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Thursday 7 September 2023
Russian Businessman Sentenced to Nine Years in Prison in $93 Million Hack-to-Trade ConspiracyRead the Press Release
BOSTON – A Russian businessman was sentenced today in federal court in Boston for his involvement in an elaborate hack-to-trade scheme that netted approximately $93 million through securities trades based on confidential corporate information stolen from U.S. computer networks.
Vladislav Klyushin, a/k/a “Vladislav Kliushin,” 42, of Moscow, Russia, was sentenced by U.S. District Court Judge Patti B. Saris to nine years in prison. Klyushin was also ordered to forfeit $34,065,419 and pay restitution in an amount that will be determined at a later date. In February 2023, Klyushin was convicted by a federal jury of securities fraud, wire fraud, gaining unauthorized access to computers, and conspiracy to commit those crimes. Klyushin was arrested in Sion, Switzerland in March 2021 and extradited to the United States in December 2021.
Klyushin was charged along with two Russian co-conspirators: Ivan Ermakov and Nikolai Rumiantcev. Two others, Mikhail Vladimirovich Irzak and Igor Sergeevich Sladkov, were charged in a separate indictment. All four co-conspirators remain at large. In July 2018, a federal grand jury in Washington, D.C. indicted Ermakov in connection with his alleged role in a scheme to interfere with the 2016 United States elections by way of computer hacking. In October 2018, Ermakov was also charged by a federal grand jury in Pittsburgh in connection with his alleged role in hacking and related disinformation operations targeting international anti-doping agencies, sporting federations and anti-doping officials.
“Mr. Klyushin hacked into American computer networks to obtain confidential corporate information that he used to make money illegally in the American stock market,” said Acting United States Attorney Joshua S. Levy. “He thought he could get away with his crimes by perpetrating them from a foreign base, hidden behind layers of fake domain names, virtual private networks, and computer servers rented under pseudonyms and paid for with cryptocurrency. He found out otherwise, and will now spend nearly a decade of his life in a U.S. prison. This case should send a message to criminals around the world that their location does not provide anonymity and the reach of American law enforcement is long. Anyone who defrauds American companies, markets or investors, will be found and prosecuted, regardless of where they hide, or how long it takes.”.
“Russian businessman Vladislav Klyushin is a sophisticated hacker who engineered a global get-rich-quick scheme that defrauded unsuspecting American businesses of approximately $93 million. He hacked into U.S. computer networks, stole non-public information, and illegally traded on it,” said Jodi Cohen, Special Agent in Charge of the FBI Boston Division. “This case demonstrates how cybercrime knows no boundaries and justice will not stop at international borders. The FBI will not stand idly by and allow criminals like him to launch intrusive cyber-attacks to meddle in our financial markets. We are committed to working with our public and private sector partners to stop computer intrusions and prevent further harm.”
Klyushin, Ermakov and Rumiantcev worked at M-13, a Moscow-based information technology company that Klyushin owned. M-13 offered penetration testing and “Advanced Persistent Threat (APT) emulation,” – both services that seek exploitable vulnerabilities in a computer system via hacking techniques, purportedly for defensive purposes. M-13’s website indicated that the company’s “IT solutions” were used by “the Administration of the President of the Russian Federation, the Government of the Russian Federation, federal ministries and departments, regional state executive bodies, commercial companies and public organizations.” In addition to these services, Klyushin invested the money of several investors in his hack-to-trade scheme, and took a cut of up to 60 percent of their profits.
Trial evidence showed that, between at least in or about January 2018 and September 2020, Klyushin, and allegedly Ermakov, Irzak, Sladkov and Rumiantcev, conspired to use stolen earnings information to trade in the securities of companies that are publicly traded on U.S. national securities exchanges, including the NASDAQ and the NYSE, in advance of public earnings announcements. Using the same malicious hacking techniques M-13 advertised to customers, Klyushin and, allegedly his co-conspirators, obtained inside information by hacking into the computer networks of two U.S.-based filing agents that publicly-traded companies used to make quarterly and annual filings through the U.S. Securities and Exchange Commission (SEC). Specifically, Klyushin, and allegedly his co-conspirators, deployed malicious infrastructure capable of harvesting and stealing employees’ login information and used proxy (or intermediary) computer networks outside of Russia to conceal the origins of their activities. With this access, Klyushin, and allegedly his co-conspirators, viewed and downloaded material non-public information, such as quarterly and annual earnings reports that had not yet been filed with the SEC or disclosed to the general public, for hundreds of companies – including Capstead Mortgage Corp., Tesla, Inc., SS&C Technologies, Roku and Snap, Inc. Many of the illegally obtained earnings reports were downloaded through a computer server located in downtown Boston.
Armed with this information before it was disclosed to the public, Klyushin, and allegedly his co-conspirators, knew ahead of time, among other things, whether a company’s financial performance would meet, exceed or fall short of market expectations – and thus whether its share price would likely rise or fall following the public earnings announcement. Klyushin then traded based on that stolen information in brokerage accounts held in his own name and in the names of others. Klyushin, and allegedly his co-conspirators, also distributed their trading across accounts they opened at banks and brokerages in several countries, including Cyprus, Denmark, Portugal, Russia and the United States, and misled brokerage firms about the nature of their trading activities.
Evidence presented at trial demonstrated that the times in which the filing agents were hacked corresponded with the times in which Klyushin, and allegedly his co-conspirators, made profitable trades. Additionally, of the more than 2,000 earnings events around which Klyushin and allegedly his co-conspirators traded between January 2018 and September 2020, more than 97 percent were filed with the SEC by the victim filing agents. Testimony at trial indicated that the odds of this trading pattern occurring in the absence of a relationship between the trading and the identity of the filing agent was less than one in a trillion.
In total, Klyushin and allegedly his co-conspirators earned close to $100 million in earnings trading from roughly $9 million in investments using inside information, even as they lost close to $10 million in non-earnings trading – representing a return of more than 900 percent during a period in which the broader stock market returned just over 25 percent.
Of that amount, Klyushin individually netted more than $34 million, including nearly $22.5 million on his personal trading and trading for his company, in addition to more than $11.5 million on the money he invested for others. Further, Klyushin’s sophisticated cyber attack cost its two victims more than $8 million dollars.
Acting U.S. Attorney Levy and FBI SAC Cohen made the announcement today. The SEC, the Swiss Federal Office of Justice, the Valais and Zurich Cantonal Police authorities and the victim filing agents provided valuable assistance to the investigation. The Justice Department’s Office of International Affairs provided significant assistance in securing Klyushin’s arrest and extradition from Switzerland. Stephen E. Frank and Seth B. Kosto, Chief and Deputy Chief, respectively, of the Securities, Financial & Cyber Fraud Unit prosecuted the case.
Repeat offender who triggered neighborhood lock-down pleads guilty to drug and gun crimesRead the Press Release
Seattle – A 42-year-old Seattle man pleaded guilty today in U.S. District Court in Seattle to possession of controlled substances with intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime, announced Acting U.S. Attorney Tessa M. Gorman. Pedro Fernandez Kent will be sentenced by U.S. District Judge Ricardo S. Martinez on December 8. 2023. Prosecutors have agreed to recommend no more than ten years in prison, but Judge Martinez is free to impose any sentence allowed by law.
According to records filed in the case, on January 15, 2023, Seattle Police were responding to a domestic violence report in North Seattle when they spotted the distinctive car driven by the suspect, Pedro Kent. Kent attempted to flee from police crashing his car into two curbs, rupturing the tires. Kent abandoned the car and ran into the yards of neighboring homes. Video from area cameras show Kent with a handgun in his hand as he ran into a back yard. Police converged on the area, alerting residents to stay in their homes with the doors locked. One couple called police reporting that the defendant appeared to be hiding in their backyard. A K-9 officer helped take Kent into custody.
In addition to the gun Kent carried when he ran from the car, police located a carbine rifle in the car as well as distribution amounts of fentanyl, cocaine, heroin, and methamphetamine. Kent also had a hatchet and a dagger in the car as well as scales and plastic baggies for drug distribution.
Kent was prohibited from possessing firearms due to previous King County convictions for burglary, theft, assault, and trafficking in stolen property.
The case was investigated by the Seattle Police Department with assistance from Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
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.
Reedsburg Attorney Sentenced to 45 Months for Embezzlement SchemeRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Kristin Lein, 61, Reedsburg, Wisconsin, was sentenced today by U.S. District Judge William M. Conley to 45 months in prison, followed by three years of supervised release, for wire fraud, money laundering, and filing a false tax return. Lein pleaded guilty to these charges on June 14, 2023.
The government’s investigation revealed that Lein, a licensed attorney in Wisconsin, engaged in a fraud scheme in which she stole $1,643,818 from a client’s trust accounts. In June 2019, Lein began transferring money from several accounts belonging to the client’s trust to her own personal bank account. During a telephone call on February 2, 2022, Lein and the beneficiary of the trust discussed financial matters. During the telephone call, Lein told the beneficiary that the trust balance was over $1,800,000. However, Lein knew that the actual amount of money held in the trust was significantly less due to her embezzlement of funds. Lein continued to embezzle money from the trust accounts until the funds were depleted in September 2022.
The investigation revealed that Lein used the embezzled funds to pay personal expenses, including improvements to her residence in Reedsburg and to purchase multiple vehicles, including a 2019 F-250 pickup truck, a 2017 Toyota Tacoma pickup truck, and a 2020 Mahinda tractor. Lein also admitted that she failed to report the income she obtained from the embezzlement on her 2019 personal tax return.
At the sentencing hearing, Judge Conley stated that it was hard to overstate the level of betrayal the defendant’s client endured as a result of the embezzlement scheme. Judge Conley noted that Lein violated her ethical obligations as an attorney in “stunning ways.” Judge Conley stated that the evidence showed that the defendant had lost her moral compass and the result was an “unspeakable loss” for the client.
The charges against Lein were a result of an investigation conducted by IRS Criminal Investigation. Assistant U.S. Attorney Aaron Wegner is handling the prosecution.
Readout of Russian Elites, Proxies, and Oligarchs (REPO) Task Force Deputies MeetingRead the Press Release
Principal Associate Deputy Attorney General Marshall Miller and Deputy Secretary of the Treasury Wally Adeyemo convened deputies of the REPO Task Force to enhance sanctions enforcement efforts and bolster ongoing oligarch asset forfeiture initiatives.
Participants from Australia, Canada, the European Commission, France, Germany, Japan, Italy, the United Kingdom, and the United States discussed ongoing sanctions enforcement initiatives and noted the need to counter Russian elites and their proxy networks that continue to enable and profit from Putin’s war economy. Deputies emphasized that those profiting from Russia’s war should not be able to live lives of luxury, and that task force members will continue to identify and disrupt proxy networks that attempt to use global financial centers to store and access wealth. Deputies also discussed ongoing efforts to counter sanctions evasion and disrupt Russian efforts to acquire critical dual-use technologies that fuel the Russian war machine.
Following the G7 leaders’ commitment in May, the REPO Task Force has completed its initial effort to map and account for Russian sovereign assets that are immobilized and held in REPO member jurisdictions. REPO members committed to taking steps to fully map these holdings and ensure that, consistent with their respective legal systems, Russia’s sovereign assets held in REPO member jurisdictions will remain immobilized until Russia pays for the damage it has caused to Ukraine. The total value of assets in this mapping exercise is estimated at around $280 billion, the majority of which is held in the European Union. Given the complexity of this exercise, task force members expect to refine the asset mapping through the end of the year, leveraging new reporting requirements and enhanced information sharing arrangements.
Quincy Man Arrested for $1 Million Counterfeit Check SchemeRead the Press Release
BOSTON – A Quincy man was arrested and charged today in connection with a bank fraud scheme involving approximately 114 counterfeit checks – totaling more than $1 million.
Hui Zhang, 41, was charged with one count of bank fraud. Zhang was arrested this morning and will appear in federal court in Worcester at 3 p.m. today.
From in or around June 2020 through at least May 2022, Zhang allegedly opened fraudulent bank accounts under false identities, deposited over $1 million worth of approximately 114 counterfeit checks and then subsequently withdrew hundreds of thousands of dollars in cash from these accounts via ATMs. Zhang was allegedly identified in part by a tattoo on his left hand that was visible in surveillance footage of the ATM withdrawals. Zhang allegedly used the same IP address that was used to open one of the fraudulent bank accounts and to deposit counterfeit checks.
The charge of bank fraud provides for a sentence of up to 30 years in prison, five years of supervised release and a fine of up to $1 million, or twice the gross proceeds. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistant U.S. Attorney William F. Abely, Chief of the Criminal Division is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Prince George’s County Felon Sentenced to 11 Years in Federal Prison for Drug Conspiracy and Illegal Possession of a FirearmRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Toumani Thomas, age 46, of Accokeek, Maryland, to 11 years in federal prison, followed by five years of supervised release, for being a felon in possession of a firearm, a drug distribution conspiracy, and for violating his supervised release for a previous conviction for an attempted armed commercial robbery. Judge Chasanow ordered that Thomas must forfeit firearms and ammunition seized during the investigation, $18,004 in cash that was proceeds of drug trafficking, and the Mercedes-Benz AMG GT, the Yamaha R1 motorcycle, and the Audi S8 that Thomas used to facilitate drug trafficking and/or obtained with proceeds of such activity.
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Jarod Forget of the Drug Enforcement Administration (“DEA”) - Washington Division; and Chief Malik Aziz of the Prince George’s County Police Department.
According to his guilty plea, in October 2022, DEA agents received a tip that Thomas was involved in drug trafficking. Investigation connected Thomas to a storage unit in Temple Hills, Maryland. A subsequent search warrant executed at the storage unit recovered a duffel bag containing eleven shrink-wrapped bricks of cocaine with a total weight of 12.8 kilograms and a single plastic cup. Surveillance footage and storage facility access records obtained after the search showed Thomas accessing the unit several times since it was rented by another individual on October 6, 2022. Video showed that Thomas had traveled to the facility using his Yamaha R1 motorcycle, his Mercedes Benz AMG GT, and his Audi S8 at different times in furtherance of Thomas’s drug trafficking. The day after the seizure of the cocaine, Thomas arrived at the facility with a large, empty plastic tub and attempted to retrieve some or all of the cocaine from the storage unit when he discovered it had been seized.
After officers discovered the 12.8 kilograms of cocaine, they learned that Thomas had an active account at another storage facility in Brentwood, Maryland. On December 6, 2022, officers executed a search warrant at that storage unit and found items belonging to Thomas. From a backpack located inside the unit, officers recovered a 7.62x39mm semiautomatic rifle; a 100 round high-capacity drum-style magazine containing 97 rounds of 7.62 caliber ammunition; a 30-round high-capacity magazine containing 20 rounds of 7.62 caliber ammunition; and a pistol magazine containing 5 rounds of ammunition. The 7.62 mm firearm had been reported stolen in Virginia in June 2022. Thomas admitted that the firearm, magazines and ammunition recovered from the Brentwood storage unit were used, or intended to be used, to facilitate his drug trafficking. Thomas also admitted that he knew he was prohibited from possessing firearms or ammunition that as a result of his previous federal conviction.
A search warrant was also executed at Thomas’s residence and agents recovered a money counting machine, an empty handgun container, a large roll of shrink-wrap plastic, rubber bands, and a large container of automotive grease, which is frequently used to attempt to mask drug scents from detection dogs. The Mercedes Benz AMG GT and the Yamaha R1 motorcycle were also found in the home’s garage. Law enforcement seized $18,004 in cash at Thomas’s arrest on December 16, 2022.
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.
United States Attorney Erek L. Barron commended the DEA and the Prince George’s County Police Department for their work in the investigation and thanked the Baltimore County Police Department for its assistance. Mr. Barron thanked Assistant U.S. Attorney Adam K. Ake and Special Assistant U.S. Attorney Dawn M. Ellison, who prosecuted the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/project-safe-neighborhoods-psn and https://www.justice.gov/usao-md/community-outreach.
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Philadelphia Man Sentenced to 15 Months in Prison for Role in Healthcare Fraud Conspiracy Targeting New Jersey Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – A Philadelphia man was sentenced today to 15 months in prison for his role in defrauding New Jersey state health benefits programs and other insurers out of $2.69 million by submitting fraudulent claims for medically unnecessary prescriptions, Attorney for the United States Vikas Khanna announced.
