta Gorda.
Maresca’s fraud scheme caused the USPS to issue more than $100,000 in claims checks. Internet addresses, bank, and email records, along with USPS data, linked Maresca to the fraudulent claims. In December 2021, a United States Postal Inspector and USPS Office of Inspector General (OIG) Special Agent interviewed Maresca at his home in Newcastle. During the interview, Maresca admitted to submitting more than 2,200 fraudulent claims and forging his family members’ signatures on USPS indemnity checks.
This case was investigated by the U. S. Postal Inspection Service and the U.S. Postal Service-OIG. It was prosecuted by Assistant United States Attorneys Trent Reichling and Patrick Darcey.
Foreign National Sentenced to 40 Months Custody for $5 Million Unemployment Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – November 20, 2023
SAN DIEGO – Constantin Bobi Sandu, who admitted that he masterminded a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic, was sentenced in federal court today to 40 months in prison.
According to his plea agreement, Sandu conspired with over 200 other individuals across California and in Romania to fraudulently obtain millions of dollars by fabricating documents, creating fictitious accounts and businesses, and filing bogus claims with California’s Economic Development Department, which administers the state’s unemployment benefits. Among other things, Sandu wired $16,000 in fraud proceeds to Romania to renovate his house.
Sandu also was ordered to forfeit $214,950 that he personally received from the offenses.
“This devious scheme diverted millions of dollars from those who truly needed it during the pandemic,” said U.S. Attorney Tara McGrath. “The public health emergency may be over, but we are still tracking, charging, and convicting the people who exploited it.”
“The FBI remains fully committed to ensuring people who intentionally stole government funds during the COVID-19 pandemic are brought to justice,” said FBI San Diego Special Agent in Charge Stacey Moy. “We continually collaborate with our law enforcement partners to thoroughly investigate all those responsible for stealing from the United States Government and its people during such a critical time in our lives, taking away valuable resources and services from those truly in need.”
“Mr. Sandu and his criminal organization committed financial crimes that hurt people here in California and stole funds intended for those in need,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “IRS:CI is committed to partnerships with law enforcement organizations around the world, and we will follow the money to find the guilty and bring them to justice.”
This case was prosecuted by Assistant U.S. Attorney Jessica Adeline Schulberg.
DEFENDANT Case Number 23CR0386-LAB
Constantin Bobi Sandu, Age: 34 Romanian national
aka Constantin Sandu,
aka Bobi Sandu,
aka Ionut Mihai
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 and 1343 - Conspiracy to Commit Wire Fraud
Maximum penalty: Thirty years in prison, a fine of $1 million or both;
Title 18 U.S.C. § 1956(a)(2)(A) — Laundering Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;
Title 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and Title 28, U.S.C. § 2461(c) - Criminal Forfeitures
AGENCY
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
Department of Labor Office of Investigator General
U.S. Department of Homeland Security
Florida Man Admits Fraudulently Obtaining $2.4 Million in CARES Act LoansRead the Press Release
TRENTON, N.J. – A Florida man admitted fraudulently obtaining over $2.4 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loan (EIDL) payments, U.S. Attorney Philip R. Sellinger, announced today.
Mohamed A. Awad, 61, of Ocala, Florida, pleaded guilty on Nov. 20, 2023, before Judge Michael A. Shipp in Trenton federal court to an information charging him with wire fraud and money laundering.
U.S. Attorney Philip R. Sellinger“The defendant admitted falsifying documents to obtain millions of dollars from government programs that were intended to provide financial help to Americans who were struggling to cope with the COVID-19 pandemic. My office continues to work with all of our law enforcement partners to find and punish those who take advantage of these vital programs.”
“The defendant’s abuse of a program designed for those in need is appalling,” Tammy Tomlins, Special Agent in Charge of the Newark Field Office, said. “Today’s plea demonstrates the significant consequence for fraudulently accessing government programs to steal from taxpayers. IRS Criminal Investigation and our law enforcement partners are committed to protecting the integrity of relief programs.”
According to documents filed in this case and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Awad engaged in a scheme to illegally obtain over $2.4 million in PPP and EIDL loans through numerous misrepresentations to lenders. He submitted fraudulent loan applications that fabricated numbers of employees and misrepresented company information, to induce PPP and EIDL lenders to approve the loan applications that they otherwise would not have approved. Awad submitted falsified tax documents in support of PPP applications. According to IRS records, none of the purported tax documents that Awad submitted in support of the loan applications were ever in fact filed with the IRS. Awad thereafter transferred the loan proceeds among various bank accounts he controlled, withdrawing significant amounts in cash and transferring loan proceeds out of the country via wire transfers to banks based in Egypt.
The charge of wire fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The charge of money laundering carries a maximum penalty of 20 years in prison and a maximum fine of $500,000, or twice the value of the monetary instrument or funds involved in the laundering offense, whichever is greater. Sentencing is scheduled for April 9, 2024.
U.S. Attorney Sellinger credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins; special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney, with the investigation leading to the charges.
The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
The government is represented by Assistant U.S. Attorney Katherine M. Romano of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
awad.information.pdfFederal Grand Jury Indicts Louisville Felon for Illegally Possessing FirearmRead the Press Release
Louisville, KY – A federal grand jury in Louisville returned an indictment on November 21, 2023, charging a local man with possession of a firearm by a convicted felon.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge R. Shawn Morrow of the ATF Louisville Field Division, and Chief Jacquelyn Gwinn-Villaroel of the Louisville Metro Police Department made the announcement.
According to the indictment, Jaron Bobbitt, 38, was charged with possession of a firearm by a convicted felon. On November 13, 2023, Bobbitt possessed an Anderson Manufacturing, AM-15, multi-caliber pistol, bearing serial number 19221737, and ammunition. Bobbitt was prohibited from possessing a firearm because he had previously been convicted of the following felony offenses.
On November 9, 2021, in Jefferson County Circuit Court, Bobbitt was convicted of two counts of receiving stolen property, possession of controlled substance in the first degree, and possession of a handgun by a convicted felon.
On January 16, 2019, in Jefferson County Circuit Court, Bobbitt was convicted of escape in the second degree.
On August 31, 2018, in Jefferson County Circuit Court, Bobbitt was convicted of receiving stolen property, theft of identity of another without consent, and criminal mischief in the second degree.
On April 29, 2011, in Jefferson County Circuit Court, Bobbitt was convicted of possession of a handgun by a convicted felon.
On June 17, 2004, in Jefferson County Circuit Court, Bobbitt was convicted of trafficking in a controlled substance in the first degree, cocaine, tampering with physical evidence, and receiving stolen property.
On May 7, 2004, in Jefferson County Circuit Court, Bobbitt was convicted of receiving stolen property, receiving a stolen vehicle, and tampering with physical evidence.
On December 3, 2001, in Jefferson County Circuit Court, Bobbitt was convicted of wanton endangerment in the first degree and receiving a stolen vehicle.
The defendant remains in state custody on charges related to a November 13, 2023, incident in which he brandished a firearm at LMPD police officers. He will make made his initial court appearance on a later date before a U.S. Magistrate Judge of the U.S. District Court for the Western District of Kentucky. If convicted, Bobbitt faces a maximum sentence of 15 years in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors.
There is no parole in the federal system.
This case is being investigated by the ATF and the Louisville Metro Police Department.
Assistant U.S. Attorney Josh Porter is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Federal Grand Jury Indicts Grand Junction Man for Distributing FentanylRead the Press Release
The U.S. Attorney’s Office for the District of Colorado announces that Shawn Burket, age 43, of Grand Junction, was charged with possessing fentanyl with intent to distribute, and with possessing a firearm as a prohibited person. A federal grand jury returned the indictment against Burket on October, 4, 2023, and he was arrested on November 14, 2023. According to court documents, the offenses allegedly took place in Clear Creek County on or about August 2, 2023. If convicted on the narcotics charge, Burket faces not less than ten years imprisonment. He is currently detained in federal custody pending trial.
The investigation in this matter was conducted by the ATF and the Idaho Springs Police Department. Assistant United States Attorney Al Buchman is handling the prosecution.
The charges in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Case Number 23-cr-420
Edmund Thornton Sentenced for Failing to Register as a Sex OffenderRead the Press Release
Burlington, Vermont – The United States Attorney for the District of Vermont announced that Edmund Thornton, 66, who until recently lived in East Calais, Vermont was sentenced yesterday in United States District Court in Burlington following his guilty plea to a charge that he failed to register as a sex offender after moving to Vermont. Senior U.S. District Judge William K. Sessions III sentenced Thornton to time served, to be followed by five years of supervised release. Before being released on conditions this past May, Thornton had been incarcerated for more than six months following his arrest in late October 2022.
According to court records, on October 27, 2022, a federal grand jury in Vermont returned a one count indictment alleging that Thornton violated the Sex Offender Registration And Notification Act (SORNA). Thornton was arrested in Pennsylvania on the charge on October 31 and was then transferred to the custody of U.S. Marshals in Vermont.
Records indicate that in 1999, Thornton pleaded guilty in Pennsylvania to charges that included attempted deviate sexual intercourse with a ten-year-old girl. Thornton served several years in prison. Under Pennsylvania law, Thornton was required to register in that state as a convicted sex offender upon his release from custody. The federal Sex Offender Registration And Notification Act also required Thornton to promptly register with authorities in any state to which he moved. According to the indictment, Thornton moved to Vermont in about June 2020 but failed to register with authorities here, as required by SORNA.
Thornton is represented by Assistant Federal Defender Barclay Johnson. The prosecutor is Assistant U.S. Attorney Gregory Waples.
This case was investigated by the United States Marshals Service.
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 Child Exploitation Obscenity Section, Criminal Division (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 www.justice.gov/psc.
Dual U.S./Mexican Citizen Extradited to the United States from Spain to Face Charges Related to Most Potent Fentanyl SeizureRead the Press Release
NEWS RELEASE SUMMARY – November 21, 2023
SAN DIEGO –Aaron Leib Kobisher, the alleged leader of a drug trafficking organization based in San Diego and Tijuana, made his first appearance in federal court today following his extradition from Spain to face fentanyl, methamphetamine, and cocaine trafficking charges.
According to publicly filed court documents, the charges relate to multiple seizures, including a June 2021 interception of approximately two kilograms of powdered fentanyl that was linked to Kobisher and his drug trafficking organization. After the fentanyl was tested by the DEA Southwest Laboratory, investigators discovered that it was the most concentrated powdered fentanyl that had been tested to date by the laboratory.
At today’s hearing, the United States moved for detention, arguing that Kobisher was a substantial flight risk. U.S. Magistrate Judge Steven B. Chu scheduled a detention hearing for November 24, 2023, at 10 a.m.
Kobisher is the lead defendant charged in a six-defendant indictment stemming from a long-term investigation. Four others charged in the same indictment were arrested earlier this year. One defendant remains a fugitive.
In court documents, Kobisher was described as an organizer and leader of the drug trafficking organization who coordinated the smuggling of fentanyl, methamphetamine and cocaine from Mexico to San Diego for distribution in the U.S.
