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Monday 12 June 2023
Great Falls meth, heroin dealer sentenced to five years in prisonRead the Press Release
GREAT FALLS — A Great Falls woman who admitted to dealing methamphetamine and heroin for a drug trafficking organization in Mexico was sentenced today to five years in prison, to be followed by five years of supervised release, U.S. Attorney Jesse Laslovich said.
Katie Marie Marceau, 38, pleaded guilty in March to possession with intent to distribute controlled substances.
Chief U.S. District Judge Brian M. Morris presided.
The government alleged in court documents that Marceau was a significant drug dealer in Great Falls and had direct connections to a drug trafficking ring in Mexico. Leaders of the organization sent workers to Great Falls to distribute meth and heroin and to recruit local workers, like Marceau, to distribute drugs. The workers typically distributed the drug in Great Falls for a few months, and then the leaders rotated to the next worker to avoid law enforcement detection. In late 2020, Marceau became the new designated worker for the drug organization and sold meth and heroin to undercover officers. Marceau also was on state supervision at the time when she engaged in this drug activity.
Assistant U.S. Attorney Jessica A. Betley prosecuted the case. The Great Falls Police Department, Drug Enforcement Administration, Montana Division of Criminal Investigation and Russell Country Drug Task Force conducted the investigation.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Gloucester County Man Admits Healthcare FraudRead the Press Release
CAMDEN, N.J. – A Gloucester County, New Jersey, man today admitted defrauding his employer’s health insurance plan out of more than $4 million by submitting fraudulent claims for medically unnecessary compounded medications, Attorney for the United States Vikas Khanna announced.
Christopher Gualtieri, 50, of Franklinville, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler to one count of an indictment charging him with conspiracy to commit health care and mail fraud and one count charging him with obtaining oxycodone through fraud.
According to documents filed in this case and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Compounded drugs can be properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
Gualtieri and others learned that certain compound medication prescriptions were reimbursed by their health insurance plan for up to thousands of dollars for a one-month supply. Gualtieri recruited co-workers who were covered by their employer’s self-funded health insurance plan to agree to receive medically unnecessary compounded medications for themselves and their family members. Gualtieri and others caused the submission of fraudulent prescriptions to compounding pharmacies, which filled the prescriptions and billed the health insurance plan’s pharmacy benefits administrator. The pharmacy benefits administrator paid the compounding pharmacies more than $4 million for compounded medications arranged by Gualtieri and two conspirators for themselves, their dependents, and other family members. Gualtieri received a portion of the amount paid by the pharmacy benefits administrator to the compounding pharmacies. Gualtieri admitted to paying cash to his conspirators for their participation in the scheme. When questioned by special agents of the FBI, Gualtieri falsely denied recruiting others to receive compounded medications and falsely denied paying cash to others for their participation in the scheme.
During the same time period as the conspiracy involving compounded medications, Gualtieri also prepared and caused the filling of fraudulent prescriptions for oxycodone for himself and a family member.
The charge of conspiracy to commit health care and mail fraud is punishable by a maximum potential penalty of 20 years in prison; the charge of obtaining drugs by fraud is punishable by a maximum potential penalty of four years in prison. Both counts are also punishable by a fine of up to $250,000, or twice the gross gain or gross loss from the offense, whichever is greatest. Sentencing is scheduled for Oct. 18, 2023.
Attorney for the United States Khanna credited agents of the FBI, Philadelphia Field Office, Health Care Fraud Task Force, under the direction of Special Agent in Charge Jacqueline Maguire; task force members from the Pennsylvania Attorney General’s Office, Department of Health and Human Services – Office of Inspector General; the Philadelphia Police Department; and diversion investigators of the Drug Enforcement Administration, New Jersey Division, Camden Resident Office, under the direction of Special Agent in Charge Cheryl Ortiz, with the investigation leading to today’s guilty plea. Attorney for the United States Khanna also thanked U.S. Postal Service – Office of Inspector General, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
gualtieri.indictment.pdfFormer St. Louis Alderman Indicted, Accused of Insurance FraudRead the Press Release
ST. LOUIS – A grand jury has indicted former St. Louis Alderman Brandon Bosley on charges accusing him of committing insurance fraud while in office.
Bosley was indicted on three felony wire fraud charges Wednesday. The indictment was sealed until his appearance in court Monday, when he pleaded not guilty.
The indictment accuses Bosley of orchestrating a scheme to obtain money from his insurance company by falsely inflating the cost of repairs to a Prius that he was driving. The car had been obtained by Bosley from a businessman who owned a convenience store in Bosley’s ward as well as a used car lot and an auto repair business elsewhere.
Bosley paid $500 cash for the Prius, which had an approximate value of nearly $10,000, but he did not register or title the car in his name, the indictment says. The Certificate of Title listed the purchase price as $3,000.
On Sept. 16, 2021, another driver struck the Prius while it was parked in front of Bosley’s office. After the other driver’s insurance company contacted Bosley about the damages, Bosley offered a bribe to the businessman to prepare an inflated estimate of the repair costs so the insurance company would total the car, the indictment says.
He also asked the businessman to prepare a second, legitimate repair estimate in case he wanted to buy the car back from the insurance company, the indictment says. Based upon the falsely inflated repair estimate which Bosley submitted to the insurance company, the insurance company paid Bosley $7,978.90 for the vehicle, and Bosley then asked the businessman to offer the insurance company $2,000 to buy the car back, the indictment says.
Each wire fraud charge is punishable by up to 20 years in prison and a $250,000 fine, or both.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The FBI investigated the case. Assistant U.S. Attorney Hal Goldsmith is prosecuting the case.
Former Registered Broker Sentenced to Prison for Wire FraudRead the Press Release
CLEVELAND – Thomas H. Hissong, 58, of Akron, Ohio, was sentenced Friday to 12 months and a day in prison by U.S. District Solomon Oliver, Jr. after Hissong pleaded guilty to a five count indictment that charged him with wire fraud. Hissong was also ordered to pay $552,850 in restitution to the victim investors and a fine of $2,000.
According to court documents and today’s sentencing hearing, Hissong was a former registered broker. From in or around May 2016 to in or around May 2018, Hissong pitched an investment opportunity to investors to buy shares in Plasma Ignitor, a new spark plug technology, but failed to disclose that he would receive a commission on the sales of the shares. Hissong wrongfully withheld $552,850 of the investors’ monies.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Brian M. McDonough.
Former New Philadelphia, Ohio Resident Sentenced to 70 Months Imprisonment for Conspiring to Distribute and Distributing 50 Grams of MethamphetamineRead the Press Release
A former resident of New Philadelphia, Ohio, has been sentenced in federal court to 70 months of imprisonment and 4 years of supervised release on his conviction of conspiring to distribute and distributing 50 grams or more of methamphetamine, United States Attorney Eric G. Olshan announced today.
On June 9, 2023, United States District Judge Robert J. Colville imposed the sentence on Phillip Bonanno, 56, who is currently incarcerated at the Northeast Ohio Correctional Center.
According to information presented to the court, the Greater Pittsburgh Safe Streets Task Force, led by the Federal Bureau of Investigation, conducted a long-term investigation, which included obtaining authorization for a federal wiretap, into drug-trafficking activity occurring in the Western District of Pennsylvania.
Bonanno (aka “Guido”, “Ohio Guido”) was a “fully-patched” member of the PMC, reportedly from 2020 until 2022, and a close associate of co-defendants Bill Rana, who is pending sentencing, and Eric Armes, who was also sentenced to 70 months’ imprisonment. Bonanno and his nephew, co-defendant Cody Bonanno, who was already sentenced, lived in Ohio and were identified as methamphetamine sources of supply for among others, Rana, Armes and co-defendant Dominic Quarture, pending sentencing.
Intercepted communications confirmed that Bonanno facilitated drug trafficking activity at a residence located in New Philadelphia, Ohio, where drug customers, including members of the conspiracy, traveled to conduct drug transactions with his nephew. Additionally, Bonanno and his nephew would travel to the Western District of Pennsylvania also for their drug-trafficking activity.
Assistant United States Attorney Rebecca L. Silinski prosecuted this case on behalf of the government.
Acting United States Attorney Rivetti commended the Federal Bureau of Investigation, the United States Postal Inspection Service, Drug Enforcement Administration, Allegheny County Sheriff’s Office, Pennsylvania State Police, and Pennsylvania Office of Attorney General Bureau of Narcotics Investigations, for the investigation leading to the successful prosecution of Bonanno.
This sentencing was the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Federal Jury Convicts Former Midland Teacher, Lacrosse Coach of Five Counts Related to Wire FraudRead the Press Release
MIDLAND, Texas – A federal jury in Midland convicted a Midland man Thursday for one count of conspiracy to commit wire fraud and four counts of aiding and abetting wire fraud.
According to court documents and evidence presented at trial, William Logsdon, 54, used the trust he had built with community members during his time as a lacrosse coach and teacher in the Midland area, and even the trust he had established with members of his own family, to convince them to “invest” in a Ponzi scheme. Logsdon conducted the scheme in concert with his mother-in-law, Jamie Thompson, a former geologist in the oil and gas industry who had previously pleaded guilty.
Together, Thompson and Logsdon told their victims that the money they were “investing” was being used to purchase royalty interests for various oil, gas and mineral projects located in Texas and New Mexico. The royalty interests were allegedly being purchased through an entity called the National Royalty Group, or NRG. In actuality, the National Royalty Group did not exist, and rather than purchasing royalty interests, Thompson and Logsdon used the money to primarily pay for personal expenses, as well as to advance the Ponzi scheme by providing some “distributions” back to earlier “investors.”
In total, Logsdon and Thompson are believed to have defrauded their victims out of more than $1,500,000.
U.S. Attorney Jaime Esparza of the Western District of Texas made the announcement.
The Midland Police Department investigated the case.
Assistant U.S. Attorney John Fedock prosecuted the case.
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Fayette County Couple Plead Guilty to Federal Drug CrimesRead the Press Release
CHARLESTON, W.Va. – Valerie A. Angel, 58, of Mount Carbon, pleaded guilty today to distribution of a quantity of cocaine and Christopher Lee Miller, 61, of Mount Carbon, pleaded guilty to aiding and abetting the distribution of a quantity of cocaine.
According to court documents and statements made in court, Angel admitted to distributing three packages each containing 3.5 grams of cocaine to a confidential informant at the Mount Carbon residence she shared with Miller on July 11, 2019. Miller admitted to arranging the transaction by telephone earlier that day and accepting $600 from the confidential informant in exchange for the cocaine distributed by Angel.
Angel and Miller further admitted to selling cocaine to the confidential informant on 10 other occasions between July 15, 2019, and October 24, 2019, at their residence. Angel or Miller arranged each of these transactions over the telephone with the confidential informant, and shared the responsibilities and benefits of distributing the cocaine.
Angel and Miler are scheduled to be sentenced on September 6, 2023, and each faces a maximum penalty of 20 years in prison, at least three years of supervised release, and a $1 million fine.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI) and the West Virginia State Police-Bureau of Criminal Investigations (BCI).
United States District Judge Joseph R. Goodwin presided over the hearing. Assistant United States Attorney Joshua Hanks is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case Nos. 2:23-cr-76 and 2:23-cr-77.
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Evansville Man Sentenced to 20 Years in Federal Prison After Engaging in Sexually Explicit Conduct with a 14-Year-Old via Facebook Video ChatRead the Press Release
EVANSVILLE- Stacy Ryan Goldman, 32, of Evansville, Indiana, has been sentenced to 20 years in federal prison after pleading guilty to sexual exploitation of a child.
According to court documents, between August of 2016 and March of 2017, Stacy Goldman communicated with a 14-year-old girl via Facebook video chat sessions. The child lived in Wisconsin and Goldman lived in Evansville, Indiana. During the video chat sessions, Goldman discussed sexual activity with the girl and sent her videos of himself in sex acts. Goldman also asked the child to send him sexually explicit material.
In an interview with FBI agents, Goldman admitted that he knew the girl was a minor. Goldman also admitted that on at least one occasion he threatened to publicly post intimate pictures of the child online.
U.S. Attorney for the Southern District of Indiana, Zachary A. Myers and Herbert J. Stapleton, Special Agent in Charge of the FBI’s Indianapolis Field Office made the announcement.
“Through social media networks and mobile devices, predators like this defendant can gain access to our children’s bedrooms from hundreds of miles away,” said U.S. Attorney for the Southern District of Indiana, Zachary A. Myers “Those who might seek to engage in sexual contact with children online should take notice of the federal prison sentence imposed today. Child sexual exploitation is a heinous crime and will be met with serious punishment. Our office, alongside the FBI and our law enforcement partners, are committed to keeping our children safe and holding child sex offenders accountable.”
This case was investigated by the Federal Bureau of Investigation with valuable assistance provided by the Wisconsin Rapids Police Department. The sentence was imposed by U.S. District Court Judge Richard L. Young. Judge Young also ordered that Goldman be supervised by the U.S. Probation Office for 15 years following his release from federal prison. Goldman must also register as a sex offender wherever he lives, works, or goes to school.
U.S. Attorney Myers thanked Assistant United States Attorney Todd S. Shellenbarger, who prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
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Drug Dealer Who Sold Fentanyl-Laced Crack Sentenced to More Than 16 Years After Four People Died in a Single DayRead the Press Release
ELIZABETH CITY, N.C. – A Beulaville man was sentenced today to 200 months in prison for conspiracy and distribution of cocaine base (crack) and fentanyl. Four people died from overdoses after consuming drugs sold by Marshall Ray Scarborough on a single day in April 2021. Scarborough was also ordered to pay the funeral expenses for all the victims. On February 7, 2023, Scarborough, age 65, pled guilty to the charges.