Robert Bessey, 49, of Philadelphia, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with conspiracy to commit health care fraud. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From January 2015 through April 2016, Bessey, a recruiter in the conspiracy, and others persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy. The conspirators learned that a pharmacy benefits administrator would reimburse pharmacies thousands of dollars for a one-month supply of certain prescription compounded medications, including pain, scar, antifungal, and libido creams, as well as over $10,000 per month for certain vitamin combinations.
The pharmacy benefits administrator managed the prescription drug benefit plan for some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers. The conspirators recruited public employees and other individuals covered by the pharmacy benefits administrator to fraudulently obtain compounded medications from the compounding pharmacy without any evaluation by a medical professional that they were medically necessary.
In addition to the prison term, Judge Kugler sentenced Bessey to two years of supervised release. Bessey was ordered to forfeit $485,540 and pay restitution of $2.69 million.
Attorney for the United States Khanna credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge James E. Dennehy in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the sentencing.
The government is represented by R. David Walk Jr., Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Daniel Friedman of the Criminal Division in Camden.
Peoria, Illinois, Felon Sentenced to 65 Months in Prison for Possession of a FirearmRead the Press Release
PEORIA, Ill. – A Peoria, Illinois, man, Dazmine M. Erving, 32, was sentenced on September 6, 2023, to a total of 65 months in federal prison for possessing a firearm as a felon.
In a prior written filing, the government stated that on September 14, 2022, a Peoria Police officer approached an SUV that was backed into a parking spot at River Front Park after the park had closed. The officer discovered Erving in the backseat of the vehicle with a juvenile female later determined to have an outstanding warrant for her arrest. The officer also smelled the odor of burnt cannabis coming from the SUV during the encounter. During a records check, the officer learned that Erving was on federal supervised release following a conviction for possessing a firearm as a felon. After Erving and the female exited the SUV, the officer located a firearm on the floorboard where Erving had been seated. The gun, a semiautomatic pistol, was loaded with a round of ammunition in the chamber and eight rounds in the magazine. The firearm had previously been reported stolen.
Erving was indicted in September 2022 and entered a guilty plea in May of 2023. Erving also pleaded guilty to a petition to revoke supervised release in his prior case alleging that possession of the pistol was a violation of the terms of his supervised release.
At sentencing, U.S. District Judge James E. Shadid imposed a term of 41 months’ imprisonment for Erving’s new gun case, to run consecutively to a term of 24 months’ imprisonment for violating the terms of his supervised release. The new sentence and supervised release sentence in combination require Erving to serve 65 months’ imprisonment. Erving’s term of imprisonment on the new case will be followed by a three-year term of supervised release. He has remained in the custody of the U.S. Marshals Service since his arrest.
The statutory penalties for possessing a firearm as a felon are up to 15 years; imprisonment, a possible $250,000 fine, and up to three years of supervised release.
The U.S. Department of Justice; Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Peoria Police Department investigated the case. Assistant U.S. Attorney Ronald L. Hanna represented the government in the prosecution.
The case against Erving 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.
Onondaga County Man Sentenced to 68 Months for Possession of a Firearm in Furtherance of Drug Trafficking and Possession of Crack Cocaine for DistributionRead the Press Release
SYRACUSE, NEW YORK – Ernest B. Shaw, Jr., age 26, of Nedrow, New York, was sentenced today to serve 68 months in federal prison for his convictions for possession with intent to distribute cocaine base and possession of a firearm in connection with a drug trafficking crime, announced United States Attorney Carla B. Freedman and Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division.
As part of his previous guilty plea, Shaw admitted that on September 25, 2019, he possessed 14 grams of cocaine base (crack cocaine) for distribution and a loaded Glock .40 caliber handgun at his residence in Nedrow, New York. DEA Special Agents assisted by other law enforcement agencies executed a federal search warrant and seized the cocaine base and the loaded handgun from the defendant’s bedroom, along with digital scales and plastic bags. Federal Agents searched the residence as part of a long-term drug investigation that involved the defendant’s father, Ernest B. Shaw, Sr, and others.[1]
This case was investigated by the United States Drug Enforcement Administration (DEA) Syracuse Resident Office, which includes Task Force Officers from the City of Auburn Police Department, the City of Syracuse Police Department, the New York State Police, and the Oneida County Sheriff’s Office. Other Agencies that assisted in this investigation included the New York State Police, the Onondaga County Sheriff’s Office, the Onondaga County District Attorney’s Office, and the U.S. Department of Homeland Security-Homeland Security Investigations (HSI). The case was prosecuted by Assistant U.S. Attorney Richard Southwick and Assistant U.S. Attorney Thomas Sutcliffe.
[1] Ernest B. Shaw Sr. was convicted after trial in federal court in September 2021, and is serving a 15-year sentence in federal prison for his conviction for participating in a federal drug conspiracy.
Omaha Man Sentenced for Possessing Child PornographyRead the Press Release
Acting United States Attorney Susan Lehr announced that Derric Shy, 41, of Omaha, Nebraska, was sentenced today in federal court in Omaha for distribution and receipt of child pornography. United States District Judge Brian C. Buescher sentenced Shy to 121 months’ imprisonment. There is no parole in the federal prison system. After his release from prison, Shy will serve 5 years of supervised release.
Homeland Security Investigations (“HSI”) agents in Nebraska began investigating a chat application after receiving a case referral from an HSI agent in Detroit, Michigan, who was conducting undercover chats. The undercover agent observed users upload numerous videos of child pornography to a chat group, ‘#daugh.’ On January 10, 2022, the agent specifically observed user “kikaroo” post three videos of child pornography. HSI Detroit sent a subpoena to the chat application and learned that “kikaroo” was associated with Derric Shy. An IP address associated with the user also resolved to Shy. HSI forwarded the chats, videos, and user information to HSI Nebraska.
On April 7, 2022, agents executed a search warrant at Shy’s residence. Agents interviewed Shy, who immediately admitted to knowing why they were there, stating it was because he was looking at stuff on the chat application at issue. Shy claimed the username “kikaroo” and admitted to viewing and sharing child pornography. Shy told agents they would find child pornography on his devices and provided the passcodes.
Forensic examinations of Shy’s devices revealed at least nine videos of child pornography on Shy’s cell phone. Shy’s computer also showed artifacts related to the case investigation.
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 United States Attorney’s 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.
This case was investigated by Homeland Security Investigations.
Omaha Man Sentenced for Distributing FentanylRead the Press Release
Acting United States Attorney Susan Lehr announced that Jerrell Jackson, 34, of Omaha, Nebraska, was sentenced on September 6, 2023, in federal court in Omaha for distributing fentanyl. United States District Judge Brian C. Buescher sentenced Jackson to 54 months in prison. There is no parole in the federal system. After Jackson’s release from prison, he will begin a three-year term of supervised release.
On November 9, 2020, in Omaha, Jackson knowingly sold pills containing fentanyl to a witness cooperating with law enforcement. Jackson sold the cooperator approximately 50 fentanyl pills in exchange for $1,000. The 54-month sentence took into account that at the time Jackson sold the fentanyl, he was on federal supervised release following a conviction for being a felon in possession of a firearm.
This case was investigated by the Federal Bureau of Investigation, the Omaha Police Department, and the Bellevue Police Department.
New York Woman Arrested for Trafficking Methamphetamine, Heroin, and "Tranq"Read the Press Release
CONCORD – A Bronx, New York, woman has been charged in connection with trafficking methamphetamine and fentanyl combined with xylazine from New York to New Hampshire, U.S. Attorney Jane E. Young announces.
Katherine Sanchez Lugo, 33, was arrested today in Nashua on a criminal complaint of possessing with intent to distribute and distributing controlled substances. Sanchez Lugo will make an initial appearance in federal court in Concord on September 7, 2023.
According to the charging documents, Sanchez Lugo trafficked controlled substances on three occasions from New York to New Hampshire. Sanchez Lugo distributed a 200-gram mixture of fentanyl, heroin and xylazine, and 55-grams of methamphetamine on June 14, 2023. The defendant also trafficked more than half of a kilogram of substances allegedly containing fentanyl on July 12th, 2023 and August 10th, 2023.
Xylazine, also known as “Tranq,” is a powerful non-opiate sedative that the U.S. Food and Drug Administration (FDA) has approved for veterinary use only. Because xylazine is not an opioid, naloxone (Narcan) does not reverse its effects. Xylazine and fentanyl drug mixtures place users at a higher risk of suffering a fatal drug poisoning. People who inject drug mixtures containing xylazine also can develop severe wounds, including necrosis—the rotting of human tissue—that may lead to amputation. The combination is referred to on the street as the “zombie drug.”
The U.S. Drug Enforcement Administration (DEA) recently issued a public safety alert warning the American public of a sharp increase in the trafficking of fentanyl mixed with xylazine and the drug’s deadly effects. The FDA also published an alert to health care providers about the risks to patients exposed to xylazine in illicit drugs.
The charge of possessing with intent to distribute and distributing controlled substances provides for a sentence of up to 20 years in prison, at least three years of supervised release and a fine of up to $1,000,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
DEA led the investigation. Valuable assistance was provided by the Nashua Police Department. Assistant U.S. Attorney Cesar A. Vega is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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New Orleans Man Pleads Guilty to Heroin Trafficking ChargeRead the Press Release
NEW ORLEANS, LOUISIANA – JOHN CRAWFORD, age 39, a New Orleans resident, pleaded guilty on September 6, 2023, before U.S. District Judge Mary Ann Vial Lemmon to a superseding bill of information charging him with conspiracy to distribute heroin, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(C), and 846, announced U.S. Attorney Duane A. Evans.
According to court documents, the FBI New Orleans Gang Task Force and the New Orleans Police Department started investigating CRAWFORD for his involvement in a drug distribution operation in September 2020. The investigation involved numerous controlled purchases of narcotics from CRAWFORD and DONALD MYLES, a/k/a “D-Ray.” The investigation revealed that CRAWFORD conspired with MYLES, KEVIN JOHNSON, CHRISTOPHER JOHNSON, ERNEST GREEN, and others known and unknown, to distribute heroin and cocaine.
CRAWFORD faces up to twenty years imprisonment, a fine of up to $1,000,000, at least three years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee.
The U.S. Federal Bureau of Investigation New Orleans Gang Task Force, with the assistance of the New Orleans Police Department, the Jefferson Parish Sheriff’s Office, and the Gretna Major Crimes Task Force, led the investigation. The prosecution is being handled by Assistant United States Attorney J. Benjamin Myers of the Narcotics Unit.
New Orleans Man Pleads Guilty to Drug and Gun OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – EMANUEL ROSS, age 24, a resident of New Orleans, Louisiana, pled guilty on September 6, 2023 before United States District Court Judge Ivan L.R. Lemelle to Possession with Intent to Distribute Cocaine and Fentanyl in violation of Title 21 U.S.C. Sections 841(a)(1) and (b)(1)(C) and Possession of a Machinegun in violation of Title 18, United States Code, Section 922(o), announced U.S. Attorney Duane A. Evans.
The Possession with Intent to Distribute Cocaine and Fentanyl charge carries a term of imprisonment of not more than 20 years, a fine of up to $1,000,000, and at least 3 years supervised release. The Possession of a Machinegun charge carries a maximum term of imprisonment of 10 years, up to a $250,000 fine, and up to three years of supervised release. Each offense also carries a mandatory special assessment fee of $100.00.
Judge Lemelle ordered a pre-sentence report and scheduled sentencing for December 13, 2023. ROSS will remain detained without bond.
Court documents reveal that the Federal Bureau of Investigation Violent Crime Task Force and the New Orleans Police Department began an investigation of ROSS in mid-2022 and discovered an online video of him firing a pistol that had been converted into a machine gun through the use of a device known as a “switch.” A search warrant of ROSS’s home was executed on January 27, 2023, and law enforcement officials found cocaine, fentanyl and various weapons including the machine gun seen on the online video.
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.
The case was investigated by the Federal Bureau of Investigation Violent Crimes Task Force, and the New Orleans Police Department. Assistant United States Attorney Mark A. Miller of the Violent Crime Unit is assigned the prosecution.
Multiple Foreign Nationals Charged in Connection with Trickbot Malware and Conti Ransomware ConspiraciesRead the Press Release
WASHINGTON - Three indictments in three different federal jurisdictions have been unsealed charging multiple Russian cybercrime actors involved in the Trickbot malware and Conti ransomware schemes.
According to court documents and public reporting, Trickbot, which was taken down in 2022, was a suite of malware tools designed to steal money and facilitate the installation of ransomware. Hospitals, schools, and businesses were among the millions of Trickbot victims who suffered tens of millions of dollars in losses. While active, Trickbot malware, which acted as an initial intrusion vector into victim computer systems, was used to support various ransomware variants, including Conti. Conti was a ransomware variant used to attack more than 900 victims worldwide, including victims in approximately 47 states, the District of Columbia, Puerto Rico, and approximately 31 foreign countries. According to the FBI, in 2021, Conti ransomware was used to attack more critical infrastructure victims than any other ransomware variant.
“The Justice Department has taken action against individuals we allege developed and deployed a dangerous malware scheme used in cyberattacks on American school districts, local governments, and financial institutions,” said Attorney General Merrick B. Garland. “Separately, we have also taken action against individuals we allege are behind one of the most prolific ransomware variants used in cyberattacks across the United States, including attacks on local police departments and emergency medical services. These actions should serve as a warning to cybercriminals who target America’s critical infrastructure that they cannot hide from the United States Department of Justice.”
“Today’s announcement shows our ongoing commitment to bringing the most heinous cyber criminals to justice – those who have devoted themselves to inflicting harm on the American public, our hospitals, schools, and businesses,” said FBI Director Christopher Wray. “Cyber criminals know that we will use every lawful tool at our disposal to identify them, tirelessly pursue them, and disrupt their criminal activity. We, alongside our federal and international partners, will continue to impose costs through joint operations no matter where these criminals may attempt to hide.”
“The defendants charged in these three indictments across three different jurisdictions allegedly used their cyber knowledge and capabilities to victimize people and businesses around the world without regard for the damage they caused,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “These indictments should serve as a reminder that no matter a cybercriminal’s location, we will identify and pursue them by doing everything in our power to ensure they face the consequences of their actions.”
“Conti ransomware was used to exploit our financial systems and target hundreds of innocent victims,” said Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division. “The Secret Service will continue to work with our local, state, and federal law enforcement partners to investigate cybercriminals and bring offenders to justice.”
As detailed below, a federal grand jury in the Northern District of Ohio returned an indictment charging Maksim Galochkin, aka Bentley; Maksim Rudenskiy, aka Buza; Mikhail Mikhailovich Tsarev, aka Mango; Andrey Yuryevich Zhuykov, aka Defender; Dmitry Putilin, aka Grad and Staff; Sergey Loguntsov, aka Begemot and Zulas; Max Mikhaylov, aka Baget; Valentin Karyagin, aka Globus; and Maksim Khaliullin, aka Maxfax, Maxhax, and Kagas, all Russian nationals, with conspiring to use the Trickbot malware to steal money and personal and confidential information from unsuspecting victims, including businesses and financial institutions located in the United States and around the world, beginning in November 2015.
A federal grand jury in the Middle District of Tennessee returned an indictment charging Galochkin, Rudenskiy, Tsarev, and Zhuykov with conspiring to use Conti ransomware to attack businesses, nonprofits, and governments in the United States beginning in 2020 and continuing through June 2022.
A federal grand jury in the Southern District of California returned an indictment charging Galochkin in connection with the Conti ransomware attack on Scripps Health on May 1, 2021.
Northern District of Ohio
The indictment returned in the Northern District of Ohio charged all nine defendants for their alleged roles in developing, deploying, managing, and profiting from the malware known as Trickbot. Trickbot was a sophisticated, modular, multi-functional suite of malware tools which (a) infected victims’ computers with malware designed to capture victims’ online banking login credentials; (b) obtained and harvested other personal identification information, including credit cards, emails, passwords, dates of birth, social security numbers, and addresses; (c) infected other computers connected to the victim computer; (d) used the captured login credentials to fraudulently gain unauthorized access to victims’ online bank accounts at financial institutions; (e) stole funds from victims’ bank accounts and laundered those funds using U.S. and foreign beneficiary bank accounts provided and controlled by the defendants and co-conspirators; and (f) installed ransomware on victim computers.