Prosecutors alleged that Kobisher fled to Mexico in November 2022, after several seizures linked to Kobisher and his drug trafficking organization.
Kobisher was arrested in Spain on June 21, 2023. He had boarded a flight in Madrid that was headed to Mexico City, Mexico. After the flight left the gate, Spanish police stopped the aircraft and arrested Kobisher based on an Interpol Diffusion Notice from the United States government. On November 20, 2023, Kobisher was extradited to the United States.
“Fentanyl is deadly in all forms, but one of the seizures in this case packed an extraordinary punch,” said U.S. Attorney Tara McGrath. “Getting fentanyl out of the hands of drug traffickers – especially the most potent versions - no doubt saves many lives. The diligence of law enforcement means our neighborhoods are safer.”
“Drug trafficking is a violent crime, that impacts the safety and security of our communities,” said DEA Special Agent in Charge Shelly Howe. “The DEA and its partners will continue to work together to disrupt drug trafficking organizations and bring drug traffickers to justice. These organizations must be held accountable for the harm they cause in our communities.”
“Fentanyl continues to be the most significant drug-related concern for Homeland Security Investigations and our partners due to its widespread availability, highly addictive features, and deadly effects,” said Chad Plantz, Special Agent in Charge for Homeland Security Investigations San Diego. “The success of this investigation is the result of law enforcement agencies working together to dismantle drug trafficking organizations and holding those accountable for their actions- no matter where they hide.”
The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Kobisher.
This case is being prosecuted by Assistant U.S. Attorney Kevin Mokhtari.
DEFENDANT Case Number 23cr0916-JES-1
Aaron Lei Kobisher Age: 34 Mexico
aka “El Kobi”
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine, Fentanyl and Cocaine –
Title 21, U.S.C., Sections 841(a)(1), 846Maximum penalty: Life in prison and $10 million fine
Criminal Forfeiture – Title 21, U.S.C., Sections 853
AGENCIES
Drug Enforcement Administration
Homeland Security Investigations
United States Marshals ServiceDEA Attaché Madrid, Spain
U.S. Department of Justice, Office of International AffairsU.S. Department of Justice, Office of Enforcement Operations
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)U.S. Customs and Border Protection
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Dominican Republic Native Pleads Guilty to Smuggling $2 Million in Heroin Nearly 6 Years After His Flight from JusticeRead the Press Release
A native resident of the Dominican Republic pleaded guilty in federal court to two drug trafficking counts, United States Attorney Eric G. Olshan announced today.
On Monday, November 20, 2023, Habys Omar Meran pleaded guilty to both the heroin trafficking and criminal conspiracy counts in the 2016 federal Indictment, before United States District Judge Robert J. Colville.
In connection with the guilty plea, the court was advised that on January 26, 2016, Meran was driving a van containing a sophisticated, hydraulically activated, hidden compartment when stopped on Route 80 by a Pennsylvania State Trooper who specializes in drug interdiction. The compartment was found to contain over 4 kilograms of heroin - an amount valued at over $2 million once packaged and sold on the street. Meran’s passenger, his relative Juan Wilquin Hernandez-Bourdier, was convicted of all charges by a jury on December 13, 2018, and is currently serving his ten-year sentence in the Federal Bureau of Prisons. But Meran had removed his ankle monitor and fled the country before trial on November 23, 2017. The United States Marshal Service initiated a fugitive investigation and Meran was arrested in the Dominican Republic in 2023. Meran was subsequently extradited back to the United States under an international treaty with the government of the Dominican Republic .
Judge Colville scheduled Meran’s sentencing for April 2, 2024, at 10:00am. Federal law provides for a total sentence of up to life in prison, a fine of up to $10 million, or both. Meran also faces the imposition of restitution for the ankle monitor, and the forfeiture of the van he was driving. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court remanded Meran back to federal custody.
Assistant United States Attorneys Ross E. Lenhardt and James Wilson are prosecuting this case on behalf of the government.
The Department of Homeland Security Investigations (HSI) conducted the investigation that led to the prosecution of both Meran and Hernandez-Bourdier, with valuable assistance from the Pennsylvania State Police Interdiction Team, the Pennsylvania State Police Crime Lab, the Department of Homeland Security Crime Lab, the United States Marshal Service, and the Drug Enforcement Administration (DEA).
Cyber Scam Organization Disrupted Through Seizure of Nearly $9M in CryptoRead the Press Release
The Justice Department announced today the seizure of nearly $9 million worth of Tether, a cryptocurrency pegged to the U.S. dollar. These seized funds were traced to cryptocurrency addresses allegedly associated with an organization that exploited over 70 victims through romance scams and cryptocurrency confidence scams, which are widely known as “pig butchering.”
“Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States. These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The department hopes this recovery of assets will bring some closure and a sense of justice to the over 70 victims affected by this series of scams. This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.”
According to court documents, criminal actors worked together to target victims and convince them to make cryptocurrency deposits by fraudulently representing that the victims were making investments with trusted firms and cryptocurrency exchanges. In reality, the purported firms and cryptocurrency exchanges were non-existent trading platforms. Agents and analysts from the U.S. Secret Service (USSS) were able to trace those victim deposits and observed that the funds were quickly laundered through dozens of cryptocurrency addresses and exchanged for several different cryptocurrencies, a money laundering technique often referred to as “chain hopping.” These techniques are used to “layer” the proceeds of criminal activity into new cryptocurrency ecosystems, all to obfuscate the nature, source, control, and ownership of those proceeds. The seized funds were linked to numerous victim reports made via the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Commission’s (FTC) Consumer Sentinel Network.
“This seizure is the culmination of the exceptional hard work and collaborative partnership between the Justice Department and the United States Secret Service,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms. As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of frauds and scams. Even when money and criminals are abroad, we will work with our partners to seize cyber criminals’ illegal proceeds.”
“This seizure exemplifies the Secret Service’s mission to protect the financial infrastructure of the United States. We remain determined and vigilant to combat cyber-enabled financial fraud,” said Special Agent in Charge Shawn Bradstreet of the USSS San Franscisco Field Office. “It is a priority for the Secret Service to protect the financial security that citizens work so hard to obtain. We want to thank the Justice Department for their partnership, dedication, and outstanding work on this case.”
The USSS San Francisco Field Office investigated this case.
Trial Attorney Georgiana MacDonald of the Criminal Division’s Computer Crime and Intellectual Property Section, National Cryptocurrency Enforcement Team, and Assistant U.S. Attorneys Chris Kaltsas and Galen Phillips for the Northern District of California are handling the case, as well as the seizure and forfeiture actions.
The department would like to acknowledge Tether for its assistance in effectuating the transfer of these assets.
If you are a victim of a cryptocurrency scam, or other scam involving the use of the Internet, please file a report with the IC3 at ic3.gov and with the FTC at www.reportfraud.ftc.gov.
Cyber Scam Organization Disrupted Through Seizure of Nearly $9M in CryptoRead the Press Release
SAN FRANCISCO – The Justice Department announced today the seizure of nearly $9 million worth of Tether, a cryptocurrency pegged to the U.S. dollar. These seized funds were traced to cryptocurrency addresses allegedly associated with an organization that exploited over 70 victims through romance scams and cryptocurrency confidence scams, which are widely known as “pig butchering.”
“Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States. These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The department hopes this recovery of assets will bring some closure and a sense of justice to the over 70 victims affected by this series of scams. This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.”
“This seizure is the culmination of the exceptional hard work and collaborative partnership between the Justice Department and the United States Secret Service,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms. As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of frauds and scams. Even when money and criminals are abroad, we will work with our partners to seize cyber criminals’ illegal proceeds.”
“This seizure exemplifies the Secret Service’s mission to protect the financial infrastructure of the United States. We remain determined and vigilant to combat cyber-enabled financial fraud,” said Special Agent in Charge Shawn Bradstreet of the USSS San Francisco Field Office. “It is a priority for the Secret Service to protect the financial security that citizens work so hard to obtain. We want to thank the Justice Department for their partnership, dedication, and outstanding work on this case.”
According to court documents, criminal actors worked together to target victims and convince them to make cryptocurrency deposits by fraudulently representing that the victims were making investments with trusted firms and cryptocurrency exchanges. In reality, the purported firms and cryptocurrency exchanges were non-existent trading platforms. Agents and analysts from the U.S. Secret Service (USSS) were able to trace those victim deposits and observed that the funds were quickly laundered through dozens of cryptocurrency addresses and exchanged for several different cryptocurrencies, a money laundering technique often referred to as “chain hopping.” These techniques are used to “layer” the proceeds of criminal activity into new cryptocurrency ecosystems, all to obfuscate the nature, source, control, and ownership of those proceeds. The seized funds were linked to numerous victim reports made via the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Commission’s (FTC) Consumer Sentinel Network.
The USSS San Francisco Field Office investigated this case.
Trial Attorney Georgiana MacDonald of the Criminal Division’s Computer Crime and Intellectual Property Section, National Cryptocurrency Enforcement Team, and Assistant U.S. Attorneys Chris Kaltsas and Galen Phillips for the Northern District of California are handling the case, as well as the seizure and forfeiture actions.
The department would like to acknowledge Tether for its assistance in effectuating the transfer of these assets.
If you are a victim of a cryptocurrency scam, or other scam involving the use of the Internet, please file a report with the IC3 at ic3.gov and with the FTC at www.reportfraud.ftc.gov.
Convicted Felon Found Unconscious in Vehicle Flees Police Resulting in Crash and Federal Prison TimeRead the Press Release
LAFAYETTE, La. – United States Attorney Brandon B. Brown announced that Jorel Hughes, 40, of Opelousas, Louisiana, has been sentenced for illegally possessing a firearm. United States District Judge David C. Joseph sentenced Hughes to 126 months (10 years, 6 months) in prison, followed by 3 years of supervised release. Hughes pleaded guilty on August 18, 2023, to being a convicted felon in possession of a firearm.
On July 12, 2022, officers with the Lafayette Police Department encountered Hughes while he was seated in the driver’s seat of a vehicle and parked adjacent to a fuel pump at a RaceTrac gas station in Lafayette. At the time, Hughes appeared to be in a drug-induced unconscious state and officers and other first responders rendered aid to him, including administering two doses of Narcan. While providing aid to Hughes and before he regained consciousness, officers located two firearms near Hughes in the vehicle. Officers later learned that Hughes had previously been convicted of a felony offense and one of the firearms had been reported stolen.
When Hughes regained consciousness, he did not comply with officers and instead resisted their efforts to detain him, attempted to disarm one of the officers, and crashed into other vehicles as he drove the vehicle out of the gas station parking lot. Hughes fled the scene at a high rate of speed, eventually crashing into a drainage ditch and then attempted to flee the crash on foot. Hughes was apprehended by officers and arrested. Hughes admitted to being a convicted felon and possessing the firearms, knowing that he was prohibited from doing so.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Lafayette Police Department and Lafayette Parish Sheriff’s Office, and prosecuted by Assistant United States Attorney Danny Siefker.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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Casper man arraigned for unlawful possession of a firearmRead the Press Release
McCloskey was detained at the request of the government and will remain in custody pending trial. If convicted, McCloskey faces up to 15 years’ imprisonment with three years of supervised release and up to a $250,000 fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This crime is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Casper Police Department. The case is being prosecuted by Assistant U.S. Attorney Jonathan C. Coppom.
