Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
8 November 2023
More than $4.4 million in federal grants focused on reentry services coming to Washington StateRead the Press Release
Seattle – More than $4.4 million in Department of Justice funds will flow to Washington State entities to provide reentry services to those involved with the criminal justice system, announced Acting U.S. Attorney Tessa M. Gorman. The largest share of the grants – some $1.8 million – goes to the Washington State Department of Corrections for programs aimed at helping incarcerated persons be successful once released from custody.
“The vast majority of justice involved persons will be returning to our communities. It is critical that we invest in ways to improve reentry so that those former inmates can lead safe and productive lives,” said Acting U.S. Attorney Gorman. “These grants are aimed at mental health issues, substance abuse problems and family unification programs that can make a difference for individuals and for the community as a whole.”
The Department of Corrections (DOC) was awarded $550,000 to provide mental health and substance abuse treatment for 200 women at the Correction Center at Purdy. In its application, DOC says a shortage of health providers and constraints at the institution have limited the services it can provide. This additional funding will also be used to hire a psychologist and a reentry navigator to help those leaving custody to find services in the community.
The Department of Corrections was awarded $764,508 to evaluate, refine and expand services DOC provides to try to keep families together and break the cycle of intergenerational incarceration. The funding will provide access to mental health programs, substance abuse programs, and parenting skills programs. The University of Washington will help evaluate what programs are working.
Finally, DOC was awarded $534,828 to train staff in mental health disorders, and how to appropriately de-escalate and defuse mental health crises. The training will address mental health as well as co-occurring substance abuse disorder and intervention strategies. The training is for staff both at the institutions and those working in community supervision.
The non-profit organization House of Mercy of Federal Way was awarded $750,000to provide reentry services to some 864 formerly incarcerated persons. The case management and training and reentry support will serve men returning to King, Pierce, Whatcom, Clark, Yakima, and Spokane counties. Former inmates who are involved in House of Mercy services have a re-offense rate below 5%.
Skagit County was awarded $677,356 for its Community Court. The program is an alternative problem-solving court that serves low-level non-violent offenders. The program connects the offenders with mental health and substance abuse services. Areas served include Anacortes, Burlington, Sedro Woolley, Mount Vernon, Hamilton, Lyman, Concrete, Marblemount, and Diablo.
The Suquamish Indian Tribe was awarded $784,943 for a new “Begin Again” program for those reentering the community from incarceration or court-ordered inpatient substance abuse treatment. The funding will ensure that tribal services are coordinated and culturally appropriate for those reentering the community.
And finally, Government Impact Consulting LLC of Marysville, Washington, was awarded $350,000 to work on barriers to Treatment Courts and work to enhance support for culturally appropriate treatment and recovery. The consulting group will work with community partners including Tribal Wellness to Healing courts to reduce the stigma around substance abuse treatment.
The U.S. Attorney’s Office, Western District of Washington has active programs to assist with reentry to the community for those involved with the criminal justice system. For more on those programs visit: https://www.justice.gov/usao-wdwa/reentry-program
Assistant United States Attorneys Zach Dillon and Michelle Lambert lead the reentry program in the Western District of Washington.
Mississippi Return Preparers Found Guilty of Tax FraudRead the Press Release
A federal jury in Jackson, Mississippi, convicted Adam Earnest, Christopher Randell and James Klish yesterday of conspiracy to defraud the United States. Earnest and Randell were separately convicted of individual counts of preparing false tax returns.
According to court documents and evidence presented at trial, Earnest, Randell and Klish worked at Sunbelt Tax Services, a return preparation business with a primary office located in Jackson,. Earnest, Randell and Klish conspired together and with others at Sunbelt Tax Services to fraudulently claim inflated tax refunds for clients by reporting false education credits, itemized deductions and business profits or losses. Earnest and Klish also created at least four tax returns for some of their clients claiming false items.
A sentencing hearing is scheduled for Feb. 22, 2024. Each defendant faces a maximum penalty of five years in prison for conspiracy to defraud the United States, and Earnest and Randell face a maximum penalty of three years in prison for each false return count on which they were found guilty. They also each face a period of supervised release, restitution 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 made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Patrick Elwell, Zachary Cobb and Mary Frances Richardson of the Tax Division are prosecuting the case.
Man Admits Two St. Louis County Carjackings, Robbery and Shooting of Store ClerkRead the Press Release
ST. LOUIS – Two men have pleaded guilty to crimes that include two St. Louis County carjackings, the robbery of a convenience store and the shooting of the store clerk.
James Furlow, 20, of St. Ann, Missouri, pleaded guilty Wednesday in U.S. District Court in St. Louis to two counts of carjacking and one count each of possession and brandishing of a firearm in furtherance of a crime of violence, robbery and discharge of a firearm in furtherance of a crime of violence.
Monya Jones, 23, of St. Louis County, pleaded guilty July 19 to one robbery charge and one charge of possession, brandishing and discharge of a firearm in furtherance of a crime of violence.
Both men admitted in their plea agreements that Furlow carjacked a 2017 Kia Sorrento SUV at gunpoint on Dec. 26, 2021. Later that day, Furlow tried to break into an ATM by shooting it as Jones waited in the stolen Kia. Both Furlow and Jones then robbed a Quick Mart in St. Louis County. Furlow admitted shooting the store clerk in the mouth.
On Dec. 30, 2021, Furlow carjacked a 2021 Volkswagen Tiguan at gunpoint. He was later spotted by police and fled, first in the stolen SUV and later on foot. Police caught him in a basement and found a pouch nearby with a 9mm pistol, Furlow’s identification and the Tiguan’s keys.
A dating app was used to set up both carjackings.
Jones is scheduled to be sentenced November 27 and Furlow is scheduled to be sentenced Feb. 7, 2024. The possession of a firearm in furtherance of a crime of violence charge carries a mandatory minimum prison term of seven years, consecutive to any other charge, and the discharge count carries a mandatory minimum term of 10 years, also consecutive to all other counts.
The St. Louis County Police Department and the FBI investigated the case. Assistant U.S. Attorney Cassandra Wiemken is prosecuting the case.
Kersey Man Sentenced to Prison for Distribution of MethamphetamineRead the Press Release
PITTSBURGH, PA – A resident of Kersey, Pennsylvania, has been sentenced in federal court to 28 months of imprisonment followed by four years of supervised release on his conviction for violating federal narcotics laws related to a nine-month Title III wiretap investigation into drug trafficking in and around the counties of Jefferson, Clearfield, and Allegheny, United States Attorney Eric G. Olshan announced today.
United States District Judge Christy Criswell Wiegand imposed the sentence on Melvin Shelander, age 33.
According to information presented to the court, Shelander was a methamphetamine distributor who obtained over a pound of methamphetamine from Derek Hillebrand, which Shelander then redistributed.
Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Drug Enforcement Administration, Homeland Security Investigations, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Internal Revenue Services, Pittsburgh Bureau of Police, Allegheny County Police, and Pennsylvania State Police. Also assisting were the Jefferson County District Attorney’s Office, Clearfield County District Attorney’s Office, and the Clarion Borough Police Department for the investigation leading to the successful prosecution of Shelander. This prosecution 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.
Justice Department and the Federal Trade Commission Meet with G7 Enforcement Partners in Tokyo to Discuss the Challenges of Ensuring Competition in Digital MarketsRead the Press Release
The Justice Department’s Antitrust Division and the Federal Trade Commission participated in the G7 Competition Authorities and Policymakers’ Summit today to discuss the ways in which enforcers and policymakers are addressing competition concerns in digital markets.
The Summit was convened by the G7 Digital and Tech Ministers and hosted in Tokyo by Japan’s Secretariat of Headquarters for Digital Market Competition and the Japan Fair Trade Commission. The Antitrust Division was represented by Chief of Staff Joshua Tzuker, assisted by International Counsel Mark Niefer.
“We thank Japan for organizing such a productive and important event,” said Chief of Staff Tzuker. “International cooperation is necessary if we are to protect consumers and workers from emerging risks to competition in digital markets around the world. The Summit was a significant step toward enhancing our collective efforts to protect digital market competition today and in the future.”
In preparation for the Summit, G7 members contributed to the Compendium of Approaches to Improving Competition in Digital Markets, which describes member efforts in digital markets. Japan also published the G7 Inventory of New Rules for Digital Markets and an accompanying Analytical Note which describe new or contemplated laws and regulations intended to address competition in digital markets.
At the conclusion of the Summit, G7 competition authorities and policymakers issued a Digital Competition Communique, which describes a shared commitment to enforce competition laws and develop policies necessary to ensure that principles of fair competition are applied to digital markets. The Communique highlights competition concerns arising from emerging technologies, and it describes the ways in which G7 competition authorities and policymakers are enhancing their ability to better understand and anticipate the challenges to competition arising from new technologies such as generative AI. The Communique emphasizes that current competition law applies to AI and its uses, and that the G7 is committed to addressing any risks to competition associated with the rise of AI.
Justice Department and City of Portland, Oregon, Seek Independent Monitor and Partial Termination of Consent Decree Covering the Portland Police Bureau after Substantial Progress in Policing ReformRead the Press Release
The Justice Department and the city of Portland, Oregon, filed a joint motion seeking court approval to terminate certain portions of the consent decree covering the Portland Police Bureau (PPB).
The joint motion is based on one year of collaborative discussions between the department, the City, and key community stakeholders with a U.S. Magistrate Judge. Specifically, the joint motion requests:
- Terminating certain provisions based on the city and PPB’s sustained substantial compliance for at least three years. These provisions cover electronic control weapons (ECWs); Behavioral Health Unit; Training Advisory Committee; Enhanced Crisis Intervention Team; Behavioral Health Response Team; Service Coordination Team; Bureau of Emergency Communications; and Citizen Review Committee;
- Transferring to the city and PPB the responsibility for assessing and reporting their compliance with provisions covering community-based mental health services, a behavioral health advisory committee, portions of community oversight, and PPB’s stops data and annual reports;
- Appointing an independent monitor to assess the city’s compliance with the remaining provisions covering uses of force, training, PPB’s employee information system, and accountability.
“Ensuing effective and constitutional policing is one of the Justice Department’s highest priorities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Under this consent decree, the Portland Police Bureau has made substantial progress toward meaningful policing reform for the entire Portland community. The action we are taking now is a true testament to the collaborative efforts of the police, city officials and community which have helped transform aspects of policing over the last eight years. The Justice Department will continue to support the community, the city and the police as they forge ahead toward achieving full compliance with the consent decree.”
“The Portland Police Bureau is committed to providing just and equitable policing for all Portlanders. We have seen this commitment repeatedly, firsthand, throughout the life of this settlement agreement,” said U.S. Attorney Natalie Wight for the District of Oregon. “The city has remained intently focused on improving its public safety services amid an incredibly challenging period marked by increasing violence, a global pandemic, and a historic addiction crisis. Despite these challenges, the police bureau has persevered and continued to achieve its objectives. We are proud to join the city today in marking this important milestone.”
PPB has made meaningful change in reaching compliance with numerous provisions of the consent decree, including:
- PPB’s use of force against those with mental illness is now extremely low, occurring in about 0.5% of encounters (one in 209) and most of that is the lowest level of force, which does not cause injury;
- PPB has significantly reduced the use of ECWs and when officers do use ECWs, the use is in line with policy and national standards;
- PPB’s Behavioral Health Unit provides coordination and oversight of PPB’s various units that intersect with people in crisis, including the Enhanced Crisis Intervention Team, the Behavioral Health Response Teams and the Service Coordination Team, and interfaces with community partners across the region. A Portland State University study found that every dollar the City spends on the Service Coordination Team “has a corresponding $20.61 in avoided cost for the community;”
- The city’s Bureau of Emergency Communications has adopted policies and training to dispatch an appropriate first responder to calls for service that have a nexus to a person in mental health crisis; and
- PPB’s Training Advisory Committee has held open public meetings to provide valuable citizen input to PPB’s Training Division.
If the court grants the joint motion, the parties will issue a public request for proposal seeking candidates for the Monitor role. Finalists will participate in a public town hall to answer community questions before the parties select a Monitor for the court to appoint. Once chosen, the Monitor will publicly report to the court every six months on the City’s progress and prepare outcome assessments measuring PPB’s performance implementing reforms.
The District Court for the District of Oregon entered the settlement agreement in July 2015. The agreement and information about the Civil Rights Division are available on the division’s website at Special Litigation Section Cases and Matters.
Justice Department Announces Investigation of the City of Lexington, Mississippi, and the Lexington Police DepartmentRead the Press Release
The Justice Department announced today that it has opened a civil pattern or practice investigation into the City of Lexington, Mississippi, and the Lexington Police Department (LPD). Lexington is a town of approximately 1,600 people, located about an hour outside of the state’s capitol in Jackson, Mississippi.
The investigation will seek to determine whether there are systemic violations of the Constitution and federal law. The investigation will focus on the police department’s use of force and its stops, searches and arrests. It will assess whether those activities are reasonable, non-discriminatory and respect the right to engage in speech and conduct protected by the First Amendment. The investigation will include a comprehensive review of LPD policies, training and supervision, practices for the collection of fines and fees and systems of accountability.
“No city, no town and no law enforcement agency is too large or too small to evade our enforcement of the constitutional rights every American enjoys,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We are opening this investigation to determine whether the Lexington Police Department engages in a pattern or practice of discriminatory policing, excessive force or First Amendment violations. This investigation should send a clear message to small and mid-size police departments that they are not exempt from the obligation to provide fair, effective and non-discriminatory policing. We will leave no community behind, including underserved regions in the Deep South, in our quest to ensure lawful and constitutional policing in America.”
“Police officers are trusted with the important duty to keep our communities safe. When police officers fail to respect constitutional rights, they violate that trust,” said U.S. Attorney Todd W. Gee for the Southern District of Mississippi. “Our office is committed to ensuring that everyone in Mississippi is treated fairly and lawfully by the police. Today’s announcement reflects that commitment. We will conduct a thorough and impartial investigation of LPD, and we will take decisive action to address any unlawful conduct.”