"Drug dealers who lace fentanyl into their supply are killing Americans at record rates, and families across Eastern North Carolina are feeling the pain of burying their loved ones far too early,” said U.S. Attorney Michael Easley. “Four of this fentanyl dealer’s customers had their lives snuffed out in a single day. Dealers should know, the U.S. Attorney’s Office is partnering local Sheriffs Offices to send fentanyl dealers to federal prison for the death and sorrow they sow."
“This is a great example of what happens when we work together, and I commend the men and women who worked relentlessly in conducting a thorough investigation,” said Duplin County Sheriff Stratton Stokes. “Today, Marshall Scarborough was sentenced to a lengthy prison sentence in federal court, which ensures that he will no longer spread poison in our community, or other communities. I hope this brings some form of comfort and closure to the victims’ families. Let this be a notice to anyone actively dealing narcotics or planning to deal narcotics in Duplin County. Our Office will continue to work diligently with our local, state, and federal allies to rid our communities of these issues.”
According to court documents and other information presented in court, deputies with the Duplin County Sheriff’s Office responded to three separate residences with unresponsive individuals, and the Columbus County Sheriff’s Office responded to a fourth. Efforts to revive individuals were unsuccessful. In three of the four cases, autopsies were performed, and the cause of death was listed as acute fentanyl and cocaine intoxication. In the fourth case, no autopsy was performed, but a blood test revealed fentanyl, cocaine and diazepam. The investigation determined that Scarborough was the source of supply for the crack that all four victims had ingested.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Drug Enforcement Administration and the Duplin County Sheriff’s Office, the Wallace Police Department, and the Columbus County Sheriff’s Office investigated the case and Assistant U.S. Attorney Tyler Lemons 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-116-BO-001.
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District Man Found Guilty of Voluntary Manslaughter and Related Charges for Killing Cousin in the Intersection of 29th and S Streets SoutheastRead the Press Release
Defendant Shot Victim Following a Series of Arguments Started by an Instagram Post
WASHINGTON – Lewkus Turner, 29, of Washington, D.C., was found guilty by a jury of voluntary manslaughter while armed and related charges stemming from a mid-afternoon shooting on December 11, 2020, at 29th and S Streets Southeast, announced U.S. Attorney Matthew M. Graves and Interim Chief Ashan M. Benedict, of the Metropolitan Police Department (MPD).
Turner was found guilty by a jury, on June 9, 2023, following a trial in the Superior Court of the District of Columbia, of voluntary manslaughter while armed, possession of a firearm during a crime of violence, and unlawful possession of a firearm. The Honorable Maribeth Raffinan scheduled sentencing for August 25, 2023.
According to the government’s evidence, just before 4:00 p.m. on December 11, 2021, the victim—and Turner’s first cousin—Vincent Gyamfi, drove to the 1600 block of 29th Street SE to speak to Turner regarding an Instagram post Turner had made earlier in the week. Shortly after arriving in the area, an argument broke out and Turner left the area. Turner returned shortly thereafter armed with a gun and the two men argued again before leaving in separate directions, with Mr. Gyamfi stopping his vehicle near the intersection of 29th and S Streets SE. At 4:07 p.m., Turner drove to the intersection and confronted his cousin for a final time. Mr. Gyamfi ran at Turner’s car, and Turner shot Mr. Gyamfi three times with a large caliber weapon. Turner then dragged Mr. Gyamfi’s body into the street, got into his vehicle, and fled the scene without calling for aid.
Turner was arrested in the murder case on December 29, 2021. He has been in custody ever since.
In announcing the verdict, U.S. Attorney Graves and Interim Chief Benedict commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the assistance provided by the U.S. Marshals Service and FBI CAST team. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Dan Lenerz and Bryan Han of the Appellate Section; Investigative Analyst Zachary McMenamin; Victim/Witness Advocate Karina Hernandez; Special Agents Mark Crawford and Durand Odom of the Criminal Investigations Unit; Supervisory Victim/Witness Service Coordinator Katina Adams-Washington, Victim/Witness Service Coordinators Tonya Jones and Maenylie Watson; Supervisory Budget Analyst Nikiya Burnette and Accounting Technician Evelyn Miles; Paralegal Specialist Meridith McGarrity; and Litigation Technology Specialist Charlie Bruce.
Finally, they commended the work of Assistant U.S. Attorneys Gregory Kimak, Christopher Carson, and Gauri Gopal, who investigated, indicted, and prosecuted the case.
Danvers Man Arrested for Money Laundering and Operating Unlicensed Money Transmitting BusinessRead the Press Release
BOSTON – A Danvers man has been arrested and charged with money laundering in connection with allegedly running an unlicensed, “no questions asked” money transmitting business that converted more than $1 million in cash to the digital currency Bitcoin, including on behalf of scammers and drug dealers.
Trung Nguyen, a/k/a “DCS420”, 46, was indicted on one count of conducting an unlicensed money transmitting business, one count of concealment money laundering, and one count of money laundering. Nguyen was arrested on June 9, 2023 and, following an initial appearance in federal court in Boston, was released on $250,000 unsecured bond with conditions.
According to the indictment, between September 2017 and October 2020, Nguyen owned and operated National Vending, LLC. Through National Vending, Nguyen accepted cash from customers and, in exchange for a fee, sent them Bitcoin in return. Exchangers of virtual currency, including Bitcoin exchangers, were money transmitters under federal law and were subject to federal anti-money laundering (AML) regulations, which, among other things, required them to register as money service businesses with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and to maintain effective AML programs, including by filing Suspicious Activity Reports with FinCEN, and by filing Currency Transaction Reports for Bitcoin-for-cash exchanges of more than $10,000.
It is alleged that Nguyen purposely failed to register National Vending with FinCEN, despite being required to do so. In approximately 15 transactions in 2018, Nguyen allegedly accepted a total of $200,000 to $300,000 in cash from an individual who identified himself to Nguyen as a methamphetamine dealer. In another series of transactions between October 2018 and September 2019, Nguyen allegedly accepted cash from an undercover law enforcement agent who told Nguyen that his business was delivering the controlled substance Adderall to gamblers at a Massachusetts casino. In a third series of transactions in 2020, Nguyen allegedly accepted approximately $60,000 from a 59-year old romance scam victim who believed she was sending cash to a romantic partner overseas. It is alleged that Nguyen failed to file Suspicious Activity Reports or Currency Transaction Reports on any of these transactions, including cash transactions of more than $10,000.
Nguyen allegedly concealed his money transmitting business by, among other ways, holding National Vending out to banks, cryptocurrency exchanges, and state authorities as a vending machine business, using encrypted messaging apps to communicate with customers, using technologies that made it more difficult to trace Bitcoin transactions, and breaking cash deposits of more than $10,000 into smaller cash deposits of less than $10,000 over consecutive days or at different branches of the same bank. Nguyen also allegedly enrolled in a paid course on concealing his business that recommended, among other things, that Nguyen purport to operate “a business for which cash deposits from around the country make sense” and that he “develop [his] cover story”, “create a list or your suppliers Fictitious of course”, and “Don’t say the word ‘Bitcoin’”.
The charges of money laundering each provide for a sentence of up to 20 years, three years of supervised release and a fine of up to $500,000 or twice the value of the property involved in the transaction. The charge of conducting an unlicensed money transmitting business provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting United States Attorney Joshua S. Levy; Michael Krol, Acting Special Agent in Charge of Homeland Security Investigations in New England; Joleen Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations, and Ketty Larco Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division made the announcement today. Assistant U.S. Attorney Seth B. Kosto, Deputy Chief of Levy’s Securities, Financial & Cyber Fraud Unit, 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.
Commercial Fisherman Pleads Guilty to Illegal Harvesting of Striped BassRead the Press Release
NORFOLK, Va. – A Saxis man pleaded guilty today to violating the Lacey Act related to his illegal harvest of striped bass.
According to court documents, Keith J. Martin, 52, was a commercial fisherman licensed in the Commonwealth of Virginia to harvest striped bass. Between 2018 and 2020, Martin routinely violated Virginia state law in the harvesting of striped bass from Virginia waters. Martin took bass in excess of his quota, failed to report the amount of bass he took, and completed at least one sale of striped bass with a commercial purchaser without using a properly certified scale.
For instance, in 2018 and 2019 Martin had a quota of 4,010 pounds of striped bass. Investigators learned that Martin sold over 6,000 pounds of striped bass to a single seafood company in Maryland in 2018 and over 4,300 pounds to the same company in 2019. Martin’s harvesting of the striped bass in violation of Virginia law, coupled with transporting it in interstate commerce to Maryland, constitutes a violation of the Lacey Act. During the relevant period, Martin illegally harvested and sold at least 12,663 pounds of striped bass, constituting a commercial value of at least $36,988.25.
Martin is scheduled to be sentenced on October 26. He faces a maximum penalty of 5 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Edward Grace, Assistant Director of Law Enforcement for the U.S. Fish and Wildlife Service, made the announcement after U.S. Magistrate Judge Lawrence R. Leonard accepted the plea.
Assistant U.S. Attorney Joseph L. Kosky is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:23-cr-40.
Chief Engineer Convicted for Obstruction of Justice and Oil Record Book Offenses; Operating Company Pleads Guilty for Oil Record Book OffenseRead the Press Release
On June 9, vessel Chief Engineer Denys Korotkiy was convicted of conspiracy to obstruct justice, obstruction of justice, and failure to maintain an accurate oil record book for the vessel Donald in San Diego, California, following a five-day jury trial. Interunity Management (Deutschland) GMBH, a vessel operating company, previously pleaded guilty for maintaining false and incomplete records relating to the discharge of oily bilge water.
The evidence showed that oily bilge water was illegally dumped from the Donald directly into the ocean through the vessel’s sewage tank without being properly processed through required pollution prevention equipment. Oily bilge water typically contains oil contamination from the operation and cleaning of machinery on the vessel. These illegal discharges were not recorded in the vessel’s oil record book as required by law. The evidence also showed that Korotkiy made false and fictitious entries in the oil record book claiming transfers of oily bilge had been made from the vessel’s engine room bilge wells to the vessel’s Bilge Holding Tank when, in fact, those transfers had not been made. Finally, the evidence showed that Korotkiy conspired with others to obstruct the U.S. Coast Guard’s inspection and investigation into the mishandling of oily bilge water onboard the motor vessel Donald.
At the conclusion of the trial, the court remanded Chief Engineer Korotkiy to custody. Sentencing is scheduled for Sept. 1.
“The illegal discharge of oily bilge water at sea and the falsification and destruction of records in order to obstruct the United States’ ability to investigate those discharges are crimes we take seriously,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The Department of Justice will continue to work with our partner agencies to ensure polluters are held fully accountable.”
“Unlawful oil discharges can cause immeasurable harm to the marine environment,” said U.S. Attorney Randy Grossman for the Southern District of California. “We will continue to work closely with our agency partners to safeguard our oceans by vigorous enforcement of environmental laws. This case is a reflection of that commitment.”
“This prosecution highlights the Department of Justice and the U.S. Coast Guard’s dedication in safeguarding our oceans against those that seek to deliberately harm our natural resources,” said Captain James Spitler, Sector Commander, Coast Guard Sector San Diego. “Illegal dumping of oil and falsification of oil record books are egregious violations. This guilty verdict should serve as a reminder that the Coast Guard and our partners at the Department of Justice will work tirelessly to hold accountable those that seek to deliberately discharge oil and falsify records.”
In the same matter, Interunity pleaded guilty to a felony violation of the Act to Prevent Pollution from Ships, for failing to accurately maintain the Donald’s oil record book. Under the terms of the plea agreement and subject to court approval, Interunity will pay a total monetary penalty of $1.25 million and serve a four-year term of probation, during which any vessels operated by the company and calling on U.S. ports will be required to implement a robust Environmental Compliance Plan. The monetary penalty includes $312,500 to fund projects, activities, or initiatives intended to benefit marine and coastal natural resources located in or around the Tijuana River National Estuarine Research Reserve.
The U.S. Coast Guard Sector San Diego and the U.S. Coast Guard Investigative Service are investigating the case.
Assistant U.S. Attorney Melanie K. Pierson for the Southern District of California and Senior Trial Attorney Stephen Da Ponte of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case.
Chester County Man Charged with Sexually Assaulting a Minor on Cross Country FlightRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Edward Decker, 45, of West Chester, Pennsylvania, was charged by indictment with two counts of abusive sexual contact on an aircraft.
In July 2022, Decker allegedly engaged in sexual contact with a minor on an American Airlines flight, departing San Diego, California, arriving in Philadelphia, Pennsylvania. If convicted, the defendant faces a maximum possible sentence of 5 years in prison, one year of supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Josh A. Davison.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Central City Woman Sentenced to Five Years in Federal Prison for Elder Financial Abuse and Identity Theft SchemeRead the Press Release
A Central City, Iowa, woman who stole over $400,000 from two elderly relatives was sentenced today to five years in federal prison. Carrie April Martin, age 44, received the prison term after a September 26, 2022 guilty plea to one count of bank fraud and one count of aggravated identity theft.
Evidence at Martin’s plea and sentencing hearings established that Martin had two elderly relatives, Victim-1 and Victim-2, in the Cedar Rapids area. Victim-1 was an elderly widow who was indigent, lived in a nursing home, and suffered from dementia and various physical ailments. Victim-2 was also an elderly widow in poor physical and mental health but had significant assets and lived in an assisted living facility. Victim-1 died at the age of 89 in December 2014, and Victim-2 died at the age of 96 in October 2017.