An indictment merely contains allegations, and every defendant is presumed innocent unless and until proven guilty.
Case No. 23-CR-00155
Bloomington Man Sentenced to Thirty Years in Federal Prison for Sexually Exploiting a Child Under His CareRead the Press Release
INDIANAPOLIS- Joshua Ray Vestal, 40, of Bloomington has been sentenced to 30 years in federal prison after pleading guilty to sexual exploitation of a child.
According to court documents, on September 5, 2022, Joshua Vestal forced a child to engage in sexually explicit conduct with him, and Vestal filmed the conduct with his cell phone. At the time the video was recorded, the child victim was between 12- and 16-years-old and was under Vestal’s care, custody, or control.
Four days later, a witness discovered the video and multiple nude images of the child on Vestal’s phone. The witness identified Vestal and the child in the video. The witness sent the images and video to her personal phone to preserve the evidence, and then confronted Vestal about what they found.
When the witness confronted Vestal, he took their cell phone and submerged it in a toilet. Vestal then performed a factory reset on his own cell phone and took out the SIM card in an attempt to erase the digital evidence. However, when the witness obtained a new phone, they found the video of Vestal sexually abusing the child synced to their electronic account. The following day, Bloomington Police Department officers arrested Vestal for sexual exploitation of a child.
“Everyone deserves a childhood free from sexual abuse, and it is up to us as adults to do all we can to protect children. This defendant not only sexually abused a vulnerable child entrusted in his care, he then attempted to conceal his heinous acts by destroying the evidence,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana “The serious sentence imposed in this case will ensure that children are protected from this predator for several decades to come. I commend the Bloomington Police Department, FBI, Indiana State Police, and state and federal prosecutors for stopping the abuse of this child, and preventing the abuse of others who may have fallen within his grasp in the future.”
“Indiana State Police investigators work diligently every day, all across Indiana, and in close collaboration with its law enforcement partners, to help bring to justice those who seek to perpetuate the victimization of children”, said Indiana State Police Superintendent Douglas G. Carter.
The FBI investigated this case with valuable assistance provided by the Bloomington Police Department, Indiana State Police, and the Monroe County Prosecutor’s Office. The sentence was imposed by U.S. District Court Judge Matthew P. Brookman. Judge Brookman also ordered that Vestal be supervised by the U.S. Probation Office for life following his release from federal prison and pay $10,000 in restitution to the child victim. Vestal is also required to register as a sex offender wherever he lives, works, or attends school for the rest of his life.
U.S. Attorney Myers thanked Assistant United States Attorney Kyle M. Sawa, who prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the 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.
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Binance and CEO Plead Guilty to Federal Charges in $4B ResolutionRead the Press Release
SEATTLE – Binance Holdings Limited (Binance), the entity that operates the world’s largest cryptocurrency exchange, Binance.com, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).
Binance’s founder and chief executive officer (CEO), Changpeng Zhao, a Canadian national, also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the BSA and has resigned as CEO of Binance.
Binance’s guilty plea is part of coordinated resolutions with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) and the U.S. Commodity Futures Trading Commission (CFTC).
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history,” said Attorney General Merrick B. Garland. “In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” said Secretary of the Treasury Janet L. Yellen. “Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences.”
“A corporate strategy that puts profits over compliance isn’t a path to riches; it’s a path to federal prosecution,” said Deputy Attorney General Lisa O. Monaco. “Today’s charges and guilty pleas – combined with a more than $4 billion financial penalty – sends an unmistakable message to crypto and defi companies: if you serve U.S. customers, you must obey U.S. law.”
“Changpeng Zhao made Binance, the company he founded and ran as CEO, into the largest cryptocurrency exchange in the world by targeting U.S. customers, but refused to comply with U.S. law,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “Binance’s and Zhao’s willful violations of anti-money laundering and sanctions laws threatened the U.S. financial system and our national security, and each of them has now pleaded guilty. Make no mistake: when you place profits over compliance with the law, you will answer for your crimes in the United States.”
“Binance’s crimes gave sanctioned customers unfettered access to American capital and financial services,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division (NSD). “This prosecution is a warning that companies that do not build sanctions compliance into their services face serious criminal penalties, as do the executives who lead them.”
“From the beginning of its existence, Binance and founder Changpeng Zhao chose growth and personal wealth over following financial regulations aimed at stopping the laundering of criminal cash,” said Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington. “Because Changpeng Zhao knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees.”
“Binance’s activities undermined the foundation of safe and sound financial markets by intentionally avoiding basic, fundamental obligations that apply to exchanges, all the while collecting approximately $1.35 billion in trading fees from U.S. customers,” said Chairman Rostin Behnam of the Commodity Futures Trading Commission (CFTC). “American investors, small and large, have demonstrated eagerness to incorporate digital asset products into their portfolios. It is our duty to ensure that when they do so, the full protections afforded by our regulatory oversight are in place, and that illegal and illicit conduct is swiftly addressed. When, as here, an entity goes even further, deliberately avoiding to employ meaningful access controls, intentionally avoiding knowing customers’ identities, and actively concealing the presence of U.S. customers on its platforms, there is no question that the CFTC will strike hard and aggressively.”
“When you put growth above compliance, you end up in hot water,” said Chief Jim Lee of the IRS Criminal Investigation (IRS-CI). “Our team of investigators uncovered that Binance disregarded anti-money laundering Know Your Customer laws, failed to register as a money transmitter, and willfully violated U.S. sanctions tied to the International Emergency Economic Powers Act. When you do so, your business becomes a playground for bad actors. Hundreds of millions of dollars in illicit proceeds from ransomware variants, darknet transactions, and various internet-related scams moved through Binance in an attempt to evade detection by law enforcement.”
According to court documents, Binance admitted to prioritizing growth and profits over compliance with U.S. law. Binance launched in 2017 and focused on attracting high-volume customers, including U.S.-based customers. Binance quickly became the largest cryptocurrency exchange in the world, with the greatest share of its customers coming from the United States. As a result of serving U.S. customers, Binance was required to register with FinCEN as a money services business and to implement an effective AML program that was reasonably designed to prevent Binance from being used to facilitate money laundering. Binance chose not to comply with U.S. law and failed to implement controls and procedures to prevent money laundering. Binance also did not implement controls that would have prevented U.S. customers from conducting transactions with customers in sanctioned jurisdictions, despite knowing that the system it used to match customers for transactions would necessarily cause transactions in violation of IEEPA.
Instead of complying with U.S. law, in 2019, Binance announced that it would block U.S. customers and launched a separate U.S. exchange, Binance.US. Despite this announcement, Binance took steps to maintain a substantial number of U.S. customers. In particular, Binance focused on retaining valuable “VIP” customers, which were responsible for a large portion of Binance’s trading volume and revenue. These VIP customers were critical to Binance’s business because they helped provide the necessary liquidity to facilitate trades of digital assets. For example, Binance executives, including Zhao, made a plan to contact VIP customers and help the VIP register a new account for an offshore entity and transfer holdings to that account. Binance employees also called U.S. VIPs to encourage them to provide information that suggested the customer was not located in the United States.
Binance also did not implement the core components of an effective AML program: Binance did not implement comprehensive know-your-customer (KYC) protocols or systematically monitor transactions, and Binance never filed a suspicious activity report (SAR) with FinCEN. For years, Binance allowed users to open accounts and trade without submitting any identifying information beyond an email address. Binance began requiring all users to provide KYC information in August 2021 but allowed users who had not provided KYC to continue trading on the exchange until May 2022. Between August 2017 and October 2022, U.S. users, including VIPs, conducted trillions of dollars in transactions on the platform, generating over $1.6 billion in profit for Binance.
As Binance’s internal communications showed, Binance’s compliance employees recognized that Binance did not have protocols to flag or report transactions for money laundering risks, which employees recognized would attract criminals to the exchange. As one compliance employee wrote, “we need a banner ‘is washing drug money too hard these days - come to binance we got cake for you.’” Due in part to Binance’s failure to implement an effective AML program, illicit actors used Binance’s exchange in various ways, including conducting transactions for mixing services that obfuscated the source and ownership of cryptocurrency; transferring illicit proceeds from ransomware variants; and moving proceeds of darknet market transactions, exchange hacks, and various internet-related scams.
Binance also knew that U.S. sanctions laws prohibited U.S. persons – including its U.S. customers – from trading with its customers subject to U.S. sanctions, including customers in comprehensively sanctioned jurisdictions, such as Iran. Binance knew that it had a significant number of users from comprehensively sanctioned jurisdictions and a substantial number of U.S. users and that its matching engine would necessarily cause U.S. users to transact with users in sanctioned jurisdictions in violation of U.S. law. Nonetheless, Binance did not implement controls that would prevent U.S. users from trading with users in Iran; and, because of this intentional failure, between January 2018 and May 2022, Binance willfully caused over $898 million in trades between U.S. users and users ordinarily resident in Iran.
As part of the plea agreement, Binance has agreed to forfeit $2,510,650,588 and to pay a criminal fine of $1,805,475,575 for a total financial penalty of $4,316,126,163. Binance has also agreed to retain an independent compliance monitor for three years and remediate and enhance their anti-money laundering and sanctions compliance programs. Binance separately has also reached agreements with the CFTC, FinCEN, and OFAC, and the Department will credit approximately $1.8 billion toward those resolutions.
The Department reached its resolution with Binance based on a number of factors, including the nature, seriousness, and pervasiveness of the offense, as a result of which Binance processed billions of dollars of cryptocurrency transactions for U.S. persons and caused U.S. customers to engage in transactions in violation of U.S. sanctions. Binance did not make a timely and voluntary disclosure of wrongdoing, but it received partial credit for its cooperation with the Department’s investigation, and it has taken steps to remediate its compliance program. Binance did not receive full credit for its cooperation because it delayed producing relevant evidence, including recorded meetings in which Binance executives discussed U.S. legal requirements. Accordingly, the total criminal penalty reflects a 20% reduction off the bottom of the applicable U.S. sentencing guidelines fine range.
In addition, according to court documents, Zhao, Binance’s founder, owner, and CEO, admitted that he understood that Binance served U.S. users and was thus required to register with FinCEN and implement an effective AML program. Zhao knew that U.S. users were essential to Binance’s growth and were a significant source of revenue and knew that an effective AML program would include KYC protocols that would mean that some customers would choose not to use Binance. Zhao told employees it was “better to ask for forgiveness than permission,” and prioritized Binance’s growth over compliance with U.S. law. Without an effective AML program, Binance caused transactions between U.S. users and users in jurisdictions subject to U.S. sanctions. These illegal transactions were a clear and foreseeable result of Zhao’s decision to prioritize Binance’s profit and growth over compliance with the BSA.