Before this announcement, officials from the Justice Department notified Lexington officials, who have pledged to cooperate with the investigation. As part of this investigation, the Justice Department will conduct outreach to community groups and members of the public to learn about their experiences with LPD.
The Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S Attorney’s Office for the Southern District of Mississippi will jointly conduct this investigation pursuant to the Violent Crime Control and Law Enforcement Act of 1994, which prohibits state and local governments from engaging in a pattern or practice of conduct by law enforcement officers that deprives people of rights protected by the Constitution or federal law. If the Justice Department has reasonable cause to believe that the law enforcement officers of a state or local government have engaged in a prohibited pattern or practice, the department is authorized to bring a lawsuit seeking court-ordered changes to remedy the violations. In this investigation, the department will assess the law enforcement practices under the First, Fourth and 14th Amendments to the U.S. Constitution, Title VI of the Civil Rights Act of 1964 and the non-discrimination provisions of the Safe Streets Act.
Individuals with relevant information are encouraged to contact the Justice Department via email at [email protected] or by phone at (833) 610-1232. Individuals can also report civil rights violations regarding this or other matters using the reporting portal of the Justice Department’s Civil Rights Division, available at www.civilrights.justice.gov. Individuals can also report civil rights violations to the U.S. Attorney’s Office at [email protected] or (601) 973-2825.
Today’s announcement marks the 11th pattern or practice investigation into law enforcement misconduct opened by the Justice Department during this Administration. The department has ongoing investigations into the Phoenix Police Department; the Mount Vernon (NY) Police Department; the Louisiana State Police; the New York City Police Department’s Special Victims Division; the Worcester (MA) Police Department; the Oklahoma City Police Department; the Memphis (TN) Police Department; and the Trenton (NJ) Police Department. The department recently completed investigations in Louisville, Kentucky, and Minneapolis, and secured agreements in principle with both jurisdictions to negotiate consent decrees to address the violations found.
Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office for the Southern District of Mississippi is available at www.justice.gov/usao-sdms. Information specific to the Civil Rights Division’s Police Reform Work can be found here: www.justice.gov/crt/file/922421/download.
The Justice Department will hold a public community meeting on Nov. 8 at 5:00 p.m. CT at St. Paul COGIC Fellowship Hall, located at 17214 Highway 17 South, Lexington, Mississippi. Members of the public are encouraged to attend to learn more about the investigation.
Justice Department Announces Investigation of the City of Lexington, Mississippi, and the Lexington Police DepartmentRead the Press Release
The Justice Department announced today that it has opened a civil pattern or practice investigation into the City of Lexington, Mississippi, and the Lexington Police Department (LPD). Lexington is a town of approximately 1,600 people, located about an hour outside of the state’s capitol in Jackson, Mississippi.
The investigation will seek to determine whether there are systemic violations of the Constitution and federal law. The investigation will focus on the police department’s use of force and its stops, searches and arrests. It will assess whether those activities are reasonable, non-discriminatory and respect the right to engage in speech and conduct protected by the First Amendment. The investigation will include a comprehensive review of LPD policies, training and supervision, practices for the collection of fines and fees and systems of accountability.
“No city, no town and no law enforcement agency is too large or too small to evade our enforcement of the constitutional rights every American enjoys,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We are opening this investigation to determine whether the Lexington Police Department engages in a pattern or practice of discriminatory policing, excessive force or First Amendment violations. This investigation should send a clear message to small and mid-size police departments that they are not exempt from the obligation to provide fair, effective and non-discriminatory policing. We will leave no community behind, including underserved regions in the Deep South, in our quest to ensure lawful and constitutional policing in America.”
“Police officers are trusted with the important duty to keep our communities safe. When police officers fail to respect constitutional rights, they violate that trust,” said U.S. Attorney Todd W. Gee for the Southern District of Mississippi. “Our office is committed to ensuring that everyone in Mississippi is treated fairly and lawfully by the police. Today’s announcement reflects that commitment. We will conduct a thorough and impartial investigation of LPD, and we will take decisive action to address any unlawful conduct.”
Before this announcement, officials from the Justice Department notified Lexington officials, who have pledged to cooperate with the investigation. As part of this investigation, the Justice Department will conduct outreach to community groups and members of the public to learn about their experiences with LPD.
The Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S Attorney’s Office for the Southern District of Mississippi will jointly conduct this investigation pursuant to the Violent Crime Control and Law Enforcement Act of 1994, which prohibits state and local governments from engaging in a pattern or practice of conduct by law enforcement officers that deprives people of rights protected by the Constitution or federal law. If the Justice Department has reasonable cause to believe that the law enforcement officers of a state or local government have engaged in a prohibited pattern or practice, the department is authorized to bring a lawsuit seeking court-ordered changes to remedy the violations. In this investigation, the department will assess the law enforcement practices under the First, Fourth and 14th Amendments to the U.S. Constitution, Title VI of the Civil Rights Act of 1964 and the non-discrimination provisions of the Safe Streets Act.
Individuals with relevant information are encouraged to contact the Justice Department via email at [email protected] or by phone at (833) 610-1232. Individuals can also report civil rights violations regarding this or other matters using the reporting portal of the Justice Department’s Civil Rights Division, available at www.civilrights.justice.gov. Individuals can also report civil rights violations to the U.S. Attorney’s Office at [email protected] or (601) 973-2825.
Today’s announcement marks the 11th pattern or practice investigation into law enforcement misconduct opened by the Justice Department during this Administration. The department has ongoing investigations into the Phoenix Police Department; the Mount Vernon (NY) Police Department; the Louisiana State Police; the New York City Police Department’s Special Victims Division; the Worcester (MA) Police Department; the Oklahoma City Police Department; the Memphis (TN) Police Department; and the Trenton (NJ) Police Department. The department recently completed investigations in Louisville, Kentucky, and Minneapolis, and secured agreements in principle with both jurisdictions to negotiate consent decrees to address the violations found.
Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office for the Southern District of Mississippi is available at www.justice.gov/usao-sdms. Information specific to the Civil Rights Division’s Police Reform Work can be found here: www.justice.gov/crt/file/922421/download.
The Justice Department will hold a public community meeting on Nov. 8 at 5:00 p.m. CT at St. Paul COGIC Fellowship Hall, located at 17214 Highway 17 South, Lexington, Mississippi. Members of the public are encouraged to attend to learn more about the investigation.
Jury convicts McAllen man for gunpoint extortion of migrantsRead the Press Release
McALLEN, Texas – A federal jury has convicted a 25-year-old man on multiple counts for hostage taking, smuggling and weapons charges, announced U.S. Attorney Alamdar S. Hamdani.
The jury deliberated for less than an hour before returning the guilty verdict on all counts against Heriberto Mendez-Lozano following a three-day trial.
During the trial, the jury heard evidence that on Sept. 29, 2022, Mendez-Lozano and others were engaged in smuggling migrants from near the Rio Grande River further into the United States.
On that date, the group was harboring five undocumented aliens. Instead of transporting the aliens further into the United States, Mendez-Lozano and his co-conspirators held the aliens against their will at a location in Donna.
There, Mendez-Lozano and others brandished firearms, held guns to the heads and ribs of hostages, threatened the hostages and forced them to call family members to demand money for their release.
The investigation led law enforcement to the location in Donna where they arrested Mendez-Lozano who had a pending warrant for aggravated robbery, and a co-conspirator Lorenzo Campbell. Authorities also rescued the hostages from the scene.
U.S. District Judge Micaela Alvarez presided over the trial and set sentencing for Jan. 17, 2024. At that time, he faces life in a federal prison. Mendez-Lozano has been and will remain in custody pending that hearing.
Homeland Security Investigations (HSI) conducted the investigation with the assistance of Border Patrol (BP), U.S. Marshals Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives and Hidalgo County Sherriff’s Office.
Assistant U.S. Attorneys Colton Turner and Theodore Parran prosecuted the case as part of the Human Smuggling Prevention Program (HSPP). The primary goal of HSPP is to disrupt and dismantle human smuggling organizations on our Southwest Border through close cooperation with HSI, BP, Customs and Border Protection – Office of Field Operations and local law enforcement partners.
Jury Convicts Pinellas Man of Trafficking FentanylRead the Press Release
Tampa, FL – United States Attorney Roger B. Handberg announces that a federal jury has found Corey Gaddy (31, St. Petersburg) guilty of conspiracy to distribute controlled substances including fentanyl and two counts of distribution of fentanyl. Gaddy faces a maximum sentence of 60 years’ imprisonment. His sentencing hearing is scheduled for February 1, 2024. Gaddy was arrested on September 9, 2020, and has remained in custody.
According to court records, testimony and evidence presented at trial, Gaddy was a supplier of opioids in Pinellas County since 2017. One of his dealers, Shawn Rodriguez, was at various times during the conspiracy a distributor of opioids in the Madeira Beach area. In February 2019, the Largo Police Department conducted a traffic stop of Gaddy where heroin was concealed on his person. On November 6, 2019, while on bond for that offense, Gaddy distributed fentanyl to Rodriguez who then supplied the same to K.E. In the early morning hours of November 7, 2019, K.E. died of fentanyl toxicity. Gaddy learned that K.E. had died but continued distributing opioids anyway. In April 2020, while still on bond for his pending state case, Gaddy distributed opioids to J.P. and another individual. Two days later, J.P. was found dead on a fishing boat.
Rodriguez previously pleaded guilty to his role in the case. His sentencing hearing is scheduled for February 7, 2024.
This case was investigated by Drug Enforcement Administration, the Pinellas County Sheriff’s Office, and the Largo Police Department, with assistance from the Federal Bureau of Investigation as part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case is being prosecuted by Assistant United States Attorneys Dan Baeza and Lauren Stoia.
Jury Convicts Hospice Owner for Defrauding MedicareRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that on November 6, 2023, a federal jury convicted SHIVA AKULA, age 67, of New Orleans, of health care fraud related to fraudulent claims billed to Medicare. AKULA owned and oversaw the day-to-day operations of Canon Healthcare, LLC, a hospice facility with offices in the New Orleans area, Baton Rouge, Covington, and Gulfport, Mississippi. Between January 2013 and December 2019, Canon’s New Orleans area office billed Medicare approximately $62 million and was paid approximately $47 million.
The jury convicted AKULA on all 23 counts of health care fraud charged in the indictment. Counts 1 through 8 involved AKULA’s overbilling for hospice patients for General Inpatient (“GIP”) services to fraudulently maximize reimbursement from Medicare. By improperly billing for GIP, AKULA fraudulently caused Medicare to pay approximately $600 more per patient, per day, than it would have for the appropriate level of care, for multiple months per patient. Moreover, many of the patients whose claims were fraudulently billed to Medicare were not hospice eligible, meaning any Medicare hospice payments for these patients were improper. Between January 2013 and August 2017, AKULA billed over 2,800 monthly claims for GIP billing, totaling approximately $15.3 million.
Additionally, the jury convicted AKULA for multiple counts related to manipulating Medicare billing codes, known as Common Procedural Terminology (“CPT”) codes. Counts 9 through 11 involved AKULA’s fraudulent billing for physician services under CPT code 99236. AKULA fraudulently billed Medicare for these services, despite such services being medically unnecessary, and despite their inclusion in the daily hospice benefit Canon already received for its patients. Between January 2013 and August 2017, AKULA submitted approximately 1,053 claims for CPT code 99236 and was paid approximately $223,601 by Medicare.
Counts 12 through 17 involved AKULA’s fraudulent billing of History and Physical forms under CPT code 99233. AKULA fraudulently billed Medicare for these forms, despite their being hand-copied by a member of AKULA’s family based on work performed by referring physicians not employed by Canon, and despite their being unbillable in the hospice setting. Between January 2013 and August 2017, AKULA submitted approximately 23,000 claims to Medicare for CPT code 99233 and was paid approximately $2,281,251.
Finally, Counts 18 through 23 involved AKULA’s fraudulent billing for home visits under CPT code 99350. AKULA fraudulently billed Medicare for visits under a physician’s name, even though they were performed by a nurse practitioner, the patients were not hospice eligible, and the services were included in the daily hospice benefit Canon already received for its patients. Between January 2013 and August 2017, AKULA submitted claims to Medicare for approximately 1,949 home visits using CPT code 99350 and was paid approximately $316,384.
U.S. District Judge Lance M. Africk presided over the five-day trial during which the government called fifteen witnesses and presented approximately 290 exhibits.
As to each of the 23 counts of health care fraud, AKULA may receive a maximum sentence of ten years in prison, a maximum fine of up to $250,000, up to three years of supervised release, and a $100 mandatory special assessment fee. Judge Africk scheduled sentencing in this case for February 21, 2024, at 2:00 p.m.
“Health care fraud schemes such as these profoundly impact our nation, not only because of the monetary loss triggered by the fraud, but also by the damaging erosion of public trust”, said U.S. Attorney Duane A. Evans. “Our office, along with our investigative partners, will continue to work diligently to preserve taxpayer confidence in our medical institutions and seek justice for all victims of fraud.”
“Mr. Akula took advantage of the American taxpayer by billing for services that weren’t medically necessary, and in some cases, didn’t happen at all,” said Douglas A. Williams, Jr., Special Agent in Charge for FBI New Orleans. “The FBI will continue its work to uncover fraudulent schemes like this that take advantage of people when they are most vulnerable.”
“A federal jury correctly found Shiva Akula, MD guilty on all 23 counts of health care fraud,” said Jason E. Meadows, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Medical providers who are motivated by greed place our most vulnerable citizens at risk, and HHS-OIG remains committed to working with our law enforcement partners to identify and investigate greedy providers who defraud our federal health care programs.”
This case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, and the Louisiana Department of Justice, Medicaid Fraud Control Unit. Assistant U.S. Attorneys Kathryn McHugh and J. Ryan McLaren, an attorney in the Appellate Unit, are in charge of the prosecution.