“As alleged in the indictment, Trickbot infected millions of computers worldwide, including those used by hospitals, schools, and businesses,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Today’s announcement demonstrates that these dangerous cybercriminals are not anonymous, as they once believed. The indictments unsealed today show the resolve of the international community to work together to bring cybercriminals to justice. We will continue to use all resources at our disposal to stop cybercrime.”
Each defendant is charged with one count of conspiracy to violate the Computer Fraud and Abuse Act, one count of wire fraud conspiracy, and one count of conspiracy to launder the proceeds of the scheme. The indictment also included an enhancement for falsely registering domains. If convicted, each defendant faces a maximum penalty of 62 years in prison.
Trickbot malware developers Alla Witte and Vladimir Dunaev were previously indicted and apprehended. Witte, a Latvian national pleaded guilty to conspiracy to commit computer fraud and was sentenced to 32 months in June 2023. Dunaev, a Russian national, currently is in custody and pending trial in Cleveland.
Middle District of Tennessee
The Middle District of Tennessee indictment charges that the individuals behind Conti ransomware, including Galochkin, Rudenskiy, Tsarev, and Zhuykov, conspired to use Conti to attack hundreds of victims. Conti’s victims included hospital systems, local governments, and foreign governments. Conti conspirators allegedly extorted funds from victims in the Middle District of Tennessee and encrypted the computer systems of a local sheriff’s department, a local police department, and local emergency medical services, among others. Ransom notes left on Conti victims’ computer systems typically boasted “if you don’t [know Conti] – just ‘google it.’”
“The conspirators who developed and deployed Conti ransomware victimized businesses, governments, and non-profits around the world, including a sheriff’s office and an emergency medical service in Tennessee,” said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee. “We will continue to use the full power of this office to ensure that hackers can no longer hide behind their computer screens and to hold them accountable.”
Galochkin was a “crypter” for Conti, modifying the ransomware so that it would not be detected by anti-virus programs; Rudenskiy was a developer who supervised other Conti developers; Tsarev was a manager of other Conti conspirators; and Zhuykov was a systems administrator who managed users of Conti infrastructure, organized and paid for infrastructure and tools, and assisted in problem solving infrastructure-related issues.
Galochkin, Rudenskiy, Tsarev, and Zhuykov are each charged with one count of conspiracy to violate the Computer Fraud and Abuse Act and one count wire fraud conspiracy. If convicted, each defendant faces a maximum penalty of 25 years in prison.
Southern District of California
As alleged in the Southern District of California indictment, Galochkin caused the transmission of the Conti malware and impaired the medical examination, diagnosis, treatment, and care of one or more individuals.
Galochkin is charged with three counts of computer hacking. If convicted, he faces a maximum penalty of 20 years in prison.
“The indictment alleges a callous disregard for the medical care and the personal information of residents of the Southern District of California,” said Acting U.S. Attorney Andrew R. Haden for the Southern District of California. “This office is committed to protecting victims of cybercrime and holding perpetrators accountable.”
The FBI Cleveland Field Office is leading the investigation into Trickbot malware.
Assistant U.S. Attorneys Daniel Riedl and Duncan Brown for the Northern District of Ohio and Senior Counsel Candina Heath of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the Trickbot malware case.
The FBI San Diego, Memphis, and El Paso Field Offices, with U.S. Secret Service, are leading the investigation into Conti ransomware. The U.S. Attorney’s Office for the Western District of Texas provided significant assistance.
Assistant U.S. Attorney Taylor J. Phillips for the Middle District of Tennessee, Assistant U.S. Attorneys Jonathan Shapiro and Kareem Salem for the Southern District of California, and Trial Attorney Sonia V. Jimenez and Senior Counsel Ryan K.J. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the Conti ransomware cases.
The Justice Department’s National Security Division provided significant assistance in the Conti ransomware and Trickbot malware investigations.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Northern District of Ohio indictment
Middle District of Tennessee indictment
Southern District of California indictment
Multiple Foreign Nationals Charged in Connection with Trickbot Malware and Conti Ransomware ConspiraciesRead the Press Release
Three indictments in three different federal jurisdictions have been unsealed charging multiple Russian cybercrime actors involved in the Trickbot malware and Conti ransomware schemes.
According to court documents and public reporting, Trickbot, which was taken down in 2022, was a suite of malware tools designed to steal money and facilitate the installation of ransomware. Hospitals, schools, and businesses were among the millions of Trickbot victims who suffered tens of millions of dollars in losses. While active, Trickbot malware, which acted as an initial intrusion vector into victim computer systems, was used to support various ransomware variants, including Conti. Conti was a ransomware variant used to attack more than 900 victims worldwide, including victims in approximately 47 states, the District of Columbia, Puerto Rico, and approximately 31 foreign countries. According to the FBI, in 2021, Conti ransomware was used to attack more critical infrastructure victims than any other ransomware variant.
“The Justice Department has taken action against individuals we allege developed and deployed a dangerous malware scheme used in cyberattacks on American school districts, local governments, and financial institutions,” said Attorney General Merrick B. Garland. “Separately, we have also taken action against individuals we allege are behind one of the most prolific ransomware variants used in cyberattacks across the United States, including attacks on local police departments and emergency medical services. These actions should serve as a warning to cybercriminals who target America’s critical infrastructure that they cannot hide from the United States Department of Justice.”
“Today’s announcement shows our ongoing commitment to bringing the most heinous cyber criminals to justice – those who have devoted themselves to inflicting harm on the American public, our hospitals, schools, and businesses,” said FBI Director Christopher Wray. “Cyber criminals know that we will use every lawful tool at our disposal to identify them, tirelessly pursue them, and disrupt their criminal activity. We, alongside our federal and international partners, will continue to impose costs through joint operations no matter where these criminals may attempt to hide.”
“The defendants charged in these three indictments across three different jurisdictions allegedly used their cyber knowledge and capabilities to victimize people and businesses around the world without regard for the damage they caused,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “These indictments should serve as a reminder that no matter a cybercriminal’s location, we will identify and pursue them by doing everything in our power to ensure they face the consequences of their actions.”
“Conti ransomware was used to exploit our financial systems and target hundreds of innocent victims,” said Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division. “The Secret Service will continue to work with our local, state, and federal law enforcement partners to investigate cybercriminals and bring offenders to justice.”
As detailed below, a federal grand jury in the Northern District of Ohio returned an indictment charging Maksim Galochkin, aka Bentley; Maksim Rudenskiy, aka Buza; Mikhail Mikhailovich Tsarev, aka Mango; Andrey Yuryevich Zhuykov, aka Defender; Dmitry Putilin, aka Grad and Staff; Sergey Loguntsov, aka Begemot and Zulas; Max Mikhaylov, aka Baget; Valentin Karyagin, aka Globus; and Maksim Khaliullin, aka Maxfax, Maxhax, and Kagas, all Russian nationals, with conspiring to use the Trickbot malware to steal money and personal and confidential information from unsuspecting victims, including businesses and financial institutions located in the United States and around the world, beginning in November 2015.
A federal grand jury in the Middle District of Tennessee returned an indictment charging Galochkin, Rudenskiy, Tsarev, and Zhuykov with conspiring to use Conti ransomware to attack businesses, nonprofits, and governments in the United States beginning in 2020 and continuing through June 2022.
A federal grand jury in the Southern District of California returned an indictment charging Galochkin in connection with the Conti ransomware attack on Scripps Health on May 1, 2021.
Northern District of Ohio
The indictment returned in the Northern District of Ohio charged all nine defendants for their alleged roles in developing, deploying, managing, and profiting from the malware known as Trickbot. Trickbot was a sophisticated, modular, multi-functional suite of malware tools which (a) infected victims’ computers with malware designed to capture victims’ online banking login credentials; (b) obtained and harvested other personal identification information, including credit cards, emails, passwords, dates of birth, social security numbers, and addresses; (c) infected other computers connected to the victim computer; (d) used the captured login credentials to fraudulently gain unauthorized access to victims’ online bank accounts at financial institutions; (e) stole funds from victims’ bank accounts and laundered those funds using U.S. and foreign beneficiary bank accounts provided and controlled by the defendants and co-conspirators; and (f) installed ransomware on victim computers.
“As alleged in the indictment, Trickbot infected millions of computers worldwide, including those used by hospitals, schools, and businesses,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Today’s announcement demonstrates that these dangerous cybercriminals are not anonymous, as they once believed. The indictments unsealed today show the resolve of the international community to work together to bring cybercriminals to justice. We will continue to use all resources at our disposal to stop cybercrime.”
Each defendant is charged with one count of conspiracy to violate the Computer Fraud and Abuse Act, one count of wire fraud conspiracy, and one count of conspiracy to launder the proceeds of the scheme. The indictment also included an enhancement for falsely registering domains. If convicted, each defendant faces a maximum penalty of 62 years in prison.
Trickbot malware developers Alla Witte and Vladimir Dunaev were previously indicted and apprehended. Witte, a Latvian national pleaded guilty to conspiracy to commit computer fraud and was sentenced to 32 months in June 2023. Dunaev, a Russian national, currently is in custody and pending trial in Cleveland.
Middle District of Tennessee
The Middle District of Tennessee indictment charges that the individuals behind Conti ransomware, including Galochkin, Rudenskiy, Tsarev, and Zhuykov, conspired to use Conti to attack hundreds of victims. Conti’s victims included hospital systems, local governments, and foreign governments. Conti conspirators allegedly extorted funds from victims in the Middle District of Tennessee and encrypted the computer systems of a local sheriff’s department, a local police department, and local emergency medical services, among others. Ransom notes left on Conti victims’ computer systems typically boasted “if you don’t [know Conti] – just ‘google it.’”
“The conspirators who developed and deployed Conti ransomware victimized businesses, governments, and non-profits around the world, including a sheriff’s office and an emergency medical service in Tennessee,” said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee. “We will continue to use the full power of this office to ensure that hackers can no longer hide behind their computer screens and to hold them accountable.”
Galochkin was a “crypter” for Conti, modifying the ransomware so that it would not be detected by anti-virus programs; Rudenskiy was a developer who supervised other Conti developers; Tsarev was a manager of other Conti conspirators; and Zhuykov was a systems administrator who managed users of Conti infrastructure, organized and paid for infrastructure and tools, and assisted in problem solving infrastructure-related issues.
Galochkin, Rudenskiy, Tsarev, and Zhuykov are each charged with one count of conspiracy to violate the Computer Fraud and Abuse Act and one count wire fraud conspiracy. If convicted, each defendant faces a maximum penalty of 25 years in prison.
Southern District of California
As alleged in the Southern District of California indictment, Galochkin caused the transmission of the Conti malware and impaired the medical examination, diagnosis, treatment, and care of one or more individuals.
Galochkin is charged with three counts of computer hacking. If convicted, he faces a maximum penalty of 20 years in prison.
“The indictment alleges a callous disregard for the medical care and the personal information of residents of the Southern District of California,” said Acting U.S. Attorney Andrew R. Haden for the Southern District of California. “This office is committed to protecting victims of cybercrime and holding perpetrators accountable.”
The FBI Cleveland Field Office is leading the investigation into Trickbot malware.
Assistant U.S. Attorneys Daniel Riedl and Duncan Brown for the Northern District of Ohio and Senior Counsel Candina Heath of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the Trickbot malware case.
The FBI San Diego, Memphis, and El Paso Field Offices, with U.S. Secret Service, are leading the investigation into Conti ransomware. The U.S. Attorney’s Office for the Western District of Texas provided significant assistance.
Assistant U.S. Attorney Taylor J. Phillips for the Middle District of Tennessee, Assistant U.S. Attorneys Jonathan Shapiro and Kareem Salem for the Southern District of California, and Trial Attorney Sonia V. Jimenez and Senior Counsel Ryan K.J. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the Conti ransomware cases.
The Justice Department’s National Security Division provided significant assistance in the Conti ransomware and Trickbot malware investigations.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Northern District of Ohio indictment Middle District of Tennessee indictment Southern District of California indictmentMonroe County Man Sentenced to 63 Months’ Imprisonment for Bank RobberyRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Terrance Tyson, age 45, of East Stroudsburg, Pennsylvania, was sentenced on September 6, 2023, by U.S. District Court Judge Robert D. Mariani, to 63 months’ imprisonment on the charge of bank robbery.
According to United States Attorney Gerard M. Karam, Tyson previously entered a guilty plea and admitted to committing a robbery of the NBT Bank in East Stroudsburg, on September 24, 2019. Tyson stole approximately $5,226 in the robbery and was apprehended by investigators the following day.
The case was investigated by the Stroud Area Regional Police Department and the FBI Safe Streets Task Force. Assistant United States Attorney Robert J. O’Hara prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Miami Medical Clinic Owner and Pharmacist Convicted for Clinical Trial Fraud SchemeRead the Press Release
A jury in Miami convicted two defendants on Sept. 5 in a scheme involving the falsification and fabrication of clinical trial data.
On Sept. 5, Miguel Angel Montalvo Villa, 53, and Ivette Maria Portela Martinez, 53, both of Miami, were each convicted of one count of conspiracy to commit wire fraud and one count of wire fraud. Montalvo also was convicted of making a false statement to a regulatory investigator with the Food and Drug Administration (FDA).
Previously, on Sept. 13, 2022, Montalvo and Portela were charged in a three-count indictment returned by a federal grand jury. The indictment alleged that, from September 2015 through March 2018, the defendants and a co-conspirator conspired to falsify clinical trial data for profit while working at AMB Research Center Inc. (AMB), a medical clinic located in Miami, Florida.
According to court documents and evidence presented during the trial, Montalvo was co-owner, president and chief executive officer of AMB, and Portela was an employee who, among other things, served as AMB’s pharmacist and data entry specialist. Montalvo and Portela used the names of individuals without their knowledge or permission, and listed those individuals as subjects who who were enrolled and participated in a clinical trial for a drug that was being developed to treat Clostridium difficile-associated diarrhea (CDAD), a moderate to serious form of diarrhea. None of the listed individuals knew that the defendants were using their personal information to falsely portray them as subjects in the CDAD clinical trial. Montalvo and Portela falsified hundreds of pages of documents and entered that false information into clinical trial databases, to make it appear as though the purported subjects had CDAD and were fully participating in the clinical trial, when in fact they were not.
In connection with a February 2018 FDA regulatory inspection of AMB, Montalvo told the FDA regulatory investigator that AMB’s principal investigator had obtained informed consent from all purported CDAD clinical trial subjects, when in fact (and as Montalvo knew) the principal investigator had not done so. As part of the conspiracy, Montalvo also submitted falsified and fraudulent invoices, totaling $277,920.70, in order for AMB to receive payments for conducting the CDAD clinical trial.
Sentencing is scheduled for Nov. 30 before the Honorable K. Michael Moore of the U.S. District Court for the Southern District of Floria.
“Truthful clinical trial data is essential to ensuring that new drug treatments are safe and effective,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will continue to work with its law enforcement partners to prosecute those who intentionally falsify clinical trial data for personal profit.”
“Reliable and accurate data from clinical trials is the cornerstone of FDA’s drug approval process. The jury’s finding demonstrates that those who attempt to subvert the regulatory functions of the FDA by making false statements to the agency will be held accountable for their actions,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations Miami Field Office. “We commend the efforts of the Department of Justice for vigorously pursuing the prosecution of this matter.”
FDA’s Office of Criminal Investigations, Miami Field Office, investigated the case, and the U.S. Attorney’s Office of the Southern District of Florida has provided critical assistance.
The Justice Department’s Consumer Protection Branch prosecuted the case.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Southern District of Florida, visit its website at www.justice.gov/usao-sdfl.
Mexican National Charged with Human Smuggling and Illegal ReentryRead the Press Release
CONCORD – A previously removed Mexican national has been charged in connection with a human smuggling incident along the New Hampshire-Canada border, U.S. Attorney Jane E. Young announces.