IRS-CI is investigating the case. The case is being prosecuted by Bank Integrity Unit Deputy Chief and National Cryptocurrency Enforcement Team Deputy Director Kevin Mosley and Trial Attorney Elizabeth Carr of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), Trial Attorneys Beau Barnes and Alex Wharton of NSD’s Counterintelligence and Export Control Section (CES), and Assistant U.S. Attorney (AUSA) Mike Dion for the Western District of Washington. Trial Attorney Julia Jarrett, formerly of MLARS and currently an AUSA for the District of Oregon, and Trial Attorney Matthew Anzaldi, formerly of CES and currently with NSD’s National Security Cyber Section, made substantial contributions to this investigation and prosecution.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system. The Criminal Division has surged resources to the Bank Integrity Unit, which has imposed over $12 billion in penalties on financial institutions for sanctions violations over the last decade. NSD’s Counterintelligence and Export Control Section investigates and prosecutes individuals and corporations for violations of export control and sanctions laws, in addition to other national security crimes. NSD continues to expand its corporate enforcement efforts – including growing the ranks of prosecutors dedicated to this work and establishing a Chief Counsel and Deputy Chief Counsel for Corporate Enforcement.
Binance and CEO Plead Guilty to Federal Charges in $4B ResolutionRead the Press Release
Binance Holdings Limited (Binance), the entity that operates the world’s largest cryptocurrency exchange, Binance.com, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).
Binance’s founder and chief executive officer (CEO), Changpeng Zhao, a Canadian national, also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the BSA and has resigned as CEO of Binance.
Binance’s guilty plea is part of coordinated resolutions with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) and the U.S. Commodity Futures Trading Commission (CFTC).
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history,” said Attorney General Merrick B. Garland. “In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” said Secretary of the Treasury Janet L. Yellen. “Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences.”
“A corporate strategy that puts profits over compliance isn’t a path to riches; it’s a path to federal prosecution,” said Deputy Attorney General Lisa O. Monaco. “Today’s charges and guilty pleas – combined with a more than $4 billion financial penalty – sends an unmistakable message to crypto and defi companies: if you serve U.S. customers, you must obey U.S. law.”
“Changpeng Zhao made Binance, the company he founded and ran as CEO, into the largest cryptocurrency exchange in the world by targeting U.S. customers, but refused to comply with U.S. law,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “Binance’s and Zhao’s willful violations of anti-money laundering and sanctions laws threatened the U.S. financial system and our national security, and each of them has now pleaded guilty. Make no mistake: when you place profits over compliance with the law, you will answer for your crimes in the United States.”
“Binance’s crimes gave sanctioned customers unfettered access to American capital and financial services,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division (NSD). “This prosecution is a warning that companies that do not build sanctions compliance into their services face serious criminal penalties, as do the executives who lead them.”
“From the beginning of its existence, Binance and founder Changpeng Zhao chose growth and personal wealth over following financial regulations aimed at stopping the laundering of criminal cash,” said Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington. “Because Changpeng Zhao knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees.”
“Binance’s activities undermined the foundation of safe and sound financial markets by intentionally avoiding basic, fundamental obligations that apply to exchanges, all the while collecting approximately $1.35 billion in trading fees from U.S. customers,” said Chairman Rostin Behnam of the Commodity Futures Trading Commission (CFTC). “American investors, small and large, have demonstrated eagerness to incorporate digital asset products into their portfolios. It is our duty to ensure that when they do so, the full protections afforded by our regulatory oversight are in place, and that illegal and illicit conduct is swiftly addressed. When, as here, an entity goes even further, deliberately avoiding to employ meaningful access controls, intentionally avoiding knowing customers’ identities, and actively concealing the presence of U.S. customers on its platforms, there is no question that the CFTC will strike hard and aggressively.”
“When you put growth above compliance, you end up in hot water,” said Chief Jim Lee of the IRS Criminal Investigation (IRS-CI). “Our team of investigators uncovered that Binance disregarded anti-money laundering Know Your Customer laws, failed to register as a money transmitter, and willfully violated U.S. sanctions tied to the International Emergency Economic Powers Act. When you do so, your business becomes a playground for bad actors. Hundreds of millions of dollars in illicit proceeds from ransomware variants, darknet transactions, and various internet-related scams moved through Binance in an attempt to evade detection by law enforcement.”
According to court documents, Binance admitted to prioritizing growth and profits over compliance with U.S. law. Binance launched in 2017 and focused on attracting high-volume customers, including U.S.-based customers. Binance quickly became the largest cryptocurrency exchange in the world, with the greatest share of its customers coming from the United States. As a result of serving U.S. customers, Binance was required to register with FinCEN as a money services business and to implement an effective AML program that was reasonably designed to prevent Binance from being used to facilitate money laundering. Binance chose not to comply with U.S. law and failed to implement controls and procedures to prevent money laundering. Binance also did not implement controls that would have prevented U.S. customers from conducting transactions with customers in sanctioned jurisdictions, despite knowing that the system it used to match customers for transactions would necessarily cause transactions in violation of IEEPA.
Instead of complying with U.S. law, in 2019, Binance announced that it would block U.S. customers and launched a separate U.S. exchange, Binance.US. Despite this announcement, Binance took steps to maintain a substantial number of U.S. customers. In particular, Binance focused on retaining valuable “VIP” customers, which were responsible for a large portion of Binance’s trading volume and revenue. These VIP customers were critical to Binance’s business because they helped provide the necessary liquidity to facilitate trades of digital assets. For example, Binance executives, including Zhao, made a plan to contact VIP customers and help the VIP register a new account for an offshore entity and transfer holdings to that account. Binance employees also called U.S. VIPs to encourage them to provide information that suggested the customer was not located in the United States.
Binance also did not implement the core components of an effective AML program: Binance did not implement comprehensive know-your-customer (KYC) protocols or systematically monitor transactions, and Binance never filed a suspicious activity report (SAR) with FinCEN. For years, Binance allowed users to open accounts and trade without submitting any identifying information beyond an email address. Binance began requiring all users to provide KYC information in August 2021 but allowed users who had not provided KYC to continue trading on the exchange until May 2022. Between August 2017 and October 2022, U.S. users, including VIPs, conducted trillions of dollars in transactions on the platform, generating over $1.6 billion in profit for Binance.
As Binance’s internal communications showed, Binance’s compliance employees recognized that Binance did not have protocols to flag or report transactions for money laundering risks, which employees recognized would attract criminals to the exchange. As one compliance employee wrote, “we need a banner ‘is washing drug money too hard these days - come to binance we got cake for you.’” Due in part to Binance’s failure to implement an effective AML program, illicit actors used Binance’s exchange in various ways, including conducting transactions for mixing services that obfuscated the source and ownership of cryptocurrency; transferring illicit proceeds from ransomware variants; and moving proceeds of darknet market transactions, exchange hacks, and various internet-related scams.
Binance also knew that U.S. sanctions laws prohibited U.S. persons – including its U.S. customers – from trading with its customers subject to U.S. sanctions, including customers in comprehensively sanctioned jurisdictions, such as Iran. Binance knew that it had a significant number of users from comprehensively sanctioned jurisdictions and a substantial number of U.S. users and that its matching engine would necessarily cause U.S. users to transact with users in sanctioned jurisdictions in violation of U.S. law. Nonetheless, Binance did not implement controls that would prevent U.S. users from trading with users in Iran; and, because of this intentional failure, between January 2018 and May 2022, Binance willfully caused over $898 million in trades between U.S. users and users ordinarily resident in Iran.
As part of the plea agreement, Binance has agreed to forfeit $2,510,650,588 and to pay a criminal fine of $1,805,475,575 for a total financial penalty of $4,316,126,163. Binance has also agreed to retain an independent compliance monitor for three years and remediate and enhance their anti-money laundering and sanctions compliance programs. Binance separately has also reached agreements with the CFTC, FinCEN, and OFAC, and the Department will credit approximately $1.8 billion toward those resolutions.
The Department reached its resolution with Binance based on a number of factors, including the nature, seriousness, and pervasiveness of the offense, as a result of which Binance processed billions of dollars of cryptocurrency transactions for U.S. persons and caused U.S. customers to engage in transactions in violation of U.S. sanctions. Binance did not make a timely and voluntary disclosure of wrongdoing, but it received partial credit for its cooperation with the Department’s investigation, and it has taken steps to remediate its compliance program. Binance did not receive full credit for its cooperation because it delayed producing relevant evidence, including recorded meetings in which Binance executives discussed U.S. legal requirements. Accordingly, the total criminal penalty reflects a 20% reduction off the bottom of the applicable U.S. sentencing guidelines fine range.
In addition, according to court documents, Zhao, Binance’s founder, owner, and CEO, admitted that he understood that Binance served U.S. users and was thus required to register with FinCEN and implement an effective AML program. Zhao knew that U.S. users were essential to Binance’s growth and were a significant source of revenue and knew that an effective AML program would include KYC protocols that would mean that some customers would choose not to use Binance. Zhao told employees it was “better to ask for forgiveness than permission,” and prioritized Binance’s growth over compliance with U.S. law. Without an effective AML program, Binance caused transactions between U.S. users and users in jurisdictions subject to U.S. sanctions. These illegal transactions were a clear and foreseeable result of Zhao’s decision to prioritize Binance’s profit and growth over compliance with the BSA.
IRS-CI is investigating the case. The case is being prosecuted by Bank Integrity Unit Deputy Chief and National Cryptocurrency Enforcement Team Deputy Director Kevin Mosley and Trial Attorney Elizabeth Carr of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), Trial Attorneys Beau Barnes and Alex Wharton of NSD’s Counterintelligence and Export Control Section (CES), and Assistant U.S. Attorney (AUSA) Mike Dion for the Western District of Washington. Trial Attorney Julia Jarrett, formerly of MLARS and currently an AUSA for the District of Oregon, and Trial Attorney Matthew Anzaldi, formerly of CES and currently with NSD’s National Security Cyber Section, made substantial contributions to this investigation and prosecution.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system. The Criminal Division has surged resources to the Bank Integrity Unit, which has imposed over $12 billion in penalties on financial institutions for sanctions violations over the last decade. NSD’s Counterintelligence and Export Control Section investigates and prosecutes individuals and corporations for violations of export control and sanctions laws, in addition to other national security crimes. NSD continues to expand its corporate enforcement efforts – including growing the ranks of prosecutors dedicated to this work and establishing a Chief Counsel and Deputy Chief Counsel for Corporate Enforcement.
Binance Plea Agreement Zhao Plea Agreement Binance Information Zhao InformationBillings felon admits illegal possession of firearms; numerous guns found in residenceRead the Press Release
BILLINGS — A Billings felon who was on state probation admitted today to illegally possessing numerous firearms, U.S. Attorney Jesse Laslovich said.
Erik Joseph Perlberg, 48, pleaded guilty to prohibited person in possession of a firearm. Perlberg faces a maximum of 15 years in prison, a $250,000 fine and three years of supervised release.
U.S. Magistrate Judge Timothy J. Cavan presided. A sentencing date will be set before U.S. District Judge Susan P. Watters. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Perlberg was released pending further proceedings.