Jamestown man indicted by federal grand jury on multiple drug and firearms chargesRead the Press Release
BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that a federal grand jury has returned a five-count indictment charging Zaid Mendoza a/k/a Diamond, 45, of Jamestown, NY, with possession with intent to distribute fentanyl and methamphetamine, possession of a firearm in furtherance of drug trafficking crimes and being a felon in possession of a firearm. The charges carry a mandatory minimum penalty of five years in prison, a maximum of life and a $1,000,000 fine.
Assistant U.S. Attorney Joshua A. Violanti, who is handling the case, stated that according to the indictment and a previously filed complaint, in October and December 2022, Mendoza possessed fentanyl and methamphetamine with the intent to distribute it in the Jamestown area. On December 7, 2022, investigators executed a search warrant at Mendoza’s residence and recovered $1,800 cash, approximately 36 grams of fentanyl and a quantity of methamphetamine, a 9mm semi-automatic pistol, drug packaging paraphernalia, and cell phones. Mendoza, who was taken into custody at the scene, had another 36 grams of fentanyl on his person. In October 2014, Mendoza was convicted of a felony in Chautauqua County Court and is legally prohibited from possessing a firearm.
Mendoza was arraigned before U.S. Magistrate Judge Michael J. Roemer and is detained.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The indictment is the result of an investigation by the Jamestown Police Department Metro Drug Task Force, under the direction of Chief Timothy Jackson, the Chautauqua County Sheriff’s Office County Drug Task Force, under the direction of Sheriff James Quattrone, the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia, Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. DeVito, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
# # # #
Interpol Washington’s Project Terminus Launches Initiative to Enhance Border Security in ColombiaRead the Press Release
WASHINGTON – Last week, INTERPOL Washington successfully launched a new phase of assistance to the Colombian government that will enhance its border security capabilities, improving its ability to detect and interdict transnational criminals and terrorists entering Colombia. Through Project TERMINUS, a technical team from INTERPOL Washington’s Border Security Division (BSD) worked on the ground in Bogotá to provide, install, and ensure effective operation of equipment that connects Colombian law enforcement authorities to INTERPOL databases.
“Project TERMINUS is bringing critical new law enforcement tools to our indispensable partners in Colombia,” said INTERPOL Washington BSD Deputy Assistant Director Keith Hood. “Close collaboration between nations is the only way to stop transnational crime and terrorism. By strengthening Colombia’s interconnection with INTERPOL, the world’s largest police organization, TERMINUS is making the world a safer place and protecting our communities.”
During the visit, the INTERPOL Washington technical team worked closely with National Central Bureau Bogotá and met with Colombian National Police representatives from each region of the country. They discussed the current threat landscape, challenges with irregular migration, and the security benefits of Project TERMINUS.
Project TERMINUS is a partnership established in 2016 between INTERPOL Washington’s BSD and the State Department's Bureau of Counterterrorism. It helps deliver solid, actionable criminal intelligence in a secure manner around the world by extending INTERPOL’s I-24/7 secure global police communications system in high-risk areas and select host nations globally. Through Project TERMINUS, expert technical assistance is made available to countries seeking to integrate access via the TERMINUS Tool Kit of Solutions, enhancing their ability to screen against the illicit international travel of transnational criminals and terrorists. Partner nations receiving assistance from Project TERMINUS include Indonesia, Malaysia, Nigeria, Kyrgyzstan, Panama, The Republic of Georgia, and The Maldives.
A component of the U.S. Department of Justice, co-managed by the U.S. Department of Homeland Security, INTERPOL Washington—the U.S. National Central Bureau (USNCB)—is the designated U.S. representative to INTERPOL. It serves as the national point of contact and coordination for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, tribal, and territorial law enforcement agencies.
Hyde Resident Sentenced to Prison on Distribution of Methamphetamine ChargesRead the Press Release
PITTSBURGH, PA – A resident of Hyde, Pennsylvania, has been sentenced in federal court to 23 months of imprisonment followed by two years of supervised release on his conviction for violating federal narcotics laws related to a nine-month Title III wiretap investigation into drug trafficking in and around the counties of Jefferson, Clearfield, and Allegheny, United States Attorney Eric G. Olshan announced today.
United States District Judge Christy Criswell Wiegand imposed the sentence on Jeffrey Peters, age 68.
According to information presented to the court, Peters was a methamphetamine distributor who obtained over two pounds of methamphetamine from Derek Hillebrand, which Peters then redistributed. Additionally, 46 grams of methamphetamine was seized from Peters’ vehicle during a traffic stop on April 6, 2021.
Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Drug Enforcement Administration, Homeland Security Investigations, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Internal Revenue Services, Pittsburgh Bureau of Police, Allegheny County Police, and Pennsylvania State Police. Also assisting were the Jefferson County District Attorney’s Office, Clearfield County District Attorney’s Office, and the Clarion Borough Police Department for the investigation leading to the successful prosecution of Peters. This prosecution 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.
Huber Heights man sentenced to 50 years in prison for child exploitation crimes involving more than 175 victimsRead the Press Release
DAYTON, Ohio – A Huber Heights, Ohio, man was sentenced in U.S. District Court today to 600 months in prison for crimes related to creating hundreds of images and videos of child pornography by victimizing children as young as 6 years old over a 15-year period.
Ty Brandon Roberts, 38, pleaded guilty in February 2023 to producing child pornography and coercing minors.
“From California to New York, Texas to Illinois, Washington to Florida, the United Kingdom to Australia, no minors anywhere were safe from Roberts so long as Roberts had access to the Internet. It stops now in the Southern District of Ohio,” said U.S. Attorney Kenneth L. Parker. “Roberts was opportunistic; his victims ranged in age from 6 to 17 years old. They were white, Black, Hispanic and Native American. They were male and female. In all, FBI agents fully identified 57 minors whom Roberts coerced into producing 502 distinct images and videos of child pornography.”
Roberts’ child pornography includes 120 more victims depicted in an additional 216 distinct files who remain unidentified to this day.
According to court documents, beginning in 2007, Roberts exploited young victims online and sexually abused victims in person. Roberts used two schemes to coerce minors into creating child pornography. One scheme was bribing young minors with video game gift cards to online games such as “Fortnite” in exchange for sexually explicit images and videos. The second scheme Roberts used was pretending to be a teenaged girl online to entice and coerce minors to send him sexually explicit images and videos of themselves. He also committed hands-on sexual offenses to at least three minor victims.
For example, between 2007 and 2008, Roberts sexually abused an 11-to-12-year-old boy and took photos of the abuse on a Polaroid camera. Roberts eventually created digital images of the Polaroids and kept the original Polaroids in his home until law enforcement seized them in 2022.
Roberts possessed more than 11,000 child pornography images in total.
Kenneth L. Parker, United States Attorney for the Southern District of Ohio; J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; and Huber Heights Police Chief Mark Lightner announced the sentence imposed today by Senior U.S. District Judge Thomas M. Rose. Assistant United States Attorneys Kelly K. Rossi and Dwight Keller are representing the United States in this case.
# # #
Hastings Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
Acting United States Attorney Susan Lehr announced that Armando Ibarra, 50, of Hastings, Nebraska, was sentenced November 6, 2023, in federal court in Lincoln, Nebraska for conspiracy to distribute methamphetamine. United States District Court Judge John M. Gerrard sentenced Ibarra to 156 months’ imprisonment. There is no parole in the federal system. After Ibarra’s release from prison, he will begin a five-year term of supervised release.
Between August of 2019 and May of 2021, Ibarra reached an agreement with others to distribute meth in Hastings, Nebraska. Ibarra sold meth to confidential informants and police found meth at his residence and in his car during several traffic stops.
This case was investigated by the Adams County Sheriff’s Office, the Hastings Police Department, and the Trident Drug Task Force, which is made up of officers from the Grand Island Police Department, Hall County Sheriff, Hastings Police Department, Adams County Sheriff, Kearney Police Department, Buffalo County Sheriff, Nebraska State Patrol, Homeland Security Investigations, and the Federal Bureau of Investigation.
Hamilton Man Sentenced to 84 Months in PrisonRead the Press Release
FORT WAYNE–David L. Westfall, 44 years old, of Angola and Hamilton, Indiana, was sentenced by United States District Court Chief Judge Holly A. Brady upon his plea of guilty to illegally possessing an unregistered sawed-off shotgun and for possession of a firearm by a felon, announced United States Attorney Clifford D. Johnson.
Westfall was sentenced to 84 months in prison followed by 2 years of supervised release.
According to documents in the case, on February 19, 2023, officers responded to a rural area east of New Haven, Indiana, regarding a suspicious occupied vehicle. When Officers arrived, they located Westfall who had active warrants for his arrest. They attempted to detain Westfall, but he retreated to his vehicle, indicating he had a firearm. Westfall then fired a shotgun, shattering the driver’s window of his truck. Officers called the Allen County SWAT team for assistance, and the officers eventually convinced Westfall to surrender after a standoff of at least 10 hours.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance of the Allen County Sheriff’s Department, the New Haven Police Department, the Woodburn Police Department, the Allen County Sheriff’s Department Special Weapons and Tactics Team, and the Fort Wayne Police Department. The case was prosecuted by Assistant United States Attorney Anthony W. Geller.
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.
Great Falls College student loan fraud scheme sends Cascade woman to prison for a year and a halfRead the Press Release
GREAT FALLS — A Cascade woman convicted of illegally receiving approximately $126,000 in federal student aid through a scheme in which she enrolled others in courses at Great Falls College, Montana State University, was sentenced today to 18 months in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.
Ricci Lea Castellanos, 35, pleaded guilty in March to conspiracy to commit wire fraud and to aggravated identity theft.
Chief U.S. District Judge Brian M. Morris presided. The court ordered $68,175 restitution.
The government alleged in court documents that between January 2016 and December 2019, Castellanos enrolled unwitting family members and others in online classes at Great Falls College, Montana State University. When doing so, Castellanos, and others, applied for and received federal student aid totaling approximately $126,219, none of which was allowed. In addition, Castellanos and others fraudulently submitted American Indian Tuition Waivers and used false tribal enrollment forms to receive student living expense refunds. Castellanos also forged the signature of a person, Jane Doe 1, to apply for enrollment with Great Falls College and received $2,378 in financial aid into her bank account, which she withdrew in cash. Jane Doe 1 had reported her identity stolen to the Great Falls Police Department.
Assistant U.S. Attorneys Ryan G. Weldon and Benjamin D. Hargrove prosecuted the case, which was investigated by the U.S. Department of Education, Office of Inspector General.
XXX
Grand Jury Returns IndictmentsRead the Press Release
MADISON, WIS. - A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.
Two La Crosse Men Charged with Drug Crimes Involving Cocaine & Fentanyl
Louis A. Ray, 46, La Crosse, Wisconsin, is charged with three counts of distributing cocaine and he and Timothy A. Cannon, 35, also of La Crosse, are charged with four counts of distributing fentanyl. The indictment alleges that two of the counts of distributing fentanyl involved 40 grams or more. Cannon is also charged with one count of possessing fentanyl with intent to distribute. The indictment alleges that these offenses occurred between April 19 and July 6, 2023.
If convicted, Ray and Cannon face a mandatory minimum penalty of 5 years and a maximum of 40 years in federal prison on the two charges alleging the distribution of 40 grams or more of fentanyl. They face a maximum of 20 years on each of the other charges.
The charges against Ray and Cannon are the result of an investigation by the La Crosse Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Anita Marie Boor is handling the prosecution.
Mexican National Charged with Illegally Reentering U.S.
Maurillo Mendoza-Vasques, also known as Mauricio Mendoza-Vasquez, 46, a citizen of Mexico found in Arcadia, Wisconsin, is charged with illegally reentering the United States after being removed. The indictment alleges he was found in the U.S. on July 25, 2023.
If convicted, Mendoza-Vasques faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by U.S. Immigration and Customs Enforcement. Assistant U.S. Attorney Corey Stephan is handling the prosecution.
Glencoe Man Pleads Guilty to Illegally Possessing a Firearm and Possessing Marijuana with Intent to DistributeRead the Press Release
OKLAHOMA CITY – Earlier this week, LESTER LEE BAYS, 69, of Glencoe, Oklahoma, pleaded guilty to illegally possessing a firearm after a previous felony conviction and possession of marijuana with intent to distribute, announced U.S. Attorney Robert J. Troester.
On September 5, 2023, a federal grand jury returned a three-count Indictment against Bays, charging him with being a felon in possession of a firearm, possession of marijuana with intent to distribute, and possession of a firearm in furtherance of a drug-trafficking crime. According to court documents, on or about March 25, 2023, Bays was found to be in possession of marijuana and a firearm, despite a previous felony conviction. On September 21, 2023, Bay was ordered to be detained in federal custody.
On November 6, 2023, Bays pleaded guilty to Counts 1 and 2 of the Indictment. As part of his plea, Bays admitted to being a felon in possession of a firearm on March 25, 2023. He also admitted to being in possession of marijuana which he intended to distribute. At sentencing, Bays faces up to 15 years in federal prison on Count 1 and up to five years in federal prison on Count 2.
Public records reflect that Bays holds multiple prior felony convictions, including assault and battery with a deadly or dangerous weapon in Payne County District Court case number CF-1986-60, and possession of a firearm after a former conviction of a felony in Payne County District Court case number CF-2018-161.
This case is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Payne County Sheriff’s Office. Assistant U.S. Attorney Mary E. Walters is prosecuting the case.
This case is part of “Operation 922” and operation “Shots Fired,” the Western District of Oklahoma’s implementation of Project Safe Neighborhoods, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. “Operation 922” prioritizes prosecution of federal firearms violations connected to domestic violence. “Shots Fired” targets cases involving individuals who discharge firearms as part of their criminal activity, such as drive-by shootings or when shots are fired during robberies, domestic disputes, or other incidents. For more information about Project Safe Neighborhoods, please visit https://justice.gov/psn and https://justice.gov/usao-wdok.