Between April 2014 and July 2017, Martin stole checks drawn on accounts at a credit union from Victim-1 and Victim-2. Another one of Martin’s relatives was the power of attorney for the two elderly widows and had full legal authority to act for them. From time to time, Martin stole the power of attorney’s identity and wrote checks to herself from her victims’ accounts at the credit union. Martin also leveraged her friendship with the office administrator at the local branch of a national investment firm to access an account that Victim-2 held at the firm. Martin also sold over $100,000 worth of stock that Victim-2 held in an energy company, which Victim-2 intended to bequeath to a church in Elkader. In total, Martin stole over $416,000 from Victim-1 and Victim-2.
Victim-2 went into hospice care less than a week after learning of defendant’s theft, which left Victim-2 with minimal assets. When informed that Martin lacked funds to repay Victim-2, Victim-2 asked that Martin be charged and held accountable for her scheme. Victim-2 died within a month’s time.
Evidence at Martin’s sentencing also established that Martin made false statements to a fraud specialist at her credit union and law enforcement to cover up her crimes. In May 2022, Martin told two witnesses to “just watch what you say” and, “If they don’t specifically ask, don’t give information.”
Martin was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Martin was sentenced to 60 months’ imprisonment. She was ordered to make $416,910.82 in restitution to her victim’s heirs, including the power of attorney and the church. She must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
In 2016, the United States Attorney’s Office for the Northern District of Iowa was selected as one of 10 districts in the nation to form an Elder Justice Task Force (http://go.usa.gov/cSngj). The task force was assembled to foster a collaborative working relationship among all levels of government officials, advocacy groups for the elderly and the disabled, and others charged with the care and protection for these vulnerable groups. The goals include ensuring the integrity of all government expenditures by eliminating fraud, waste, and abuse in health programs, and protecting some of the state’s most vulnerable citizens from harm, whether it occurs in nursing homes or other institutions or involves financial fraud schemes. To learn more about the Department of Justice’s Elder Justice Initiative, visit: https://www.justice.gov/elderjustice/
This week, the Department of Justice joins millions around the world in commemorating World Elder Abuse Awareness Day (WEAAD), a day intended to raise public awareness of the fight against elder abuse, neglect, and financial exploitation. Research sponsored by the Department’s National Institute of Justice finds that millions of older Americans experience some form of elder abuse, neglect, and financial exploitation every year, often by someone they love. The harms resulting from mistreatment of older Americans drives our work every day. Today, the Department of Justice is proud to announce 10 new resources to train, inform, and support elder justice professionals across the country.
Martin was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set. The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and investigated by the Cedar Rapids Police Department. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 22-CR-51.
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Cedar Rapids Man Sentenced to More than 15 Years’ Imprisonment for Possessing Methamphetamine, a Loaded Firearm, and over $135,000 in Drug MoneyRead the Press Release
A man who possessed methamphetamine with intent to distribute it and who possessed a firearm as an unlawful drug user, was sentenced today to more than 15 years in federal prison.
Joshua Ryan Gorrell, age 37, from Cedar Rapids, Iowa, received the prison term after a November 23, 2022 guilty plea to one count of possession of methamphetamine with intent to distribute it within 1,000 feet of a protected location, and one count of possession of a firearm as an unlawful drug user.
In a plea agreement, Gorrell admitted that, on July 22, 2022, he made a 911 call regarding an overdose that occurred at his home in Cedar Rapids. When first responders arrived, they found a deceased overdose victim. Officers searched Gorrell’s home and found $123,038 in U.S. Currency and over two pounds of actual (pure) methamphetamine, 43 grams of fentanyl, 56 grams of a mixture of fentanyl and heroin, 68 grams of marijuana, and 238 grams of THC wax. Evidence at the sentencing hearing showed that Gorrell stored these items throughout his house, in air ducts, laundry dryer vents, ceiling insulation, pipes, a fake plant, the freezer, and elsewhere.
Gorrell also admitted that on August 22, 2022, officers searched his home again and found a firearm, $15,253 in U.S. Currency, approximately 28 grams of ice methamphetamine, and approximately 252 grams of marijuana. Later that day, Gorrell’s urine tested positive for methamphetamine and fentanyl. Evidence at the sentencing hearing demonstrated that the firearm was loaded.
Gorrell was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Gorrell was sentenced to 188 months’ imprisonment and must also serve a 10-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Special Assistant United States Attorney Devra T. Hake and Assistant United States Attorney Dan Chatham. It was investigated as part of the Northern Iowa Heroin Initiative and the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the Cedar Rapids Police Department, United States Drug Enforcement Administration, Iowa Division of Narcotics Enforcement, Marion Police Department, and Linn County Sheriff’s Office.
This case is also 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.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22-CR-59.
Follow us on Twitter @USAO_NDIA.
Byram Woman Sentenced to over 20 Years in Prison for Conspiracy to Possess with Intent to Distribute Methamphetamine and Falsification of Records in a Federal InvestigationRead the Press Release
Jackson, Mississippi – A Byram woman was sentenced to 250 months in federal prison for conspiracy to possess with intent to distribute methamphetamine, as well as a concurrent sentence of 21 months for falsification of records in a federal investigation, announced U.S. Attorney Darren LaMarca and Special Agent in Charge Brad Byerley of the Drug Enforcement Administration.
According to court documents, beginning as early August 1, 2017, and continuing until April 2019, communications between Kristy Dier, 37, and her codefendants were intercepted wherein they negotiated and conducted the sale of ice-methamphetamine throughout the state of Mississippi from as far as Aberdeen to Biloxi, Mississippi. In total, Dier is responsible for the distribution of approximately 22 pounds of ice-methamphetamine.
During the conspiracy, from December 1, 2017, through December 19, 2017, Dier also elicited help from a codefendant to falsify income and business records and file the records with the Hinds County Court to obstruct the forfeiture of drug proceeds seized from Dier by law enforcement.
The case was investigated by the Drug Enforcement Administration, Bureau of Alcohol Tobacco Firearms and Explosives, U.S. Marshals Service, Hinds County Sheriff’s Office, Jones County Sheriff’s Office, Jackson Police Department, Richland Police Department, Mississippi Bureau of Narcotics, and the Internal Revenue Service.
The case is the result of an extensive investigation, dubbed “Drama Queen,” which began as an operation targeting illegal methamphetamine distribution in central Mississippi. “Drama Queen” is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The case was prosecuted by Assistant United States Attorneys Keesha Middleton and Chris Wansley.
Boyd County Man Sentenced to 262 Months for Armed Drug TraffickingRead the Press Release
ASHLAND, Ky. — An Ashland man, Gary R. Rowe, 49, was sentenced on Monday to 262 months in federal prison, by U.S. District Judge David Bunning for armed drug trafficking charges.
Rowe pleaded guilty in November 2022, to possession with intent to distribute 50 grams or more of methamphetamine, 2 counts; possession of methamphetamine less than 50 grams; possession with intent to distribute 10 grams or more of a fentanyl analogue (fluorofentanyl); possession with intent to distribute 40 grams or more of fentanyl, 3 counts; possession of a firearm by a convicted felon, 2 counts; and possession of a firearm in furtherance of drug trafficking. Rowe qualifies as an Armed Career Criminal and a Career Offender.
In September 2021, law enforcement received information that Rowe was distributing large quantities of narcotics in Boyd County. During the investigation, law enforcement seized 163 grams of methamphetamine, 165 grams of a fentanyl analogue (fluorofentanyl), and 91 grams of fentanyl from Rowe. Law enforcement also seized two firearms and Rowe admitted that he possessed a firearm in furtherance of his drug trafficking crimes. Rowe is a convicted felon and since 2001 has been convicted on eight occasions of trafficking in a controlled substance.
Rowe pleaded guilty in November 2022.
Under federal law, Rowe must serve 85 percent of his prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for eight years.
Carlton S. Shier IV, United States Attorney for the Eastern District of Kentucky and Shawn Morrow, Special Agent in Charge, ATF, Louisville Field Division, jointly announced the sentence.
The investigation was conducted by ATF and the Northeast Kentucky Drug Task Force. The United States was represented by Assistant U.S. Attorney Cynthia Rieker.
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Armed Drug Trafficker Pleads Guilty to Possessing Firearm and Distribution Quantities of FentanylRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces that Eugene Washington, Jr. (36, Bradenton) has pleaded guilty to possessing a firearm as a convicted felon and possession with the intent to distribute 40 grams more of fentanyl. Washington faces a maximum penalty of 55 years in federal prison. A sentencing date has not yet been scheduled.
According to the plea agreement, on the morning of August 12, 2022, officers from the Bradenton Police Department (BPD) responded to a call for service from a concerned citizen regarding an unresponsive man at the steering wheel of his Ford Focus vehicle in the 700 block of 9th Street East in Bradenton. The vehicle was stopped in traffic and facing the traffic light in the median lane.
Once at the scene, BPD officers asked Washington to exit the vehicle, and when he did, the officers noticed a silver and black Smith and Wesson SD40 .40 caliber pistol on the driver’s seat. Washington turned back into the car and appeared to reach for the firearm. The firearm was loaded with 11 rounds of ammunition. Officers also found a backpack inside the vehicle, located on the passenger floorboard. The backpack contained a variety of controlled substances, including approximately 44 grams of fentanyl, 35 grams of methamphetamine, 106 grams of cocaine, 36 grams of hydrocodone, 10 grams of oxycodone, 433 grams of dimethylpentylone (a substituted cathinone), and 21 grams of cannabis. Washington admitted to the officers that he was a convicted felon.
Washington was previously convicted in federal court for distribution of heroin and served a prison sentence for that offense. As such, he is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Bradenton Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney David W.A. Chee.
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.
Arizona man sentenced to nine years in prison for “massive” tax fraud schemeRead the Press Release
Seattle – A 57-year-old Paradise Valley, Arizona man was sentenced today in U.S. District Court in Seattle to nine years in prison and a $1 million fine for an eight-year tax fraud scheme that resulted in more than $50 million in illegal tax refunds, announced U.S. Attorney Nick Brown.
Charles St. George Kirkland pleaded guilty in January 2023 to three counts of aiding or assisting the filing of fraudulent tax documents. At the sentencing hearing, U.S. District Judge John H. Chun rejected the defense request for a sentence of home confinement, commenting that Kirkland’s fraud was “a massive tax fraud scheme.” Judge Chun said he was struck by the “outrageous nature of the fraudulent scheme” and Kirkland’s “fraudulent and deceitful behavior.”
“This tax fraud scheme is an affront to all the taxpayers who honestly file tax returns and pay what they owe. These funds that Mr. Kirkland stole from the U.S. Treasury could have gone for infrastructure improvements, social services, and other programs aimed at community safety,” said U.S. Attorney Brown. “This is a significant sentence, and an example of the price to be paid for such dishonesty and deceit.”
According to records in the case, Kirkland falsely claimed in tax filings that he had lost more than $135 million by investing in solar equipment. Kirkland then “sold” those made-up losses to taxpayers through a network of tax preparers, telling the preparers that their clients could use Kirkland’s losses to claim refunds on their own tax returns. Taxpayers would file amended returns claiming that, because of the losses transferred from Kirkland, they were entitled to a refund of all the tax payments they had made in a prior tax year. After receiving the fraudulent refunds taxpayers paid 90% of the proceeds to Kirkland.
Taxpayers participating in Kirkland’s program filed nearly 3,200 fraudulent tax returns. In all, Kirkland’s scheme resulted in a loss to the U.S. Treasury of over $50 million. Kirkland collected $45 million.
Kirkland used a web of limited liability entities he controlled to claim both net operating losses and investment tax credits based on fake investments in solar equipment.
For example, in 2013 alone, Kirkland claimed his businesses lost more than $40 million through investments in solar equipment. In fact, the businesses spent only about $150,000 on solar equipment that year. From 2012 to 2018, Kirkland’s companies claimed to have lost more than $135 million on investments in solar equipment. The companies spent less than $6 million on solar equipment over that period.
Some of the taxpayers who participated in the program were Washington residents. For example, one Maple Valley, Washington couple claimed to be partners in Kirkland’s Solar Farm entity and amended their 2015 tax return to claim a net operating loss of $347,893. The couple got a tax refund of $17,759. In 2018, a Seattle couple claimed a 2017 tax loss from Solar Farm of $22,870 so that they could claim a refund of $28,180. In 2019, Grapeview, Washington resident claimed a 2018 solar energy credit of $10,341 so she could claim a refund of $10,704.
Kirkland owes $51,615,484 in restitution in addition to the $1 million fine imposed by Judge Chun.
Two days after agreeing to plead guilty, Kirkland and his wife began a divorce proceeding. In the proceeding, they agreed the wife would take ownership of approximately 100 parcels of real estate, five Tesla automobiles and the couple’s 10,000 square foot home in Arizona. Prosecutors noted in their filings that the government will continue to pursue the assets in order to satisfy the restitution obligation.
In asking for the nine-year sentence, prosecutors wrote to the court, “This is by far the largest loss in a tax case in this district in least a dozen years. Kirkland’s brazen fraud, his long history of professional misconduct, and his efforts to keep the stolen money make clear he will continue to engage in fraud as long as he is permitted to do so.”
“This sentence is a win for American taxpayers! All of Mr. Kirkland’s schemes served the sole purpose of making him very wealthy, and he cared little for those he manipulated,” said IRS Criminal Investigation Seattle Field Office’s Assistant Special Agent in Charge Carrie Nordyke. “The IRS relies on taxpayers to file accurate tax returns. If you observe something suspicious, go to IRS.gov and report it.”
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).
The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Alleged fraudster extradited to face charges in $7M international advance-fee scamRead the Press Release
HOUSTON – A 57-year-old Nigerian national has been extradited from France to face charges in the United States for his alleged leadership role in a conspiracy perpetrated against victims in more than 20 countries, announced U.S. Attorney Alamdar S. Hamdani.