The government alleged in court documents that on April 4, Perlberg attempted to collect a firearm at Scheels in Billings. When a store employee asked why a family member had to complete an ATF form, Perlberg replied that he was prohibited because he was on felony probation. The firearm was not provided to Perlberg. An investigation led to an interview in which Perlberg acknowledged to his probation officer that he could not possess a firearm but had them at his residence and that the keys to the gun safe were at his place of employment. When law enforcement went to his employer for the keys, officers were shown a firearm that Perlberg possessed in a toolbox. During a search of Perlberg’s residence, law enforcement found numerous firearms and determined that 18 of the guns had been manufactured outside the state of Montana. Perlberg was convicted of felony DUI in Yellowstone County in 2021 and was prohibited from possessing firearms.
Assistant U.S. Attorney Zeno B. Baucus is prosecuting the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Bank Robber Sentenced to 15 Years in Federal PrisonRead the Press Release
Tampa, FL – U.S. District Judge Kathryn Kimball Mizelle has sentenced John Charles Anderson (40, Spring Hill) to 12 years in federal prison, followed by 5 years of supervised release, for a bank robbery with an assault by using a deadly weapon. Anderson was also ordered to pay $941 in restitution. Judge Mizelle previously sentenced Anderson to 3 years in prison for a violation of his federal supervised release, to be served consecutively to the new robbery sentence. Anderson had pleaded guilty on July 31, 2023.
According to court documents, on January 14, 2022, Anderson armed himself, donned a mask, and robbed a bank just over one month after being placed on supervised release following a federal prison sentence for committing five bank robberies. On January 14, 2022, Anderson pointed what looked like a semi-automatic handgun toward the teller and demanded money and got away with $941 from the SunTrust bank located at 12902 Dale Mabry Highway in Tampa. Anderson was identified, in part, by his distinct hand tattoos, which read “KILL COPS” across his knuckles.
Anderson fled the bank, and the state, making his way to Michigan. On January 20, 2022, officers from the River Rouge Police Department encountered Anderson and attempted a traffic stop. Anderson fled, crashing his car into a wall at a gas station before continuing to flee on foot. Officers recovered a loaded firearm, which had been been reported stolen in South Carolina, from the front seat of Anderson’s car. Anderson was taken into custody after hiding in a garage.
This case was investigated by the Federal Bureau of Investigation, the Hillsborough County Sheriff’s Office, the Ecorse Police Department, and the River Rouge Police Department. It was prosecuted by Assistant United States Attorney Samantha E. Beckman.
Accountant Pleads Guilty to Stealing More than $715,000 from Spokane Medical PracticeRead the Press Release
Spokane, Washington - Today, Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced Carol Casilla, age 26, of Spokane, Washington, pleaded guilty to Wire Fraud in connection with Casilla’s theft of more than $715,000 from a Spokane medical practice at which she was employed between 2020 and 2023. United States District Judge Thomas O. Rice accepted Casilla’s guilty plea, and set sentencing for February 22, 2024, in Spokane.
According to court documents, between May 2020 and March 2023, Casilla was employed as an accountant by Spokane Dermatology Clinic (SDC), a dermatological practice located in Spokane. While employed at SDC, Casilla used her position to fraudulently issue company checks to herself and deposit them into her own personal accounts, and to make electronic funds transfers using company funds toward her personal credit cards. According to court documents, some of the transfers were made to a fictitious company that Casilla created in order to make it appear as though the transfers were for legitimate company expenditures. Casilla made hundreds of fraudulent transfers in this manner, stealing more than $715,000 in total.
“Ms. Casilla abused the trust of her employer to line her own pockets,” said United States Attorney Waldref. “We will continue to work together with our law enforcement partners to vigorously prosecute those who commit financial fraud, and to strengthen our communities by protecting our local businesses.”
“Ms. Casilla was a trusted employee and used her access to steal over $700,000 from her employer.” said Richard A. Collodi, Special Agent in Charge of the FBI’s Seattle field office. “Additionally, she committed and hid her fraud for over three years. This guilty plea is the first step to restoring the victims and reinforcing accountability for those who violate trust.”
The charges to which Casilla pled carries a maximum sentence of up to 20 years in federal prison. This case was investigated by the Federal Bureau of Investigation, Spokane Resident Agency. Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene are prosecuting the case on behalf of the United States.
United States v. Casilla, Case No: 2-23-CR-00085-TOR
20 November 2023
Waggaman Man Sentenced for Federal Gun OffenseRead the Press Release
NEW ORLEANS, LOUISIANA – On November 15, 2023, U.S. District Judge Sarah Vance sentenced DEVYN ALLEN to 31 months in the Bureau of Prisons for violating the Federal Gun Control Act, announced U.S. Attorney Duane A. Evans.
ALLEN was charged on December 3, 2021, in a one-count indictment with possession of a Springfield Model XD, nine-millimeter handgun while being a convicted felon. ALLEN will serve 31 months in prison, followed by three years of supervised release, and a $100 mandatory special assessment fee.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
U. S. Attorney Duane A. Evans praised the work of the United States Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Louisiana State Police. The prosecution was handled by Assistant United States Attorney Rachal Cassagne of the Narcotics Unit.
Virginia tactical gear & equipment company agrees to pay more than $2 million to settle allegations related to Buy American ActRead the Press Release
COLUMBUS, Ohio – U.S. Attorney Kenneth L. Parker today announced that a Virginia-based tactical gear and equipment company has agreed to pay nearly $2.1 million to resolve False Claims Act allegations that it failed to comply with the requirements of the Buy American Act (“BAA”), Trade Agreements Act (“TAA”) and Berry Amendment when selling textile-based products to the Department of Defense.
London Bridge Trading Company, Ltd. (“LBT”) entered the settlement with the United States and qui tam relator Ann Keating.
The BAA was enacted in 1933 to protect U.S. manufacturing by creating a preference for domestic products when the federal government purchases supplies. The Berry Amendment requires certain items purchased by the Department of Defense to be 100% domestic in origin and mandates a higher level of domestic content than the Buy American Act. The TAA governs trade agreements between the United States and foreign countries and limits certain U.S. Government procurement to US-made products or products made in designated countries.
Court documents allege that since at least 2008, LBT submitted false claims in connection with the sale of “American-made” products that were actually manufactured in foreign countries, including Peru, Mexico and China. The company marketed its goods as “100% made in America” and replaced the original foreign manufacturers’ tags with tags that read “Made in USA.”
LBT also offered its products for sale to all federal agencies on the government-owned website “GSA Advantage!” that permits government agencies throughout the United States to purchase products from contracted vendors.
The United States, including through the Defense Logistics Agency’s supply center located in Columbus, purchased a variety of textile-based products from LBT, including clothing, armor, boots, belts, bags, rope, slings, backpacks and medical pouches. This settlement specifically addressed load-out bags purchased from LBT that violated the TAA and Berry Amendment.
The civil settlement includes the resolution of claims brought by an employee of LBT under the qui tam provisions of the False Claims Act. These provisions allow a private party, known as a relator, to file an action on behalf of the United States and receive a portion of any recovery. Under the terms of the settlement agreement the relator will receive a share of the proceeds.
The lawsuit is titled U.S. ex rel. Keating v. London Bridge Trading, et al. The relator in this case had a personal interest in the safety and security of the United States military; in 2004, the relator’s son was killed while serving in Iraq. The relator believes the scheme as alleged was a threat to the safety and integrity of U.S. military operations.
This matter was investigated by agents from the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service’s Mid-Atlantic Field Office; Department of the Army Criminal Investigation Division, Major Procurement Fraud Field Office; General Services Administration, Office of Inspector General, Mid-Atlantic Division; Homeland Security Investigations; and Defense Logistics Agency working with the U.S. Attorneys’ offices in the Southern District of Ohio and Eastern District of Virginia.
“We greatly appreciate the steadfast, thorough, and collaborative work on this case by each of the federal agencies involved,” said U.S. Attorney Kenneth L. Parker. “This office takes very seriously the duty of government contractors to meet all of their obligations under government contracts and we will pursue anyone falsely certifying compliance with the Buy American Act.”
“GSA OIG will continue to work with its investigative partners and the Department of Justice to protect the integrity of GSA's Multiple Award Schedule program and hold accountable those who attempt to defraud the government," said Special Agent in Charge Elisa Pellegrini with the General Services Administration’s Office of Inspector General.
“We are very pleased with this resolution. This is a testament to the aggressive investigation we conducted, and now the public can see this.” said Andrew Johnson, Special Agent in Charge, Department of the Army Criminal Investigation Division, Major Procurement Fraud Field Office. “Companies that do business with the government must comply with all of their obligations, and if they seek to circumvent the rules and regulations of what and how they supply our women and men in uniform, they must be held accountable for their actions.”
Civil Chief Andrew M. Malek is representing the United States in this matter.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Versailles Man Pleads Guilty to Possession of a Firearm and Explosive as Convicted FelonRead the Press Release
LEXINGTON, Ky. – A Versailles, Ky., man, Bryan Carroll, 46, pleaded guilty on Monday, before Chief U.S. District Judge Danny Reeves, to two counts of possession of a firearm by a convicted felon and one count of carrying an explosive during the commission of a federal felony offense.
According to his plea agreement, on March 25, 2021, law enforcement was notified that Carroll was enroute to the University of Kentucky Hospital and that had an active arrest warrant. Law enforcement met Carroll outside the Emergency Department, where he was taken into custody. During a subsequent search of Carroll and his vehicle, law enforcement located a total of eight firearms, including a sawed-off shotgun, four explosive devices, and one improvised explosive bomb.
During an interview, Carroll admitted to having the firearms on him when he was arrested and acknowledged the additional firearms in his vehicle. Carroll also acknowledged the “fireworks” in his vehicle and admitted to constructing the metal can devices, which contained nails. Carroll told law enforcement he had additional destructive devices at his home, and he possessed a large quantity of explosive materials. Law enforcement obtained a search warrant for Carroll’s home where they located two additional firearms along with six additional improvised explosive bombs.
Carroll admitted that he possessed the firearms and explosives and that he was prohibited from possessing the devices and firearms, based on a prior felony conviction. Carroll had previously been convicted of complicity to trafficking a controlled substance, First Degree in the Woodford Circuit Court, in December 2015.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Shawn Morrow, Special Agent in Charge, ATF, Louisville Field Division; Michael E. Stansbury, Special Agent in Charge, FBI, Louisville Field Office; Chief Michael Murray, Versailles Police Department; Chief Lawrence Weathers, Lexington Police Department; and Chief Joe Monroe, University of Kentucky Police Department; jointly announced the guilty plea.
The investigation was conducted by ATF, FBI, Versailles Police Department, the Lexington Police Department, and the University of Kentucky Police Department. Assistant U.S. Attorney Francisco Villalobos prosecuted the case on behalf of the United States.
Carroll is scheduled to be sentenced on March 1, 2024. He faces a maximum of 10 years in prison for the firearm charges and 10 years consecutive in prison for the explosive charge. However, any sentence will be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
This case was prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, U.S. Attorney Shier coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
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Utah Man Charged for Violent Threats Against Members of a Palestinian Rights OrganizationRead the Press Release
A Utah man was arrested on Friday and charged for threatening a Palestinian rights organization.