Reference is made to public filings for additional information.
Founder of Beverly Hills ‘Gentlemen Timepieces’ Consignment Store Charged with Conning Victims in Luxury Watch Ponzi-Type SchemeRead the Press Release
LOS ANGELES – A Los Angeles man who previously operated a business in Beverly Hills known as “Gentlemen Timepieces” appeared in court this afternoon after his arrest Tuesday by FBI agents on charges of defrauding customers of his luxury watch consignment business.
Anthony Farrer, 35, who until recently lived in downtown Los Angeles, was charged in a federal criminal complaint filed Monday with wire fraud, a felony that carries a statutory maximum sentence of 20 years in federal prison.
Farrer, who also was known as “The Timepiece Gentleman,” was arrested without incident at a storage facility in Venice and was held in federal custody overnight. He made his initial appearance this afternoon in United States District Court, and an arraignment was scheduled for December 14. A detention hearing is scheduled for Thursday.
According to an affidavit filed with the complaint that was unsealed today, Farrer founded the company in Texas in 2017 and opened a location in Beverly Hills in 2022. Farrer used this business to connect purchasers and sellers of high-end watches. He would typically collect a watch from an individual and have them sign a consignment agreement that stipulated he would collect a commission from the sale, typically 5%.
The complaint alleges that Farrer defrauded victims beginning in late 2022 until the summer of 2023, when he promised customers he would sell their luxury watches on consignment. Rather than remitting funds back to the customers less the commission, he kept the proceeds for himself. Farrer lived in a luxury rental property and was known to drive a Lamborghini and Ducati motorcycles. He traveled frequently to, and engaged in gambling in, Las Vegas, according to the complaint.
Farrer induced victims into wiring funds for the purchase of luxury watches and, instead of purchasing the agreed upon watch, he would send them a different watch, the complaint alleges. In one case, a victim received a Rolex watch from Farrer in lieu of money Farrer owed, but the Rolex belonged to another victim who had provided the watch to Farrer to sell on consignment and did not authorize Farrer to use the watch as payment for his debts to other victims.
The complaint further alleges that Farrer operated a scheme in a similar manner to a Ponzi scheme and would lull victims into a sense of security by engaging in smaller successful transactions prior to requesting or engaging in significantly larger transactions.
Multiple victims contacted law enforcement to report that they wired funds to Farrer for the purchase of a watch, or mailed him a watch to consign for sale, but were never paid for the watch or never received their watch back. To date, law enforcement estimates that victim losses currently total approximately $3 million. The investigation is ongoing and law enforcement is in the process of identifying additional victims.
Farrer apparently abandoned the Beverly Hills store in August 2023 and began posting about his various travel throughout the United States on social media. As recently as October 2023, Farrer continued to advertise watches for sale on his social media platforms, according to the complaint.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI, IRS Criminal Investigation, and the Beverly Hills Police Department are investigating this matter.
Assistant United States Attorney Joshua O. Mausner of the Violent and Organized Crime Section is prosecuting this case.
Former U.S. Postal worker sentenced for mail crimeRead the Press Release
WICHITA, KAN. – A former U.S. Postal Service worker was sentenced to 24 months of probation for criminal conduct related to her employment.
According to court documents, Tammy L. Frink, 50, of Beardsley, Kansas, pleaded guilty to one count of opening of mail by a postal employee.
On September 21, 2022, Frink, while working at a post office in McDonald, Kansas, opened a sealed greeting card destined for an address in Missouri. Frink did not have authority or permission to open the piece of mail.
Frink was ordered to serve 60 hours of community service and to pay a total restitution of $1,686, with the U.S. Postal Service receiving $1,075 and $611 to five individuals who were victims in other instances of mail theft linked to Frink.
“This sentence represents our commitment to work with our law enforcement partners to maintain the integrity and trust in the U.S. Mail,” said Ryan Petry, Acting Special Agent in Charge, United States Postal Service Office of Inspector General, Central Area Field Office. “The majority of postal employees are hard-working public servants dedicated to moving mail to its proper destination. The USPS OIG, along with the U.S. Attorney’s Office, remains committed to safeguarding the U.S. Mail and ensuring the accountability and integrity of U.S. Postal Service employees.”
The U.S. Postal Service – Office of the Inspector General investigated the case.
Assistant U.S. Attorney Matt Treaster prosecuted the case.
###
Former KC Bank Manager Pleads Guilty to Facilitating Covid Fraud Scheme, Unemployment Benefits Fraud SchemeRead the Press Release
JEFFERSON CITY, Mo. – A former bank branch manager in Kansas City, Mo., has pleaded guilty in federal court to accepting Kansas City Chiefs playoffs tickets and a new Chevrolet Tahoe in exchange for facilitating a $12.4 million Covid fraud scheme by a Jefferson City, Mo., business owner, as well as a separate fraud scheme to receive unemployment benefits.
Anthony Omar Brockman, 48, who currently resides in Bennington, Nebraska, pleaded guilty before U.S. Magistrate Judge Willie J. Epps, Jr., on Tuesday, Nov. 7, to one count of wire fraud, one count of receiving gifts for procuring loans, and one count of money laundering.
Brockman was the branch manager of the Truman Hospital location of US Bank in Kansas City, Mo., until the COVID-19 pandemic caused the bank branch to close. Brockman was reassigned to US Bank’s Paycheck Protection Program project from April 12 through July 19, 2020. Brockman was then returned to his role as on-site manager at the Truman Hospital bank branch until May 22, 2021.
On March 27, 2020, The CARES Act established several new temporary programs and provided for the expansion of others to address the COVID-19 pandemic. Among these programs, the Paycheck Protection Program (PPP) authorized forgivable loans to small businesses to retain workers and maintain payroll, make mortgage interest payments, lease payments, and utility payments.
By pleading guilty, Brockman admitted that he assisted and facilitated fraudulent PPP loan applications for Tod Ray Keilholz, the owner of TRK Construction, LLC, TRK Valpo, LLC, TL Builders, LLC, and Project Design, LLC, in Jefferson City. Keilholz has been charged in a separate indictment for his role in a more than $27.1 million bank fraud scheme that included more than $12.4 million in PPP loans for his businesses.
According to that separate indictment, Keilholz received a total of $12,430,932 in PPP loans for his four businesses. In each of those loan applications, the indictment says, Keilholz failed to disclose his ownership in the other three businesses, and made materially false and fraudulent claims in the loan applications and supporting documentation. Keilholz allegedly inflated the income of those businesses and claimed payrolls for employees who did not exist or no longer worked for him.
Brockman admitted that he received gifts in exchange for assisting Keilholz in procuring those loans. On Nov. 4, 2020, Keilholz used PPP loan proceeds to pay for a 2021 Chevrolet Tahoe that he gave to Brockman. Brockman admitted that the gift was intended to influence and reward him in connection with Keilholz’s applications for PPP loans and for the forgiveness of PPP loans.
Brockman also admitted that he received tickets from Keilholz to the Jan. 24, 2021, AFC Championship Game between the Kansas City Chiefs and the Buffalo Bills. In pleading guilty to money laundering, Brockman admitted that he signed an affidavit gifting the 2021 Chevrolet Tahoe to Rich Girl, Rich Boy Prep, Inc., a charity of which his wife was the Chief Executive Officer. On May 25, 2021, Brockman transferred the title to the Tahoe to Rich Girl, Rich Boy Prep but continued to drive the Tahoe until he sold it in July 2022.
In pleading guilty to wire fraud, Brockman admitted that he fraudulently received $11,040 in unemployment benefits from March 27, 2020, to Nov. 4, 2021, while he was employed by US Bank. Brockman falsely claimed he was unemployed when he applied for unemployment benefits via the internet, then repeated that false claim in 11 subsequent weekly online applications submitted to the state.
Under the terms of his plea agreement, Brockman must pay the government a $84,582 money judgment, which represents the proceeds he obtained from the offenses.
Under federal statutes, Brockman is subject to a sentence of up to 70 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau-Office of Inspector General, the Small Business Administration-Office of Inspector General, the Treasury Inspector General for Tax Administration, the Federal Deposit Insurance Corporation (FDIC)-Office of Inspector General, the FBI, and IRS-Criminal Investigation.
Pandemic Response Accountability Committee Task Force
The Pandemic Response Accountability Committee Task Force was established to promote transparency and facilitate coordinated oversight of the federal government’s COVID-19 pandemic response. The PRAC’s 20 member Inspectors General identify major risks that cross program and agency boundaries to detect fraud, waste, abuse, and mismanagement in the more than $5 trillion in COVID-19 spending, including spending via the Paycheck Protection Program (PPP), and Economic Injury Disaster Loan (EIDL) program. This case was also supported by the PRAC’s Pandemic Analytics Center of Excellence, which applies the latest advances in analytic and forensic technologies to help OIGs and law enforcement pursue data-driven pandemic relief fraud investigations.
Former Indiana University Foundation Employee Sentenced to One Year in Federal Prison for Embezzling More Than $326,000 in DonationsRead the Press Release
INDIANAPOLIS- Teresa Maners, 64, of Spencer, Indiana, has been sentenced to one year and a day in federal prison after pleading guilty to wire fraud.
According to court documents, Maners was employed with the Indiana University Foundation as a Depositor and Payroll Deduction Associate beginning in 1988. The Indiana University Foundation works to maximize financial support for Indiana University through private donations and on-campus fundraisers. Maners’ job duties included recording cash and checks received from donors and preparing them for deposit in the foundation’s bank account.
During her employment, Maners stole hundreds of thousands of dollars from the foundation by taking cash before recording it in the foundation’s accounting systems. To hide the stolen cash, Maners secretly withheld checks from the day’s deposits and substitute those checks in a subsequent day’s deposit to hide the missing cash. She also wrote checks to the foundation from her personal bank account to cover any difference between the substituted donor checks and the stolen cash. This type of fraud is sometimes referred to as a “lapping scheme.” As the only employee in charge of recording cash donations, Maners was able to alter the accounting paperwork to “balance” the books and keep the stolen cash donations for herself. Maners continued the fraud for nearly four years, and stole approximately $326,334 from the foundation. In 2019, the foundation conducted an external audit after discovering accounting irregularities, and confronted Maners who admitted to stealing the money.
“For years, this defendant abused her position of trust to line her own pockets and steal hundreds of thousands of dollars in charitable donations from a foundation dedicated to advancing important educational programs in our state,” said U.S. Attorney, Zachary A. Myers. “Our office and the FBI are dedicated to identifying criminals who steal from and defraud our charities, businesses, and government organizations and holding them accountable. The federal prison sentence imposed here demonstrates that financial crimes cause serious harms and merit serious punishment.”
“Charitable organizations like the Indiana University Foundation count on people in positions of trust to act in the interests of organization and its mission rather than taking advantage of their position for personal gain as the defendant did,” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “The FBI will continue to identify and investigate those who choose to commit fraud and enrich themselves at the expense of others.”
The FBI investigated this case. The sentence was imposed by U.S. District Court Judge Jane Magnus-Stinson. Judge Stinson ordered that Maners be supervised by the U.S. Probation Office for two years following her release from federal prison and pay $326,334.64 in restitution.
U.S. Attorney Myers thanked Assistant U.S. Attorney Corbin Houston, who prosecuted this case.
###
Former Defense Contractor in Tomah Receives 15-Month Prison Sentence & $10,000 Fine for Wire FraudRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Jonathan Walker, 46, Tomah, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 15 months in federal prison for wire fraud. The prison term will be followed by one year of supervised release. Judge Peterson also ordered Walker to pay restitution in the amount of $72,000 and to pay a fine of $10,000. Judge Peterson ordered Walker to report to prison on January 4, 2024.
Walker pleaded guilty on July 11, 2023, to devising and participating in a scheme to defraud the U.S. Department of Defense (DoD). Walker owned and operated Walker Investment Properties (WIP) in Tomah, which was a contracting business that did heating and air conditioning services. Walker fraudulently obtained two DoD contracts to do work at Fort McCoy, falsely claiming that WIP was a service-disabled veteran owned small business (SDVOSB). WIP obtained two SDVOSB contracts worth a total of $1,927,536. WIP received a total of $482,577 from these two contracts.
Walker did not qualify as a SDVOSB, because he had never served in the military, much less been disabled as a result of his military service. The government’s proof showed that Walker was a 100% owner of WIP and ran the company.
As part of the government contracting system, a government contractor is required to sign a Federal Acquisition Regulation report under penalty of perjury certifying that the government contractor is providing true and correct information to the General Services Administration and will abide by all of the federal regulations pertaining to DoD contracting. Walker did this eight times from 2015 to 2019, falsely certifying he was a SDVOSB when he was not.
At today’s sentencing, Judge Peterson explained that a substantial sentence was warranted to send a message of general deterrence to other defense contractors, noting that the integrity of the set-aside program depends on the honesty of the contractors, and cheaters will be dealt with severely.
“The United States Attorney’s Office is committed to honoring and protecting those who served in America’s armed forces,” stated United States Attorney O’Shea. “In part, we demonstrate that commitment by working with our law enforcement partners to investigate and prosecute those who fraudulently pose as veterans for financial advantage.”
”The Defense Criminal Investigative Service (DCIS) is committed to working with our investigative partners to bring to justice those who abuse Government set-aside programs designed to encourage and support service-disabled veterans and woman and minority-owned small businesses,” stated Darrin K. Jones, Special Agent in Charge of the U.S. Department of Defense Office of Inspector General, DCIS, Southeast Field Office. ”Schemes like this undermine the integrity of these noble programs and cannot be allowed to continue.”
Special Agent in Charge Jeffrey Ryan of the General Services Administration Office of Inspector General added, “The GSA OIG will work with law enforcement partners to aggressively pursue cases involving anyone who falsifies information to fraudulently win government contracts. Legitimate service-disabled veteran businesses deserve a level playing field when competing for contract opportunities.”