Uche Victor Diuno is set to appear today at 2 p.m. before U.S. Magistrate Judge Dena H. Palermo in Houston.
He arrived in the United States Friday, June 9.
The charges allege Diuno helped to orchestrate a scam involving false promises of investment funding by individuals who impersonated U.S. bank officials in person and over the internet to victims around the world. Those victims were allegedly told they had to make certain payments before they could supposedly receive their funding. Proceeds of the scheme were laundered through U.S. bank accounts and diverted back to the scheme’s perpetrators in Nigeria, according to the charges.
Diuno allegedly lead a criminal network of “catchers,” who sent phishing emails to potential victims falsely offering investment funding on behalf of BB&T Corporation and other U.S. banks. Victims in various countries were deceived into believing they would receive millions of dollars of investment funding as part of joint ventures with U.S. banks, usually BB&T or Chase,
according to the indictment. The perpetrators allegedly utilized false domain names to make it appear that senders of emails were actually affiliated with BB&T or Chase. The charges further allege that to convince victims the opportunities were authentic, the perpetrators recruited U.S. citizens to pose as bank “representatives” at in-person meetings with victims around the world. Further, if occurring abroad, they utilized sham visits to the local U.S. embassy or consulate and fabricated documents to make the victims believe the U.S. government was sponsoring the investment agreements, according to the indictment. The victims were then allegedly induced to pay tens of thousands, and often hundreds of thousands, of dollars to U.S.-based bank accounts on the belief that such payments were necessary to effectuate their investment agreements.
Diuno was originally charged in a second superseding indictment filed Oct. 3, 2018, with one count of wire fraud conspiracy, one count of money laundering conspiracy and one count of concealment money laundering.
As alleged in that indictment, Diuno was a “chairman” or leader in the scheme who operated his own network of catchers and money movers alongside other fraudsters, which he used in furtherance of the same BB&T investment scam.
Five other individuals have been charged as part of the same indictment.
The scheme allegedly resulted in losses of more than $7 million.
The FBI and Department of State – Office of Inspector General conducted the investigation. Assistant U.S. Attorney (AUSA) Christian Latham of the Southern District of Texas and Trial Attorney Philip Trout of the Criminal Division’s Fraud Section are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Friday 9 June 2023
Wagoner County Resident Sentenced for Manslaughter in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Lonnie Leonard Swarer, III, age 25, of Wagoner County, Oklahoma, was sentenced to probation for Manslaughter in Indian Country.
The charges arose from an investigation by the Oklahoma Highway Patrol and the Federal Bureau of Investigation.
On May 17, 2022, Swarer entered a guilty plea to one count of Manslaughter in Indian Country. During the plea hearing, Swarer admitted that on June 13, 2020, he lost control of his vehicle while doing a burnout and crashed into another vehicle. A passenger in Swarer’s vehicle was killed in the collision. The crime occurred in the Eastern District of Oklahoma, within the boundaries of the Cherokee Nation Reservation.
The Honorable John. F. Heil, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma in Muskogee, presided over the sentencing.
Wagoner County Homicide Sentencings CompletedRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Martha Christine Simpson, age 46, of Henryetta, Oklahoma, Jabaica Lee Tecumseh, age 43, of Morris, Oklahoma, and Tommy Glen Tecumseh, age 36, of Okmulgee, Oklahoma, were sentenced to federal prison for their roles in a 2019 homicide.
Simpson was sentenced to 99 months for Voluntary Manslaughter in Indian Country. Tommy Glen Tecumseh was sentenced to 120 months for one count of Murder in Indian Country. Jabaica Lee Tecumseh was sentenced to 169 months for one count of Murder in Indian Country.
The charges arose from investigations by the Broken Arrow Police Department, the Oklahoma State Bureau of Investigation, and the Federal Bureau of Investigation.
On May 4, 2022, a federal jury found Simpson guilty of one count of Voluntary Manslaughter in Indian Country. During the trial, the United States presented evidence that on July 15, 2019, Jabaica Lee Tecumseh and Tommy Glen Tecumseh beat the victim before Simpson fatally stabbed him in the neck. The crime occurred in Wagoner County, within the boundaries of the Muscogee (Creek) Nation Reservation.
Tommy Glen Tecumseh and Jabaica Lee Tecumseh each pleaded guilty to Murder in Indian Country in February of 2021.
The Honorable Ronald A. White, Chief Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearings in Muskogee. The defendants were remanded to the custody of the U.S. Marshal pending transportation to a designated United States Bureau of Prisons facility to serve non-paroleable sentences of incarceration.
Assistant United States Attorney Joshua Satter represented the United States at the sentencing.
United States Issues Advisory to Industry on Unmanned Aerial Vehicle Activity Connected to IranRead the Press Release
The Departments of Justice, Commerce, State and Treasury today issued an advisory to alert the international community, private sector, and public to the threat posed by Iran’s procurement, development and proliferation of unmanned aerial vehicles (UAVs).
The advisory informs private industry of key components Iran seeks to develop its UAV program and entities involved in the procurement, production, and proliferation of Iranian UAVs. The advisory also provides recommendations to exporters, manufacturers, distributors, and financial institutions on implementing effective due diligence and internal controls – specifically, relevant to Iran’s UAV-related activities – to ensure compliance with legal requirements across the entire supply chain and to avoid unintentionally contributing to Iran’s UAV programs.
Today’s announcement complements ongoing work by the Justice Department, including its Task Force KleptoCapture and the Disruptive Technology Strike Force. Launched in March 2022, Task Force KleptoCapture enforces the sweeping sanctions, export controls, and other economic countermeasures imposed on Russia for its unprovoked military invasion of Ukraine, in order to disrupt the Russian war machine and hold its enablers accountable – including the transfer of UAVs from Iran being used against the Ukrainian people. Additionally, in February, the Justice Department and Commerce Department’s Bureau of Industry and Security (BIS) created the Disruptive Technology Strike Force, an interagency effort focused on investigating and prosecuting the illicit transfer of sensitive technologies to foreign state adversaries, including Iran.
To encourage corporate disclosures of potential criminal violations of national security laws, including sanctions and export laws, the National Security Division updated its voluntary self-disclosure policy this past March. The Justice Department has also announced the hiring of 25 new prosecutors in the National Security Division to investigate and prosecute sanctions evasion, export control violations, and similar economic crimes.
It is critical the private sector be vigilant in meeting its compliance obligations due to the threat posed by the extensive overseas network of procurement agents, front companies, suppliers, and intermediaries Iran uses to obtain UAV components – all of which employ a variety of methods to evade export controls and sanctions.
The advisory is available here.
U.S. Supreme Court Justice Sotomayor Addresses Latin American Judges at Justice Department’s Judicial Studies InstituteRead the Press Release
Yesterday at the Judicial Studies Institute (JSI) in San Juan, Puerto Rico, U.S. Supreme Court Justice Sonia Sotomayor virtually addressed 22 judges from Argentina, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, and Peru as part of a Department of Justice training program for the judiciaries of the Western Hemisphere. Justice Sotomayor stressed the importance of their contribution to the rule of law in the hemisphere and lauded them for their role in the transformation of Latin American justice.
JSI Program Manager Vivian Durieux Rodriguez (third row, far right, standing), Dean of Interamerican University School of Law Julio Fontanet (third row, first on the far left), and JSI Program Analyst Suzette Escamilla Morales (second row, far right, standing) with the 22 participant judges during the special session.With the support of Justice Sotomayor, and in partnership with the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs, the Justice Department’s Office of Prosecutorial Development, Assistance and Training (OPDAT) launched JSI in 2012 as a response to the wave of justice sector reforms in Latin America that saw many countries transition from an inquisitorial to an adversarial system of justice. Through Spanish instruction, practical exercises, and observations of courtroom proceedings, participating judges learned about evidentiary guidelines, the role of judges, courtroom management in an adversarial justice system, human smuggling, and judging without gender bias, among other important topics.
This capacity building is critical to the region as there are significant differences between the two judicial system models. For example, in an inquisitorial system, judges investigate charges and determine guilt through written deliberations behind closed doors. In an adversarial system, the judge acts as an impartial referee responsible for weighing evidence and guaranteeing the rights of both the victim and the accused in an open courtroom setting. JSI offers judges practical skills, and JSI alumni become agents of change within their judiciary. Many have been able to impart what they have learned through trainings within their own judiciary system and at OPDAT-sponsored events.
Since establishing JSI in 2012, OPDAT and its partners at the University of Puerto Rico and Inter-American University law schools, the Puerto Rico State Judiciary, and the U.S. Federal Judiciary have trained over 1,114 Latin American judges.
Please visit www.justice.gov/criminal-opdat for more information about OPDAT’s capacity building efforts around the world.
U.S. Supreme Court Justice Sotomayor Addresses Latin American Judges at Justice Department’s Judicial Studies InstituteRead the Press Release
WASHINGTON - Yesterday at the Judicial Studies Institute (JSI) in San Juan, Puerto Rico, U.S. Supreme Court Justice Sonia Sotomayor virtually addressed 22 judges from Argentina, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, and Peru as part of a Department of Justice training program for the judiciaries of the Western Hemisphere. Justice Sotomayor stressed the importance of their contribution to the rule of law in the hemisphere and lauded them for their role in the transformation of Latin American justice.
JSI Program Manager Vivian Durieux Rodriguez (third row, far right, standing), Dean of Interamerican University School of Law Julio Fontanet (third row, first on the far left), and JSI Program Analyst Suzette Escamilla Morales (second row, far right, standing) with the 22 participant judges during the special session.
With the support of Justice Sotomayor, and in partnership with the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs, the Justice Department’s Office of Prosecutorial Development, Assistance and Training (OPDAT) launched JSI in 2012 as a response to the wave of justice sector reforms in Latin America that saw many countries transition from an inquisitorial to an adversarial system of justice. Through Spanish instruction, practical exercises, and observations of courtroom proceedings, participating judges learned about evidentiary guidelines, the role of judges, courtroom management in an adversarial justice system, human smuggling, and judging without gender bias, among other important topics.
This capacity building is critical to the region as there are significant differences between the two judicial system models. For example, in an inquisitorial system, judges investigate charges and determine guilt through written deliberations behind closed doors. In an adversarial system, the judge acts as an impartial referee responsible for weighing evidence and guaranteeing the rights of both the victim and the accused in an open courtroom setting. JSI offers judges practical skills, and JSI alumni become agents of change within their judiciary. Many have been able to impart what they have learned through trainings within their own judiciary system and at OPDAT-sponsored events.
Since establishing JSI in 2012, OPDAT and its partners at the University of Puerto Rico and Inter-American University law schools, the Puerto Rico State Judiciary, and the U.S. Federal Judiciary have trained over 1,114 Latin American judges.
Please visit www.justice.gov/criminal-opdat for more information about OPDAT’s capacity building efforts around the world.
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U.S. Attorney Ross Hosts AGAC Subcommittee Meeting in BuffaloRead the Press Release
BUFFALO, N.Y. – This week, U.S. Attorney Trini E. Ross, a member of Attorney General Merrick Garland’s Advisory Committee (AGAC) and Chair of the Law Enforcement Coordination, Victim Assistance and Community Relations Subcommittee (LEVC), hosted the LEVC meeting in the Western District of New York, which brought U.S. Attorneys from across the country to the Buffalo area for two days. The meeting included presentations and discussions on several issues:
- Members participated in detailed presentations from members of law enforcement and victim witness personnel regarding the May 14th tragedy. They also heard from Tops President John Persons and visited the Tops store on Jefferson Avenue.
- Members went to the Merriweather Library and spoke with community leaders who work with the U.S. Attorney’s Office on community outreach efforts.
- Members spoke with representatives of the business community, who work with the U.S. Attorney’s Office on multiple issues, including fraud and cybercrime.
- Members met with federal law enforcement who work on the front lines of international border issues.
“I was honored to host the LEVC meeting in Buffalo, which allowed my U.S. Attorney colleagues to spend time in this wonderful community and learn from our experiences. Over these two days, my colleagues from across the country were able to witness firsthand how our District works with law enforcement, the community and crime victims,” stated U.S. Attorney Ross. “In addition, these U.S. Attorneys witnessed the resiliency of our Buffalo community in the aftermath of the May 14th shooting and experienced the progress that the community has made.”
Members of the AGAC advise the Attorney General on matters of policy, procedure, and management impacting the Offices of the U.S. Attorneys and elevates the voices of U.S. Attorneys in Department policies. The LEVC is a subcommittee of the AGAC.
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Three Men Sentenced to a Collective 25 Years in Federal Prison for Armed Robbery of Lawrence Mobile Phone StoreRead the Press Release
INDIANAPOLIS- Clifford Lewis, 20, Tyrese Turner, 22, and Calvin Johnson, 21, all of Indianapolis, have been sentenced to federal prison after pleading guilty to interference with commerce by robbery and using a firearm during a crime of violence. Lewis was sentenced to 8 years in federal prison. In November 2022, Tyrese Turner, 22, was sentenced to seven and a half years in federal prison. In June of 2022, Calvin Johnson was sentenced to 10 years in federal prison.
According to court documents, on November 12, 2020, at approximately 7:03 pm, Johnson and Lewis entered a T-Mobile store on Pendleton Pike in Lawrence, Indiana. Both men approached an employee at the display counter and inquired about switching a service plan. As the employee began to help them, he noticed that Lewis had a pistol secured in a holster in his waistband.
Johnson and Lewis then approached a second employee as Turner entered the business carrying a black backpack over his shoulders. Johnson brandished a semiautomatic pistol at the second employee and ordered him into the back room.
In the back room, the three men took turns removing electronic devices from the safe and placing them into Turner’s backpack. Johnson zip-tied the victims’ hands behind their backs as well as their ankles.