According to publicly filed court documents, between Oct. 31 and Nov. 2, Kevin Brent Buchanan, of Tooele, called the organization and left at least five voice messages stating, in part, “You’re the enemy,” “You’re being catalogued,” “You’re gonna die” and “You’re dead people walking.”
Buchanan is charged with transmitting in interstate commerce a communication containing a threat to injure the person of another. If convicted, Buchanan faces a maximum of five years in prison and a fine not to exceed $250,000.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Matthew M. Graves for the District of Columbia and Assistant Director in Charge David Sundberg of the FBI Washington Field Office made the announcement.
The FBI Washington Field Office investigated the case, with significant assistance from the FBI Salt Lake City Field Office and the U.S. Attorney’s Office for the District of Utah.
Trial Attorney Sanjay Patel of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Risa Berkower for the District of Columbia’s Fraud, Public Corruption and Civil Rights Section are prosecuting the case, with assistance from James Donnelly of the National Security Division’s Counterterrorism Section.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Utah Man Arrested on Charges of Interstate Death ThreatsRead the Press Release
WASHINGTON – Kevin Brent Buchanan, 62, of Tooele, Utah, was charged by complaint, unsealed today, with threatening a Palestinian rights organization. According to publicly filed court documents, between Oct. 31 and Nov. 2, Buchanan called the organization and left at least five voice messages stating, in part, “You’re the enemy,” “You’re being catalogued,” “You’re gonna die,” and “You’re dead people walking.”
Buchanan is charged with transmitting in interstate commerce a communication containing a threat to injure the person of another. If convicted, the defendant faces a maximum of five years in prison and a fine not to exceed $250,000.
U.S. Attorney Matthew M. Graves, Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, and Assistant Director in Charge David Sundberg of the FBI Washington Field Office made the announcement.
The FBI Washington Field Office investigated the case, with significant assistance from the FBI Salt Lake City Field Office and the U.S. Attorney’s Office for the District of Utah. Trial Attorney Sanjay Patel of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Risa Berkower, of the Fraud, Public Corruption, and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case, with assistance from James Donnelly of the National Security Division’s Counterterrorism Section.
A Complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Undocumented Immigrant Previously Convicted of Involuntary ManslaughterRead the Press Release
RICHMOND, Va. – A Guatemalan man was sentenced today to 4 years in prison for illegally reentering the United States.
According to court documents, Jose Gonzalez Flores, 33, was unlawfully present in the United States when he killed a four-year-old child in a car wreck in August 2018. Gonzalez Flores was driving a pickup truck when he struck the rear of a sedan that belonged to a family of four. The collision caused the death of the family’s youngest son. Immediately after the wreck, Gonzalez Flores got out of his truck, surveyed the scene, and fled. He was arrested a few days later, and in April 2019 was convicted of involuntary manslaughter and drug possession in Chesterfield County Circuit Court. The state judge sentenced Gonzalez Flores to 20 years’ imprisonment, with all but three-and-a-half years suspended. The judge also ordered Gonzalez Flores to not illegally reenter the country following his term of imprisonment and subsequent deportation.
Gonzalez Flores was deported to Guatemala in January 2022. One year later, he illegally reentered the United States without admission, inspection, or parole and was located within the Eastern District of Virginia.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Patrick Divver, Acting Field Office Director for Enforcement and Removal Operations (ERO) Washington, D.C., made the announcement after sentencing by Senior U.S. District Judge Robert E. Payne.
Assistant U.S. Attorney Robert Day and Kashan Pathan prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:23-cr-88.
U.S. Trustee Program Provides Nearly 10,000 Language Interpretation Sessions in Fiscal Year 2023 for Debtors with Limited English ProficiencyRead the Press Release
Consistent with its commitment to access to justice for all, the U.S. Trustee Program provided 9,910 free telephone interpretation sessions for debtors with limited English proficiency in bankruptcy proceedings in Fiscal Year 2023, the Executive Office for U.S. Trustees announced today.
“Language interpretation services are essential to fulfilling the bankruptcy system’s promise of a fresh start for consumer debtors,” said Director Tara Twomey of the Executive Office for U.S. Trustees. “The U.S. Trustee Program is committed to ensuring that promise is accessible to all debtors no matter their English language proficiency.”
Debtors use the interpretation services during their meetings of creditors. Section 341 meetings, as they are known, are a critical part of the bankruptcy process at which debtors testify under oath in response to questions by trustees and creditors. The interpretation services help consumer debtors with limited English proficiency participate meaningfully in these meetings. Interpretation for more than 200 languages is available through a third-party vendor contracted with the U.S. Trustee Program. Historically, the top five languages of debtors who use the service have been Spanish, Korean, Vietnamese, Russian and Mandarin, while other top languages include Portuguese, Arabic, Cantonese, Armenian, Tagalog and Haitian Creole.
Before the USTP made language interpretation services available nationwide, interpretation at section 341 meetings occurred ad hoc, sometimes through the debtor’s relatives, friends or attorney. The U.S. Trustee Program and trustees were concerned about the objectivity and accuracy of those interpretations. Using third-party translation services for the debtor’s sworn testimony helps protect consumer debtors from fraud and abuse by opening access to independent, objective and professional interpretations from service providers free from conflicting interests.
Beyond offering free interpretation services, the U.S. Trustee Program also has posted on its website a Bankruptcy Information Sheet that is available in 17 languages and provides debtors with a helpful overview of the bankruptcy process. These and other language access initiatives reflect the Justice Department’s broader goal of providing meaningful access to programs and activities conducted or supported by federal agencies regardless of an individual’s English proficiency.
The U.S. Trustee Program is the component of the Justice Department whose mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders – debtors, creditors and the public. The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. Learn more about the program at www.justice.gov/ust.
Two Charlotte Men Charged with Orchestrating High-End Auto Thefts from South Carolina Businesses Appear in CourtRead the Press Release
CHARLOTTE, N.C. – Aaron Duncan Hall, 31, a Charlotte man charged in the theft of numerous high-end vehicles from multiple businesses in South Carolina made his initial appearance in federal court this morning, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. The federal indictment charging Hall was unsealed last week and also charges Jacquarreus Rashon Clyburn, 26, of Charlotte, for conspiring with Hall to transport, possess, and sell stolen vehicles in interstate commerce, and interstate transportation of a stolen motor vehicle. Clyburn, who is also charged with possession of a stolen motor vehicle, made his initial federal court appearance last week and is scheduled to appear in court again tomorrow.
U.S. Attorney King is joined in making today’s announcement by Robert M. DeWitt, Special Agent in Charge of the FBI in North Carolina, Ronnie Martinez, Special Agent in Charge of Homeland Security Investigations (HSI) in North Carolina and South Carolina, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD).
According to allegations contained in Hall and Clyburn’s indictment, from December 2022 to April 2023, the men were part of a conspiracy to steal high-end vehicles from multiple businesses located throughout South Carolina. The indictment alleges that Hall and Clyburn and other co-conspirators generally stole the luxury vehicles late at night or into the early morning hours, using wire cutters to cut open large portions of security fences surrounding the targeted businesses. Once inside, the co-conspirators allegedly drove the vehicles off the lots through the openings of the security fences, often using key fobs left overnight in the vehicles. According to the indictment, Hall and Clyburn and their co-conspirators drove several of the stolen South Carolina vehicles back to Charlotte. The indictment further alleges that, over the course of the scheme, the co-conspirators stole at least 20 vehicles made by BMW, Mercedes-Benz, and Land Rover, and highly desired Dodge models such as Challengers and Chargers, worth over $900,000.
As alleged in the indictment, Hall, Clyburn and their co-conspirators used a number of methods to avoid detection by law enforcement, to include using fake tags to transport the stolen vehicles, removing the stolen vehicles’ GPS navigation and tracking systems, listening to police radio transmissions, and fleeing from law enforcement to evade arrest.
This is the second indictment filed in the Western District of North Carolina related to criminal activity stemming from high-end vehicle thefts. In August 2023, the U.S. Attorney’s Office brought charges against five individuals for their alleged involvement in the theft of dozens of luxury vehicles worth millions of dollars from car dealerships located across the United States.
The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The charge of conspiracy to transport, possess, and sell stolen vehicles in interstate commerce carries a maximum penalty of five years in prison and a $250,000 fine. The charge of interstate transportation of a stolen motor vehicle and possession of a stolen vehicle each carry a statutory maximum penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney King thanked FBI, HSI, and CMPD for their investigative efforts and recognized the contributions of many other state and local law enforcement partners involved in the investigation.
Assistant U.S. Attorneys William Bozin and Daniel Ryan of the U.S. Attorney’s Office in Charlotte are prosecuting the case.
Two Charged with $12 Million Health Care Fraud SchemeRead the Press Release
Two individuals were charged with submitting fraudulent claims for corticosteroid injections and other services that were not performed and unlawfully distributing hydrocodone, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
Drs. Desi Barroga, 51, and Deno Barroga, 51, were indicted on November 14th on one count each of conspiracy to commit healthcare fraud, five counts each of healthcare fraud, and one count each of unlawful distribution of a controlled substance. The defendants were arrested November 16th, and made their initial appearances Friday morning.
According to court documents, the defendants operated a pain management clinic in Dallas where patients received prescriptions for high doses of hydrocodone, oxycodone, and morphine. Patients submitted to a short office visit each month and would receive their prescriptions. As part of those monthly visits, the defendants would submit fraudulent claims to the patients’ insurance companies representing that the patients received dozens of corticosteroid injections, when in fact, the patients received few injections or none. The doctors would place a needle on the patient’s body without actually piercing the skin to mimic an injection. If patients actually received any injections they would generally receive only a small amount. In many instances the defendants falsely represented that they provided over eighty injections to the patient on a single date of service. Fake medical records were also created to falsely reflect that injections were performed.
The doctors billed health care benefit programs over $50 million and were paid approximately $12 million for these fraudulent services.
An indictment is merely an allegation of criminal conduct, not evidence. Both defendants are presumed innocent until proven guilty in a court of law.
If convicted, they face up to up to ten years in federal prison for each count of health care fraud and conspiracy to commit health care fraud. They face up to twenty years for the unlawful distribution of a controlled substance counts. They will also be required to forfeit any proceeds or property traceable to the commission of the offenses of which they’re convicted.
The U.S. Department of Labor, Office of Inspector General, U.S Department of Labor, Employee Benefits Security Administration, U.S Office of Personnel Management, Office of the Inspector General, Drug Enforcement Administration Dallas Field Division Diversion Group, Texas Department of Insurance – Fraud Unit – Austin and Ft. Worth Field Office conducted the investigation. Assistant U.S. Attorney Renee Hunter is prosecuting the case.
Thurmont Man Sentenced to 18 Years in Federal Prison for Sexual Exploitation of a ChildRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Jose Alexander Diaz-Rodriguez, age 23, of Thurmont, today to 18 years in federal prison, followed by 25 years of supervised release, for sexual exploitation of a child, after he broke into his neighbor’s home and took sexually explicit photographs of a child. Judge Bennett also ordered that, upon his release from prison, Diaz-Rodriguez will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (“SORNA”).