The charges against Walker were the result of an investigation conducted by the U.S. Department of Defense - Office of Inspector General, Defense Criminal Investigation Service, General Services Administration - Office of Inspector General, and the Department of the Army Criminal Investigation Division. Assistant U.S. Attorney Daniel Graber handled the prosecution.
Former Clerk for Chicago Transit Authority Retirement Plan Sentenced to a Year in Prison for Fraudulently Obtaining $356,000 in Plan FundsRead the Press Release
CHICAGO — A former clerk for the Retirement Plan for Chicago Transit Authority Employees has been sentenced to a year in federal prison for fraudulently obtaining more than $356,000 in Plan funds.
AYANNA NESBITT created and obtained approval for approximately 43 fraudulent requests for the Plan to issue various benefits to CTA employees or their beneficiaries, including pension and death benefit payments, and refunds of pension contributions. The fraudulent requests contained false representations about the purported recipients’ identities and entitlement to the payments. Nesbitt had the payments sent to financial accounts she controlled or else had the money paid to others and then transferred to Nesbitt. From 2019 to 2021, Nesbitt defrauded the Plan of approximately $356,934.
Nesbitt, 51, of Chicago, pleaded guilty earlier this year to a wire fraud charge. U.S. District Judge Matthew F. Kennelly imposed the year-and-a-day sentence Tuesday after a hearing in federal court in Chicago.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The Retirement Plan for CTA Employees provided valuable assistance.
“Defendant was a public employee who abused her position to benefit herself and those close to her,” Assistant U.S. Attorney Christopher K. Veatch argued in the government’s sentencing memorandum.
Former California Resident Sentenced to Ten Years in Prison on Drug Trafficking and Money Laundering ChargesRead the Press Release
PITTSBURGH, PA – A former resident of Stockton, California has been sentenced in federal court to 120 months of imprisonment followed by three years of supervised release on his conviction for violating federal narcotics and money laundering laws related to a nine-month Title III wiretap investigation into drug trafficking in and around the counties of Jefferson, Clearfield, and Allegheny, United States Attorney Eric G. Olshan announced today.
United States District Judge Christy Criswell Wiegand imposed the sentence on Christian Maldonado, age 35.
According to information presented to the court, Maldonado packed for shipment at least 280 pounds of methamphetamine that was shipped from the Stockton, California area to the Western District of Pennsylvania. Maldonado also received parcels containing over $1,000,000 in United States currency as payment for the methamphetamine. At the time of Maldonado’s arrest, seventeen firearms, jewelry, a large amount of marijuana, and $212,907 was seized from his residence.
Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Drug Enforcement Administration, Homeland Security Investigations, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Internal Revenue Services, Pittsburgh Bureau of Police, Allegheny County Police, and Pennsylvania State Police. Also assisting were the Jefferson County District Attorney’s Office, Clearfield County District Attorney’s Office, and the Clarion Borough Police Department for the investigation leading to the successful prosecution of Maldonado. This prosecution 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.
Former California Resident Sentenced to 9 Years in Prison for Role in Distribution of MethamphetamineRead the Press Release
PITTSBURGH, PA – A former resident of Stockton, California has been sentenced in federal court to 108 months of imprisonment followed by two years of supervised release on his conviction for violating federal narcotics laws related to a nine-month Title III wiretap investigation into drug trafficking in and around the counties of Jefferson, Clearfield, and Allegheny, United States Attorney Eric G. Olshan announced today.
United States District Judge Christy Criswell Wiegand imposed the sentence on Armando Razo Jr., age 34.
According to information presented to the court, Razo supplied approximately one hundred pounds of methamphetamine to Christian Maldonado in Stockton, California, which Maldonado then packaged for shipment to the Western District of Pennsylvania.
Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Drug Enforcement Administration, Homeland Security Investigations, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Internal Revenue Services, Pittsburgh Bureau of Police, Allegheny County Police, and Pennsylvania State Police. Also assisting were the Jefferson County District Attorney’s Office, Clearfield County District Attorney’s Office, and the Clarion Borough Police Department for the investigation leading to the successful prosecution of Razo. This prosecution 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.
Former California Resident Sentenced to 5 Years in Prison on Drug ChargesRead the Press Release
PITTSBURGH, PA – A former resident of Stockton, California, has been sentenced in federal court to 60 months of imprisonment followed by four years of supervised release on his conviction for violating federal narcotics laws related to a nine-month Title III wiretap investigation into drug trafficking in and around the counties of Jefferson, Clearfield, and Allegheny, United States Attorney Eric G. Olshan announced today.
United States District Judge Christy Criswell Wiegand imposed the sentence on Abel Perez, age 36.
According to information presented to the court, Perez was a courier who transported methamphetamine to post offices in the Stockton, California area that were shipped to individuals in the Western District of Pennsylvania.
Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Drug Enforcement Administration, Homeland Security Investigations, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Internal Revenue Services, Pittsburgh Bureau of Police, Allegheny County Police, and Pennsylvania State Police. Also assisting were the Jefferson County District Attorney’s Office, Clearfield County District Attorney’s Office, and the Clarion Borough Police Department for the investigation leading to the successful prosecution of Perez. This prosecution 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.
Florida Man Who Failed to Appear in Idaho for Sentencing in 2019 and Fled to Cuba Now Sentenced to Federal Prison on Fraud ChargesRead the Press Release
BOISE – Adrian Acosta Alonso, 34, of Florida, was sentenced to 24 months in federal prison for access device fraud charges and failing to appear in court, announced U.S. Attorney Josh Hurwit. Chief U.S. District Judge David C. Nye imposed the sentence and also ordered Alonso to serve three years of supervised release following his prison sentence.
According to court records and statements made in court, in December 2018, Alonso and his codefendants attempted to pry open a gas pump with a crowbar at a gas station in Meridian. They intended to place a device inside the gas pump capable of recording and storing customers’ financial transaction card information, also known as a skimming device.
Alonso and his codefendants fled the scene after an employee called the police. Alonso and his codefendants were arrested in a nearby van and Meridian police officers located access device-making equipment in the van, including skimming devices, chip readers, a financial transaction card reader/encoder, and security seals for gas pumps.
In addition, officers located 55 blank financial transaction cards and 15 counterfeit financial transaction cards embossed in the names of Alonso and his codefendants. On a laptop, officers additionally located spreadsheets containing 423 financial transaction card numbers along with associated financial transaction card holders’ names, personal identification numbers, and expiration dates.
In February 2019, Alonso and his codefendants were federally charged in the District of Idaho with access device fraud charges, and Alonso was released from custody with the condition to appear in court pursuant to the Bail Reform Act. Thereafter, Alonso pleaded guilty in August 2019, and the Court set a sentencing hearing for November 2019. On that date, however, Alonso knowingly and intentionally failed to appear for the sentencing hearing and instead, fled to Cuba where Alonso is also a citizen. Thereafter, in July 2022, Alonso was separately charged with failing to appear at his sentencing.
Alonso was arrested on both cases upon returning to the United States in December 2022. Judge Nye sentenced Alonso to 12 months in federal prison for access device charges and another 12 months in prison for failing to appear at his sentencing in 2019.
Judge Nye previously sentenced co-defendant Yatsel Aleman Santana, 34, of Florida, in February 2023 to 30 months in federal prison after Santana also fled to Cuba to avoid the same access device fraud charges.
U.S. Attorney Hurwit commended the work of the United States Secret Service and the Meridian Police Department, which led to the charges. Assistant U.S. Attorney Sean Mazorol prosecuted the case.
###
Five Indicted in Scheme to Fraudulently Obtain Bank and Small Business Administration Loans in Property Flipping SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury has returned an indictment charging five individuals for a fraud scheme intended to obtain over $35 million from financial institutions by providing false documentation in support of SBA loan applications for the purchase of hotels. Defendant Mehul Ramesh Khatiwala, a/k/a “Mike Khatiwala,” age 41, of Voorhees, New Jersey, also faces a continuing financial crimes enterprise charge, also known as the financial crime kingpin statute—the first time this statute has been charged in Maryland. The indictment was returned on November 1, 2023. In addition to Khatiwala, the following defendants are charged in the indictment with bank fraud, making false statements to financial institutions, and money laundering:
Rajendra G. Parikh, age 63, of Monroe, New Jersey; Jennifer H. Watkins, age 47, of Marlton New Jersey; Rebecca Marie Cohn, a/k/a Rebecca Marie Stanton, age 36, of Fallston, Maryland; and
Rajnikant I. Patel, age 59, of North Brunswick, New Jersey.Rajnikant Patel and Jennifer Watkins will have initial appearances on November 9, 2023, at 11:00 a.m. and 11:30 a.m., respectively, in U.S. District Court in Baltimore before U.S. Magistrate Judge A. David Copperthite. Cohn had her initial appearance on November 6, 2023. Khatiwala and Parikh had initial appearances in the U.S. District Court in New Jersey on November 3, 2023, and were ordered to be detained.
The indictment was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Robert Manchak, Federal Housing Finance Agency Office of Inspector General (“FHFA-OIG”); and Special Agent in Charge Jeffrey D. Pittano, Mid-Atlantic Region, Federal Deposit Insurance Corporation Office of Inspector General (“FDIC-OIG”).
According to the 31-count indictment, Khatiwala was the owner and managing member of Delaware Hotel Group LLC (“DHG”), and an operator of GMK Consulting LLC (“GMK”) and KPG Hotel Mgmt. LLC (“KPG”), which were hotel management and loan brokerage companies located in Mount Laurel, New Jersey. Jennifer Watkins was a project coordinator for DHG and managing member of Forza Consulting LLC (“Forza”), a hotel consulting and loan brokerage company located in Marlton, New Jersey. Rajendra Parkih was an owner of KPG and Rebecca Cohn was a settlement and title processor for Residential Title & Escrow Company (“Residential Title”), a real estate title company located in Owings Mills, Maryland, that offered escrow and loan settlement services. Rajnikant Patel worked as the manager of a convenience store owned by Parikh and Parikh’s brother.
The indictment alleges that from August 2018 until February 2020 the defendants conspired to obtain loan proceeds for the defendants and others to buy and sell hotels in a hotel flipping scheme by making material misrepresentations and omissions to financial institutions during the loan application process regarding the identity of the sellers, the familial relationships between the parties, and the nature and amount of the equity injected by the borrowers, under the SBA’s Section 7(a) Program. The SBA’s Section 7(a) Program guaranteed and insured 75 percent to 90 percent of qualified loans made and administered by participating lending institutions and required that the small business owner/borrower invest a certain amount of their own money into the business to qualify for the loan.
Specifically, the indictment alleges that Khatiwala, Parikh, and Watkins created shell companies using Patel and a co-conspirator as the straw owners of the companies, then had the straw owners sign purchase contracts, operating agreements, and related documents to buy hotel properties in the names of the shell companies created by Khatiwala, Parikh, and Watkins, while at the same time soliciting investors, including family members, and creating other companies to serve as buying entities (the “Buyers”) so they could quickly resell the hotels at a much higher price.
As detailed in the indictment, Khatiwala, Parikh, Watkins, and Cohn collected, compiled, and submitted documentation needed by financial institutions to determine whether the Buyers qualified for the SBA loans, including records proving that the Buyers provided sufficient cash upfront to satisfy SBA’s equity injection requirements for Section 7(a) funding, such as checks, bank statements, and wire transfer records. Cohn maintained the equity injection funds in designated Residential Title escrow accounts pending the loan settlements and kept ledgers to track the use of those escrow funds.
The indictment alleges that Khatiwala, Parikh, Watkins and Cohn: fraudulently diverted some of the Buyers’ equity injections to make down payments on hotels that were under contract to shell companies controlled by Khatiwala and Parikh; submitted the same wire transfer records and gift letters as support for equity injections that had been already been used to satisfy the buyer’s equity injection obligations for other SBA loan applications; and fraudulently submitted falsified bank statements and wire transfers to satisfy the equity injections.
The indictment also alleges that the defendants engaged in roundtrip transactions, whereby they falsely represented to financial institutions that over $1.5 million on deposit in a Residential Title escrow account would be used to satisfy the Buyer’s equity injection obligations, when, the indictment alleges, the funds were temporarily withdrawn from that account prior to the loan closings and redeposited back into the same escrow account subsequent to the loan closings.
Further, the indictment alleges that Khatiwala, Parikh, Watkins, and Cohn falsely represented to financial institutions that the buying entities had purchased the hotels from the shell companies when, in fact, the shell companies had not yet owned the properties. Khatiwala, Parikh, Watkins, and Cohn diverted loan proceeds intended for the buyers to purchase hotels from the shell companies so that the shell companies could first purchase the property and then flip it to the buyer.
If convicted, Khatiwala faces a mandatory minimum sentence of 10 years and up to life in prison for a continuing financial crime enterprise. All of the defendants face a maximum of 30 years in federal prison for the conspiracy to commit bank fraud and for each count of bank fraud; a maximum of 5 years in federal prison for a conspiracy to make a false statement to a financial institution. Khatiwala, Parikh, Watkins, and Cohn also face a maximum of 30 years in federal prison for each count of making a false statement a financial institution and a maximum of 10 years in federal prison for conspiracy to launder money and for each count of money laundering. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Erek L. Barron commended the FHFA-OIG and FDIC-OIG for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Martin J. Clarke, and Harry M. Gruber, who are prosecuting 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 and https://www.justice.gov/usao-md/community-outreach.
# # #
Federal grand jury indicts Jamestown felon on gun and methamphetamine chargesRead the Press Release
BUFFALO, N.Y. — U.S. Attorney Trini E. Ross announced today that a federal grand jury has returned an indictment charging Steven Glover, Sr., 39, of Jamestown, NY, with being a felon in possession of a firearm and possession of methamphetamine. The charges carry a maximum penalty of 15 years in prison and a $250,000 fine.