Reynaldo Velasco-Velasco, 36, was charged by criminal complaint with illegal reentry of a removed alien in violation of 8 U.S.C. § 1326 and unlawful transportation of certain aliens in violation of 8 U.S.C. § 1324. Velasco-Velasco made an initial appearance in federal court in Concord on September 5, 2023.
According to the charging documents, on the evening of September 2, 2023, a group of individuals wearing backpacks were observed crossing the international border from Canada near Canaan, Vermont. At approximately 5:30 a.m. the next morning, a U.S. Border Patrol agent observed two vehicles traveling away from the same area. The agent stopped the lead vehicle and determined that all five of its occupants were citizens of Mexico with no lawful authority to be present in the United States. All four passengers had backpacks with them, and their pants appeared wet and dirty from their shins down. The driver was subsequently identified via biometric databases as Velasco-Velasco, a Mexican citizen who was previously removed from the United States in 2011.
The illegal reentry charge provides for a sentence of up to two years in prison, up to one year of supervised release, and a fine of up to $250,000. The alien smuggling charge provides for a sentence of up to five years in prison per count, up to three years of supervised release per count, and a fine of up to $250,000 per count. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Border Patrol led the investigation. Assistant U.S. Attorney Jarad Hodes is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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Merrimack Man Pleads Guilty to Stealing More than $100,000 from Confluence MedicalRead the Press Release
CONCORD – A Merrimack man pleaded guilty today in federal court to charges in connection with his theft of funds from his previous employer, U.S. Attorney Jane E. Young announces.
Scott Dulac, 40, pleaded guilty to one count of federal wire fraud charges. U.S. District Court Judge Samantha Elliott scheduled sentencing for December 14, 2023. Defendant was indicted on March 7, 2022.
Dulac worked as the manager of Confluence Medical, a radiologist staffing and recruiting company. He had access to and signatory authority on the company’s bank accounts in order to manage payroll, pay company bills, and arrange for payments to contracted radiologists. On numerous occasions, between early 2019 and early 2020, Dulac made unauthorized fund transfers and cash withdrawals for his own personal benefit in excess of $100,000.
The charging statute provides a sentence of no greater than 20 years in prison, 3 years of supervised release, a fine of up to $250,000. The plea agreement additionally requires Dulac to pay restitution in the amount of $135,000 to the victim company. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
The Federal Bureau of Investigation led the investigation. Assistant U.S. Attorney Charles L. Rombeau is prosecuting the case.
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Manchester Man Sentenced to 33 Months in Federal Prison for Unlawfully Possessing, Manufacturing, and Selling FirearmsRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that ANDREW FRANCOEUR, 36, of Manchester, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant to 33 months of imprisonment, followed by three years of supervised release, for offenses related to his illegal possession, manufacture, and sale of firearms.
According to court documents and statements made in court, as part of an ongoing investigation into the proliferation of privately made firearms (“PMFs” or “ghost guns”) in Connecticut, ATF investigators determined that Francoeur was buying firearm parts from a Missouri company, having the parts shipped to him, and manufacturing guns inside a shipping container on a property in Suffield. Francoeur sold some of the firearms he manufactured.
In September 2022, while Francoeur was incarcerated in state custody for drug and firearm offenses, investigators searched the shipping container and found tools for manufacturing firearms, gun parts, ammunition, and other firearms-related items. In November 2022, investigators retrieved two storage bins used by Francoeur that contained firearm parts, a .22 caliber rifle, more than 1,800 rounds of ammunition, 25 high-capacity magazines, M-80 explosives, firearm gear, and other items.
Francoeur’s criminal history includes felony convictions for firearm, drug, burglary, and failure to appear offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On April 27, 2023, Francoeur pleaded guilty to one count of unlawful possession of a firearm and ammunition by a felon, and one count of manufacturing and dealing in firearms without a license.
Judge Bryant ordered that the 33-month federal sentence run consecutively to the state sentence that Francoeur is currently serving.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and prosecuted by Assistant U.S. Attorney A. Reed Durham.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Man Sentenced for Omaha Guitar Store RobberyRead the Press Release
Acting United States Attorney Susan Lehr announced that Marco A. Lopez, 30, was sentenced today in federal court in Omaha, Nebraska, for robbery and brandishing a firearm during a crime of violence. United States District Court Judge Brian C. Buescher sentenced Lopez to 44 months’ imprisonment on the robbery charge and 91 months’ consecutive on the brandishing a firearm charge, resulting in a sentence of 135 months in the Bureau of Prisons. There is no parole in the federal system. After his release from federal prison, Lopez will begin a 3-year term of supervised release.
On July 1, 2022, Omaha Police Department officers responded to a radio call to Ground Floor Guitar in Omaha for an armed robbery. The store owner told officers that two men entered the store separately before Marco Lopez entered the store. After entering the store, Lopez displayed a black handgun and robbed the store owner of cash and property, specifically several guitars and at least one amplifier. Several customers were also robbed by being instructed to “hand over their wallets.”
Marco Lopez instructed all the victims to move down into the basement where he locked them and a dog into a bathroom, telling them not to come out or he would “shoot them,” while displaying a handgun. The victims eventually left the bathroom and called 911.
On July 2, 2022, Omaha Police were responding to a tip related to a residential break-in, which identified Marco Lopez as a suspect. Marco Lopez and co-defendant Jorge Lopez are cousins. Investigators contacted and interviewed Jorge Lopez, who admitted that both he and Marco Lopez robbed the guitar store, and that Marco Lopez took the cash and guitars with him to Texas after the robbery. Police also searched a truck used in the robbery, finding a wallet belonging to one of the victims and other materials linking the truck to the robbery. Marco Lopez was located and arrested in Texas before being extradited to Nebraska.
Co-defendant Jorge Lopez pleaded guilty to robbery and brandishing a firearm during a crime of violence and was sentenced on July 26, 2023, to 114 months’ imprisonment with three years of supervised release.
This case was investigated by the Omaha Police Department.
Multiple Foreign Nationals Charged in Connection with Conti Ransomware and Trickbot Malware ConspiraciesRead the Press Release
NASHVILLE – Three indictments were unsealed yesterday charging multiple Russian cybercrime actors involved in the Conti ransomware and Trickbot malware schemes.
Conti was a ransomware variant used to attack more than 900 victims worldwide, including victims in the Middle District of Tennessee, approximately 47 states, the District of Columbia, Puerto Rico, and approximately 31 foreign countries. According to the FBI, in 2021, Conti ransomware was used to attack more critical infrastructure victims than any other ransomware variant. According to court documents and public reporting, Trickbot, which was taken down in 2022, was a suite of malware tools designed to steal money and facilitate the installation of ransomware. Hospitals, schools, and businesses were among the millions of Trickbot victims who suffered tens of millions of dollars in losses.
“The Justice Department has taken action against individuals we allege developed and deployed a dangerous malware scheme used in cyberattacks on American school districts, local governments, and financial institutions,” said Attorney General Merrick B. Garland. “Separately, we have also taken action against individuals we allege are behind one of the most prolific ransomware variants used in cyberattacks across the United States, including attacks on local police departments and emergency medical services. These actions should serve as a warning to cybercriminals who target America’s critical infrastructure that they cannot hide from the United States Department of Justice.”
A federal grand jury in the Middle District of Tennessee returned an indictment charging Maksim Galochkin, aka Bentley; Maksim Rudenskiy, aka Buza; Mikhail Mikhailovich Tsarev, aka Mango; and Andrey Yuryevich Zhuykov, aka Defender, all Russian nationals, with conspiring to use Conti ransomware to attack businesses, nonprofits, and governments in the United States beginning in 2020 and continuing through June 2022.
A federal grand jury in the Northern District of Ohio also returned an indictment charging Galochkin, Rudenskiy, Tsarev, Zhuykov, Dmitry Putilin, aka Grad and Staff; Sergey Loguntsov, aka Begemot and Zulas; Max Mikhaylov, aka Baget; Valentin Karyagin, aka Globus; and Maksim Khaliullin, aka Maxfax, Maxhax, and Kagas, with conspiring to use the Trickbot malware to steal money and personal and confidential information from unsuspecting victims, including businesses and their financial institutions located in the United States and around the world, beginning in November 2015.
A federal grand jury in the Southern District of California returned an indictment charging Galochkin in connection with the Conti ransomware attack on Scripps Health on May 1, 2021.
Middle District of Tennessee
The Middle District of Tennessee indictment charges that the individuals behind Conti ransomware, including Galochkin, Rudenskiy, Tsarev, and Zhuykov, conspired to use Conti to attack hundreds of victims. Conti’s victims included hospital systems, local governments, and foreign governments. Conti conspirators allegedly extorted funds from victims in the Middle District of Tennessee and encrypted the computer systems of a local sheriff’s department, a local police department, and local emergency medical services, among others. Ransom notes left on Conti victims’ computer systems typically boasted “if you don’t [know Conti] – just ‘google it.’”
“The conspirators who developed and deployed Conti ransomware victimized businesses, governments, and non-profits around the world, including a sheriff’s office and an emergency medical service in Tennessee,” said United States Attorney Henry C. Leventis for the Middle District of Tennessee. “We will continue to use the full power of this office to ensure that hackers can no longer hide behind their computer screens and to hold them accountable.”
Galochkin was a “crypter” for Conti, modifying the ransomware so that it would not be detected by anti-virus programs; Rudenskiy was a developer who supervised other developers; Tsarev was a manager of other Conti conspirators; and Zhuykov was a systems administrator who managed users of Conti infrastructure, organized and paid for infrastructure and tools, and assisted in problem solving infrastructure-related issues.
Galochkin, Rudenskiy, Tsarev, and Zhuykov are each charged with one count of conspiracy to violate the Computer Fraud and Abuse Act and one count wire fraud conspiracy. If convicted, each defendant faces a maximum penalty of 25 years in prison.
Northern District of Ohio
The indictment returned in the Northern District of Ohio charged all nine defendants for their alleged roles in developing, deploying, managing, and profiting from the malware known as Trickbot. Trickbot was a sophisticated, modular, multi-functional suite of malware tools which (a) infected victims’ computers with malware designed to capture victims’ online banking login credentials; (b) obtained and harvested other personal identification information, including credit cards, emails, passwords, dates of birth, social security numbers, and addresses; (c) infected other computers connected to the victim computer; (d) used the captured login credentials to fraudulently gain unauthorized access to victims’ online bank accounts at financial institutions; (e) stole funds from victims’ bank accounts and laundered those funds using U.S. and foreign beneficiary bank accounts provided and controlled by the defendants and co-conspirators; and (f) installed ransomware on victim computers.
“As alleged in the indictment, Trickbot infected millions of computers worldwide, including those used by hospitals, schools and businesses,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Today’s announcement demonstrates that these dangerous cybercriminals are not anonymous, as they once believed. The indictments unsealed today show the resolve of the international community to work together to bring cybercriminals to justice. We will continue to use all resources at our disposal to stop cybercrime.”
Each defendant is charged with one count of conspiracy to violate the Computer Fraud and Abuse Act, one count of wire fraud conspiracy, and one count of conspiracy to launder the proceeds of the scheme. The indictment also included an enhancement for falsely registering domains. If convicted, each defendant faces a maximum penalty of 62 years in prison.
Latvian national Alla Witte pleaded guilty to conspiracy to violate the Computer Fraud and Abuse Act on June 28, and Russian national Vladimir Dunaev is in custody and pending trial in Cleveland.
Southern District of California
As alleged in the Southern District of California indictment, Galochkin caused the transmission of the Conti malware and impaired the medical examination, diagnosis, treatment, and care of one or more individuals.
Galochkin is charged with three counts of computer hacking. If convicted, he faces a maximum penalty of 20 years in prison.
“The indictment alleges a callous disregard for the medical care and the personal information of residents of the Southern District of California,” said Acting U.S. Attorney Andrew R. Haden for the Southern District of California. “This office is committed to protecting victims of cybercrime and holding perpetrators accountable.”
“The defendants charged in these three indictments across three different jurisdictions allegedly used their cyber knowledge and capabilities to victimize people and businesses around the world without regard for the damage they caused,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “These indictments should serve as a reminder that no matter a cybercriminal’s location, we will identify and pursue them by doing everything in our power to ensure they face the consequences of their actions.”
"Today’s announcement shows our ongoing commitment to bringing the most heinous cyber criminals to justice—those who have devoted themselves to inflicting harm on the American public, our hospitals, schools, and businesses,” said FBI Director Christopher Wray. “Cyber criminals know that we will use every lawful tool at our disposal to identify them, tirelessly pursue them, and disrupt their criminal activity. We, alongside our federal and international partners, will continue to impose costs through joint operations no matter where these criminals may attempt to hide.”
“Conti ransomware was used to exploit our financial systems and target hundreds of innocent victims,” said Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division. “The Secret Service will continue to work with our local, state, and federal law enforcement partners to investigate cybercriminals and bring offenders to justice.”
The FBI San Diego, Memphis, and El Paso Field Offices, with U.S. Secret Service, are leading the investigation into Conti ransomware. The U.S. Attorney’s Office for the Western District of Texas provided significant assistance.
Assistant U.S. Attorney Taylor J. Phillips for the Middle District of Tennessee, Assistant U.S. Attorneys Jonathan Shapiro and Kareem Salem for the Southern District of California, and Trial Attorney Sonia V. Jimenez and Senior Counsel Ryan K.J. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the Conti ransomware cases.
The FBI Cleveland Field Office is leading the investigation into Trickbot malware.
Assistant U.S. Attorneys Daniel Riedl and Duncan Brown for the Northern District of Ohio and Senior Counsel Candina Heath of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the Trickbot malware case.
The Justice Department’s National Security Division provided significant assistance in the Conti ransomware and Trickbot malware investigations.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Lowell Man Pleads Guilty to Possessing Half a Kilogram of Methamphetamine Intended for DistributionRead the Press Release
BOSTON – A Lowell man pleaded guilty today in federal court in Boston to methamphetamine charges and possessing of a firearm with an obliterated serial number.
Ravouth Chhoy, 34, pleaded guilty to one count of possession with intent to distribute 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine and one count of possession of a firearm with an obliterated serial number. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for Dec. 7, 2023. Chhoy was indicted by a federal grand jury in August 2022.
Chhoy agreed to distribute more than 5,000 counterfeit Adderall pills containing methamphetamine to a confidential source. Before Chhoy could complete this transaction, law enforcement intercepted Chhoy and recovered more than 6,000 pills – weighing approximately 1.85 kilograms. Additionally, a search of Chhoy’s residence resulted in the recovery of a firearm with an obliterated serial number.
The charge of possession with intent to distribute 500 grams or more of a mixture or substances containing a detectible amount of methamphetamine provides for a mandatory minimum sentence of 10 years and up to life years in prison, at least five years of supervised release and a fine of $5 million. The charge of possession of a firearm with an obliterated serial number provides for a sentence of no greater than 10 years in prison, up to three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting United States Attorney Joshua S. Levy and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division made the announcement today. The Boston Police Department provided critical assistance in the investigation of this case. Assistant U.S. Attorney Evan Panich of the Narcotics & Money Laundering Unit is prosecuting the case.
Lehigh Acres Armed Career Criminal Sentenced to 18 Years in Prison for Firearm and Drug OffensesRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Louis Michael Pasquazzi (53, Lehigh Acres) to 18 years in federal prison for possessing a firearm and ammunition as a convicted felon and for possessing a controlled substance with the intent to distribute it. The court also ordered Pasquazzi to forfeit the firearms and ammunition he illegally possessed. Pasquazzi had previously pleaded guilty on April 26, 2023.
According to court documents, on July 12, 2022, Lee County Sheriff’s Office narcotics detectives were conducting surveillance on a residence in Lehigh Acres when they observed Pasquazzi enter the driver’s seat of a black Cadillac Escalade that was backed into the driveway. Detectives then observed the Escalade rapidly exit the driveway, travel eastbound, and fail to stop at a stop sign. Detectives initiated a traffic stop of the vehicle and made contact with Pasquazzi at the driver’s side window. While speaking with Pasquazzi, detectives could smell the odor of marijuana coming from inside of the vehicle. An LCSO canine unit was deployed and conducted a free air sniff of the Escalade and alerted to the presence of narcotics inside. LCSO detectives searched the Escalade and located a black SCCY 9mm firearm under the driver’s seat and a Ruger .40 caliber S&W firearm in the glovebox. Detectives also found a bulky plastic bag containing 62.01 grams of cocaine on Pasquazzi’s person.