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge Ryeshia Holley of the Federal Bureau of Investigation, Baltimore Field Office; Chief Greg Eyler of the Thurmont Police Department; Chief Jason Lando of the Frederick Police Department; and Frederick County State’s Attorney J. Charles Smith, III.
According to court documents, on July 26, 2021, Diaz-Rodriguez broke into his neighbor’s home and entered the bedroom where Jane Doe 1 and Jane Doe 2 were sleeping. Diaz-Rodriguez got into bed with Jane Doe 1, who was eight years old, and produced a series of four images intending to create sexually explicit images of Jane Doe 1. DNA from Diaz-Rodriguez was found on swabs from Jane Doe 1.
Jane Doe 1’s mother heard a noise and went into the room where she found Diaz-Rodriguez on the ground next to the bed. Diaz-Rodriguez fled and was arrested a short time later at his residence. A search warrant executed at his residence and his cell phone was seized. A forensic examination of the phone located over 1,000 files depicting the sexual abuse of children, including the four images of Jane Doe 1, which Diaz-Rodriguez had deleted prior to police arrival.
Diaz-Rodriguez further admitted that he distributed child sex abuse material on his social media account, specifically an image documenting the sexual abuse of a child.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the “Resources” tab on the left of the page.
United States Attorney Erek L. Barron commended the FBI, the Thurmont Police Department, the Frederick Police Department and the Frederick County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Barron thanked Assistant U.S. Attorney Paul E. Budlow and Special Assistant U.S. Attorney Joyce King, who prosecuted the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md/project-safe-childhood and https://www.justice.gov/usao-md/community-outreach.
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Superseding Indictment Adds 13 Defendants to Fentanyl Distribution Conspiracy Spanning from California to D.C.Read the Press Release
WASHINGTON – Federal law enforcement in D.C., Virginia, Maryland, San Diego, and Los Angeles arrested 11 additional alleged members of a fentanyl drug distribution, responsible for bringing hundreds of thousands of fake blue Oxycodone (M30) pills, containing fentanyl, from California to D.C., announced U.S. Attorney Matthew M. Graves, Administrator Anne Milgram, of the Drug Enforcement Administration (DEA), Special Agent in Charge Jarod Forget, of the DEA Washington Division, Inspector in Charge Damon Wood, of the United States Postal Inspection Service Washington Division, and Chief Pamela Smith, of the Metropolitan Police Department (MPD).
Defendants Trayveon James Johnson, Karon Olufemi Blalock, Ronte Ricardo Greene, Melvin Edward Allen, Jr., Darius Quincy Hodges, Lamin Sesay, Paul Alejandro Felix, Omar Arana, Edgar Balderas, Jr., Raul Pacheco Ramirez, and Giovani Alejandro Briones, were arrested in coordinated law enforcement operations conducted across three states and the District of Columbia. They are named in a fourth superseding indictment that includes 13 other previously charged defendants (complete chart of arrested defendants below) and alleges a conspiracy to distribute 400 grams or more of a mixture and substance containing fentanyl.
“As the breadth and scope of this indictment and corresponding arrests show, our office is working tirelessly to hold those who peddle poison in our community criminally accountable,” said U.S. Attorney Matthew M. Graves. “There will be no hiding from law enforcement for anyone selling fentanyl in the District. One of the surest ways to find yourself the subject of a federal investigation is to be part of a trafficking network like these alleged defendants.”
“This investigation started when a young woman in Washington, D.C.—Diamond Lynch—took one pill and died almost immediately. DEA has worked to track down every single individual who played a part in Diamond’s death, and we found a vast network of traffickers who transported fentanyl from Mexico to L.A. to right here in D.C.,” said DEA Administrator Anne Milgram. “Today, 26 defendants are charged and in custody as a result of the investigation into Diamond Lynch’s death, and law enforcement has seized over a 94,000 fentanyl pills, 15 pounds of fentanyl powder, and 30 firearms as part of this investigation. DEA will continue to relentlessly pursue every single aspect of the global fentanyl supply chain to bring justice for Diamond Lynch and for the hundreds of thousands of American lives lost to fentanyl.”
“This joint investigation is an example of how the US Postal Inspection Service utilizes our unique investigative capabilities in the fight against the trafficking of narcotics, specifically opioids such as fentanyl, that are killing Americans,” said Damon E. Wood, Inspector in Charge – Washington Division. “It further highlights our commitment to keep the US Mail and our postal employees safe. Together with our law enforcement partners, we will ensure that those who engage in such activity are brought to justice.”
“To protect the American public, it is the mission of the DEA to investigate and take down major drug traffickers like the ones indicted today, that are illegally distributing fake pills containing fentanyl to the citizens of the District of Columbia, Maryland and Virginia,” said Special Agent in Charge Jarod Forget, of the DEA Washington Division. “As part of our initiatives Operation Overdrive and One Pill Can Kill, the DEA is making a difference by attacking the violent drug traffickers poisoning our communities.”
“Fentanyl poisons our neighbors, steals our friends and family, and attracts violence that plagues our community,” said Metropolitan Police Chief Pamela A. Smith. “Every member of the Metropolitan Police Department is deeply committed to riding our neighborhoods of this drug. This investigation and the resulting federal charges are just the latest example of how MPD will use every resource and partnership that we have to bring offenders to justice. We are all working together to make DC a safer place for everyone.”
According to the indictment, the defendants are members of a drug conspiracy that began in August of 2020 and operated in the District of Columbia, the Eastern District of Virginia, the Central District of California, the Southern District of California, the District of Maryland, the Middle District of Tennessee, and elsewhere. It further charges defendants Carias Torres, Briones, and Valdez with conspiracy to launder the proceeds of the illegal drug distribution. Defendant Columbian Thomas is charged with possession of a machinegun in furtherance of a drug trafficking offense.
DEFENDANT NAME
AGE
LOCATION
CHARGES
Hector David Valdez,
aka “Curl”
26
Santa Fe Springs, California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
Craig Eastman
20
Washington, D.C.
Conspiracy to distribute more than 400 grams of fentanyl;
Possession with intent to distribute fentanyl;
Possession with intent to distribute fentanyl within 1000 feet of a protected location
Charles Jeffrey Taylor
20
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession with intent to distribute fentanyl
Raymond Nava, Jr.
19
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl
Ulises Aldaz
27
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl
Max Alexander Carias Torres
26
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
Teron Deandre McNeil, aka “Wild Boy”
33
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Marvin Anthony Bussie,
aka “Money Marr”
21
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Marcus Orlando Brown
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Columbian Thomas, aka
"Cruddy Murda”
25
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession of a machinegun in furtherance of a drug trafficking crime
Wayne Rodell Carr-Maiden
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Andre Malik Edmond,
aka “Draco”
22
Temple Hills, Maryland
Conspiracy to distribute 400 grams or more of fentanyl
Treyveon James Johnson,
aka “Treyski”
19
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Karon Olufemi Blalock,
aka “Fat Bags”
29
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Ronte Ricardo Greene,
aka “Cardiddy”
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession with intent to distribute fentanyl
Melvin Edward Allen, Jr., aka “21”
38
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Darius Quincy Hodges,
aka “Brick”
33
Glen Allen, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Lamin Sesay,
aka “Rock Star”
27
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Paul Alejandro Felix
24
Glendale,
California
Conspiracy to distribute 400 grams or more of fentanyl
Omar Arana,
aka “Frogs”
26
Cudahy,
California
Conspiracy to distribute 400 grams or more of fentanyl
Edgar Balderas, Jr., aka
“Nano”
25
San Diego,
California
Conspiracy to distribute 400 grams or more of fentanyl
Raul Pacheco Ramirez
29
Long Beach,
California
Conspiracy to distribute 400 grams or more of fentanyl
Giovani Alejandro Briones
29
Victorville, California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
The conspiracy charge carries a mandatory minimum sentence of 10 years in prison up to life. The sentencing will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The prosecutions followed a joint investigation by the DEA Washington Division and the U.S. Postal Inspector, in partnership with the Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), with additional support from the DEA Los Angeles, San Diego, and Riverside Field Offices, the Federal Bureau of Investigation’s Washington Field Office, and the Charles County, Maryland Sheriff’s Office. Valuable assistance was provided by the U.S. Attorney’s Offices in the Central and Southern Districts of California, the Eastern District of Virginia, and the District of Maryland. The case is being prosecuted by Assistant U.S. Attorneys Matthew W. Kinskey, Solomon Eppel, and David T. Henek, of the Violence Reduction and Trafficking Offenses (VRTO) Section. Valuable assistance was provided by former Assistant U.S. Attorney Andy T. Wang.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Sharon Resident Sentenced to 36 Months in Prison for Cocaine and Fentanyl TraffickingRead the Press Release
PITTSBURGH, PA – Jammar Shelton was sentenced to 36 months in prison for cocaine and fentanyl trafficking, United States Attorney Eric G. Olshan announced today.
Shelton, age 44 of Sharon, Pennsylvania, was sentenced by United States District Judge Cathy Bissoon. Judge Bissoon ordered Shelton to serve six years of supervised release following his prison sentence. Prior to sentencing, Shelton pled guilty to conspiring to distribute fentanyl and cocaine between June 2020 and June 2021, and to possessing cocaine with intent to distribute within 1,000 feet of a school and public housing on May 17, 2021.
Assistant United States Attorneys Benjamin C. Dobkin and Craig W. Haller prosecuted this case on behalf of the United States.
The Federal Bureau of Investigation, the Drug Enforcement Administration, the Pennsylvania Attorney General’s Office, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Pennsylvania State Police, the Lawrence County Drug Task Force, the Mercer County Drug Task Force, the New Castle Police Department, the Sharon Police Department, the Hermitage Police Department, and the Farrell Police Department led the investigation resulting in the convictions and sentence in this case.
This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
School Occupational Therapist Charged with Sexual Exploitation of A Child and Receipt and Distribution of Child PornographyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of MICHAEL MEYERS. MEYERS is charged with sexual exploitation of a child and receipt and distribution of child pornography. MEYERS was presented today before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court.
U.S. Attorney Damian Williams said: “Michael Meyers’s alleged conduct is disturbing, especially given that Meyers was entrusted with the care of children for many years as an occupational therapist at a school. This Office will do everything in our power to protect the children of our community, and we will use every tool available to law enforcement to investigate and prosecute those who sexually exploit children.”
FBI Assistant Director in Charge James Smith said: “Meyers allegedly used an online communication app to receive sexually explicit pictures from a minor child. The fact Meyers was employed in a school makes this alleged crime even more horrific. Both the bad guys and the American public need to know the FBI is committed to protecting the most vulnerable members of our society, and anyone attempting to sexually exploit a child can expect to end up in handcuffs and face serious punishment in the criminal justice system.”
According to the allegations in the Complaint filed in White Plains federal court and unsealed today:[1]
A review of MEYERS’s phone revealed the existence of communications between MEYERS and a 16-year-old minor (“Victim-1”) on the online application Discord. In connection with these communications, Victim-1 sent MEYERS several sexually explicit photos of Victim-1 at MEYERS’s request.
Records received by law enforcement indicate that MEYERS was employed as an occupational therapist at a school in Oceanside, New York, from on or about September 1, 1998.