Assistant U.S. Attorney Joshua A. Violanti, who is handling the case stated that according to the indictment and a previously filed complaint, on the morning of December 14, 2022, a Jamestown Police officer observed Glover in a vehicle. The officer knew that Glover was suspended from driving. The officer stopped the vehicle and made contact with Glover, who immediately advised that he had a pipe on his person. Glover then handed over a glass pipe that contained what appeared to be methamphetamine residue inside. Glover was detained and a search of the vehicle recovered a digital scale with white crystal residue and a pistol. Glover was charged in New York State Court and released on bail. On February 22, 2023, a Jamestown Police officer observed Glover in the passenger seat of another vehicle and was aware of his outstanding charges. The officer stopped the vehicle and observed drug paraphernalia a plastic bag containing suspected methamphetamine. Glover was again taken into custody. In 2019, Glover was convicted of a felony in Chautauqua County Court and is legally prohibited from possessing a firearm.
Glover was arraigned before U.S. Magistrate Judge Jeremiah J. McCarthy and detained.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The indictment is the result of an investigation by the Jamestown Police Department, under the direction of Chief Timothy Jackson, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. DeVito, New York Field Division, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Frank A. Tarentino III, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
# # # #
Former Wayne County Employee Sentenced to 32 Months in Prison for Defrauding County Out of over $2.3 Million in Taxpayer FundsRead the Press Release
DETROIT – A former Wayne County Roads Division employee was sentenced to 32 months in federal prison today for conspiring to defraud the county out of over $2.3 million, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by Wayne County Prosecutor Kym Worthy, Cheyvoryea Gibson, Special Agent-in-Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Wayne County Sheriff Raphael Washington.
Kevin Gunn, 64, of West Bloomfield, pleaded guilty in January 2023. Gunn and fellow Wayne County employee John L. Gibson of Detroit engaged in a scheme to use taxpayer dollars to make unauthorized purchases of generators and other power equipment from retailers in southeast Michigan which they sold for hundreds of thousands in personal profit.
According to court documents, in March of 2021, the Wayne County Sheriff’s Department began an investigation into the potential misuse of taxpayer dollars. The Sheriff’s Department solicited the assistance of the FBI to investigate the criminal actions of Gunn, Gibson, other employees of the Wayne County Roads Division, and vendors to Wayne County. At the beginning of the investigation, the Wayne County Prosecutor’s Office secured a search warrant which broke open the case and led to the uncovering of the embezzlement scheme. Investigators with the Wayne County Prosecutor’s Office have played an ongoing and important role in the investigation.
As part of the scheme to defraud, between January 2019 and August 2021, Gunn solicited Wayne County vendors to purchase generators and other power equipment the vendors were not authorized to provide under their contracts with the county. To conceal the scheme to defraud, Gunn instructed the vendors to list on their invoices only the items they were authorized to sell as part of their Wayne County contracts. Roads Division employees approved and paid each vendor’s invoice with taxpayer funds. After these fraudulent purchases were verified and approved by Roads Division employees, Gibson took possession of the equipment, paid Gunn for the items, and resold the generators and other items to members of the public.
A review of invoices from Wayne County vendors revealed that between January 16, 2019, and August 3, 2021, Wayne County vendors bought 596 generators, and a variety of other power equipment including lawnmowers, chainsaws, and backpack blowers. The purchase of these items was not authorized under any vendor contract with Wayne County nor were the items ever provided to or used by Wayne County. The total value of equipment obtained as part of the scheme was over $2.3 million.
United States Attorney Dawn Ison said, “Today’s sentence underscores our relentless demand for the highest standards of integrity and honesty in our public servants. The hardworking citizens of Wayne County deserve a government free of public officials who elevate their greed over the best interests of the public.”
“Mr. Gunn could have served the citizens of Wayne County by being honest and forthright when performing his job. Instead, he chose to betray the public trust by stealing for his own personal gain. This case sends an important message that this conduct will never be accepted in Wayne County,” said Prosecutor Kym Worthy.
"The alleged misconduct by Mr. Gunn was a betrayal of his fellow government employees and is not representative of the honest and hard work they perform on a daily basis," stated Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan. "The defendant was entrusted with taxpayer money, which was intended to be used for a specific purpose, not his personal profit. I would like to commend Prosecutor Kym Worthy and the Wayne County investigators for their assistance during this case. The FBI will continue to work with our law enforcement partners to take strong action against individuals who seek to corrupt the integrity and fair administration of government programs."
“The alleged actions of these individuals are nothing short of disgraceful,” said Sheriff Raphael Washington. “To brazenly steal from hardworking taxpayers and fraudulently line their own pockets while holding positions of public trust make these crimes all the more deplorable. Today’s sentencing is another example of our strong commitment to working together.”
The investigation of this case was conducted by the Wayne County Prosecutor’s Office, the Wayne County Sheriff’s Department, and the Federal Bureau of Investigation. In addition, Wayne County Executive Evans and his administration have been assisting and cooperating with the investigation since they first learned of fraudulent activity within their organization. The case is being prosecuted by Assistant U.S. Attorney Eaton P. Brown.
Enid Woman Pleads Guilty to Fraud and Tax ChargesRead the Press Release
Defendant Allegedly Stole or Attempted to Steal More Than $400,000 from Nonprofits’ Accounts
OKLAHOMA CITY – Yesterday, DEBORAH WILCZEK, 45, of Enid, pleaded guilty to making, uttering, and possessing a forged security, and willfully filing a false federal income tax return, announced U.S. Attorney Robert J. Troester.
On May 16, 2023, a federal grand jury returned a 17-count Superseding Indictment against Wilczek, charging her with devising and carrying out a scheme to defraud the YWCA in Enid (YWCA) and the Cimarron Montessori Children’s House (Cimarron). According to the Superseding Indictment, beginning in November 2012 and continuing through April 2019, Wilczek served in leadership positions for the YWCA. She also served on Cimarron’s School Board in various capacities from August 2016 to April 2021. The Superseding Indictment alleges Wilczek routinely accessed both the YWCA and Cimarron’s business bank accounts and made several unauthorized transfers from those accounts to pay for her personal expenses. In total, the Superseding Indictment alleges Wilczek obtained and attempted to obtain approximately $414,951.35 from the two nonprofits, with $139,308.35 coming from YWCA and $275,643 coming from Cimarron. It is also alleged Wilczek forged the signature of two principals of Cimarron to draw money from Cimarron’s business account and deposit funds into bank accounts she controlled.
The Superseding Indictment further alleges Wilczek willfully filed false federal income tax returns for the years 2016 through 2020, where she listed her total income substantially below the income actually received as a result of the fraud described above.
On November 7, 2023, Wilczek pleaded guilty to Counts 10 and 17 of the Superseding Indictment, which charged her with uttering and possessing a forged security, and with willfully filing a false federal income tax return. As part of her plea, Wilczek admitted to possessing a check with a forged signature written on a bank account belonging to Cimarron and filing an income tax return for the 2020 tax year that materially understated her income.
At sentencing, Wilczek faces up to 10 years in federal prison on Count 10, up to three years in federal prison on Count 17, and fines totaling up to $500,000. In her plea agreement, Wilczek additionally agreed to pay restitution to victims of her relevant conduct, which will be determined by the court at sentencing.
This case is the result of an investigation by the FBI Oklahoma City Field Office, IRS Criminal Investigation, and the Enid Police Department. Assistant U.S. Attorneys William E. Farrior and Danielle London are prosecuting the case.
Reference is made to public filings for further information.
Dubois Resident Sentenced to 5 Years in Prison on Drug Trafficking ConvictionRead the Press Release
PITTSBURGH, PA – A resident of Dubois, Pennsylvania, has been sentenced in federal court to 60 months of imprisonment followed by three years of supervised release on his conviction for violating federal narcotics laws related to a nine-month Title III wiretap investigation into drug trafficking in and around the counties of Jefferson, Clearfield, and Allegheny, United States Attorney Eric G. Olshan announced today.
United States District Judge Christy Criswell Wiegand imposed the sentence on Chad Gasbarre, age 37.
According to information presented to the court, Gasbarre was a methamphetamine distributor who obtained over a pound of methamphetamine from Ryan Schoening, which Gasbarre then redistributed.
Assistant United States Attorney Jonathan D. Lusty prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Drug Enforcement Administration, Homeland Security Investigations, United States Postal Service – Office of Inspector General, United States Postal Inspection Service, Internal Revenue Services, Pittsburgh Bureau of Police, Allegheny County Police, and Pennsylvania State Police. Also assisting were the Jefferson County District Attorney’s Office, Clearfield County District Attorney’s Office, and the Clarion Borough Police Department for the investigation leading to the successful prosecution of Gasbarre. This prosecution 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.
Drug traffickers sentenced after smuggling millions of dollars worth of cocaine from Haiti hidden in butterRead the Press Release
ATLANTA - Amos Christolin is the last defendant to be sentenced for his role in a scheme to smuggle dozens of kilograms of cocaine hidden in tubs of butter from Haiti and distribute the drugs within the United States, including through the Atlanta area.
“Dangerous drugs smuggled from overseas threaten our communities and risk serious disruption to our international carriers,” said U.S. Attorney Ryan K. Buchanan. “We are grateful for the excellent coordination of our federal, state, and local law enforcement, and international, partners who made this successful investigation and prosecution possible.”
“Together, we were able to prevent a substantial amount of drugs from reaching the streets. I’m proud to stand alongside our partner agencies as we work to stop these criminal enterprises that pollute our neighborhoods with their poison,” said Acting Special Agent in charge Travis Pickard who oversees Homeland Security Investigations (HSI) operations in Georgia and Alabama. “HSI will continue to work with our federal, state and local law enforcement partners to disrupt and dismantle these drug trafficking organizations and prevent them from flooding our communities with illicit drugs.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: On August 24, 2017, U.S. Customs and Border Protection officers in Miami, Florida conducted a border search of a shipment bound for the Atlanta, Georgia area. The shipment entered the United States from Haiti. The search revealed 28 packages of white powder hidden within tubs of Haitian butter. The packages tested positive for cocaine and weighed approximately 28 kilograms.
Homeland Security Investigations Special Agents in Atlanta made a controlled delivery of the drugs to the shipment’s intended destination, a business in Austell, Georgia. Vital Joseph arrived to pick up the shipment.
Further investigation revealed that the source of supply for these drugs, Jean Yves-Durogel, had shipped at least four previous loads of cocaine hidden in butter from Haiti to Joseph in the United States. Joseph then distributed these drugs to individuals in the Miami, Florida, area previously identified to him by Durogel. One of these individuals was Amos Christolin. In all, agents determined that more than 100 kilograms of cocaine had been shipped from Haiti to the United States. The wholesale price for these drugs would have exceeded $3 million.
Amos Christolin, also known as “Patizan,” 52, of Miami, Florida, has been sentenced to 10 years in prison to be followed by five years of supervised release. A jury convicted Christolin of the charges on August 4, 2023.
U.S. District Judges Amy Totenberg and Steve C. Jones, respectively, previously sentenced the co-defendants as follows:
- Jean Yves Durogel, 48, of Port-au-Prince, Haiti, received a sentence of six years, eight months in prison to be followed by five years of supervised release; and
- Vital Joseph, 47, of Douglasville, Georgia, received a sentence of six years, six months in prison to be followed by five years of supervised release.
This case was investigated by Homeland Security Investigations, with valuable assistance provided by U.S. Customs and Border Protection, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Department of Transportation Office of Inspector General, the Douglas County Sheriff’s Office, Georgia State Patrol, and the Republic of Haiti.
Assistant U.S. Attorneys Nicholas N. Joy and C. Brock Brockington prosecuted the case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Downey Tax Preparation Company Owner Sentenced to 2½ Years in Prison for Knowingly Preparing Hundreds of False Tax ReturnsRead the Press Release
LOS ANGELES – An Orange County man was sentenced today to 30 months in federal prison for knowingly preparing nearly 400 fraudulent federal income tax returns that caused a loss of more than $750,000 to the IRS by inflating his clients’ tax refunds without their knowledge and then pocketing the difference between the clients’ true refunds and the inflated ones.
Raudel Sandoval, 48, of Placentia, was sentenced by United States District Judge Sherilyn Peace Garnett, who also ordered him to pay $758,550 in restitution.
Sandoval pleaded guilty on March 22 to two counts of aiding and assisting in the preparation of false and fraudulent tax returns.
Sandoval is a licensed tax preparer and owns RSE Sandoval España Inc., a Downey-based tax preparation company. Sandoval willfully prepared hundreds of false federal and state income tax returns for clients for the tax years 2015 through 2018. On these returns, he claimed false or inflated amounts of the child tax credit, business losses, short-term capital losses and other items to which the taxpayer clients were not entitled.
He falsified the tax returns with deductions and credits that his clients did not incur or had not informed him about. Sandoval also inflated the amounts of deductions and credits that his clients were entitled to claim.
When he finished preparing a tax return, Sandoval gave his clients copies of their returns that were true and correct, but falsely told them that he would file their true-and-correct copies with the IRS on their behalf.
Then, Sandoval inflated his clients’ returns with false and fraudulent deductions and credits and filed these false tax returns with the IRS. The false returns showed a larger refund than on the true-and-correct copies Sandoval had given to his clients.
Sandoval then directed the inflated refunds to himself. He did so by changing the bank account and routing numbers on the filed returns to a bank account he controlled. Sandoval controlled more than 100 bank accounts with several different banks and opened many of the accounts in his clients’ names. But he was the accounts’ only authorized signor. Several of the Sandoval-owned bank accounts had the name “Federal Tax Refund Processing.”
He directed the IRS to send the inflated refunds through a third-party refund processor to be deposited into an account he controlled. Other times, Sandoval caused the IRS to mail a check of the inflated refund to his business address. He then would deposit the check into one of his accounts.
After receiving the inflated refund, Sandoval transferred a portion of it – the amount his clients were expecting to receive based on the true-and-correct tax return copies – to one of his “Federal Tax Refund Processing” accounts. Sandoval then transferred that money to his clients’ bank accounts, causing them to believe their refunds were from a legitimate government source.