Once the defendants were satisfied with the number of cell phones in the backpack, Lewis began wrapping it in foil. As the robbery was still in progress, Lawrence Police Department officers arrived. All three men attempted to flee. Johnson and Turner were caught and arrested in the store. Lewis fled the scene and was arrested on a later date.
Officers conducted a search of Johnson’s person and found a Taurus 9mm caliber semiautomatic pistol in his right front jean pocket. Officers located the loaded Glock 19 9mm caliber semiautomatic pistol that was in Lewis’s waistband in a ravine behind the store.
The total amount of property taken during the robbery included over 50 devices and amounted to a value of $43,804.30.
“Everyone in the Southern District of Indiana deserves to feel safe where they live and work. These three violent criminals conspired not only to rob a store of thousands of dollars in merchandise, but also to traumatize innocent people just doing their jobs,” said U.S. Attorney Zachary A. Myers. “Gun-toting criminals are a menace to our communities and will be met with consequences, as demonstrated by the serious sentences imposed today. I commend the FBI and Lawrence Police Department for their quick action to protect the public in this case.”
“These convictions are the results of exemplary collaboration between Federal, State, & Local law enforcement agencies focusing their resources on those who engage in violent crime in our communities,” said Lawrence Police Deputy Chief Gary Woodruff. “The community is safer due to these collaborative efforts. We’re grateful to our law enforcement partners at the FBI & US Attorney’s Office for the Southern District of Indiana for their ongoing investment in these collaborations.”
Federal Bureau of Investigation and Lawrence Police Department investigated this case. The sentences were imposed by U.S. District Court Judge Richard L. Young. Judge Young also ordered Lewis to serve 5 years of supervised release and Turner and Johnson to serve 3 years following their release from federal prison.
U.S. Attorney Myers thanked Assistant United States Attorney Jayson W. McGrath, who prosecuted this case.
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Three Men Face Federal Charges After Portland Overdose DeathRead the Press Release
PORTLAND, Ore.—Three Honduran nationals are facing federal drug trafficking charges today after their supply of illicit fentanyl was linked to a fatal overdose in Portland.
Manuel Velasquez-Estrejo, 38, Jorge Rivera-Nunez, 27, and Dennis Palma-Hurbina, 23, have been charged by federal criminal complaint with conspiring to possess and possessing with intent to distribute fentanyl.
According to court documents, on the morning of June 7, 2023, a sheriff deputy from the Washington Interagency Narcotics Team (WIN) responded to the scene of a fatal overdose on West Burnside Street in Portland where a deceased victim had been found by her adult son. The victim’s son told investigators that he and his mother had recently purchased around 100 fentanyl pills for $200 from a person later determined to be Velasquez-Estrejo. Later the same day, law enforcement arrested Velasquez-Estrejo in possession of approximately 1,000 multicolored fentanyl pills and two ounces of powdered fentanyl. They also located a motel room key on Velasquez-Estrejo’s person.
Further investigation revealed that Velasquez-Estrejo was staying at a motel on Northeast 82nd Avenue in Portland with two associates identified as Rivera-Nunez and Palma-Hurbina. Investigators surveilled the motel property and arrested Rivera-Nunez and Palma-Hurbina as they were leaving their room. A search of the room returned more than six pounds of powdered fentanyl, 11,295 multicolored counterfeit Oxycodone pills containing fentanyl, and half a pound of methamphetamine.
All three defendants made their first appearances in federal court today before U.S. Magistrate Judge Youlee Yim You. They were detained pending further court proceedings.
This case was jointly investigated by WIN, the Oregon-Idaho High Intensity Drug Trafficking Area (HIDTA) Interdiction Task Force (HIT), Portland Police Bureau, and Homeland Security Investigations (HSI). It is being prosecuted by Assistant U.S. Attorney Scott M. Kerin and Certified Law Student Kara Blatt for the District of Oregon
WIN includes representatives from the Washington County Sheriff’s Office, Beaverton and Hillsboro Police Departments, Oregon National Guard Counter Drug Program, U.S. Drug Enforcement Administration, and HSI.
A criminal complaint is only an accusation of a crime, and defendants are presumed innocent unless and until proven guilty.
Tea Woman Charged with Tampering with Consumer Products and Obtaining Controlled Substances by FraudRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell announced that a federal grand jury has indicted a Tea, South Dakota, woman for Tampering with Consumer Products and Obtaining Controlled Substances by Misrepresentation, Fraud, Forgery, Deception, and Subterfuge.
Brittany Enstad, age 39, was indicted in June of 2023. She appeared before U.S. Magistrate Judge Veronica L. Duffy on June 7, 2023, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and up to $800 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between on or about July 1, 2022, and December 30, 2022, Enstad, who was employed as a licensed registered nurse at a medical facility, tampered with blister packs containing OxyContin, Hydrocodone Bitartrate, Oxycodone Hydrochloride, and Oxycodone and Acetaminophen, by removing the medications from their blister packs and replacing them with different medications.
The Indictment also alleges that during the same period of time, Enstad knowingly and intentionally acquired and obtained OxyContin, Hydrocodone Bitartrate, Oxycodone Hydrochloride, and Oxycodone and Acetaminophen, which are all Schedule II controlled substances.
The charges are merely accusations and Enstad is presumed innocent until and unless proven guilty.
The investigation is being conducted by the FDA, DEA, HHS-OIG, and Canton Police Department. Assistant U.S. Attorney Ann M. Hoffman is prosecuting the case.
Enstad was released on bond pending trial, which has not been set.
Three Charged with Illegal Entry into the United StatesRead the Press Release
St. Thomas, VI – United States Attorney Delia L. Smith announced today that Randy Jimenez-Vargas and Irving Jhon Mendoza-Alcantara, both from the Dominican Republic, and Jonas Alberto Mendez-Garcia, of Venezuelan, were charged with illegally entering the United States.
According to court documents, Jimenez-Vargas, Mendoza-Alcantara and o Mendez-Garcia presented themselves for inspection at the Cyril B. King airport in St. Thomas prior to boarding a flight to Washington, DC. During their inspection, Customs and Border Patrol Officers determined that the three individuals were foreign nationals and were not in possession of any legal documents that would permit them to enter the United States. A review of the individuals’ passport stamps revealed that the last stamp in each passport were dated from between March 6, 2023, and May 20, 2023, which corresponded with their exit from a foreign country. Records checks also revealed that neither individual legally entered the United States. If convicted, each faces a maximum penalty of six months in prison. A federal judge will determine any sentence after considering the appropriate statutory factors.
United States Customs and Border Protection is investigating the case, and Assistant United States Attorney Adam Sleeper is prosecuting the case. United States Attorney Delia L. Smith reminds the public that a criminal complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Statement from United States Attorney Prim F. Escalona on Appearance of Joran van der Sloot in Federal Court in Birmingham, AlabamaRead the Press Release
BIRMINGHAM, Ala. – Joran van der Sloot, 35, was arraigned today before U.S. Magistrate Judge Gray Borden in Birmingham, Alabama, on one count of extortion and one count of wire fraud for soliciting money from Beth Holloway, Natalee Holloway’s mother, on promises he would reveal the location of her daughter’s remains in Aruba and the circumstances of her 2005 death. Van der Sloot was brought to the United States to stand trial on these charges pursuant to the Extradition Treaty Between the United States of America and the Republic of Peru and will be returned to Peru after this case concludes pursuant to the terms of that same treaty.
Assistant United States Attorneys Lloyd C. Peeples, III and Catherine L. Crosby are prosecuting the case. The Justice Department’s Office of International Affairs, FBI, and Peruvian law enforcement authorities have been instrumental in securing the temporary surrender of van der Sloot.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Spiro Resident Sentenced for ManslaughterRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Hunter Caleb Spence, age 20, of Spiro, Oklahoma, was sentenced to 42 months for manslaughter.
The charges arose from investigations by the Poteau Police Department, the Oklahoma Highway Patrol, the Oklahoma State Bureau of Investigation, and the Federal Bureau of Investigation.
On March 9, 2022, Spence pleaded guilty to a Superseding Indictment charging him with one count of Manslaughter in Indian Country for killing another while operating a motor vehicle under the influence of one or more intoxicating substances.
On October 28, 2020, Spence flipped his car on US Highway 270, near Wister, Oklahoma while attempting to pass another vehicle. A passenger in Spence’s vehicle was ejected and died. Spence admitted to the Oklahoma Highway Patrol Trooper investigating the scene that he had smoked marijuana prior to the crash. Blood tests confirmed the presence of tetrahydrocannabinol (THC) in his system. The crime occurred in Leflore County, within the boundaries of the Choctaw Nation Reservation and within the Eastern District of Oklahoma.
The Honorable Charles B. Goodwin, U.S. District Judge in the United States District Court for the Western District of Oklahoma, sitting by assignment, presided over the hearing in Oklahoma City. Spence will remain in custody of the U.S. Marshal pending transportation to a designated United States Bureau of Prisons facility to serve a non-paroleable sentence of incarceration.
Assistant United States Attorney Joshua Satter represented the United States at the sentencing.
Sioux Falls Man Sentenced to over Three Years for Felon in Possession of a FirearmRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Karen E. Schreier has sentenced a Sioux Falls, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person. The sentencing took place on June 6, 2023, in Sioux Falls, South Dakota.
Richard Paul Olson, age 33, was sentenced to three years and one month in federal prison, followed by three years of supervised release. He was ordered to pay $100 as a statutorily required special assessment to the Federal Crime Victims Fund and forfeiture of the firearm was ordered by the Court.
Olson was indicted for Possession of a Firearm by a Prohibited Person by a federal grand jury in September of 2022. He pleaded guilty on May 10, 2023.
According to court documents, during the execution of a warrant at Olson’s residence on April 21, 2022, law enforcement located a firearm loaded with a round in the chamber and four rounds in the magazine in his residence. Olson was in possession of that firearm, storing it in his nightstand. Olson is prohibited from possessing firearms due to previous felony convictions.
This case was investigated by the U.S. Marshals Service, SD Highway Patrol, and the Bureau of Alcohol, Tobacco, and Firearms. Assistant U.S. Attorney Jeremy R. Jehangiri prosecuted the case.
Olson was remanded to the custody of the U.S. Marshals Service to continue serving his sentence.
Sioux Falls Man Sentenced to over Five Years in Federal Prison for Bank RobberyRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Karen E. Schreier has sentenced a Sioux Falls, South Dakota, man, convicted of Bank Robbery. The sentencing took place on June 5, 2023 in Sioux Falls, South Dakota.
Ayub Ibrahim Mohamed, age 23, was sentenced to five years and three months in federal prison, followed by three years of supervised release. He was ordered to pay $100 as a statutorily required special assessment to the Federal Crime Victims Fund.
Mohamed was indicted for Bank Robbery by a federal grand jury in September of 2022. He pleaded guilty on March 1, 2023.
According to court documents, on August 23, 2022, Mohamed entered a Wells Fargo Bank in Sioux Falls, and demanded $200,000 from the tellers. Bank employees complied with Mohamed’s demands, providing $200,000. Mohamed took the bank’s money. Law enforcement responded in short order. Mohamed was apprehended outside of the bank and the money was recovered.
This case was investigated by the FBI and the Sioux Falls Police Department. Assistant U.S. Attorney Jeremy R. Jehangiri prosecuted the case.
Mohamed was remanded to the custody of the U.S. Marshals Service to continue serving his sentence.
San Mateo Company to Pay More Than $1,000,000 for Improperly Seeking and Obtaining Paycheck Protection Program LoansRead the Press Release
SAN FRANCISCO – Fujisoft America, Inc., a San Mateo-based subsidiary of Fujisoft Inc., has agreed to pay $1,050,000 to resolve allegations that it knowingly violated the False Claims Act when it applied for, received, and retained two Paycheck Protection Program (PPP) loans totaling $400,000 in violation of PPP rules, announced United States Attorney Ismail J. Ramsey and Small Business Administration Office of Inspector General (SBA OIG) Western Region Acting Special Agent in Charge Keven Standley.
“PPP loans were intended as economic lifelines for small businesses during the pandemic,” said U.S. Attorney Ramsey. “It is unacceptable for large companies to claim a portion of this limited pool of PPP funds, which was meant for small businesses, in order to enrich themselves at the expense of the American taxpayer. This Office will continue to pursue businesses that misused the program by obtaining PPP loans for which they were not eligible.”
“Those who violate the False Claim Act by fraudulently receiving and retaining SBA program funds meant for eligible small businesses will be held accountable,” said SBA OIG’s Western Region Acting Special Agent in Charge Keven Standley. “This settlement sends a strong message that those responsible will be brought to justice. I want to thank the Department of Justice and our law enforcement partners for their dedication and pursuit of justice.”
Congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. PPP loan applicants were required to certify that they were in fact small businesses in order to be eligible for PPP loans. Among other things, PPP loan applicants generally were required to certify that they and their affiliates had no more than 500 employees to be eligible for a “first-draw” loan and had no more than 300 employees to be eligible for an additional “second-draw” loan. PPP loan applicants were also required to certify that they had a decrease in revenue of at least 25% from 2019 to 2020 to be eligible for a second-draw loan. Pursuant to the settlement announced today, Fujisoft America acknowledged that it sought and obtained PPP loans in violation of these rules.
Fujisoft America’s parent company, Fujisoft Inc, is a publicly-traded company listed on the Tokyo Stock Exchange; together with its various subsidiaries, Fujisoft Inc. has over 15,000 employees and its earnings have increased steadily between 2019 and 2021—its revenue in 2019 before the pandemic was over $1.6 billion and during the pandemic grew to over $1.7 billion in 2020 and then $1.8 billion in 2021. Fujisoft America nevertheless sought and obtained loans intended for small businesses.