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MEYERS, 62, of Port Jervis, New York, is charged with one count of sexual exploitation of a child, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of receipt and distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison.
The minimum and maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the efforts of the FBI’s Hudson Valley Resident Agency’s Safe Streets Task Force, the El Dorado Police Department, the Port Jervis Police Department, the St. John’s County Sheriff’s Office, the U.S. Postal Inspection Service, the New York State Police, and the Putnam County Sheriff’s Office. He added that the investigation is ongoing.
Any individuals who believe they have information that may be relevant to this investigation should contact the FBI at 1-800-CALL-FBI or https://tips.fbi.gov.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Shaun E. Werbelow is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
San Antonio Man Indicted for Defrauding Federal COVID-Era ProgramsRead the Press Release
SAN ANTONIO – A federal grand jury in San Antonio returned an indictment charging a San Antonio man with 11 counts related to wire fraud and money laundering.
According to court documents, James Michael Bergeron, 42, allegedly devised a scheme to secure funds made available through the Paycheck Protection Program (PPP) and the Restaurant Revitalization Fund (RRF), both of which were COVID-era programs designed to provide relief to small business owners. The indictment alleges Bergeron secured the funds by making misrepresentations about the number of employees employed, as well as the average monthly payroll paid out, by various entities he controlled. In securing the RRF money, it also reports that Bergeron made misrepresentations about the annual revenue for one of these entities. Based on these misrepresentations, Bergeron, allegedly through the various entities, received millions of dollars. He then spent the funds on various unauthorized items, including real estate, vehicles and retail investment products.
Bergeron is charged with five counts of wire fraud, one count of false statement, three counts of engaging in a monetary transaction over $10,000 using criminally derived proceeds, and two counts of concealment money laundering. The defendant made his initial court appearance Monday before U.S. Magistrate Judge Elizabeth Chestney of the U.S. District Court for the Western District of Texas. If convicted, he faces a maximum penalty of thirty years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Jaime Esparza of the Western District of Texas made the announcement.
The Federal Housing Finance Agency Office of Inspector General and IRS Criminal Investigation are investigating the case.
Western District of Texas Assistant U.S. Attorneys Justin Simmons and Bill Harris and Trial Attorney Ariel Glasner from the U.S. Department of Justice Criminal Division, Fraud Section are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Reno Resident Sentenced to 10 Years in Prison for Possession with Intent to Distribute Fentanyl and MethamphetamineRead the Press Release
RENO – A Reno man was sentenced by Chief United States District Judge Miranda M. Du to 10 years in prison to be followed by five years of supervised release for possessing fentanyl and methamphetamine with the intent to distribute it to another person.
Alan James Morgan, also known as “AJ Morgan,” 38, pleaded guilty in August 2023 to one count of possession with intent to distribute a controlled substance. Morgan was sentenced on November 13, 2023.
According to court documents, law enforcement identified Morgan as a runner for a drug trafficking organization operating out of Woodland, California. On January 12, 2022, during a traffic stop of Morgan’s vehicle, Morgan ignored law enforcement’s orders and fled in his vehicle. During the car pursuit, Morgan tossed a backpack containing a “brick” of methamphetamine and 1,000 counterfeit M30 fentanyl pills out of the vehicle. He then crashed the vehicle into a fence, causing the vehicle to catch fire, and fled on foot. Law enforcement pursued Morgan and arrested him in a nearby restaurant parking lot.
Subsequent searches of Morgan’s storage unit and residence led to the seizure of several hundred counterfeit M30 fentanyl pills and approximately four pounds of methamphetamine. In total, law enforcement seized 1,011 grams of fentanyl and 3,343 grams of methamphetamine.
United States Attorney Jason M. Frierson for the District of Nevada and Assistant Special Agent in Charge Kevin Adams for the DEA Las Vegas District Office made the announcement.
The Tri-NET Narcotic Task Force, DEA, and Regional Narcotics Unit investigated this case. Assistant United States Attorney Andolyn Johnson prosecuted the case.
If you are aware of controlled substance violations in your community — which may include the growing, manufacture, distribution or trafficking of controlled substances — please submit your anonymous tip through the DEA Tip Line at https://www.dea.gov/submit-tip.
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Registered Sex Offender Sentenced to 20 Years in Prison for Traveling to Engage in Sex with a MinorRead the Press Release
CHARLESTON, S.C. —Brandon Lazarus Pelphrey, 26, of Monroe, North Carolina, was sentenced to 20 years in federal prison after pleading guilty to Travel with Intent to Engage in Illicit Sexual Conduct and Commission of a Felony Sex Offense by a Registered Sex Offender.
Evidence presented to the Court showed that Pelphrey traveled from Monroe, North Carolina, to Mt. Pleasant, South Carolina on Nov. 5, 2021, to have sex with whom he believed to be a 13-year-old girl he met online on chat applications Scout and KIK. Pelphrey was actually communicating with an officer of the South Carolina Internet Crimes Against Children (ICAC) Task Force posing as a minor. Prior to his trip, Pelphrey transmitted a sexually explicit photograph of himself to the perceived minor female. Upon arrival at the undercover location, Pelphrey was arrested and taken into custody. Further investigation revealed that Pelphrey was previously convicted of a sexual offense with a minor while he was enlisted in the United States Army, and he was a registered sex offender.
United States District Judge Bruce Howe Hendricks sentenced Pelphrey to 120 months for Travel with Intent to Engage in Illicit Sexual Conduct and 120 months imprisonment for Commission of a Felony Sex Offense by a Registered Sex Offender, to be followed by a life term of court-ordered supervision. There is no parole in the federal system.
“Pelphrey’s actions are reprehensible and thankfully he was stopped before he could victimize an innocent child; subjecting them to unspeakable trauma,” said Ronnie Martinez, Special Agent in Charge for HSI Charlotte, which covers North and South Carolina. “We will remain vigilant and unwavering in our commitment to protect our community and hold predators accountable for their crimes.”
“We will work tirelessly to protect our children from predators like Pelphrey,” said U.S. Attorney for the District of South Carolina Adair F. Boroughs. “This just sentence serves as a warning to those who attempt to harm the most innocent among us.”
This case was investigated by Homeland Security Investigations (HSI), the Mount Pleasant Police Department (MPPD), the South Carolina Attorney General’s Office (SCAG), and other members of the South Carolina Internet Crimes Against Children (ICAC) Task Force. Assistant U.S. Attorney Dean H. Secor is prosecuting the case.This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by the U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet-safety education.
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Media note: If you are seeking a booking photo, Pelphrey is currently detained at the Charleston County Detention Center.
Portland Area Man Charged with Coercing and Enticing a Minor OnlineRead the Press Release
PORTLAND, Ore.—A transient man residing in Tigard, Oregon is facing federal charges for using social media to coerce and entice an 11-year-old child into engaging in criminal sexual activity.
Jakob Joshua Stickney, 25, has been charged by criminal complaint with coercing and enticing a minor.
According to court documents, in October 2023, the FBI and Portland Police Bureau (PPB) began investigating Stickney after receiving information that he had been engaging in sexually explicit communications with a 11-year-old child on Discord, an instant messaging social media application. On multiple occasions, Stickney, who used by the names “UNHOLY,” “unholy_xx2,” or “Unholy_22x” online, attempted to arrange an in-person meetup with the child. On at least one occasion, Stickney went in person to the child’s house where he was observed and confronted by the child’s mother, who reported the contact to law enforcement.
Stickney was located November 17, 2023, in Tigard and arrested without incident. He made his first appearance in federal court today before a U.S. Magistrate Judge and was ordered detained pending further court proceedings.
This case was investigated by the FBI and PPB. It is being prosecuted by Eliza Carmen Rodriguez, Assistant U.S. Attorney for the District of Oregon.
Anyone who has information about possible crimes committed by Stickney, or the physical or online exploitation of any children, are encouraged to call the FBI at (503) 224-4181 or submit a tip online at tips.fbi.gov.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A criminal complaint is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.
Piatt County, Illinois, Farmer Sentenced to 42 Months in Prison for Bank FraudRead the Press Release
SPRINGFIELD, Ill. –James R. R. Williams, 64, formerly of rural Cisco, Illinois, and now residing in Fort Meyers, Florida, was sentenced on November 17, 2023, by U.S. District Judge Collen R. Lawless to 42 months’ imprisonment, to be followed by three years of supervised release, and ordered to pay restitution to two central Illinois banks following his convictions for four counts of bank fraud.
At the sentencing hearing, which took place over two days, the government presented evidence that during the 2016 growing season Williams obtained a loan of approximately $4.6 million from participating banks First Security Bank and Gifford State Bank on behalf of his farming operation, RJW Williams Farms, Inc. The loans were collateralized by Williams’s assets, including grain. Williams defrauded the banks by concealing grain sales from the banks and by instructing employees of Archer Daniels Midland grain elevators in Niantic and Weldon, Illinois, to issue checks in his son’s name, without his son’s knowledge, which were then deposited into an account held jointly by Williams and his son. Williams then used the checks for his own benefit. Judge Lawless found that between October 20, 2014, and February 1, 2017, Williams caused ADM to issue approximately twenty-two checks totaling $540,505.35 to his son for grain that was actually sold by Williams and was collateral for Williams’s outstanding loan.
Judge Lawless also determined that Williams knowingly violated a court order in Piatt County Circuit Court that was intended to freeze grain sale disbursements following a citation to discover assets hearing and that the bankruptcy petition filed by RJW Williams Farms, Inc., and signed by Williams as president contained numerous false assertions.
A federal grand jury first returned an indictment against Williams in June 2019, and he pleaded guilty to the four bank fraud counts in May 2023.
Williams faced statutory penalties of a maximum twenty-year term of imprisonment, a maximum $1 million fine, and a maximum five-year term of supervised release on the bank fraud counts.
“This sentencing reflects the FDIC OIG’s commitment to bring to justice those who defraud banks and use stolen funds for their own personal gain,” said Special Agent in Charge Vincent R. Zehme, of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “We will continue to work with our law enforcement and DOJ partners to investigate and hold those accountable who commit such financial crimes and threaten to undermine the integrity of our Nation’s financial institutions.”
“Today’s sentencing sends a strong message that the bankruptcy system requires full, accurate and complete disclosures, and those who fail to do so will be held accountable,” stated Nancy J. Gargula, U.S. Trustee for Central Illinois, Southern Illinois, and Indiana (Region 10). “I am grateful to U.S. Attorney Gregory K. Harris and our law enforcement partners for their strong commitment to uphold the integrity of the bankruptcy system.”
The matter was referred by the U.S. Trustee and investigated by the Federal Deposit Insurance Corporation -- Office of Inspector General in collaboration with the Central District of Illinois Bankruptcy Fraud Working Group, coordinated by U.S. Trustee Gargula. The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Ind., and Peoria, Ill.
The case investigation was conducted by the Federal Deposit Insurance Corporation -- Office of Inspector General. Supervisory Assistant U.S. Attorneys Eugene L. Miller and Douglas J. Quivey, along with Assistant U.S. Attorney William J. Lynch, represented the government in the prosecution.