Sandoval kept the difference between the true refund and the inflated refund.
For the tax years 2015 through 2018, Sandoval willfully understated his clients’ tax liabilities and caused a loss of $758,550 to the IRS, caused by the filing of at least 389 fraudulent income tax returns.
“[Sandoval] enriched himself while depriving the United States Treasury of monies by artificially inflating his clients’ refunds,” prosecutors argued in a sentencing memorandum. “[Sandoval] needlessly exposed his clients to a risk that the IRS would hold them accountable for the loss caused by the inflated refund amount. In addition, [Sandoval] charged his clients to prepare the returns, of which he had hundreds, to then use their returns as a vehicle for crime.”
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section prosecuted this case.
As the tax season continues, taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS offers tips on how to accurately file returns and how to choose a tax return preparer, as well as steps taxpayers can take to get a jumpstart on filing.
Taxpayers seeking assistance can access the IRS’s free directory of federal tax preparers. The IRS also has programs offering free basic return preparation for qualifying seniors and individuals with low to moderate income. In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
District Man Indicted for Premeditated Murder and Arson Following Multiple-Hour Barricade and Police Standoff in Southeast, D.C.Read the Press Release
WASHINGTON – Sherman Holley, 46, of Washington, D.C., was charged by indictment today for the January 2023 murder of James Brooks, Jr. and subsequent arson of a residence following a barricade and standoff, announced U.S. Attorney Matthew M. Graves and Chief Pamela Smith of the Metropolitan Police Department (MPD).
The indictment charges Holley with first-degree premeditated murder while armed, arson, resisting arrest, and related offenses, all committed while Holley was on pretrial release.
According to the government’s evidence, in the evening on January 15, 2023, Holley stabbed Brooks, Jr. multiple times in the torso while the men were walking together through an alleyway near the Southeast, Washington, D.C. home where Holley had been residing. Brooks, Jr. was pronounced dead at the scene. Holley fled the scene but returned to the residence the next day. When law enforcement responded, Holley barricaded himself inside the home and, after a multiple-hour standoff with police, set the residence on fire before surrendering.
Holley was arrested for the murder on January 16, 2023, and has been detained pending trial since his arrest. At the time of these events, Holley was on release pending trial in another felony case in Washington, D.C.
This case is being investigated by members of MPD’s Homicide Branch. The case is being prosecuted by Assistant U.S. Attorney Charles R. Jones.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
District Man Indicted for Premeditated Double Murder Inside Home in Southeast, D.C.Read the Press Release
WASHINGTON – James P. Jones, 42, of Washington, D.C., was charged by indictment today, for the February 2023 murders of David Wright and Nathaniel Howard, announced U.S. Attorney Matthew M. Graves and Chief Pamela Smith of the Metropolitan Police Department (MPD).
The indictment charges Jones with two counts of first-degree premeditated murder while armed committed with aggravating circumstances, two counts of possession of a firearm during a crime of violence, and one count of unlawful possession of a firearm by a person previously convicted of a crime punishable by imprisonment for a term exceeding one year.
According to the government’s evidence, in the early afternoon on February 26, 2023, Jones shot Howard three times and Wright at least six times inside Howard’s home in Southeast, Washington, D.C., where Jones had been residing. Both men were pronounced dead at the scene. Jones, who at the time was on supervised release and GPS monitoring related to previous felony convictions in Washington, D.C., was located and arrested within approximately one hour of the murders. A firearm was recovered from his person and has been ballistically linked to the murders. Jones has been detained pending trial since his arrest.
This case is being investigated by members of MPD’s Homicide Branch. The case is being prosecuted by Assistant U.S. Attorney Charles R. Jones.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Des Moines Man Sentenced to 34 Years for Child Pornography OffenseRead the Press Release
DES MOINES, IA – On November 2, 2023, a Des Moines man was sentenced to 32 years in prison after pleading guilty to the crime of transportation of child pornography and two additional years for violating his term of federal supervised release.
In 2022, Adam Christopher Evans, 39, amassed an extensive collection of child sexual abuse material. Over several months, Evans stockpiled over 500 images and 69 videos depicting the sexual exploitation of children, including infants and toddlers.
In 2021, Evans was convicted in federal court of failure to register as a sex offender. He was required to register as a sex offender because of a 2011 conviction for sexual exploitation of a minor under Iowa law. Evan’s supervised release was revoked, and he was sentenced to two years consecutive to his 32-year sentence.
Following his prison term, Evans will be required to serve 10 years of supervised release. There is no parole in the federal system.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. Homeland Security Investigations and the United States Probation Office investigated this case. Assistant United States Attorney Laura M. Roan prosecuted the case.
This case was prosecuted as part of the U.S. Department of Justice’s “Project Safe Childhood” initiative, which was started in 2006 as a nationwide effort to combine law enforcement investigations and prosecutions, community action, and public awareness in order to reduce the incidence of sexual exploitation of children. For more information about Internet safety education, please visit https://www.justice.gov/psc and click on the resources tab.
DC Man Pleads Guilty to Illegal Possession of a Firearm in Relation to Drug TraffickingRead the Press Release
WASHINGTON – Ahmad Robertson, 32, of Washington, D.C., pleaded guilty on November 7, 2023 to one count of possession of a firearm in furtherance of a drug trafficking crime. The announcement was made by U.S. Attorney Matthew M. Graves, Special Agent in Charge Derek W. Gordon, of Homeland Security Investigations (HSI) and Acting Chief Pamela Smith, of the Metropolitan Police Department (MPD).
Robertson entered the guilty plea in the United States District Court for the District of Columbia. U.S. District Court Judge Carl J. Nichols scheduled a sentencing hearing for February 16, 2024. Robertson has been in custody since June 1, 2023.
According to court documents, on June 1, 2023, officers from the U.S. Marshals Capital Area Regional Fugitive Task Force (CARFTF), HSI, MPD and other law enforcement agencies executed a search warrant on Robertson’s home and vehicle located in Washington, D.C. Law enforcement officers identified themselves and ordered the occupants to come out of the residence. After fifteen minutes, Robertson exited the premises and was taken into custody. Officers searched the defendant and discovered two baggies of white powder in his pants pockets, which was later determined to be cocaine. Officers then searched Robertson’s vehicle and discovered a digital scale and a privately manufactured AR-style pistol with no serial number, loaded with one 5.56 caliber rounds in the chamber and 28 such rounds in the magazine. The entire magazine of the pistol had a total capacity of 30 rounds.
When officers searched Robertson’s home, they recovered two additional firearms, extended magazines, assorted rounds of ammunition of various calibers, drug paraphernalia including additional digital scales, a blender with fentanyl residue, and fentanyl.
This case was investigated by HSI and MPD. It is being prosecuted by Assistant U.S. Attorney Will Hart and Special Assistant U.S. Attorney Jordan Leiter.
Corporate Executive Pleads Guilty to Misappropriating Combustion Turbine Trade SecretsRead the Press Release
RICHMOND, Va. – A former Executive for a global industrial manufacturing conglomerate (Company 1), pleaded guilty today to conspiracy to convert trade secrets.
According to court documents, John Gibson, 58, of Winter Park, Florida, was the former Executive Vice President of Power Generation and the Head of Sales for North America for Company 1. From May to June of 2019, he conspired with others to misappropriate combustion turbine-related trade secrets of two competitor companies, General Electric Company (GE) and Mitsubishi Heavy Industries, Ltd. (MHI), for the benefit of Company 1. Gibson’s co-conspirators were Theodore Fasca, 57, of Richmond, the former Director of Generation System Planning at Dominion Energy, Inc. (Dominion), a Virginia-based utility company, and Michael Hillen, 56, of Midlothian, a former Account Manager at Company 1.
In March 2019, Dominion sought to build a “Peaker" combustion turbine power plant in Chesterfield with a projected cost of upwards of $500 million. Peaker plants are specifically designed to add electricity generation capacity to alleviate high grid load and improve electric grid resiliency. To build the plant, Dominion opened a competitive, closed bid process soliciting requests for proposals from qualified companies. Three companies bid for the work: GE, MHI, and Company 1. All companies signed non-disclosure agreements restricting the disclosure of confidential information provided to Dominion during the bid.
After GE, MHI, and Company 1 submitted their closed bids to Dominion, Fasca and Hillen organized to repeatedly funnel GE and MHI confidential information, often using private email accounts, to Company 1. Gibson received the GE and MHI trade secrets knowing such information to be illegally obtained. Nevertheless, Gibson strategically disseminated it to other senior executives, to leaders within Company 1’s business intelligence unit, and to representatives of Company 1’s parent company in Germany.
Gibson’s dissemination of the GE and MHI trade secrets was calculated to provide Company 1 with a competitive advantage in the bid for the Dominion Peaker Project, to the detriment of GE and MHI; improve Company 1’s business intelligence; and provide Company 1 with a competitive advantage in future bids against GE and MHI. After learning of GE’s and MHI’s bids for the Dominion Peaker Project, Gibson authorized and obtained approvals within Company 1, including from the CEO for Power Generation, to resubmit a lower bid for the Dominion Peaker Project and undercut GE’s bid. Company 1 won the bid for the Peaker Project with Dominion.
The losses to victims reasonably foreseeable to Gibson were between $25 million and $65 million. The losses to victims reasonably foreseeable to Fasca and Hillen were between $9.5 million and $25 million.
Both Fasca and Hillen have pleaded guilty to their roles in the conspiracy and are scheduled to be sentenced on March 1, 2024, and April 11, 2024, respectively. Both defendants face a maximum penalty of 5 years in prison. Gibson is scheduled to be sentenced on May 29, 2024. He faces a maximum penalty of 10 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Field Office; and Damon E. Wood, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after U.S. District Judge David J. Novak accepted the plea.
Assistant U.S. Attorneys Avi Panth and Kenneth R. Simon, Jr. are prosecuting the case. Former Assistant U.S. Attorney Michael R. Gill assisted the prosecution.
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 Nos. 3:23-cr-137, 3:23-cr-83, and 3:23-cr-120.
Convicted Felon Sentenced for Prison Unemployment Benefits Fraud SchemeRead the Press Release
NEWPORT NEWS, Va. – A man who formerly resided in Newport News was sentenced today to 68 months in prison for his role to defraud the government of pandemic-related unemployment benefits.
According to court documents, from approximately May 2020 through May 2021, Reginald Prentice Phillips, 39, was incarcerated at Hampton Roads Regional Jail for striking a woman in the face and choking her three times in front of her children, in addition to shooting another victim three times because the victim reportedly owed him $10. Phillips, a documented gang member, spearheaded a scheme with his non-incarcerated co-conspirator to fraudulently obtain federal unemployment benefits related to the COVID-19 pandemic. Phillips recruited at least 13 other inmates to provide their personal identifying information (PII) to his co-conspirator, who filed fraudulent applications for unemployment benefits on their behalf. Phillips and his co-conspirator discussed the progress of the fraudulent claims on jail calls, and Phillips would instruct his co-conspirator on where to send the unemployment benefit funds. Phillips received his share of the benefits through his commissary account. Once the commissary account reached its maximum balance, Phillips’ co-conspirator deposited the funds in other inmate’s accounts, who would then give the funds to Phillips.
In total, the defendant was responsible for an actual loss amount of $210,310 from the Virginia Employment Commission on behalf of Department of Corrections inmates who were not entitled to receive unemployment benefits.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Troy W. Springer, Special Agent in Charge of the U.S. Department of Labor - Office of Inspector General (DOL-OIG), National Capital Region, made the announcement after sentencing by Senior U.S. District Judge Raymond A. Jackson.
Special Assistant U.S. Attorney Alyssa Levey-Weinstein prosecuted the case.
On May 17, 2021, Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force, led by the Deputy Attorney General, to bring together the full resources of the federal government to bolster fraud enforcement efforts.
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. 4:22-cr-73.
Chatham County man indicted on multiple child sexual exploitation charges, including production of child pornographyRead the Press Release
SAVANNAH, GA: A Chatham County man has been indicted on multiple federal charges alleging sexual exploitation of children.
Sheldon Jason Burch, 49, of Savannah, is being held in the Chatham County Detention Center after being arrested on a criminal complaint, and now has been indicted on three counts of Production of Child Pornography, and one count each of Receipt of Child Pornography and Possession of Child Pornography, said Jill E. Steinberg, U.S. Attorney for the Southern District of Georgia.
Conviction on the production charges carries a statutory minimum sentence of 15 years in prison, up to 30 years, while receipt carries a mandatory minimum sentence upon conviction of five years, up to 20, and the penalty upon conviction for possession of child pornography is up to 20 years in prison. There is no parole in the federal system, and conviction on any of the charges could include substantial financial penalties and restitution, a requirement to register as a sex offender, and a period of supervised release following any prison term.
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
“Criminal allegations involving the sexual exploitation of children are horrific, particularly when they involve subjecting minor victims to portrayal in pornographic images,” said U.S. Attorney Steinberg. “The creation and continued viewing of those images is tremendously traumatizing to victims, and our office works diligently to protect them and hold their abusers accountable.”
The indictment alleges that Burch, from on or about June 2006 through 2016, produced sexually explicit images of three minor victims, and up until June 2023 received and possessed additional images of child sexual exploitation.
Investigators are seeking information on other unidentified potential victims found on images in electronic devices seized from Burch’s residence, located on Cowan Avenue in Savannah, and are asking anyone who might have had contact with Burch to call the FBI Savannah Resident Agency at 877-644-0277. Investigators believe that many of the explicit images of the child victims in this case were taken at Burch’s residence over a period of several years.
The case is being investigated by the FBI and the Chatham County Police Department, and prosecuted for the United States by Assistant U.S. Attorney and Project Safe Childhood Coordinator Jason W. Blanchard.
Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 800-843-5678, or https://report.cybertip.org/.