As part of the settlement, Fujisoft America, Inc. admitted, among other things, that:
• Fujisoft America, Inc. knew that it was not eligible for PPP loans because, with its affiliates, it had more than 500 employees.
• In 2020, Fujisoft America, Inc. applied for and received a $250,000 PPP first-draw loan, and subsequently obtained loan forgiveness and retained that $250,000, by falsely certifying that it met the company size restrictions necessary to be eligible for a PPP first-draw loan.
• In 2021, Fujisoft America, Inc. applied for and received a $150,000 PPP second-draw loan, and subsequently obtained loan forgiveness and retained that $150,000, by falsely certifying that it met the company size restrictions necessary to be eligible for a PPP second-draw loan. Fujisoft America, Inc. also falsely certified that it had a decrease in revenue in excess of 25% from 2019 to 2020 when, with its affiliates, its revenue from 2019 to 2020 had increased.
• As a result of its false claims and false statements, Fujisoft America, Inc. received and retained $400,000 in PPP funds to which it was not entitled.Assistant U.S. Attorney Shiwon Choe handled this matter for the government. The investigation and settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Northern District of California and SBA OIG.
fsai_settlement_agreement.pdfRussian Nationals Charged with Hacking One Cryptocurrency Exchange and Illicitly Operating AnotherRead the Press Release
The Justice Department unsealed charges related to the 2011 hack of the cryptocurrency exchange Mt. Gox and the operation of the illicit cryptocurrency exchange BTC-e.
According to court documents, Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, both Russian nationals, are charged with conspiring to launder approximately 647,000 bitcoins from their hack of Mt. Gox. Bilyuchenko is also charged with conspiring with Alexander Vinnik to operate BTC-e from 2011 to 2017.
“This announcement marks an important milestone in two major cryptocurrency investigations. As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “These indictments highlight the department’s unwavering commitment to bring to justice bad actors in the cryptocurrency ecosystem and prevent the abuse of the financial system.”
“As cyber criminals have become more sophisticated in their methods of thievery, our career prosecutors and law enforcement partners, too, have become experts in the latest technologies being abused for malicious purposes,” said U.S. Attorney Damian Williams for the Southern District of New York. “As alleged, Alexey Bilyuchenko and Aleksandr Verner thought they could outsmart the law by using sophisticated hacks to steal and launder massive amounts of cryptocurrency, a novel technology at the time, but the charges unsealed demonstrate our ability to tenaciously pursue these alleged criminals, no matter how complex their schemes, until they are brought to justice.”
“For years, Bilyuchenko and his co-conspirators allegedly operated a digital currency exchange that enabled criminals around the world – including computer hackers, ransomware actors, narcotics rings, and corrupt public officials – to launder billions of dollars,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “The Department of Justice will work tirelessly to identify cyber criminals, no matter where they are. And Bilyuchenko and his co-conspirators will learn that the Department of Justice has long arms and an even longer memory for crimes that harm our communities.”
Southern District of New York indictment
According to court documents unsealed in the Southern District of New York (SDNY), in or about September 2011, Bilyuchenko, Verner, and their co-conspirators allegedly gained unauthorized access to the server holding the cryptocurrency wallets for Mt. Gox. At the time, Mt. Gox was the largest Bitcoin exchange in existence, servicing thousands of users worldwide. Mt. Gox stored the cryptocurrency wallets containing its customers’ bitcoin, and the corresponding private keys used to authorize bitcoin transfers from those wallets, on a computer server in Japan.
“The FBI will continue to work with our U.S. government and international partners to relentlessly pursue and disrupt malicious cyber actors wherever they may reside,” said Assistant Director Bryan Vorndran of the FBI’s Cyber Division. “When cyber criminals engage in fraudulent activity, such as hacking and illicitly operating cryptocurrency exchanges, it is critical that we impose cost on the bad actors and ensure they face justice.”
Bilyuchenko, Verner, and their co-conspirators allegedly used their unauthorized access to Mt. Gox’s server to fraudulently cause bitcoin to be transferred from Mt. Gox’s wallets to bitcoin addresses controlled by Bilyuchenko, Verner, and their co-conspirators. From September 2011 through at least May 2014, Bilyuchenko, Verner, and their co-conspirators allegedly caused the theft of at least approximately 647,000 bitcoins from Mt. Gox, representing the vast majority of the bitcoins belonging to Mt. Gox’s customers. Bilyuchenko, Verner, and their co-conspirators allegedly laundered the bulk of the bitcoins stolen through Mt. Gox principally through bitcoin addresses associated with accounts Bilyuchenko, Verner, and their co-conspirators controlled at two other online bitcoin exchanges.
“Cryptocurrency offers a new way for criminals to steal and launder money, but greed and deceit are nothing new,” said Chief Jim Lee of IRS Criminal Investigation (IRS-CI). “IRS-CI is specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed. IRS-CI is proud to stand with our law enforcement partners to announce this indictment.”
In furtherance of the money laundering scheme, in or about April 2012, Bilyuchenko, Verner, and their co-conspirators allegedly negotiated and entered into a fraudulent contract (the “Advertising Contract”) to provide purported advertising services to a Bitcoin brokerage service based in the Southern District of New York (the “New York Bitcoin Broker”). Under the guise of the Advertising Contract, in order to conceal and liquidate the bitcoins stolen from Mt. Gox, Bilyuchenko and Verner allegedly made regular requests to the owner and operator of the New York Bitcoin Broker to make large wire transfers into various offshore bank accounts, including in the names of shell corporations, controlled by Bilyuchenko, Verner, and their co-conspirators. In accordance with these requests, between in or about March 2012 and in or about April 2013, the New York Bitcoin Broker allegedly transferred more than approximately $6.6 million to overseas bank accounts controlled by Bilyuchenko, Verner, and their co-conspirators. In exchange for the wire transfers, the New York Bitcoin Broker allegedly received “credit” on Exchange-1, through which Bilyuchenko, Verner, and their co-conspirators allegedly laundered more than 300,000 of the bitcoins stolen from Mt. Gox. The fraudulent Advertising Contract with the New York Bitcoin Broker allegedly enabled Bilyuchenko, Verner, and their co-conspirators to conceal and liquidate bitcoins stolen through the Mt. Gox Hack.
Mt. Gox ceased operations in 2014 after the theft was revealed.
Northern District of California indictment
According to court documents unsealed in the Northern District of California (NDCA), Bilyuchenko allegedly worked with Vinnik and others to operate the BTC-e exchange from 2011 until it was shut down by law enforcement in July 2017. During that time period, BTC-e was one of the world’s largest cryptocurrency exchanges and was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities.
BTC-e served over one million users worldwide, moving millions of bitcoin worth of deposits and withdrawals, and processing billions of dollars’ worth of transactions. BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings.
“The Secret Service has a long tradition of pursuing and bringing to justice those who aim to exploit our financial systems and target innocent victims,” said Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division. “Working together with our local, state, and federal law enforcement partners, we will continue to investigate criminal organizations that operate in the ever-evolving cyber domain.”
“Homeland Security Investigations (HSI) continues to investigate cyber criminals illicitly operating in virtual spaces, and we are proud to have worked collaboratively with our law enforcement partners to bring these two individuals to justice,” said Acting Executive Associate Director Katrina W. Berger of HSI. “Our special agents continue to investigate transnational criminal organizations operating in emerging technologies, leveraging our broad authorities to identify, and dismantle those behind sophisticated crypto-scams.”
The SDNY indictment charges Bilyuchenko and Verner with conspiracy to commit money laundering. The NDCA indictment charges Bilyuchenko with money laundering conspiracy and operating an unlicensed money services business.
The U.S. Attorney’s Office for the Southern District of New York’s Complex Frauds and Cybercrime Unit is handling the SDNY case. The FBI and IRS-CI are investigating the case and SDNY Assistant U.S. Attorney Olga I. Zverovich is prosecuting the case.
The Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are handling the NDCA case. The FBI; IRS-CI Oakland Field Office and Cyber Crime Unit in Washington, D.C.; U.S. Secret Service Criminal Investigative Division; and HSI are investigating the case. CCIPS Trial Attorney C. Alden Pelker and NDCA Assistant U.S. Attorney Claudia Quiroz, both members of the National Cryptocurrency Enforcement Team, and NDCA Assistant U.S. Attorney Katherine Lloyd-Lovett are prosecuting the case. The Justice Department’s Office of International Affairs provided invaluable assistance.
A criminal indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Russian Nationals Charged with Hacking One Cryptocurrency Exchange and Illicitly Operating AnotherRead the Press Release
SAN FRANCISCO – The Department of Justice today unsealed charges related to the 2011 hack of the cryptocurrency exchange Mt. Gox and the operation of the illicit cryptocurrency exchange BTC-e.
According to court documents, Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, both Russian nationals, are charged with laundering approximately 647,000 bitcoins from their hack of Mt. Gox. Bilyuchenko is also charged with conspiring with Alexander Vinnik to operate BTC-e from 2011 to 2017.
“This announcement marks an important milestone in two major cryptocurrency investigations. As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “These indictments highlight the department’s unwavering commitment to bring to justice bad actors in the cryptocurrency ecosystem and prevent the abuse of the financial system.”
Southern District of New York Indictment
According to court documents unsealed in the Southern District of New York (SDNY), in or about September 2011, Bilyuchenko, Verner, and their co-conspirators allegedly gained unauthorized access to the server holding the cryptocurrency wallets for Mt. Gox. At the time, Mt. Gox was the largest Bitcoin exchange in existence, servicing thousands of users worldwide. Mt. Gox stored the cryptocurrency wallets containing its customers’ bitcoin, and the corresponding private keys used to authorize bitcoin transfers from those wallets, on a computer server in Japan.
“As cyber criminals have become more sophisticated in their methods of thievery, our career prosecutors and law enforcement partners, too, have become experts in the latest technologies being abused for malicious purposes,” said U.S. Attorney Damian Williams for the Southern District of New York. “As alleged, Alexey Bilyuchenko and Aleksandr Verner thought they could outsmart the law by using sophisticated hacks to steal and launder massive amounts of cryptocurrency, a novel technology at the time, but the charges unsealed today demonstrate our ability to tenaciously pursue these alleged criminals, no matter how complex their schemes, until they are brought to justice.”
Bilyuchenko, Verner, and their co-conspirators allegedly used their unauthorized access to Mt. Gox’s server to fraudulently cause bitcoin to be transferred from Mt. Gox’s wallets to bitcoin addresses controlled by Bilyuchenko, Verner, and their co-conspirators. From September 2011 through at least May 2014, Bilyuchenko, Verner, and their co-conspirators allegedly caused the theft of at least approximately 647,000 bitcoins from Mt. Gox, representing the vast majority of the bitcoins belonging to Mt. Gox’s customers. Bilyuchenko, Verner, and their co-conspirators allegedly laundered the bulk of the bitcoins stolen through Mt. Gox principally through bitcoin addresses associated with accounts Bilyuchenko, Verner, and their co-conspirators controlled at two other online bitcoin exchanges.
“The FBI will continue to work with our U.S. government and international partners to relentlessly pursue and disrupt malicious cyber actors wherever they may reside,” said Assistant Director Bryan Vorndran of the FBI’s Cyber Division. “When cyber criminals engage in fraudulent activity, such as hacking and illicitly operating cryptocurrency exchanges, it is critical that we impose cost on the bad actors and ensure they face justice.”
“Cryptocurrency offers a new way for criminals to steal and launder money, but greed and deceit are nothing new,” said Chief Jim Lee of the IRS Criminal Investigation (IRS-CI). “IRS-CI is specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed. IRS-CI is proud to stand with our law enforcement partners to announce this indictment.”
In furtherance of the money laundering scheme, in or about April 2012, Bilyuchenko, Verner, and their co-conspirators allegedly negotiated and entered into a fraudulent contract (the “Advertising Contract”) to provide purported advertising services to a Bitcoin brokerage service based in the Southern District of New York (the “New York Bitcoin Broker”). Under the guise of the Advertising Contract, in order to conceal and liquidate the bitcoins stolen from Mt. Gox, Bilyuchenko and Verner allegedly made regular requests to the owner and operator of the New York Bitcoin Broker to make large wire transfers into various offshore bank accounts, including in the names of shell corporations, controlled by Bilyuchenko, Verner, and their co-conspirators. In accordance with these requests, between in or about March 2012 and in or about April 2013, the New York Bitcoin Broker allegedly transferred more than approximately $6.6 million to overseas bank accounts controlled by Bilyuchenko, Verner, and their co-conspirators. In exchange for the wire transfers, the New York Bitcoin Broker allegedly received “credit” on Exchange-1, through which Bilyuchenko, Verner, and their co-conspirators allegedly laundered more than 300,000 of the bitcoins stolen from Mt. Gox. The fraudulent Advertising Contract with the New York Bitcoin Broker allegedly enabled Bilyuchenko, Verner, and their co-conspirators to conceal and liquidate bitcoins stolen through the Mt. Gox Hack.
Mt. Gox ceased operations in 2014 after the theft was revealed.
Northern District of California Indictment
According to court documents unsealed in the Northern District of California (NDCA), Bilyuchenko allegedly worked with Vinnik and others to operate the BTC-e exchange from 2011 until it was shut down by law enforcement in July 2017. During that period, BTC-e was one of the world’s largest cryptocurrency exchanges and was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities.
“For years, Bilyuchenko and his co-conspirators operated a digital currency exchange that enabled criminals around the world – including computer hackers, ransomware actors, narcotics rings, and corrupt public officials – to launder billions of dollars,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “The Department of Justice will work tirelessly to identify cyber criminals, no matter where they are. And Bilyuchenko and his co-conspirators will learn that the Department of Justice has long arms and an even longer memory for crimes that harm our communities.”