LCSO detectives then obtained a search warrant for the residence from which Pasquazzi had been observed leaving. Inside Pasquazzi’s bedroom, LCSO detectives located a Marlin Arms .22 rifle, a Masterpiece Arms 9mm sub-machine gun, a Taurus G3 9mm firearm, a Ruger AR-556 rifle, and more than 500 rounds of assorted ammunition. The safe in Pasquazzi’s bedroom closet was also accessed and searched by detectives. Inside of the safe, detectives located approximately 353 grams of cocaine. Also, inside Pasquazzi’s bedroom, detectives found articles of drug paraphernalia used to distribute and manufacture controlled substances, including measuring cups, packaging material, and cutting agents.
This case was investigated by the Lee County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Trent Reichling.
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.
Leader of Murderous St. Louis Drug Organization Sentenced to 20 Years in PrisonRead the Press Release
ST. LOUIS – U.S. District Judge Ronnie L. White on Thursday sentenced one of the leaders of a murderous St. Louis drug trafficking organization to 20 years in prison.
Maurice Herbert Lee II, 35, obtained bulk fentanyl and crystal methamphetamine from Arizona and supplied it to his co-conspirators, who sold over 20,000 doses per week at the height of the conspiracy. Lee also offered cash bounties of between $5,000 and $15,000 for the murder of rival gang members or drug dealers.
When he pleaded guilty in May to one count of conspiracy to distribute and possess with intent to distribute fentanyl, one count of conspiracy to distribute and possess with intent to distribute methamphetamine and two counts of conspiracy to possess a firearm in furtherance of drug trafficking, Lee admitted to offering and paying the bounty for the killing of two different men.
Alexander Noodel was fatally shot on May 8, 2017 by Tremayne Silas, now 30, and Jerome Lamont Fisher Jr., 30, Lee’s plea agreement says. The men fired over 100 rounds.
Lee also paid a $10,000 bounty for the murder of Kevin Davis Jr., 24, on June 30, 2017 in the 1900 block of Belt Avenue in St. Louis. Lee paid Delvin Bost, who paid Michael “Beezy” Johnson, 30, plea agreements by Lee and Bost say.
Lee also admitted supplying methamphetamine to another person who then redistributed it. He admitted being responsible for between 4 and 12 kilograms of fentanyl and between 500 grams and 1.5 kilos of methamphetamine.
Fisher and Bost were among Lee’s “runners,” who dealt fentanyl for him. Christopher Jerrin Warlick Jr., 27, Norris Douglas Jr., 31, Mikell Rayford, 26, Sherod Jacolby Tucker, 34, Jerry O. Streeter Jr., 35, and Maricus Davon Futrell, 23, were others listed as runners in Lee’s plea agreement.
Bost, 28, pleaded guilty in May to conspiracy to possess a firearm in furtherance of drug trafficking and possession with intent to distribute methamphetamine. Bost is serving a nine-year sentence. Judge White sentenced both Silas and Johnson to 18 years in prison. Fisher is scheduled to be sentenced September 19, with both sides recommending 17 years in prison.
All 17 defendants who were charged in the case pleaded guilty.
The case was investigated by the St. Louis County Police Department, the St. Louis Metropolitan Police Department and the Drug Enforcement Administration. Assistant U.S. Attorneys Paul D’Agrosa and Mohsen Pasha are prosecuting the case.
Justice Department Finds State of New Jersey Violated U.S. Constitution with Deficient Care at Two State Run Veterans’ HomesRead the Press Release
The Justice Department announced today that it has concluded an investigation into whether New Jersey subjected residents of two veterans’ homes to conditions that violate the 14th Amendment of the United States Constitution.
The department found reasonable cause to believe the residents of the New Jersey Veterans Memorial Homes at Menlo Park and Paramus face unreasonable harm and risk due to inadequate infection control practices and inadequate medical care, in violation of the U.S. Constitution. The New Jersey Department of Military and Veterans Affairs operates the homes, which provide long-term nursing care to veterans and their families.
“We owe the veterans who served our nation our deepest thanks, and those veterans and their family members who live in these facilities have the right to appropriate care,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Based on our investigation, we have found that these facilities have provided inadequate protection from infections and deficient medical care, which have caused these veterans and their families great harm. We look forward to working with the New Jersey Department of Military and Veterans Affairs to improve the conditions in these homes they operate and ensure these veterans and their families receive the care they need and deserve.”
“Those who served to protect this nation and their families are entitled to appropriate care when they reside at a veterans’ home,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “The Paramus and Menlo Park veterans’ homes fail to provide the care required by the U.S. Constitution and subject their residents to unacceptable conditions, including inadequate infection control and deficient medical care. These conditions must swiftly be addressed to ensure that our veterans and their families at these facilities receive the care they so richly deserve. We will not stop working until they do.”
The inadequate infection control practices and inadequate medical care at the homes are compounded by a lack of effective management and oversight. Such deficiencies expose residents to uncontrolled, serious and deadly infections and have resulted in the veterans’ homes suffering among the highest number of resident deaths of all similarly sized facilities in the region.
The investigation was conducted under the Civil Rights of Institutionalized Persons Act (CRIPA), which authorizes the Justice Department to act to address a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run residential institutions.
As required by CRIPA, the department provided the state with written notice setting out the department’s conclusions and the supporting facts. The department also notified the state of the minimum remedial measures necessary to address the alleged violations.
The Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey conducted the investigation.
Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office for the District of New Jersey is available on its website at www.justice.gov/usao-nj/civil-rights-enforcement.
Idaho Falls Man Sentenced to over 11 Years in Federal Prison for Receiving Child PornographyRead the Press Release
POCATELLO – Che Tayen Miles, 39, of Idaho Falls, was sentenced to federal prison for receipt of child pornography, U.S. Attorney Josh Hurwit announced today. Chief U.S. District Judge David C. Nye sentenced Miles to 136 months in federal prison followed by 8 years of supervised release.
According to court records, between July and September of 2022, the Idaho Internet Crimes Against Children (ICAC) Task Force found that Nathan Mark Law, 49, of Idaho Falls, had downloaded thousands of images of child pornography also known as, “child sexual abuse material” (CSAM) over the internet. Investigators executed a search warrant of Law’s residence where they discovered CSAM on Law’s electronic devices. Law admitted he downloaded and uploaded images of CSAM and shared CSAM images with Miles. On December 21, 2022, investigators executed a search warrant at Miles’s residence and seized his electronic devices. Miles admitted he downloaded CSAM and that he received CSAM from Law. Upon searching Miles’s electronic devices investigators discovered thousands of CSAM images that Miles downloaded from the internet as well as CSAM images that Miles received from Law.
On June 26, 2023, Law pleaded guilty to attempted sexual exploitation of a minor child. He is scheduled to be sentenced by Chief Judge Nye on October 8, 2023, and faces a minimum of 15 and up to 30 years in federal prison and up to a lifetime of supervised release.
“We are grateful that justice will be served in these cases. But our collaborative work to guard Idaho’s children continues,” said U.S. Attorney Hurwit. “Together with our local, state, and federal law enforcement partners, my office is committed to tracking down and aggressively pursue anyone in Idaho who creates, possesses, or shares child pornography.”
“This sentence is appropriate for someone who perpetuated child victimization by downloading and sharing thousands of images of exploited children,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “HSI partnerships with the ICAC Taskforce and Idaho law enforcement are integral in keeping our communities safe from child predators.”
These cases were investigated by the Idaho ICAC Task Force, Homeland Security Investigations, the Idaho Falls Police Department, and the Bonneville County Sheriff’s Office. Assistant U.S. Attorney Justin Paskett is prosecuting these cases.
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. As part of Project Safe Childhood, the U.S. Attorney’s Office for the District of Idaho and the Idaho Attorney General’s Office partner to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Holly Ridge Man Who Sliced Witness’ Throat Sentenced to 20 Years for Firearm PossessionRead the Press Release
NEW BERN, N.C. – A Holly Ridge man who sliced a witness’ throat and stabbed a child, was sentenced to 240 months imprisonment followed by 60 months of supervised release for Possession of a Firearm by a Felon and Possession of a Stolen Firearm. Avery Ray Brinson, age 29, pled guilty to the charges on March 24, 2023. Brinson is a convicted felon and has three or more prior convictions for violent felonies making him subject to the penalties of the Armed Career Criminal Act.
According to court documents and other information presented in court Brinson was investigated by the Holly Ridge Police Department in May and July 2021 for firearm related offenses. On May 30, 2021, Brinson was at a friend’s house and learned the friend kept a firearm in his living room. Brinson stole the firearm and left the house. When the friend discovered his firearm was missing, he watched the surveillance video from his home security system and saw Brinson steal the firearm. The following day he confronted Brinson about the theft. Brinson denied knowing anything about the missing firearm until the victim told Brinson about the home security footage capturing the theft. Brinson then acknowledged he stole the firearm and returned it. The friend did not call law enforcement, thinking the matter had been handled.
The next day, June 1, 2021, Brinson broke into the friend’s house and stole multiple items, including a different firearm. Brinson disabled the home security system by cutting the power to the entire residence. The investigation revealed that after Brinson stole the firearm, law enforcement was approached by a man who said Brinson ran into his house and stashed something under the master bed. Law enforcement went to the residence and retrieved a .308 Savage Rifle from under the bed. The friend and victim of the breaking and entering confirmed it was his firearm.
The female resident of the home where Brinson stashed the gun gave a statement implicating Brinson to law enforcement on July 21, 2021, about the breaking and entering and the firearm being found in her home. On June 22, 2021, Brinson went to the female’s house and attacked her, slicing her throat and stabbing her multiple times. When a juvenile, who was also at the house, tried to protect the female resident, he was stabbed seven times. Both underwent immediate medical attention and survived the attack.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after the sentencing was concluded. U.S. District Judge Louise W. Flanagan presided over the sentencing. The Holly Ridge Police Department investigated the case and Assistant U.S. Attorneys Charity Wilson and William Van Trigt prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:22-CR-21-FL
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HSI San Juan Arrests Cataño Woman on Child Exploitation and Sex Trafficking ChargesRead the Press Release
SAN JUAN, Puerto Rico – Homeland Security Investigations (HSI) and the Puerto Rico Crimes Against Children Task Force (PRCACTF), along with the Puerto Rico Police Bureau (PRPB) arrested Daryana González Montañez, a 30-year-old woman from Cataño, PR, for sex trafficking of children, production on child pornography, and transportation of a minor with intent to engage in criminal sexual activity.
According to court documents, from February through March 28, 2023, Daryana González Montañez, recruited, enticed, harbored, transported, provided, obtained, advertised, maintained, and patronized a 14-year-old minor female to engage in sexual activity for profit. González Montañez also employed, used, persuaded, induced, enticed, and coerced the same minor to engage in sexually explicit conduct for the purpose of producing and transmitting child pornography.
“Human trafficking – particularly trafficking of children – is a reprehensible crime with far reaching consequences,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “The United States Attorney’s Office and law enforcement agencies will continue to take full advantage of our investigative tools and prosecution powers in order to protect our children from sexual predators. We want to remind the public to report all inappropriate behavior with children to their local authorities and together, local and federal law enforcement will see that justice is carried out.”
Special Agent in Charge Rebecca González-Ramos stated: “We have been following the pattern of this woman for a few months now. We have implemented our Victim Centered Approach; forensic interviews were performed, and data was gathered from digital equipment. All these efforts resulted in good evidence for a strong case of human trafficking in Puerto Rico. The victim and her family have the support they need to face this horrendous experience; and our special agents will continue this process until justice is served. We will continue to support and work with all our fellow law enforcement partners to get dangerous offenders off the streets. There will be zero tolerance for those who intend to harm our children.”
Assistant U.S. Attorney Daynelle Álvarez-Lora of the Child Exploitation and Immigration Unit is prosecuting the case. If convicted, the defendant faces a statutory minimum sentence of 10 years up to life in prison for sex trafficking of children; 15 up to 30 years in prison for production of child pornography; and 10 years up to life in prison for transportation of a minor with intent to engage in criminal sexual activity. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. The defendant was transferred to the Guaynabo Metropolitan Detention Center to await further judicial proceedings.
For more information about HSI’s efforts to protect children from sexual predators, visit https://www.ice.gov/topics/iGuardians; and to denounce suspicious activities call 787-729-6969.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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About Homeland Security Investigations
HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of more than 8,700 employees consists of more than 6,000 special agents assigned to 237 cities throughout the United States, and 93 overseas locations in 56 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.
# HSI #
Fraud Charges Added Against Health Care Staffing Executive in Las VegasRead the Press Release
LAS VEGAS - A federal grand jury in Las Vegas returned a superseding indictment yesterday charging a health care staffing executive with conspiring to fix the wages of Las Vegas nurses — and then fraudulently concealing that conspiracy and the government’s investigation so that he could sell his company for over $10 million.
According to the six-count felony indictment, Eduardo Lopez, of Las Vegas, held executive positions at three different home health agencies. For each company, Lopez oversaw recruitment, hiring, retention and assignments of nurses and other health care staff. Count one of the superseding indictment charges Lopez and other unnamed co-conspirators with agreeing to suppress and eliminate competition for the services of nurses between March 2016 and May 2019.
Counts two through six of the superseding indictment charge Lopez with wire fraud. According to the indictment, in December 2021, Lopez sold his health care staffing company for over $10 million and falsely represented to the buyer of his company that federal law enforcement was not investigating him or his company. But, according to court documents, Lopez knew that was false. FBI special agents had questioned Lopez, served Lopez with a grand jury subpoena addressed to his company and seized his cell phone pursuant to a search warrant.
“Wage fixing hurts workers,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The Antitrust Division will aggressively investigate and prosecute wage-fixing conspiracies and any fraudulent conduct aimed at keeping the illicit profits of such conspiracies.”
“Today’s superseding indictment demonstrates our ongoing commitment to enforce federal antitrust laws and to ensure workers have an opportunity to compete for employment in a fair marketplace,” said U.S. Attorney Jason M. Frierson for the District of Nevada. “We will continue to work with the Antitrust Division and our law enforcement partners to protect the right of workers to earn a fair wage, and to root out wrongdoers who commit unlawful anticompetitive conduct.”
“The FBI and its partners will not tolerate the illicit practice of fixing wages,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “As today’s indictment shows, we will continue to pursue anyone engaging in fraudulent activity and combat any attempts made to evade the consequences of those actions.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum. A violation of the wire fraud statute carries a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s San Francisco Office and the FBI’s International Corruption Unit investigated the case, with assistance from the U.S. Attorney’s Office for the District of Nevada.
The charges in this case were brought in connection with the Antitrust Division’s ongoing commitment to prosecute anticompetitive conduct affecting American labor markets. Anyone with information on market allocation or price fixing by employers should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Fraud Charges Added Against Health Care Staffing Executive in Las VegasRead the Press Release
A federal grand jury in Las Vegas returned a superseding indictment yesterday charging a health care staffing executive with conspiring to fix the wages of Las Vegas nurses — and then fraudulently concealing that conspiracy and the government’s investigation so that he could sell his company for over $10 million.
According to the six-count felony indictment, Eduardo Lopez, of Las Vegas, held executive positions at three different home health agencies. For each company, Lopez oversaw recruitment, hiring, retention and assignments of nurses and other health care staff. Count one of the superseding indictment charges Lopez and other unnamed co-conspirators with agreeing to suppress and eliminate competition for the services of nurses between March 2016 and May 2019.
Counts two through six of the superseding indictment charge Lopez with wire fraud. According to the indictment, in December 2021, Lopez sold his health care staffing company for over $10 million and falsely represented to the buyer of his company that federal law enforcement was not investigating him or his company. But, according to court documents, Lopez knew that was false. FBI special agents had questioned Lopez, served Lopez with a grand jury subpoena addressed to his company and seized his cell phone pursuant to a search warrant.