Charlotte Child Psychiatrist Is Sentenced to 40 Years in Prison for Sexual Exploitation of A Minor and Using Artificial Intelligence to Create Child Pornography Images of MinorsRead the Press Release
CHARLOTTE, N.C. – David Tatum, 41, a child psychiatrist in Charlotte, was sentenced today to 40 years in prison followed by 30 years of supervised release for sexual exploitation of a minor and using artificial intelligence (AI) to create child pornography images of minors, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. Tatum was also ordered to pay restitution in an amount to be determined within 90 days, a $100 special assessment per count of conviction, and a special assessment totaling $99,000 under the Amy, Vicky, and Andy Child Pornography Victim Assistance Act (AVAA). After he is released from prison, Tatum will also be required to register with the Sex Offender Registry Board in any state or jurisdiction where he works or resides.
Robert M. DeWitt, Special Agent in Charge of Federal Bureau of Investigation (FBI) in North Carolina joins U.S. Attorney King in making today’s announcement.
“As a child psychiatrist, Tatum knew the damaging, long-lasting impact sexual exploitation has on the wellbeing of victimized children. Regardless, he engaged in the depraved practice of using secret recordings of his victims to create illicit images and videos of them,” said U.S. Attorney King. “Tatum also misused artificial intelligence in the worst possible way: to victimize children. Today’s 40-year sentence underscores our efforts to do all we can to bring justice to child victims. As the field of artificial intelligence advances, my office is committed to prosecuting predators who seek to exploit this technology to inflict harm on children.”
“It is horrific to believe anyone would secretly record children undressing and showering for their own sexual gratification. And when the evidence proves that person is a doctor entrusted to help children through difficult mental health situations, it is inconceivable,” said FBI Charlotte Special Agent in Charge DeWitt. “The FBI will never stop working to put predators like Tatum behind bars for a very long time.”
According to filed court documents, evidence presented at Tatum's trial and witness testimony, between 2016 to 2021, Tatum possessed images and videos of child pornography. As trial evidence established, in or about July 2016, Tatum secretly recorded a minor while the minor was undressing and showering. A forensic analysis of electronic devices revealed that Tatum produced the video of the minor and possessed it, along with other images and videos of child pornography. According to trial evidence, Tatum made similar surreptitious recordings of others, including of his patient during an outpatient visit who had just turned 18 years old five days before the recording.
Additionally, trial evidence also established that Tatum used AI to digitally alter clothed images of minors making them sexually explicit. Specifically, trial evidence showed that Tatum used a web-based artificial intelligence application to alter images of clothed minors into child pornography. Two of the images Tatum used AI to modify were from a school dance and a photo commemorating the first day of school.
On May 4, a federal jury in Charlotte convicted Tatum of one count of production of child pornography, one count of transportation of child pornography, and one count of possession of child pornography. Tatum is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, U.S. Attorney King commended FBI for their investigation of the case.
Assistant United States Attorneys Daniel Cervantes and Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (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.projectsafechildhood.gov.
Burlington Man Pleads Not Guilty to Federal Robbery ChargeRead the Press Release
Burlington, Vermont – The United States Attorney’s Office stated that Eric Edson, 52, of Burlington, Vermont appeared in United States District Court yesterday for an arraignment and pleaded not guilty to violating the Hobbs Act by obstructing commerce by robbery. A federal grand jury returned a one-count indictment against Edson on September 28, 2023. Edson was in state custody following his September 7, 2023 arrest and appeared in federal court yesterday pursuant to a writ filed by the United States. United States Magistrate Judge Kevin J. Doyle ordered Edson detained pending trial, which has not yet been scheduled.
According to court records, on August 24, 2023, officers from the Burlington Police Department (BPD) responded to a report of a robbery at the Sierra Trading Post located at 555 Shelburne Road in Burlington, Vermont. Officers learned that a man, later identified as Edson, attempted to leave the store with unpaid merchandise. When a Sierra Trading Post employee asked Edson to return the merchandise to the store, Edson told the employee “I’ll blow your head off” and partially pulled an item that appeared to be a firearm from his hooded sweatshirt pocket. Edson then ran to a vehicle and drove away. Edson remained on the run until he was ultimately apprehended by law enforcement on September 7, 2023.
The U.S. Attorney’s Office notes that the indictment is an accusation only and that the defendant is presumed innocent until and unless proven guilty. If convicted, Edson faces a maximum of 20 years in prison. Any sentence in the case will be advised by the Federal Sentencing Guidelines.
U.S. Attorney Nikolas P. Kerest credited the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Burlington Police Department for their work in the investigation, and thanked the Vermont State Police, the Vermont Fish and Wildlife Warden Service, the Lamoille County Sheriff’s Department, the United States Coast Guard, the Colchester Police Department, the UVM Police Department, the Milton Police Department and the Franklin County Sheriff’s Department for their efforts to safely apprehend Edson.
Assistant United States Attorney Nicole Cate represents the government. Edson is represented by Laura Wilson, Esq. and Federal Public Defender Michael Desautels.
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. For more information about Project Safe Neighborhoods, please visit https://www.justice.gov/psn.
Bethel Park Man Pleads Guilty to Illegally Transporting Venezuelan Woman into the United StatesRead the Press Release
PITTSBURGH, PA - A resident of Bethel Park, Pennsylvania, pleaded guilty in federal court to a charge of Transporting an Illegal Alien within the United States, United States Attorney Eric G. Olshan announced today.
Blake Thomas Babin, 59, pleaded guilty to one count before United States District Judge Robert J. Colville.
In connection with the guilty plea, the court was advised that Babin, a Lieutenant with the Bethel Park Police Department, from on or about October 20, 2022, through on or about December 30, 2022, provided funding to an 18-year-old Venezuelan female living in Colombia for her transportation from Colombia to the border between Mexico and the United States so that she could cross illegally into the United States. After two unsuccessful attempts, the female was able to get through the border somewhere near El Paso, Texas, where Babin was waiting to transport her to Phoenix and then to Pittsburgh. Babin met the female in Colombia where she was working as a prostitute. Text exchanges between the two, obtained during the investigation of the case, revealed, in part, that Babin helped smuggle the female into the United States and then transported her knowing that she illegally entered the country because he “loved her”, wanted her to help him “keep his house”, and because she enjoyed sex.
Judge Colville scheduled sentencing for March 13, 2024, at 10:00 a.m. The law provides for a total sentence of not more than 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered that Babin remain on bond.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Babin.
Battle Creek Man Sentenced to 30 Years in Prison for Drug TraffickingRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney for the Western District of Michigan Mark Totten today announced that Khilon Shaquille Samuel, 29, of Battle Creek, was sentenced to 30 years in federal prison after being convicted of Possession of Controlled Substances with Intent to Distribute.
“My office is working closely with our local, state, and federal law enforcement partners to disrupt illegal drug trafficking rings that are pushing poison onto our streets,” said U.S. Attorney Totten. “We are committed to holding traffickers fully accountable to help keep our neighborhoods safe.”
Police intercepted Samuel as he returned from Detroit to the Battle Creek area on April 30, 2022, and recovered more than 17 pounds of methamphetamine in his car. Investigators executed a search warrant at Samuel’s home later that day and found an additional 183 grams of methamphetamine, approximately one-quarter kilogram of fentanyl, as well as 29 rounds of ammunition.
“Methamphetamine is an addictive and destructive substance. The amount of fentanyl seized in this case could potentially kill 125,000 people,” Orville O. Greene, Special Agent in Charge of Detroit Field Division of the Drug Enforcement Administration. “We will continue to work with our law enforcement partners to hold those who distribute illicit drugs accountable for their actions.”
“The Battle Creek Police Department takes great pride in maintaining productive relationships with our federal partners,” said Shannon Bagley, BCPD Police Chief. “This is an outstanding example of how these partnerships lead to successful prosecutions which help make the City of Battle Creek a safer place to live.”
“HSI is made exponentially stronger due to the valuable partnerships we maintain,” said HSI Detroit Special Agent in Charge Angie M. Salazar. “The success of this investigation and many others is a direct reflection of the professionalism and dedication of HSI, and our law enforcement partners who refuse to allow criminals, like Samuel, to continue to funnel narcotics into our communities. Those partnerships and the mission to remove drug traffickers are vital to ridding neighborhoods of dangerous narcotics and improving public safety.”
This case was investigated by the Battle Creek Police Department, the Drug Enforcement Administration, Homeland Security Investigations, and the Michigan State Police.
###
Approximately 150 Business and Public Sector Leaders Participate in Cybersecurity Conference Co-Hosted by the Maryland U.S. Attorney’s Office and the University of MarylandRead the Press Release
Baltimore, Maryland – On November 6, 2023, approximately 150 business and public sector leaders participated in a cybersecurity conference co-hosted by the U.S. Attorney’s Office for the District of Maryland and the University of Maryland. The conference included panels of cybersecurity experts from government and the private sector discussing the emerging threats, best practices, and effective collaboration between federal, state, and local agencies, the private sector, and law enforcement.
“Cybercrime is an ongoing threat to all of us in Maryland. The time to talk about preventing and responding to a cyber incident is before something happens,” said United States Attorney Erek L. Barron. “I am grateful for the thoughtful and frank conversations the conference inspired and I look forward to continued collaboration and partnership between the government, business, and public sectors to protect our critical infrastructure. I also want to thank our partners at the University of Maryland for their co-sponsorship of this important conference.”
“We all know that we are living in an unprecedented time of technological advancement. From the rapid adoption of artificial intelligence and machine learning applications to advances in quantum computing and quantum networks, we are at the start of an era that has tremendous potential for radical change,” said University of Maryland President Darryll J. Pines. “That’s why here at the University of Maryland we are working every day to understand technology’s benefits and limits, support experts who can see challenges even before they appear on the horizon, and educate a generation of fearless leaders who understand their obligations to our collective wellbeing.”
Panelists from the United States Department of Justice, the National Security Agency, universities, and travel, energy and financial sectors presented information on identifying threats and weaknesses, managing a cyber incident, and coordinating with law enforcement. The conference also provided networking opportunities to allow attendees to continue their conversations and enhance cyber security in all sectors throughout Maryland.
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 and https://www.justice.gov/usao-md/cybersecurity.
# # #
All Members of LA Dank DMV Plead Guilty to Conspiracy and Related Firearms ChargesRead the Press Release
WASHINGTON – Federal law enforcement has successfully prosecuted eight members of a marijuana distribution conspiracy, responsible for bringing hundreds of pounds of marijuana from California to the DMV area and possessing nineteen firearms, including machineguns, as part of their distribution scheme, announced U.S. Attorney Matthew M. Graves, FBI Special Agent in Charge Wayne A. Jacobs.
Abubakr Banire, Christopher Akinduro, Kavon Duncan, Joe Blyther, Isaac Akinduro, Avery Bost, Omar Butler, and Randall Lance, all members of the “LA Dank DMV” crew, have entered guilty pleas in U.S. District Court for the District of Columbia.
The guilty pleas follow a lengthy investigation led by the FBI’s Washington Field Office and the United States Attorney’s Office for the District of Columbia. According to court documents, between May of 2021 and December of 2021, crew members operated a sophisticated conspiracy to traffic large amounts of high-grade marijuana from California to the DMV area for distribution to customers. As part of their distribution scheme, members of the crew relied heavily on mass marketing through three dedicated LA Dank websites, as well as social media platforms like Instagram where individual crew members would advertise the LA Dank brand and LA Dank branded marijuana for sale. Crew members also used rental properties to set up stash houses or points of sale that were used to conduct drug distribution operations for a short period of time before moving on to different locations.
The crew is known - and was found to possess - numerous firearms, including semi-automatic and fully automatic machineguns, and devices used to convert semi-automatic firearms into fully automatic machineguns. Certain members of the crew also pleaded guilty to the possession of firearms in furtherance of their drug trafficking operations. In total, approximately 122 pounds of marijuana, 19 firearms, and 10 machinegun conversion devices were recovered. Three of these 19 firearms were discovered to be operational machineguns that had been modified with machinegun conversion devices. Seven of these machinegun conversion devices were found in an “LA Dank” branded bag. Two of these firearms were privately made AR-pistol style machineguns, sometimes referred to as “ghost guns.”
Ledgers and receipts show that the crew trafficked well over 100 kilograms of marijuana into the DMV area for distribution.
A list of the named defendants, date of their pleas and charges are below.
DEFENDANT NAME
DATE OF PLEA
CHARGES PLEAD TO
DATE OF SENTENCING
Abubakr Banire
9/29/2023
Conspiracy to Distribute Marijuana
Unlawful Possession of a Machinegun
Unlawful Possession of a Firearm
Possessing a Firearm During and in Relation to a Drug Trafficking Offense
4/16/2024
Christopher Akinduro
10/3/2023
Conspiracy to Distribute Over 100 Kilograms of Marijuana
1/17/2024
Kavon Duncan
10/5/2023
Conspiracy to Distribute Over 100 Kilograms of Marijuana
Possession with Intent to Distribute Marijuana
1/26/2024
Joe Blyther
11/8/2023
Conspiracy to Distribute Marijuana
Unlawful Possession of a Machinegun
Unlawful Possession of a Firearm
Possessing a Firearm During and in Relation to a Drug Trafficking Offense
4/22/2024
Isaac Akinduro
10/11/2023
Conspiracy to Distribute Marijuana
3/15/2024
Avery Bost
10/27/2023
Conspiracy to Distribute Marijuana
3/6/2024
Omar Butler
11/3/2023
Conspiracy to Distribute Marijuana
3/1/2024
Randall Lance
5/23/2023
Conspiracy to Distribute Over 100 Kilograms of Marijuana
Sentenced on 10/10/2023 to 63 months of incarceration.
The prosecutions followed a joint investigation by the FBI’s Washington Field Office, in partnership with the Metropolitan Police Department, Prince George’s County Police Department, Anne Arundel County Police Department. The case was prosecuted by Assistant United States Attorneys Justin F. Song, Meredith E. Mayer-Dempsey, and Thomas Strong.