“Bilyuchenko conspired with Vinnik and others to create a lawless and anonymous space in service to cybercriminals and cryptocurrency laundering,” said Robert Tripp, SAC of the FBI San Francisco Field Office. “FBI investigators were committed to shining a light on this activity through dogged investigation, technical skill, and partnerships. We will continue to work with our local and global law enforcement colleagues to identify, pursue, and arrest criminals no matter where they reside and no matter how long it takes.”
BTC-e served over one million users worldwide, moving millions of bitcoin worth of deposits and withdrawals, and processing billions of dollars’ worth of transactions. BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings.
“The Secret Service has a long tradition of pursuing and bringing to justice those who aim to exploit our financial systems and target innocent victims,” said Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division. “Working together with our local, state, and federal law enforcement partners, we will continue to investigate criminal organizations that operate in the ever-evolving cyber domain.”
“Homeland Security Investigations (HSI) continues to investigate cyber criminals illicitly operating in virtual spaces, and we are proud to have worked collaboratively with our law enforcement partners to bring these two individuals to justice,” said Acting Executive Associate Director Katrina W. Berger of HSI. “Our special agents continue to investigate transnational criminal organizations operating in emerging technologies, leveraging our broad authorities to identify, and dismantle those behind sophisticated crypto-scams.”
“HSI San Francisco/NorCal is on the alert to money laundering via crypto currency and other criminal activity that pervade the dark web,” said Special Agent in Charge Tatum King of HSI San Francisco. “In addition to the multi-year efforts of HSI personnel, partnerships continue to be key in this monumental and complex work and we are appreciative of joint efforts with FBI San Francisco, U.S. Secret Service San Francisco, IRS-CI San Francisco, and the Northern District U.S. Attorney’s Office, all of whom have expended significant resources in pursuit of this investigation.”
The SDNY indictment charges Bilyuchenko and Verner with conspiracy to commit money laundering. The NDCA indictment charges Bilyuchenko with money laundering conspiracy and operating an unlicensed money services business.
The U.S. Attorney’s Office for the Southern District of New York’s Complex Frauds and Cybercrime Unit is handling the SDNY case. The FBI and IRS-CI are investigating the case and SDNY Assistant U.S. Attorney Olga I. Zverovich is prosecuting the case.
The Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are handling the NDCA case. The FBI; IRS-CI Oakland Field Office and Cyber Crime Unit in Washington, D.C.; U.S. Secret Service Criminal Investigative Division; and Homeland Security Investigations are investigating the case. CCIPS Trial Attorney C. Alden Pelker and NDCA Assistant U.S. Attorney Claudia Quiroz, both members of the National Cryptocurrency Enforcement Team, and NDCA Assistant U.S. Attorney Katherine Lloyd-Lovett are prosecuting the case. The Justice Department’s Office of International Affairs provided invaluable assistance.A criminal indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
biluchenko_indicment_redacted_cr-22-0255_vc.pdf u.s._v._bilyuchenko_and_verner_indictment.pdfRussian Nationals Charged with Hacking One Cryptocurrency Exchange and Illicitly Operating AnotherRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General for the Department of Justice’s Criminal Division, Ismail J. Ramsey, the United States Attorney for the Northern District of California, James C. Lee, the Chief of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), William Mancino, the Special Agent in Charge of the U.S. Secret Service’s Criminal Investigative Division (“USSS”), and Katrina W. Berger, the Acting Executive Associate Director of Homeland Security Investigations (“HSI”), announced the unsealing of charges against ALEXEY BILYUCHENKO and ALEKSANDR VERNER, both Russian nationals. BILYUCHENKO and VERNER are charged in the Southern District of New York with conspiring to launder approximately 647,000 bitcoins from the 2011 hack of Mt. Gox (the “SDNY Case”). BILYUCHENKO is separately charged in the Northern District of California with conspiring with Alexander Vinnik to operate the illicit cryptocurrency exchange BTC-e from 2011 to 2017 (the “NDCA Case”). The SDNY Case has been assigned to U.S. District Judge P. Kevin Castel. The NDCA Case has been assigned to U.S. District Judge Chhabria.
U.S. Attorney Damian Williams said: “As cyber criminals have become more sophisticated in their methods of thievery, our career prosecutors and law enforcement partners, too, have become experts in the latest technologies being abused for malicious purposes. As alleged, Alexey Bilyuchenko and Aleksandr Verner thought they could outsmart the law by using sophisticated hacks to steal and launder massive amounts of cryptocurrency, a novel technology at the time, but the charges unsealed demonstrate our ability to tenaciously pursue these alleged criminals, no matter how complex their schemes, until they are brought to justice.”
Assistant Attorney General Kenneth A. Polite, Jr. said: “This announcement marks an important milestone in two major cryptocurrency investigations. As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide. These indictments highlight the department’s unwavering commitment to bring to justice bad actors in the cryptocurrency ecosystem and prevent the abuse of the financial system.”
NDCA U.S. Attorney Ismail J. Ramsey said: “For years, Bilyuchenko and his coconspirators operated a digital currency exchange that enabled criminals around the world – including computer hackers, ransomware actors, narcotics rings, and corrupt public officials – to launder billions of dollars. The Department of Justice will work tirelessly to identify cyber criminals, no matter where they are. And Bilyuchenko and his coconspirators will learn that the Department of Justice has long arms and an even longer memory for crimes that harm our communities.”
IRS-CI Chief James C. Lee said: “Cryptocurrency offers a new way for criminals to steal and launder money, but greed and deceit are nothing new. IRS-CI is specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed. IRS-CI is proud to stand with our law enforcement partners to announce these indictments.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged in the indictment, the defendants gained unauthorized access to a server used by Mt. Gox to house cryptocurrency wallets. Mt. Gox was the world’s largest bitcoin exchange at the time, and the defendants used their unauthorized access to steal the bulk of the bitcoins held by Mt. Gox customers. The FBI and our partners will continue to work tirelessly to protect the integrity of all of our financial markets.”
USSS Special Agent in Charge William Mancino said: “The Secret Service has a long tradition of pursuing and bringing to justice those who aim to exploit our financial systems and target innocent victims. Working together with our local, state, and federal law enforcement partners, we will continue to investigate criminal organizations that operate in the ever-evolving cyber domain.”
HSI Acting Executive Associate Director Katrina W. Berger said: “Homeland Security Investigations continues to investigate cyber criminals illicitly operating in virtual spaces, and we are proud to have worked collaboratively with our law enforcement partners to bring these two individuals to justice. Our special agents continue to investigate transnational criminal organizations operating in emerging technologies, leveraging our broad authorities to identify and dismantle those behind sophisticated crypto scams.”
The SDNY Case
According to the allegations in the Indictment unsealed in the Southern District of New York:[1]
In or about September 2011, BILYUCHENKO, VERNER, and their co-conspirators gained unauthorized access to the server holding the cryptocurrency wallets for Mt. Gox. At the time, Mt. Gox was the largest bitcoin exchange in existence, servicing thousands of users worldwide, including users in the Southern District of New York. Mt. Gox stored the cryptocurrency wallets containing its customers’ bitcoin and the corresponding private keys used to authorize bitcoin transfers from those wallets on a computer server in Japan.
BILYUCHENKO, VERNER, and their co-conspirators used their unauthorized access to Mt. Gox’s server to fraudulently cause bitcoins to be transferred from Mt. Gox’s wallets to bitcoin addresses controlled by BILYUCHENKO, VERNER, and their co-conspirators. From September 2011 through at least May 2014, BILYUCHENKO, VERNER, and their co-conspirators caused the theft of at least approximately 647,000 bitcoins from Mt. Gox, representing the vast majority of the bitcoins belonging to Mt. Gox’s customers. BILYUCHENKO, VERNER, and their co-conspirators laundered the bulk of the bitcoins stolen from Mt. Gox principally through bitcoin addresses associated with accounts BILYUCHENKO, VERNER, and their co-conspirators controlled at two other online bitcoin exchanges (“Exchange-1” and “Exchange-2”), as well as a particular user account on Mt. Gox itself.
In furtherance of the money laundering scheme, in or about April 2012, BILYUCHENKO, VERNER, and their co-conspirators negotiated and entered into a fraudulent contract (the “Advertising Contract”) to provide purported advertising services to a bitcoin brokerage service based in the Southern District of New York (the “New York Bitcoin Broker”). Under the guise of the Advertising Contract, in order to conceal and liquidate the bitcoins stolen from Mt. Gox, BILYUCHENKO and VERNER made regular requests to the owner and operator of the New York Bitcoin Broker to make large wire transfers into various offshore bank accounts, including in the names of shell corporations, controlled by BILYUCHENKO, VERNER, and their co-conspirators. In accordance with these requests, between in or about March 2012 and in or about April 2013, the New York Bitcoin Broker transferred more than approximately $6.6 million to overseas bank accounts controlled by BILYUCHENKO, VERNER, and their co-conspirators. In exchange for the wire transfers, the New York Bitcoin Broker received “credit” on Exchange-1, through which BILYUCHENKO, VERNER, and their co-conspirators laundered more than 300,000 of the bitcoins stolen from Mt. Gox. The fraudulent Advertising Contract with the New York Bitcoin Broker enabled BILYUCHENKO, VERNER, and their co-conspirators to conceal and liquidate bitcoins stolen through the Mt. Gox hack.
Mt. Gox ceased operations in 2014 after the theft was revealed.
The NDCA Case
According to the allegations in the Indictment unsealed in the Northern District of California:[2]
BILYUCHENKO worked with Alexander Vinnik and others to operate the BTC-e exchange from 2011 until it was shut down by law enforcement in July 2017. During that time period, BTC-e was one of the world’s largest cryptocurrency exchanges and was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities.
BTC-e served over one million users worldwide, moving millions of bitcoin worth of deposits and withdrawals and processing billions of dollars’ worth of transactions. BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings.
* * *
The SDNY Indictment charges BILYUCHENKO, 43, and VERNER, 29, both Russian nationals, with conspiracy to commit money laundering. If convicted of the charge in the SDNY Indictment, each defendant faces a maximum penalty of 20 years in prison.
The NDCA Indictment charges BILYUCHENKO with conspiracy to commit money laundering and operating an unlicensed money services business. If convicted of the charges in the NDCA Indictment, BILYUCHENKO faces a maximum penalty of 25 years in prison.
The maximum potential sentences set forth above are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the Court.
Mr. Williams praised IRS-CI and the FBI for their work in investigating the SDNY Case.
The SDNY Case is being handled by the Complex Frauds and Cybercrime Unit of the United States Attorney’s Office for the Southern District of New York. Assistant U.S. Attorney Olga I. Zverovich is in charge of the prosecution of the SDNY Case.
The NDCA Case is behind handled by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California and the Criminal Division’s Computer Crime and Intellectual Property Section (“CCIPS”). CCIPS Trial Attorney C. Alden Pelker and NDCA Assistant U.S. Attorney Claudia Quiroz, both members of the National Cryptocurrency Enforcement Team, and NDCA Assistant U.S. Attorney Katherine Lloyd-Lovett are prosecuting the case. The FBI; IRS-CI Oakland Field Office and Cyber Crime Unit in Washington, D.C.; U.S. Secret Service Criminal Investigative Division; and Homeland Security Investigations are investigating the case. The Justice Department’s Office of International Affairs provided invaluable assistance.
The charges in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
[2] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Bilyuchenko and Verner IndictmentRockford Man Sentenced to 15 Years in Federal Prison for the Sexual Exploitation of ChildrenRead the Press Release
ROCKFORD — A Rockford man has been sentenced to 15 years in federal prison for sexually exploiting children.
JAMES UMBAUGH, 57, admitted in a plea agreement that in 2018 he knowingly possessed, on his home computer, images of prepubescent minors, minors under the age of twelve, and toddlers engaged in sex acts. Umbaugh possessed more than 7,900 images and videos of child pornography, including children engaged in sexually explicit conduct that Umbaugh obtained online. Umbaugh further admitted that from 2016 to 2018 he acted as a moderator and administrator for chat rooms and websites that promoted the distribution of child abuse and child exploitation materials.
In addition to the prison term, U.S. District Court Judge Philip G. Reinhard on Friday ordered Umbaugh to pay $18,000 in restitution to his victims.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorney Jessica S. Maveus. Assistant U.S. Attorney Michael D. Love and Attorney James Burke of the Department of Justice’s Child Exploitation and Obscenity Section assisted with the investigation and prosecution.
Rebecca C. Lutzko Sworn in as interim United States Attorney for the Northern District of OhioRead the Press Release
CLEVELAND – Rebecca C. Lutzko was sworn in today as the interim United States Attorney for the Northern District of Ohio by United States District Judge Patricia Anne Gaughan at the federal courthouse in Cleveland.
“As a career federal prosecutor, I am honored to be selected to lead our dedicated team as we continue working toward making the Northern District a safer and better place to live, and carrying out the mission of the Department of Justice,” said interim United States Attorney Lutzko. “I want to thank President Biden for my nomination, Senators Brown and Vance for their support, and the District Judges of our court for their vote of confidence in me as the confirmation process proceeds through the Senate.”
Lutzko was nominated by President Joseph R. Biden on June 7, 2023, and was installed by the United States District Judges in the Northern District of Ohio pending her Senate confirmation. As the interim United States Attorney, Lutzko will supervise the prosecution of federal crimes in the district, including crimes related to public corruption, civil rights violations, white collar crime, child exploitation, terrorism, firearms offenses, narcotics offenses, and more. The office also defends the United States in civil cases and collects debts owed to the United States. The office covers Ohio’s northern 40 counties, which includes Cleveland, Toledo, Akron and Youngstown, and has a staff of approximately 166 employees.