“Wage fixing hurts workers,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The Antitrust Division will aggressively investigate and prosecute wage-fixing conspiracies and any fraudulent conduct aimed at keeping the illicit profits of such conspiracies.”
“Today’s superseding indictment demonstrates our ongoing commitment to enforce federal antitrust laws and to ensure workers have an opportunity to compete for employment in a fair marketplace,” said U.S. Attorney Jason M. Frierson for the District of Nevada. “We will continue to work with the Antitrust Division and our law enforcement partners to protect the right of workers to earn a fair wage, and to root out wrongdoers who commit unlawful anticompetitive conduct.”
“The FBI and its partners will not tolerate the illicit practice of fixing wages,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “As today’s indictment shows, we will continue to pursue anyone engaging in fraudulent activity and combat any attempts made to evade the consequences of those actions.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum. A violation of the wire fraud statute carries a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s San Francisco Office and the FBI’s International Corruption Unit investigated the case, with assistance from the U.S. Attorney’s Office for the District of Nevada.
The charges in this case were brought in connection with the Antitrust Division’s ongoing commitment to prosecute anticompetitive conduct affecting American labor markets. Anyone with information on market allocation or price fixing by employers should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Fort Myers Felon Headed Back to Prison for Unlawfully Possessing Loaded RifleRead the Press Release
Fort Myers, FL – U.S. District Judge Sheri Polster Chappell has sentenced Javonte Keyon Whitfield (25, Fort Myers) to four years and nine months in federal prison for possessing a firearm and ammunition as a convicted felon. The Court also ordered Whitfield to forfeit the firearm and ammunition possessed during the offense. Whitfield had been found guilty by a federal jury on May 11, 2023.
According to court documents and evidence presented at trial, shortly before 1:30 a.m. on May 14, 2021, officers from the Fort Myers Police Department (FMPD) were alerted to multiple gunshots near the intersection of Linhart Avenue and Evans Avenue in Fort Myers. While investigating the origin of the gunfire, FMPD officers spoke with an occupant of a duplex on Evans Avenue, who denied hearing any gunshots and claimed that he was alone in the residence with his three young children. Shortly thereafter, in direct contradiction to what he had just told the officers, six adult males—including Whitfield—and three young children exited the residence. Officers observed that one of the men who exited the residence was suffering from a gunshot wound, and EMS was summoned. During a later search of the residence, FMPD personnel found seven unsecured firearms, multiple high-capacity magazines, dozens of rounds of ammunition, and cocaine. FMPD recovered a loaded NORINCO SKS rifle equipped with a high-capacity magazine from under the bed in one of the two bedrooms of the home. Subsequent forensic analysis of that firearm determined that a latent fingerprint lifted from the metallic bayonet of the rifle belonged to Whitfield, a previously convicted felon who had been released from prison approximately five months earlier. As a previously convicted felon, he is prohibited from possessing a firearm or ammunition under federal law.
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.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Fort Myers Police Department, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Simon R. Eth and Patrick L. Darcey.
Former White House Advisor Convicted of Contempt of CongressRead the Press Release
WASHINGTON – Former White House advisor Peter K. Navarro, 72, of Washington, D.C., was found guilty today by a U.S. District Court jury of two counts of contempt of Congress stemming from his failure to comply with a subpoena issued by the United States House Select Committee to Investigate the January 6th Attack on the United States Capitol.
The announcement was made by U.S. Attorney Matthew M. Graves of the District of Columbia and Assistant Director in Charge David Sundberg, of the FBI’s Washington Field Office. A sentencing hearing is scheduled for Jan. 12, 2024.
According to evidence presented at trial, on Feb. 9, 2022, the Select Committee issued a subpoena to Navarro. The subpoena required him to appear and produce documents to the Select Committee on Feb. 23, 2022, and to appear for a deposition before the Select Committee on March 2, 2022. Navarro refused to appear to give testimony as required by subpoena and refused to produce documents in compliance with a subpoena.
In its subpoena, the Select Committee said it had reason to believe that Navarro had information relevant to its investigation. Navarro, formerly an advisor to the President on various trade and manufacturing policies, has been a private citizen since departing the White House on Jan. 20, 2021. He was indicted June 2, 2022.
Each count of contempt of Congress carries a minimum of 30 days and a maximum of one year in jail, as well as a fine of up to $100,000. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case is being investigated by the FBI’s Washington Field Office. It is being prosecuted by the Fraud, Public Corruption, and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia. It was tried by Assistant United States Attorneys Elizabeth Aloi and John Crabb Jr., supported by Paralegal Specialist Sonalika Chaturvedi.
Former Louisiana Correctional Officer Charged with Federal Civil Rights and Obstruction Offenses Involving Excessive Force IncidentRead the Press Release
A federal grand jury in Shreveport, Louisiana, returned a three-count indictment today charging former DeSoto Parish Sheriff’s Office (DPSO) Correctional Officer Javarrea Pouncy with federal civil rights violations for willfully using unreasonable force against a detainee, failing to obtain medical care for the detainee and obstructing justice.
According to the indictment, on Sept. 27, 2019, Pouncy, acting in his official capacity as a DPSO correctional officer, used unreasonable force against a detainee by repeatedly striking him in the head and body without legal justification while the detainee was being booked into the DeSoto Parish jail. The indictment further alleges that the assault caused bodily injury to the detainee.
In addition, the indictment alleges that Pouncy knew that the detainee had serious medical needs and willfully failed to obtain necessary medical care for him.
The indictment also charges Pouncy with obstruction of justice for knowingly falsifying and making a false entry in a DPSO report with the intent to impede, obstruct and influence an investigation into the assault.
Count one of the indictment charges Pouncy for his unreasonable use of force; count two charges Pouncy for his failure to obtain medical care; and count three charges him with filing the false report. If convicted, Pouncy faces a maximum penalty of 10 years in prison each for counts one and two, and 20 years in prison for count three.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Brandon Brown for the Western District of Louisiana and Special Agent in Charge Douglas A. Williams Jr. of the FBI New Orleans Field Office made the announcement.
The FBI New Orleans Field Office is investigating the case.
Assistant U.S. Attorney Seth Reeg for the Western District of Louisiana and Trial Attorney Erin Monju of the Civil Rights Division’s Criminal Section are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Desoto Parish Sheriff’s Office Correctional Officer Charged with Federal Civil Rights and Obstruction Offenses Involving Excessive Force IncidentRead the Press Release
SHREVEPORT, La. – A federal grand jury in Shreveport, Louisiana, has returned a three-count indictment charging former DeSoto Parish Sheriff’s Office (DPSO) Correctional Officer Javarrea Pouncy with federal civil rights violations for willfully using unreasonable force against a detainee, failing to obtain medical care for the detainee and obstructing justice.
According to the indictment, on September 27, 2019, Pouncy, acting in his official capacity as a DPSO correctional officer, used unreasonable force against a detainee by repeatedly striking him in the head and body without legal justification while the detainee was being booked into the DeSoto Parish jail. The indictment further alleges that the assault caused bodily injury to the detainee. In addition, the indictment alleges that Pouncy knew that the detainee had serious medical needs and willfully failed to obtain necessary medical care for him.
The indictment also charges Pouncy with obstruction of justice for knowingly falsifying and making a false entry in a DPSO report with the intent to impede, obstruct and influence an investigation into the assault. Count one of the indictment charges Pouncy for his unreasonable use of force; count two charges Pouncy for his failure to obtain medical care; and count three charges him with filing the false report.
If convicted, Pouncy faces a maximum penalty of 10 years in prison each for counts one and two, and 20 years in prison for count three.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Brandon Brown for the Western District of Louisiana and Special Agent in Charge Douglas A. Williams Jr. of the FBI New Orleans Field Office made the announcement. The FBI New Orleans Field Office is investigating the case. Assistant U.S. Attorney Seth Reeg for the Western District of Louisiana and Trial Attorney Erin Monju of the Civil Rights Division’s Criminal Section are prosecuting the case.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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Former Cherokee Charter Academy schoolteacher and her husband sentenced for child pornography offensesRead the Press Release
ROME, Ga. – A Calhoun man who distributed images of child sex abuse and his wife, a former middle school special education teacher who received those images and deleted text messages to conceal his crimes, have been sentenced to federal prison.
“By sharing images depicting the sexual violation of minors, the defendants re-victimized children whose lives have been forever altered by this abuse,” said U.S. Attorney Ryan K. Buchanan. “The conduct in this case is especially egregious given that one of the defendants, a schoolteacher, occupied a position of trust in the community. The Department of Justice is committed to helping to ensure the safety and well-being of children, so we especially place a high priority on protecting and combating sexual exploitation of minors. We will continue to work with our law enforcement partners to protect children from sexual predators and pedophiles.”
“Finding and arresting predators, like these, who distribute images of children being abused is one of our most important missions and we take it seriously, said HSI Atlanta acting Special Agent in Charge Travis Pickard. “HSI, along with our dedicated law enforcement partners, remains committed to identifying individuals who prey on our most vulnerable population — especially those who hold positions of public trust.”
“The possession and distribution of child pornography poses a great threat to our communities. The GBI is devoted to protecting minors in our state and will continue to work with our local, state, and federal partners to ensure we hold those accountable who sexually exploit children,” said Chris Hosey, Director, Georgia Bureau of Investigation.
According to U.S. Attorney Buchanan, the charges and other information presented in court: Beginning no later than in December 2017, William Sandridge began to send his wife, Allyn Sandridge, text messages detailing his sexual fantasies involving prepubescent children. Some of the messages contained images of children engaged in sexually explicit conduct. At that time, Allyn Sandridge was employed as a special education teacher at a charter school in Canton, Georgia.
At William Sandridge’s direction, Allyn Sandridge periodically deleted her husband’s text messages and used an encrypted messaging application. These steps were intended to avoid detection of and conceal William Sandridge’s crimes.
On December 29, 2022, federal, state, and local law enforcement officers executed a search warrant at the Sandridges’ home acting on a tip received by the Georgia Bureau of Investigation. During the search, investigators discovered multiple cell phones and a desktop computer loaded with graphic images of child sex abuse. Allyn Sandridge cooperated with the investigation immediately and disclosed to the officers the material William Sandridge had sent to her phone.
On September 6, 2023, U.S. District Judge William M. Ray, II sentenced the defendants as follows:
- William Sandridge, 42, of Calhoun, Georgia, was sentenced to seven years and three months in prison to be followed by a lifetime of supervised release. He pleaded guilty to distribution of a visual depiction of a minor engaging in sexually explicit conduct on June 6, 2023.
- Allyn Michelle Sandridge, 42, of Calhoun, Georgia, was sentenced to one year and six months in prison to be followed by a lifetime of supervised release. She pleaded guilty to possession of a visual depiction of a minor engaging in sexually explicit conduct and misprision of a felony on May 25, 2023.
This case was investigated by Homeland Security Investigations, the Georgia Bureau of Investigation, and the Calhoun Police Department.
Assistant U.S. Attorney Theodore S. Hertzberg prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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.
Former Aequitas CEO and Company Executives Sentenced to Federal Prison for Roles in $300 Million Fraud ConspiracyRead the Press Release
PORTLAND, Ore.—Following their conviction at trial, three former executives of Aequitas Management, LLC, and associated companies, were sentenced to federal prison today for their roles in a vast fraud conspiracy wherein the executives raised nearly $300 million from defrauded investors.
Robert J. Jesenik, 63, former chief executive officer of Aequitas and resident of Lake Oswego, Oregon, was sentenced to 14 years in prison and ordered to forfeit more than $1.5 million; Andrew N. MacRitchie, 59, formerly of Palm Harbor, Florida, was sentenced to 70 months in prison and ordered to forfeit $689,662; and Brian K. Rice, 56, of Portland, was sentenced to 37 months in prison and ordered to forfeit $116,627. Restitution will be determined at a later date.
“When a large investment company led by greedy executives collapses, it can destroy the lives of the victim investors and their families. The victims in this case experienced delayed retirements, lost college savings, physical and mental illness, and many lives were forever changed because of these defendants,” said Ethan Knight, Chief of the Economic Crimes Unit for the U.S. Attorney’s Office. “Bob Jesenik and other former Aequitas executives cheated their investors out of millions and went to extraordinary lengths to cover-up the rapidly-declining financial condition of their company. The sentences imposed today reflect the seriousness of these crimes and should serve as warning to other executives or financial professionals contemplating fraud as a viable path to wealth.”
“This is one of the largest fraud cases ever investigated by the Portland FBI with hundreds of millions of dollars in losses,” said Kieran L. Ramsey, Special Agent in Charge of the FBI Portland Field Office. “For years, the defendants deliberately deceived countless investors both internationally and domestically through an elaborate web of lies. Many of those investors were right here in Oregon. These sentences send a strong message that the FBI, our partners, and the United States Attorney's Office will continue to work together to investigate and prosecute those who perpetrate these kinds of fraud schemes for their personal gain.”
“A scam is a scam, no matter how sophisticated or professional it appears,” said Adam Jobes, Special Agent in Charge, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “The extensive scale of this scheme was matched only by the efforts taken to unravel the truth. Unjust gain is never secure, and today’s sentencings demonstrate that IRS:CI is committed to holding fraudsters accountable for their actions.”
According to court documents, Jesenik, MacRitchie, Rice, and others used Aequitas, formerly headquartered in Lake Oswego, to solicit investments in a variety of notes and funds, many of which were purportedly backed by trade receivables in education, health care, transportation, and other consumer credit areas. At its peak, Aequitas employed nearly 200 people.
From June 2014 through February 2016, the former executives solicited investors by misrepresenting Aequitas’ use of investor money, the financial health and strength of the company and its subsidiaries, and the risks associated with its investments and investment strategies. Collectively, the defendants also failed to disclose other critical facts about the company, including its near-constant liquidity and cash-flow crises, the use of investor money to repay other investors and to defray operating expenses, and the lack of collateral to secure funds.
In 2005, Jesenik founded the Aequitas group of companies, and, as chief executive officer, controlled the organization’s structure and had ultimate decision-making authority over company activities. As elicited through trial testimony, Jesenik was a micromanager deeply entrenched in the day-to-day workings of Aequitas. He also served as the company’s principal pitchman, frequently telling others that Aequitas would one day rival leading asset management firms.
MacRitchie was Aequitas’s executive vice president and chief compliance officer responsible for the development and implementation of risk management and compliance processes and procedures. MacRitchie oversaw the company’s accounting, legal, and auditing functions, and participated in fundraising. He also established Aequitas’s New York office and directed the company’s “Lux Fund,” a Luxembourg-based fund used to solicit international investors.
Rice served as Aequitas’s executive vice president and president of wealth management. Among other responsibilities, Rice oversaw the solicitation of investments through registered investment advisors (RIA) and managed Aequitas’s affiliated RIAs.
The company’s largest holdings were from various hospital networks, a consumer debt-consolidator, a motorcycle lender, and Corinthian Colleges, one of the nation’s largest operators of for-profit technical and post-secondary schools. The student loans Aequitas owned from Corinthian Colleges, valued at more than $200 million, were by far the company’s largest single category of receivables.
By early 2014, the U.S. Department of Education began scrutinizing Corinthian’s graduation and job-placement rates and, by June of 2014, announced it would defer the payment of federal-aid funds to the schools. Soon after, Corinthian defaulted on its monthly recourse payment to Aequitas, costing the company more than $4 million per month.
The collapse of Corinthian Colleges set off a series of events that ultimately led to Aequitas’s own demise. Meanwhile, Jesenik, MacRitchie, Rice, and others committed numerous financial crimes in an effort to conceal Aequitas’ bleak financial picture. In June 2014, they prepared a letter to investors claiming that Corinthian’s woes would not impact Aequitas’s ability to recoup its investment from student borrowers. At the same time, they continued soliciting new non-equity investments in the company, falsely claiming Aequitas used new investment funds to purchase receivables when, in reality, they were using the funds to pay the company’s bills and prior investors. By July 2014, Aequitas was effectively insolvent, and, in March 2016, the company collapsed.