Lutzko has served the district as an Assistant United States Attorney since 2005. In this capacity, she has held several leadership and line assistant positions in the office, serving as Chief of the Appeals Unit since 2017 and previously serving as Deputy Chief of the Major Fraud and Corruption Unit from 2010 to 2011.
Before becoming an Assistant United States Attorney, Lutzko was an associate at BakerHostetler in Cleveland from 1998 to 2005. She also served as a law clerk for Judge Alice M. Batchelder of the United States Court of Appeals for the Sixth Circuit from 1997 to 1998.
Lutzko received her J.D., cum laude, from Georgetown University Law Center in 1997 and her B.A., magna cum laude, from Boston University in 1993.
Raleigh County Man Sentenced to More than 12 Years in Prison for Federal Drug CrimeRead the Press Release
BECKLEY, W.Va. – Larry Wayne Meadows, 71, of Shady Spring, was sentenced today to 12 years and seven months in prison, to be followed by three years of supervised release, for possession with intent to distribute methamphetamine.
According to court documents and statements made in court, on September 21, 2021, law enforcement officers executed a search warrant at Meadows’ residence and found approximately 28 grams of methamphetamine, several grams of a heroin and fentanyl mixture, and a large assortment of prescription pills. Meadows admitted that he possessed these drugs with the intent to distribute them. Meadows further admitted to possessing four firearms that officers also found inside his residence.
Meadows told officers that he had been distributing about 1 ounce of methamphetamine and 1 ounce of heroin each week for about a year. Meadows’ criminal record includes two prior federal felony convictions for controlled substance offenses.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Beckley/Raleigh County Drug and Violent Crime Unit (BRCDVCU).
United States District Judge Frank W. Volk imposed the sentence. Assistant United States Attorney Timothy D. Boggess and former Assistant United States Attorney Alex Hamner prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:22-cr-99.
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Prohibited Person Charged in Connection with Firearm Recovered During a Homicide Investigation in FranklinRead the Press Release
CONCORD – Justin Gebo will appear before Magistrate Judge Andrea K. Johnstone for an initial appearance in federal court today for being a prohibited person in possession of firearms, U.S. Attorney Jane E. Young announces.
According to the charging documents, one of the alleged firearms was recovered during a homicide investigation on June 3, 2023 in Franklin, New Hampshire.
Gebo, 28, was charged with three counts of being a prohibited person in possession of a firearm, including (1) being in possession of a firearm while under indictment; (2) being a felon in possession of a firearm; and (3) being a user of illegal drugs in possession of a firearm.
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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Plaquemines Parish Woman Sentenced for Violating the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – CALLEIGH AMOS, age 30, a resident of Plaquemines Parish, Louisiana, was sentenced on June 8, 2023, to 6 months imprisonment, 3 years of supervised release, and a $100 mandatory special assessment fee by U.S. District Judge Susie Morgan, announced U.S. Attorney Duane A. Evans. AMOS previously pled guilty to conspiracy to distribute and possess with intent to distribute methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(C), and 846.
According to court documents, a Drug Enforcement Administration investigation revealed that AMOS was involved in a narcotics distribution conspiracy with several other co-conspirators between June 8, 2020, and June 5, 2021. As part of the conspiracy, AMOS regularly distributed quantities of methamphetamine.
This case was investigated by the Drug Enforcement Administration and Plaquemines Parish Sheriff’s Office. The prosecution was handled by Assistant United States Attorney J. Benjamin Myers of the Narcotics Unit.
Pharmacist Convicted for $1M Opioid Distribution ConspiracyRead the Press Release
A federal jury in the Southern District of Texas convicted a Texas pharmacist today for conspiracy to unlawfully distribute and dispense opioids and maintaining a drug-involved premises.
According to court documents and evidence presented at trial, from May 2018 to August 2019, Sokari “Momma” Bobmanuel, 63, of Houston, was the owner and pharmacist-in-charge of Cornerstone Rx Pharmacy, which illegally distributed nearly 160,000 opioid pills, including oxycodone and hydrocodone. Bobmanuel, through Cornerstone, distributed controlled substances outside the scope of professional practice, and without a legitimate medical purpose, to individuals who bought prescriptions in the names of other people. These individuals then sold the pills they bought from Cornerstone on the black market. Bobmanuel charged exorbitant prices for her pills – often over $1,000 for a single oxycodone prescription – generating over $1 million from the scheme.
The jury convicted Bobmanuel on one count of conspiracy to unlawfully distribute and dispense controlled substances and one count of maintaining a drug-involved premises. Her sentencing is scheduled for Sept. 20 and she faces a maximum penalty of 20 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
To date, 11 other defendants, including a physician and two nurse practitioners, have pleaded guilty to the conspiracy.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, Special Agent in Charge Daniel C. Comeaux of the DEA Houston Division, and Special Agent in Charge James Smith of the FBI Houston Field Office made the announcement.
The DEA Houston Division and FBI investigated the case.
Trial Attorneys Emily Petro, Monica Cooper, Ariel Glasner, and Courtney Chester of the Criminal Division’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Stephanie Bauman for the Southern District of Texas is handling forfeiture.
Puerto Rican Man Sentenced to 87 Months on Cocaine Possession ConvictionRead the Press Release
St. Thomas, VI – United States Attorney Delia L. Smith announced today that Emanuel Campbell Camacho of Puerto Rico was sentenced to 87 months of imprisonment by Chief District Judge Robert A. Molloy on his conviction of possession with intent to distribute cocaine.
According to court documents, on September 22, 2020, Drug Enforcement Administration agents learned that Campbell Camacho and Carlos Rafael Velez-Lopez, both of Puerto Rico, had traveled by commercial flight from Puerto Rico to St. Thomas, and were driving a purple Jeep Wrangler. After two days of surveillance, agents observed Campbell Camacho leave the Windward Passage Hotel as the passenger of a blue Mazda sedan that traveled to a parking lot at Mandela Circle. Campbell Camacho exited his vehicle and leaned into the passenger side of another vehicle parked next to his vehicle. Moments later, Campbell Camacho removed a large duffle bag from the parked vehicle and place it inside his vehicle. Agents followed Campbell Camacho back to Windward Passage Hotel and observed him carrying the duffle bag up to the second floor level of the hotel. As they approached Campbell Camacho, agents also observed Velez-Lopez near the top of the stairs with a cell phone in his hands. Agents later discovered 30 bricks of cocaine in Campbell Camacho’s black duffle bag. A search of Velez-Lopez’s cell phones revealed that Campbell Camacho and Velez-Lopez were in constant contact while Camacho traveled to Mandela Circle to collect the cocaine. Velez-Lopez is scheduled for sentencing on July 7, 2023.
The Drug Enforcement Administration investigated this case and Assistant United States Attorney Kyle Payne prosecuted the case. This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Puerto Rican Man Sentenced to 10 Years on Cocaine Possession ChargeRead the Press Release
St. Thomas, VI – United States Attorney Delia L. Smith announced today that Carlos Caez-Torres, 45, of Puerto Rico, was sentenced by District Court Judge Robert A. Molloy to 120 months incarceration on his conviction of possession with intent to distribute a controlled substance while on board a vessel subject to the jurisdiction of the United States. Molloy also sentenced Caez-Torres to five years of supervised release and ordered him to pay a special assessment of $100.00.
According to court documents, in the early morning hours of February 28, 2023, Customs and Border Protection (CBP) Marine Interdiction Unit detected a vessel with two people onboard traveling without navigational lights on the west side of St. Thomas heading towards Puerto Rico. CBP approached the vessel ordering it to stop, but the operator of the vessel refused to comply. The occupants of the vessel were observed throwing a black bag into the ocean. CBP disabled the vessel and later retrieved the black bag from the ocean which contained 18 kilograms of cocaine.
The U.S. Customs and Border Protection and Homeland Security Investigations investigated the case, and Assistant United States Attorneys Everard Potter and Natasha Baker prosecuted this case. This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Orange County Doctor Sentenced to More Than 12½ Years in Prison for Prescribing Opioids to ‘Patients’ Whom He Knew Were AddictsRead the Press Release
LOS ANGELES – An Orange County physician was sentenced today to 151 months in federal prison for illegally distributing opioids and other powerful narcotics by writing prescriptions for “patients” without a legitimate medical purpose.
Dr. Dzung Ahn Pham, 61, of Tustin, was sentenced by United States District Judge Josephine L. Staton, who also fined him $35,000, and ordered him immediately remanded into federal custody.
Pham pleaded guilty in October 2022 to one count of conspiracy to distribute controlled substances.
Pham owned Irvine Village Urgent Care and conspired with licensed pharmacist Jennifer Thaoyen Nguyen, 52, of Irvine, who operated the Irvine-based Bristol Pharmacy, to illegally distribute narcotics, including opioids. Pham knowingly prescribed oxycodone, hydrocodone, amphetamine salts, and other controlled substances to people while acting outside the usual course of professional practice and without a legitimate medical purpose, including to people he knew were drug addicts.
Because Pham knew that many pharmacies would not fill his prescriptions, he would direct his “patients” to Nguyen, who would fill them. Pham and Nguyen also took steps to attempt to conceal their criminal conspiracy by agreeing to have Pham write prescriptions for non-controlled substances to avoid red flags to the DEA and Nguyen’s wholesaler based on the amount of controlled substances Pham was prescribing and Nguyen was dispensing.
In November 2017, Pham wrote prescriptions to a patient, identified in court documents as “S.C.” and whom Pham knew was a drug addict, for more than 700 pills of 30mg oxycodone. To provide more narcotics to S.C., in August 2018, Pham wrote prescriptions for 75 pills of 30mg oxycodone in the name of a person labeled in court documents as “R.C.,” who was S.C.’s wife and who had never seen Pham for any medical appointment. R.C. was unaware that Pham issued the prescription in her name for S.C.
As part of the conspiracy, Pham admitted from January 2013 to December 2018, he wrote prescriptions to 18 different “patients” for a total of approximately 53,693 pills of oxycodone, approximately 68,795 pills of hydrocodone, and approximately 29,286 pills of amphetamine salts.
According to court documents, Pham abused his trust and authority as a physician to fuel the addiction of drug users in exchange for financial gain. Pham generated large amounts of cash from the operation of Irvine Village Urgent Care by charging between $100 and $150 per office visit, including many times collecting office visit fees in which Pham wrote prescriptions for the “patients” even though they did not even have an office visit.
“[Pham], a licensed physician trusted by society and the patients that went to him, stopped treating patients and, plain and simple, became a drug dealer,” prosecutors argued in a sentencing memorandum “He turned ‘patients’ into addicts and/or fueled the addictions of drug abusers.”
Nguyen pleaded guilty in October 2022 to one count of conspiracy to distribute controlled substances. On March 17, Judge Staton sentenced Nguyen to 33 months in federal prison and fined her $10,000.
The Drug Enforcement Administration, the California Department of Health Care Services, IRS Criminal Investigation, and the Irvine Police Department investigated this matter.
This case 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.
Assistant United States Attorneys Brett A. Sagel and Gregory W. Staples of the Santa Ana Branch Office prosecuted this case.
Omaha Man Sentenced for Possession of a Stolen FirearmRead the Press Release
United States Attorney Steven A. Russell announced that Bumatet G. Duop, 25, of Omaha, Nebraska, was sentenced today in federal court in Omaha for possessing a stolen firearm. United States District Judge Brian C. Buescher, sentenced Duop to 15 months imprisonment. There is no parole in the federal system. After his federal sentence is complete, Duop will begin a 3-year term of supervised release.
The defendant is presently serving a 10-year prison term in the Clarinda Iowa Department of Corrections following a conviction for intimidation with a dangerous weapon imposed in April 2022. After his release from state custody, Duop will begin serving his federal sentence.
On January 26, 2022, the Omaha Police Department executed a Court authorized search warrant at Duop’s Omaha residence to look for firearms and drugs. Duop was found in a bedroom of the residence where officers also located at Taurus 9mm handgun, which had been stolen out of Lincoln, Nebraska, on September 12, 2020.
This case was investigated by a Bureau of Alcohol, Tobacco, Firearms and Explosives and Omaha Police Department and was 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.
Omaha Man Sentenced as Felon in Possession of a FirearmRead the Press Release
United States Attorney Steven A. Russell announced that Jermaine L. Lewis, 24, of Omaha, Nebraska, was sentenced today in federal court in Omaha for being a prohibited person (felon) in possession of a firearm. Chief United States District Judge Robert F. Rossiter, Jr., sentenced Lewis to 43 months imprisonment. There is no parole in the federal system. After his federal sentence is complete, Lewis will begin a 3-year term of supervised release.
On May 7, 2021, officers observed several parties congregating at an abandoned Omaha residence, including Lewis. While there, Lewis reached into the passenger side of a car and appeared to wrap an unknown item inside the car. Lewis then appeared to bend down outside the vehicle near the front porch. Later that evening, shot spotter alerted law enforcement to 35 shots fired near a residence within 400 feet of the abandoned residence. Digital surveillance showed that Lewis’ car was at the residence during this time.
Officers discovered a rifle and box of ammunition concealed in a blanket under the front porch of the abandoned residence. On May 8, 2021, officers saw Lewis’ car arrive at the abandoned residence and observed him walking up to the house and bending down to look for the rifle.
On July 12, 2021, officers submitted swabs taken from the rifle to the University of Nebraska Medical Center DNA lab, which compared it to a buccal swab taken from Lewis. The DNA results concluded that Lewis could not be excluded as a contributor, and that it was eleven thousand times more likely to be his DNA than that of another unrelated individual.
This case was investigated by the Federal Bureau of Investigation.