On July 13, 2022, a federal grand jury in Portland returned a 31-count superseding indictment charging Jesenik, MacRitchie, and Rice with one count each of conspiracy to commit mail and wire fraud and conspiracy to commit money laundering, and 28 counts of wire fraud. Jesenik was also charged with a single count of making a false statement on a loan application. On May 15, 2023, after a six-week trial, a federal jury found Jesenik, MacRitchie, and Rice guilty of conspiring with one another to commit mail and wire fraud and 28 individual counts of wire fraud. Jesenik was also convicted of making a false statement on a loan application.
In 2019, former Aequitas executives and co-conspirators Brian A. Oliver, 58, of Aurora, Oregon, and Olaf Janke, 52, of Portland, pleaded guilty to conspiring to commit mail and wire fraud and money laundering. Janke will be sentenced on October 18, 2023, and, as part of his plea agreement, has agreed to pay full restitution. Following his death on July 7, 2023, Oliver’s guilty plea was vacated and his charges were dismissed.
On May 26, 2022, former Aequitas senior executive and chief financial officer Nelson Scott Gillis, 70, of Lake Oswego, pleaded guilty to making a false statement to a bank. He will be sentenced on October 10, 2023, and has also agreed to pay full restitution.
This case was investigated by the FBI, IRS-Criminal Investigation, and U.S. Department of Labor Employee Benefits Security Administration. It was prosecuted by Ryan W. Bounds and Christopher L. Cardani, Assistant U.S. Attorneys for the District of Oregon, and Siddharth Dadhich, Special Assistant U.S. Attorney for the District of Oregon. Assistant U.S. Attorney Hannah Horsley assisted the trial team.
Following Significant Policing Reform Progress, Federal Judge Terminates Most Consent Decree Provisions for City of Seattle and Seattle Police DepartmentRead the Press Release
In response to a joint motion filed in March by the Justice Department and the City of Seattle, a federal judge terminated most provisions of a consent decree that led to significant policing reform. The court’s order recognizes the city’s consistent compliance with the core requirements of a 2012 consent decree regarding the Seattle Police Department (SPD). The order details the additional obligations that the city must take to continue the reform process.
According to the order, “SPD has made tremendous improvements in its policies, methods of operation and leadership with respect to the areas of use of force, stops and detentions and crisis intervention.” The court found that “the city has achieved sustained full and effective compliance, for at least two years, with the commitments set forth in the consent decree regarding crisis intervention, stops and detentions, bias-free policing, supervision and the Office of Police Accountability and terminate[d] the parties’ obligations” under those areas of the consent decree. For example:
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After making changes to SPD’s policies and training on the use of force, SPD has reduced the use of serious force by 60%, and force is now used in less than one-quarter of one percent of all events to which officers respond.
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To better respond to people experiencing behavioral health crises, SPD developed an advanced crisis intervention program in which civilian mental health professionals and non-police mobile crisis teams respond to behavioral health crisis incidents.
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SPD developed policies and training to secure people’s rights during police investigative stops. The court monitor found that officers complied with legal and policy requirements in almost all instances it assessed.
“This ruling acknowledges the significant reforms implemented by the City of Seattle and the Seattle Police Department to ensure effective and nondiscriminatory policing for the community,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The court’s order gives the city and police department the ability to focus on the areas that need additional attention. We commend the city, police department and the community for continuing to collaborate on constitutional and non-discriminatory policing which benefits all residents in the City of Seattle.”
“I commend the personnel of the Seattle Police Department whose dedication has transformed policing in Seattle,” said Acting U.S. Attorney Tessa Gorman for the Western District of Washington. “Hard work remains in how our police confront crowd control and disciplinary action for misconduct. We look forward to working with the department, the city accountability partners, the Community Police Commission and the citizens of Seattle to achieve these remaining reforms required by the consent decree.
The court order requires continued work related to use of force in the crowd management context, accountability and racial disparities. For example:
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SPD must develop new crowd management policies, which must be approved by the court and independent monitor.
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An independent monitor must review of the city’s accountability systems and provide a plan to identify and mitigate racial disparities in stops, detentions and the use of force.
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The city must continue to measure whether the reforms required by the consent decree remain effective.
The Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office’s for the Western District of Washington’s Civil Division handled this matter.
The Civil Rights Division continues to prioritize constitutional policing and currently has pending investigations into police departments across the country, including in Memphis, Phoenix, New York City and Louisiana.
The consent decree, proposed agreement, as well as additional information about the Civil Rights Division, are available on its website at www.justice.gov/crt/special-litigation-section.
seattle_public_order.pdf-
Following Significant Policing Reform Progress, Federal Judge Terminates Most Consent Decree Provisions for City of Seattle and Seattle Police DepartmentRead the Press Release
WASHINGTON – In response to a joint motion filed in March by the Justice Department and the City of Seattle, a federal judge terminated most provisions of a consent decree that led to significant policing reform. The court’s order recognizes the city’s consistent compliance with the core requirements of a 2012 consent decree regarding the Seattle Police Department (SPD). The order details the additional obligations that the city must take to continue the reform process.
According to the order, “SPD has made tremendous improvements in its policies, methods of operation and leadership with respect to the areas of use of force, stops and detentions and crisis intervention.” The court found that “the city has achieved sustained full and effective compliance, for at least two years, with the commitments set forth in the consent decree regarding crisis intervention, stops and detentions, bias-free policing, supervision and the Office of Police Accountability and terminate[d] the parties’ obligations” under those areas of the consent decree. For example:
- After making changes to SPD’s policies and training on the use of force, SPD has reduced the use of serious force by 60%, and force is now used in less than one-quarter of one percent of all events to which officers respond.
- To better respond to people experiencing behavioral health crises, SPD developed an advanced crisis intervention program in which civilian mental health professionals and non-police mobile crisis teams respond to behavioral health crisis incidents.
- SPD developed policies and training to secure people’s rights during police investigative stops. The court monitor found that officers complied with legal and policy requirements in almost all instances it assessed.
“This ruling acknowledges the significant reforms implemented by the City of Seattle and the Seattle Police Department to ensure effective and nondiscriminatory policing for the community,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The court’s order gives the city and police department the ability to focus on the areas that need additional attention. We commend the city, police department and the community for continuing to collaborate on constitutional and non-discriminatory policing which benefits all residents in the City of Seattle.”
“I commend the personnel of the Seattle Police Department whose dedication has transformed policing in Seattle,” said Acting U.S. Attorney Tessa Gorman for the Western District of Washington. “Hard work remains in how our police confront crowd control and disciplinary action for misconduct. We look forward to working with the department, the city accountability partners, the Community Police Commission and the citizens of Seattle to achieve these remaining reforms required by the consent decree.
The court order requires continued work related to use of force in the crowd management context, accountability and racial disparities. For example:
- SPD must develop new crowd management policies, which must be approved by the court and independent monitor.
- An independent monitor must review of the city’s accountability systems and provide a plan to identify and mitigate racial disparities in stops, detentions and the use of force.
- The city must continue to measure whether the reforms required by the consent decree remain effective.
The Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office’s for the Western District of Washington’s Civil Division handled this matter.
The Civil Rights Division continues to prioritize constitutional policing and currently has pending investigations into police departments across the country, including in Memphis, Phoenix, New York City and Louisiana.
The consent decree, proposed agreement, as well as additional information about the Civil Rights Division, are available on its website at www.justice.gov/crt/special-litigation-section.
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Florida man admits to using fake debit cardsRead the Press Release
HOUSTON – A 34-year-old resident of Miami, Florida, has been convicted of conspiracy to commit access device fraud and aggravated identity theft, announced U.S. Attorney Alamdar S. Hamdani.
Claude Casimir admitted that in April-May 2019, he and others conspired together in the scheme that targeted the Houston area.
The investigation began in early 2019 after a local bank discovered numerous fraudulent transactions. They found that individuals had used the PINs of actual bank customers and withdrew money via counterfeit cards.
As part of his plea, Casmir admitted he rented a vehicle to access several ATMs in the Houston area and withdrew cash using counterfeit debit cards. He also drove another individual around the Houston area using the rented vehicle to do the same.
Additionally, he admitted that on May 8, 2019, he used a debit card of another individual without that person’s knowledge or consent. In this single transaction, Casmir attempted to take $2,000.
U.S. District Judge Eskridge will impose sentencing Dec. 28. At that time, Casimir faces up to five years in federal prison and a possible $250,000 fine for the conspiracy. He will also receive a mandatory two years for the aggravated identity theft which must be served consecutively.
He has been and will remain in custody pending that hearing.
The Secret Service conducted the investigation. Assistant U.S. Attorney Rodolfo Ramirez prosecuted the case.
Five Men Charged with Using New York Diamond District Companies as Fronts to Illegally Move More Than $600 MillionRead the Press Release
NEWARK, NJ. – Five men who work in New York City’s Diamond District were arrested today and charged with illegally processing more than $600 million through unlicensed money transmitting businesses, U.S. Attorney Philip R. Sellinger announced.
Raj Vaidya, 26; Rakesh Vaidya, 51; Shrey Vaidya, 23; and Neel Patel, 26, all of Edison, New Jersey; and Youssef Janfar, aka “Joe Rodeo,” 57, of Great Neck, New York, are each charged by complaint with one count of operating and aiding and abetting the operation of an unlicensed money transmitting business. The defendants appeared before U.S. Magistrate Judge Edward S. Kiel in Newark federal court and were released on unsecured bond.
According to documents filed in this case and statements made in court:
Since 2019, Raj Vaidya, Rakesh Vaidya, Shrey Vaidya, and Patel have operated numerous purported diamond, gold, and jewelry companies in New York City’s Diamond District, including Arya Diamond Jewellery USA Inc., d/b/a “Karats & Carats,” Diamspark LGD LLC, Royal Diamonds LLC, Raj Gold and Diamond LLC, Royal Arya Jewellery Inc, and Raj Gold and Diamond Inc. Janfar also purportedly operated companies in the Diamond District, including Rodeo of NY, d/b/a “Sarah Jewels.” The defendants used these and other entities as fronts to conduct hundreds of millions of dollars in illegal financial transactions for customers – including converting cash to checks or wire transfers – in exchange for substantial fees. At times, they moved millions of dollars in cash in a single day. None of their companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).
The charge of operating and aiding and abetting the operation of an illegal money transmitting business carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross amount of any pecuniary gain that any persons derived from the offense or of any pecuniary loss sustained by any victims of the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents and task force officers of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz in Newark; and special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel; with the investigation leading to the charges. He also thanked the Justice Department’s Money Laundering and Asset Recovery Section (MLARS), the Parsippany-Troy Hills Police Department, the Morristown Police Department, the Federal Deposit Insurance Corporation – Office of Inspector General, and the New York City Police Department for their assistance in the investigation.
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 government is represented by Assistant U.S. Attorneys Mark J. Pesce of the Economic Crimes Unit, Olta Bejleri of the Organized Crime/Gangs Unit, and Angelica Sinopole of the Health Care Fraud Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
vaidya.complaint.pdfFinal Co-Conspirator Sentenced to Prison for COVID-19 Fraud SchemeRead the Press Release
TUCSON, Ariz. – Patrick Green, 48, of Longview, Texas, was sentenced last week by United States District Judge John C. Hinderaker to 14 months in federal prison and ordered to pay $226,146 in restitution. Green pleaded guilty to Conspiracy to Commit Wire Fraud.
Green was the final co-conspirator to be sentenced in this case. Jonathan Blake, 30, of Tucson, Arizona, and Bethany Helene Green, 46, of Longview, Texas, also pleaded guilty to conspiracy to commit wire fraud in this case. In early August, Judge Hinderaker sentenced Blake to six months in prison, and sentenced Bethany Green to 37 months in prison. All three co-defendants are responsible for, and ordered to pay, $226,146 in restitution.
During the COVID-19 pandemic, to offset employees’ lost wages, the federal government added $600 per week in federal Pandemic Unemployment Assistance (PUA) to the states’ standard unemployment payments. In May 2020, shortly after this government relief was announced, Bethany Green devised a fraudulent scheme to apply for Arizona unemployment assistance and the additional PUA funds on behalf of inmates at the Pima County Jail who were not entitled to receive unemployment payments. Bethany Green conspired with inmates at the jail, including her husband, Patrick Green, and another inmate, Jonathan Blake, to apply for benefits on their behalf. Patrick Green and Jonathan Blake also recruited other inmates to the scheme. A total of 16 inmates provided their personal identifying information which Bethany Green then used online to fraudulently apply and obtain unemployment benefits for the inmates. Bethany Green charged the inmates a fee, typically $1,000, to complete the online unemployment applications. Bethany Green then charged the inmates an additional weekly fee of $100 to file the weekly certifications necessary to continue the unemployment payments. In total, Bethany Green and her co-conspirators defrauded the Arizona Department of Economic Security of $226,146 in false unemployment claims.
United States Department of Labor-Office of Inspector General, Department of Homeland Security-Office of Inspector General, and Arizona Department of Economic Security-Office of Inspector General conducted the investigation in this case. Assistant U.S. Attorney Mary Sue Feldmeier, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR-22-01664-TUC-JCH (BGM)-1
RELEASE NUMBER: 2023-133_Green# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Federal Inmate Sentenced to Seven Months for Possession of Contraband Cell PhoneRead the Press Release
WILMINGTON, N.C. – A federal inmate pled guilty to possession of a contraband cell phone at the Federal Medical Center in Butner, North Carolina (“FMC Butner”) and was sentenced on Wednesday to seven months in prison for the charge. The seven-month term of imprisonment is in addition to, and consecutive to, his current term of imprisonment.
According to court documents, Ronito Gomez, 33, an inmate located at FMC Butner at the time of the offense, was found in possession of a cell phone during a visual search by Federal Bureau of Prisons staff. During the search, staff discovered one cell phone with a SIM card and one cell phone charger, which Gomez had concealed under his clothing before the search. The Warden at FMC Butner did not give Gomez permission or authorization to have a cell phone in his possession inside of the federal prison.
Gomez’s conviction for possession of a contraband cell phone also makes him ineligible to earn time credits under the First Step Act, which allows federal inmates to earn up to 365 days off of their sentence for participating in eligible programming while incarcerated.
Michael Easley, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. The Federal Bureau of Prisons investigated the case and Special Assistant U.S. Attorney Merrill Ward prosecuted the case.
Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:23-CR-00126-FL-RJ.
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Federal Grand Jury Indicts Mexican National of Orchestrating Fentanyl and Meth Scheme that Sent Narcotics Across U.S.Read the Press Release
LOS ANGELES – A Mexican national has been indicted on federal narcotics trafficking charges that allege he oversaw a drug trafficking organization that acquired large quantities of fentanyl and methamphetamine, stored the drugs at a Compton residence, and distributed the contraband locally and across the nation, sometimes using the United States Postal Service, the Justice Department announced today.
Edgar Valentin Felix Osuna, 25, of Sinaloa, Mexico, who was arrested on August 29 in Barstow while on his way to Las Vegas, was named in a three-count indictment returned Wednesday afternoon by a federal grand jury.
The indictment charges Felix with conspiring to distribute and to possess fentanyl and methamphetamine. He is also charged with substantive counts of distributing fentanyl and methamphetamine.
This case stems from an investigation by the Drug Enforcement Administration and the United States Postal Inspection Service that culminated with a search of the Compton residence that led to the seizure of nearly 66 kilograms of fentanyl (which included nearly 27,000 counterfeit pills) and approximately 18.4 kilograms of methamphetamine.
“From at least 2019, while in Mexico and while on federal probation [in a narcotics trafficking case in the District of Utah], Felix was facilitating the distribution of large quantities of fentanyl and other drugs that were being stored at a stash house in Compton, California that Felix controlled and was operated by Juan Gonzalez,” according to a criminal complaint previously filed in this case. The indictment alleges that Felix obtained the narcotics, arranged for deliveries to be made to the stash house, and orchestrated further distribution. Gonzalez and others allegedly wired the proceeds from drug sales to Felix.
The conspiracy count in the indictment alleges a series of acts, beginning with a May 5, 2019, distribution of approximately four kilogram of narcotics that were sold on behalf of Felix. The investigation outlined in the complaint alleges that drugs from the stash house were sometimes shipped via the United States Postal Service to addresses in New York, Pennsylvania and Missouri. Those parcels were mailed by a now-deceased drug courier. After that man’s death, Gonzalez shipped at least one package to an address in Illinois, the complaint alleges.
On February 23, 2022, Felix allegedly directed the distribution of 22 kilograms of methamphetamine. The following day, law enforcement arrested Gonzalez and executed a search warrant at the stash house that resulted in the seizure of the fentanyl, fake pills and methamphetamine.
Gonzalez pleaded guilty last year to distribution of fentanyl and possession of a firearm in furtherance of a drug trafficking offense. He was sentenced in January to 15 years in federal prison.
According to the complaint filed last month, Felix continued to distribute narcotics after Gonzalez was arrested, and law enforcement determined that he had returned to the United States by late 2022.
An indictment contains allegations that a defendant has committed a crime. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Felix, who is currently being held without bond, is scheduled to be arraigned on the indictment on September 21.
Each of the three counts in the indictment carries a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life.
The investigation into Felix and Gonzalez was conducted by the DEA Los Angeles Field Division and the United States Postal Inspection Service. The Orange County Sheriff’s Department provided substantial assistance.
Assistant United States Attorney Brittney Harris and Jenna Williams of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.
This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts and dismantles the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.
Federal Grand Jury A Indictments Announced- September 2023Read the Press Release
TULSA, Okla. – United States Attorney Clint Johnson today announced the results of the September 2023 Federal Grand Jury A.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged violations of federal law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
James O'dean Clifton. Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country; Assault Resulting in Bodily Harm in Indian Country; Child Neglect in Indian Country; and First-Degree Burglary in Indian Country. James O’dean Clifton, 39, a citizen of the United Keetoowah Band of Cherokee Indians from Tulsa, is charged with assault with a dangerous weapon with intend to do bodily harm in Indian Country; assault resulting in bodily injury in Indian Country; child neglect in Indian Country; and first-degree burglary in Indian Country after police responded to multiple domestic calls. The Tulsa Police Department and FBI are the investigating agencies. Assistant U.S. Attorneys Mallory Richard and Stacey Todd are prosecuting the case. 23-CR-284
Carl Duaine Coffey. Distribution of Methamphetamine and Distribution of Fentanyl. Carl Duaine Coffey, 46, from Tulsa is charged with distribution of methamphetamine and distribution of fentanyl. The Bureau of Alcohol, Tobacco, Firearms and Explosives is the investigating agency. Assistant U.S. Attorney Joel-Lyn McCormick is prosecuting the case. 23-CR-294
Anthony Aaron King. Assault of a Spouse/Intimate/Dating Partner by Strangling, Suffocating, and Attempting to Strangle and Suffocate in Indian Country; Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country; Sexual Abuse without Consent. Anthony Aaron King, 43, a Muskogee citizen from Tulsa is charged with three counts of assault of a spouse/intimate/dating partner by strangling, suffocating, and attempting to strangle and suffocate in Indian Country; two counts of assault with a dangerous weapon with intent to do bodily harm in Indian Country; and two counts of sexual abuse without consent. The Tulsa Police Department and FBI are the investigating agencies. Assistant U.S. Attorneys Michael Harder and Stacey Todd are prosecuting the case. 23-CR-251
Brayden Kent Bull. Aggravated Sexual Abuse of a Minor Under 12 Years of Age in Indian Country: Production of Child Pornography; Receipt and Distribution of Child Pornography; and Possession of Child Pornography in Indian Country. Brayden Kent Bull, 25, a Navajo citizen of Claremore, is charged with aggravated sexual abuse of a minor under 12 years of age in Indian Country: production of child pornography; receipt and distribution of child pornography; and possession of child pornography in Indian Country. Rogers County Sheriff’s Office and Homeland Security Investigations are the investigating agencies. Assistant U.S. Attorneys Ashley Robert and Christopher Nassar are prosecuting the case. 23-CR-283
Pedro Antonio Lopez Guerra. Distribution of Fentanyl. Pedro Antonio Lopez Guerra, 27, of Tulsa, is charged with three counts of distribution of fentanyl. Drug Enforcement Administration is the investigating agencies. Assistant U.S. Attorney Joel-lyn McCormick is prosecuting the case. 23-CR-295
Kedarrion Ramon Simmons. Felon in Possession of a Firearm and Ammunition; Making a false Statement in the Attempted Acquisition of a Firearm. Kedarrion Ramon Simmons, 30, of Tulsa is charged with being a felon in possession of a firearm and ammunition and making a false statement in the attempted acquisition of a firearm. The Tulsa Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives is the investigating agencies. Assistant U.S. Attorneys Shakema Onias and John Brasher are prosecuting the case. 23-CR-290
Keelan Marquez Smallwood. Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country; Carrying, Using, Brandishing, and Discharging a Firearm During and in Relation to a Crime of Violence; Felon in Possession of a Firearm and Ammunition. Keelan Marquez Smallwood, 32, of Tulsa is charged with two counts of assault with a dangerous weapon with intent to do bodily harm in Indian Country, carrying, using, brandishing, and discharging a firearm during and in relation to a crime of violence, and being a felon in possession of a firearm and ammunition. The Tulsa Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives are the investigating agencies. Assistant U.S. Attorney George Jiang is prosecuting the case. 23-CR-286
Kenyon Ray Vessell. Second Degree Murder in Indian Country; Assault Resulting in Serious Bodily Injury in Indian Country. Kenyon Ray Vessell, 24, a Muscogee citizen from Choctaw is charged with second degree murder in Indian Country and assault resulting in serious bodily injury in Indian Country after allegedly driving under the influence of a controlled substance and crashing into a vehicle causing the death of the driver and injuring another. The Oklahoma Highway Patrol and FBI are the investigating agencies. Assistant U.S. Attorney Stephanie Ihler is prosecuting the case. 23-CR-288
Cristian Josue Mejia-Garcia. Alien Unlawfully in the United States in the Possession of a Firearm and Ammunition. Cristian Josue Mejia-Garcia, 24, a Honduran national found in Tulsa, is charged with alien unlawfully in the United States in possession of a firearm and ammunition. The Tulsa Police Department, Homeland Security Investigations, and the U.S. Immigration and Customs Enforcement's Enforcement and Removal Operations have all contributed to the investigation. Assistant U.S. Attorney Cheryl Barber is prosecuting the case. 23-CR-285
Elder Jony Perez Zacarias. Unlawful Reentry of a Removed Alien. Elder Jony Perez Zacarias, 32, a Guatemalan residing in Tulsa, is charged with unlawful reentry of a removed alien after being arrested by the Tulsa Police Department on unrelated charges. Once in custody it was determined that Perez-Zacarias had unlawfully reentered the United States after having been deported to Guatemala on January 16, 2020, at Alexandria, LA. Perez-Zacarias has been removed on three previous occasions. U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations is the investigative agency. Assistant U.S. Attorney Cymetra Williams is prosecuting the case. 23-CR-287
Father of Alleged Lamar High School Shooter Sentenced to 6+ Years for Gun CrimeRead the Press Release
The father of a 15-year-old accused of fatally shooting a classmate at Lamar High School was sentenced Thursday to more than six years in federal prison for a gun crime, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
John Edward Porter, 50, was charged in March and pleaded guilty in May to being a felon in possession of a firearm. He was sentenced Thursday by U.S. District Judge Mark Pittman to 77 months in federal prison.
According to court documents, shortly after his son allegedly opened fire at Arlington’s Lamar High School on March 20, fatally shooting one student and injuring another, law enforcement executed a search warrant on Mr. Porter’s apartment.
Inside the home, agents found paperwork for a Mossberg, model 500, 12-gauge shotgun – the same gun recovered from the scene of the shooting. A trace revealed a relative of Mr. Porter had purchased the gun for him.
Inside Mr. Porter’s bedroom, agents also found a Smith & Wesson .357 gauge revolver, a Glock .40 caliber pistol, and a Smith & Wesson M&P .556 caliber rifle.
Mr. Porter, who had been convicted of first degree robbery and sexual battery in Louisiana in 1996 and was thus legally barred from possessing firearms, admitted to possessing all four guns, including the Mossberg.
Records indicated that Mr. Porter had attempted to purchase guns from licensed firearm dealers in 2014 and 2020, but was denied after the background check flagged his prior felony convictions.
The accused shooter has been charged by the state with murder and aggravated assault. He remains innocent until proven guilty in a court of law.
The Bureau of Alcohol, Tobacco, Firearms, & Explosives Dallas Field Division and the Arlington Police Department conducted the investigation. Assistant U.S. Attorney Frank Gatto prosecuted the case.
Drug Conspiracy Leader Gets 262-Months Imprisonment for Distributing Methamphetamine in Southern IllinoisRead the Press Release
EAST ST. LOUIS, Ill. – A U.S. District judge sentenced a California man to 262-months imprisonment after he admitted to leading a drug conspiracy ring targeting communities in southern Illinois.
Thomas Hines, 33, of Los Angeles, pled guilty to one count of conspiracy to distribute and possess with intent to distribute methamphetamine and one count of money laundering conspiracy. In addition to the prison sentence, Hines will serve five years of supervised release and was ordered to pay a $100,000 fine.
“The defendant led an operation responsible for distributing a significant amount of methamphetamine in this district,” said U.S. Attorney Rachelle Aud Crowe. “Pushing pound quantities of drugs exhibits a lack of respect for the law and safety of the community, and the defendant will have years to reconsider his actions in federal prison.”
"Taking out this methamphetamine trafficking organization is a prime example of DEA's key mission," said Acting Assistant Special Agent in Charge Michael E. Rehg, head of Drug Enforcement Administration enforcement operations in southern Illinois. "We investigate the criminal networks causing the most damage to our communities, and meth is particularly prominent in the Midwest, damaging lives in every community. Significant time behind bars for defendants like Thomas Hines is a fine reward to our investigators for their diligent work."
According to court documents, the conspiracy operated from at least January 2020 until January 2021 and trafficked more than an estimated 20 pounds of methamphetamine to southern Illinois.
Hines was the source of supply of methamphetamine for the drug trafficking organization. Seven additional individuals were charged in the indictment and pleaded guilty for their involvement in the conspiracy:
- Nyeshia Anderson, 32, of North Las Vegas, Nevada;
- Corey Hendriex, 39, of Granite City, Illinois;
- Amy Lynch, 42, of Granite City, Illinois;
- Tamara Peoples, 66, of Granite City, Illinois;
- Richard Stark, 53, of Hazelwood, Missouri;
- Terrence Thompson, 36, of St. Louis, Missouri; and
- Terrell Winston, 37, of Florissant, Missouri.
In one instance, Hines and Anderson delivered a suitcase holding nearly 11 kilograms of methamphetamine to Thompson in November 2020. Law enforcement recovered the suitcase while executing a search warrant on Thompson’s residence.
To finance the illegal narcotic operation, conspirators utilized CashApp, cashier’s checks, bank transfers and postal money orders—thus resulting in money laundering.
Sentencing hearings for Lynch and Winston are scheduled for November 2023. The remaining conspirators have received federal prison sentences.
DEA led the investigation. Assistant U.S. Attorney Karelia Rajagopal prosecuted the case.
This case was part of an Organized Crime Drug Enforcement Task Forces 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.
Dozens arrested as part of Houston Violent Crime InitiativeRead the Press Release
HOUSTON – The charges against 39 individuals are the newest brought in the Department of Justice Criminal Division’s Houston Violent Crime Initiative, conducted in partnership with the U.S. Attorney’s Office for the Southern District of Texas and local, state and federal law enforcement.
The arrests were made after a federal grand jury returned seven separate indictments, with additional arrests made under four court-issued complaints. The defendants are each alleged to be part of larger organizations involved in large-scale drug trafficking or violent robberies. Many of the charged crimes involved the illegal possession or use of firearms.
The joint effort, first announced a year ago in September 2022, addresses violent crime by employing, where appropriate, federal laws to prosecute gang members and associates in the southwest and southeast areas of Houston. As part of the initiative, the Criminal Division has dedicated attorneys and other resources to prosecuting violent offenders and assisting intervention, prevention and reentry efforts to address the root causes of violent crime.
Among the charges are possession with intent to distribute cocaine, fentanyl, meth and other drugs; possessing firearms in furtherance of drug trafficking crimes; conspiracy to commit Hobbs Act robbery; felon in possession of a firearm and carjacking.
During the investigations and arrests, law enforcement seized 79 firearms, including three machineguns made by attaching a machine conversion device (MCD) to a semi-automatic firearm and three stand-alone machinegun conversion devices not attached to firearms. Also seized were a silencer, three ghost guns, an inert hand grenade, and body armor. Drugs and related items seized included approximately 248 kilograms of meth, including meth pills some of which laced with fentanyl; over 1.7 kilograms of fentanyl, heroin, cocaine, and PCP, as well as four pill presses and over $110,000 in cash.
The FBI, Houston Police Department, Drug Enforcement Administration, Homeland Security Investigations and Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigations with the assistance of the Harris County Sheriff’s Office, Texas Department of Public Safety, U.S. Postal Inspection Service, Harris County Constable’s Office (Precincts 3, 4, and 5), Montgomery County Constable’s Office (Precinct 4), U.S. Marshals Service, Waller County Sheriff’s Office, Cy-Fair Independent School District Police Department and the Texas Anti-Gang Center .
Assistant U.S. Attorneys Kelly Zenon, John Ganz and Carrie Wirsing are prosecuting the cases along with Trial Attorneys Sheila Lafferty, Ralph Paradiso, Anthony Kaplan and Jennifer Weinhold of the Criminal Division’s Organized Crime and Gang Section.
Charges in indictments and complaints are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Dozens Arrested as Part of Houston Violent Crime InitiativeRead the Press Release
The charges brought against 39 individuals are the newest brought in the Justice Department Criminal Division’s Houston Violent Crime Initiative, conducted in partnership with the U.S. Attorney’s Office for the Southern District of Texas and local, state, and federal law enforcement.
The arrests were made after a federal grand jury returned seven separate indictments, with additional arrests made under four court-issued complaints. The defendants are each alleged to be part of larger organizations involved in large-scale drug trafficking or violent robberies. Many of the charged crimes involved the illegal possession or use of firearms.
The joint effort, first announced a year ago in September 2022, addresses violent crime by employing, where appropriate, federal laws to prosecute gang members and associates in the southwest and southeast areas of Houston. As part of the initiative, the Criminal Division has dedicated attorneys and other resources to prosecuting violent offenders and assisting intervention, prevention, and reentry efforts to address the root causes of violent crime.
Among the charges are possession with intent to distribute cocaine, fentanyl, meth, and other drugs; possessing firearms in furtherance of drug trafficking crimes; conspiracy to commit Hobbs Act robbery; and felon in possession of a firearm and carjacking.
During the investigations and arrests, law enforcement seized 79 firearms, including three machineguns made by attaching a machinegun conversion device (MCD) to a semi-automatic firearm and three stand-alone machinegun conversion devices not attached to firearms. Also seized were a silencer, three ghost guns, an inert hand grenade, and body armor. Drugs and related items seized included approximately 248 kilograms of meth, including meth pills some of which laced with fentanyl; over 1.7 kilograms of fentanyl, heroin, cocaine, and PCP, as well as four pill presses and over $110,000 in cash.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, Acting Special Agent in Charge David Martinez of the FBI Houston Field Office, Houston Police Chief Troy Finner, Principal Deputy Administrator George Papadopoulos of the Drug Enforcement Administration (DEA), Special Agent in Charge Mark Dawson of Homeland Security Investigations (HSI) Houston, and Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Houston Division made the announcement.
The FBI, Houston Police Department, DEA, HSI, and ATF investigated the cases with the assistance of the Harris County Sheriff’s Office, Texas Department of Public Safety, U.S. Postal Inspection Service, Harris County Constable’s Office (Precincts 3, 4, and 5), Montgomery County Constable’s Office (Precinct 4), U.S. Marshals Service, Waller County Sheriff’s Office, the Cy-Fair Independent School District Police Department, and the Texas Anti-Gang Center (TAG).
Trial Attorneys Sheila Lafferty, Ralph Paradiso, Anthony Kaplan, and Jennifer Weinhold of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kelly Zenon, John Ganz, and Carrie Wirsing for the Southern District of Texas are prosecuting the cases.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.