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12 July 2023
Former Securities Attorney Sentenced for $1.3 Million Penny-Stock SchemeRead the Press Release
ALEXANDRIA, Va. – A former securities attorney was sentenced today to 72 months in prison for his role in a conspiracy to defraud over 1,000 investors in a penny-stock scheme.
“This case is unique because of the defendant’s greed and disregard for the rule of law, even after serving a federal prison sentence for fraud,” said Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia. “While still on supervised release from his last offense, Mr. Offill and his co-conspirators used their stock market expertise to swindle unsuspecting average investors in order to enrich themselves. I’m grateful to our attorneys and investigative agents who identified and put an end to this flagrantly exploitative scheme.”
“This serial offender defrauded over 1,000 investors, including many who entrusted him with their retirement funds and life savings,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s sentence and restitution demonstrate the Justice Department’s commitment to protecting victims from financial predators, securing the integrity of our public markets, and obtaining restitution for victims of fraud.”
“Phillip Offill engaged in a fraudulent criminal scheme to inflate stock prices through false information, causing victims to lose over $1.3 million of their hard-earned money,” said David Sundberg, Assistant Director in Charge of the FBI Washington Field Office. “Pump-and-dump schemes, such as this one, deteriorate the integrity of the market. The FBI will work to hold accountable those who choose to break the law and swindle unsuspecting victims.”
According to court documents, from at least November 2016 through October 2018, Phillip W. Offill, Jr., 64, of Dallas, Texas; Justin Wallace Herman, 52, of Canonsburg, Pennsylvania; and others conspired to misappropriate millions of shares of a publicly traded company, MCPI, that held mining claims in Arizona and Idaho. The defendants then fraudulently marketed the shares for sale through third parties, including call centers, who made materially false statements to potential investors, while manipulating the market so that the stock falsely appeared to be trading more actively than it actually was. Offill coordinated the co-conspirators, created and submitted fraudulent documents to gatekeepers such as the Financial Industry Regulatory Authority (FINRA), and knowingly caused two materially false press releases to be issued to pump up demand for MCPI stock. As a result of the scheme, victim investors lost approximately $1.3 million.
Offill was previously employed as an attorney for the U.S. Securities and Exchange Commission (SEC) for over 14 years. After leaving the SEC, in 2010, he was convicted in the Eastern District of Virginia for participating in multimillion-dollar pump-and-dump stock manipulation schemes. In April 2010, Offill was sentenced to eight years in prison and three years of supervised release. While on supervised release for his 2010 conviction, Offill committed the current offense involving MCPI stock.
As part of a prior civil case brought by the SEC, in 2011, the U.S. District Court for the Eastern District of Michigan entered a final judgment against Offill that permanently barred him from participating in an offering of penny stock. As part of another SEC case, in 2012, the U.S. District Court for the Northern District of Texas entered a final judgment against Offill that permanently barred him from participating in an offering of penny stock. Notwithstanding these bans, Offill committed the current offense.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; and Emily Odom, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division, made the announcement after sentencing by U.S. District Judge Rossie D. Alston.
Assistant U.S. Attorney Kimberly R. Pedersen of the Eastern District of Virginia, and Trial Attorneys Andrew Tyler and Amanda Fretto Lingwood of the Criminal Division’s Fraud Section at the Justice Department, are prosecuting the case. Former Trial Attorney Blake C. Goebel provided significant contributions to this prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:22-cr-152.
Former Officer at South Florida Immigrant Detention Facility Charged with COVID-19 Relief FraudRead the Press Release
MIAMI – A Miami federal grand jury has charged Anthony Faustin, 28, of Homestead, Florida, with conspiracy, wire and bank fraud, and access device and aggravated identity theft crimes, in connection with a scheme to obtain fraudulent loans under the Paycheck Protection Program (PPP).
According to the allegations in the indictment, Faustin submitted fraudulent PPP loan applications on behalf of six individuals in 2021. In the loan paperwork, Faustin made the applicants appear eligible for pandemic relief by misrepresenting them as sole proprietors or lying about their prior years’ income (or both). Lenders disbursed over $100,000 to bank accounts controlled by the individuals, who would then withdraw the money and gave Faustin his cut.
At the time of the alleged crimes, Faustin was a contractor with Immigration and Customs Enforcement working as a detention officer at Krome North Service Processing Center in Miami.
Faustin made his initial appearance yesterday in federal magistrate court in Miami. If convicted, he faces up to 20 years in prison on the conspiracy and fraud counts and two years on the aggravated identity theft counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Special Agent in Charge Jimmy Valenzuela for U.S. Immigration and Customs Enforcement Office of Professional Responsibility (ICE OPR), and SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite, U.S. Small Business Administration Office of Inspector General (SBA OIG), Investigations Division’s Eastern Region, announced the charges.
ICE OPR and SBA OIG investigated this matter. Assistant U.S. Attorney Daniel Bernstein is prosecuting the case.
An indictment contains mere allegations, and all defendants are presumed innocent unless and until proven guilty in a court of law.
In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted. It was designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Among other sources of relief, the CARES Act authorized and provided funding to the SBA to provide Economic Injury Disaster Loans (“EIDLs”) to eligible small businesses, including sole proprietorships and independent contractors, experiencing substantial financial disruptions due to the COVID-19 pandemic to allow them to meet financial obligations and operating expenses that could otherwise have been met had the disaster not occurred. EIDL applications were submitted directly to the SBA via the SBA’s on-line application website, and the applications were processed and the loans funded for qualifying applicants directly by the SBA.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
On September 15, 2022, the Attorney General selected the Southern District of Florida’s U.S. Attorney’s Office to head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. For more information on the department’s response to the pandemic, please click here.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov under case number 23-cr-20275.
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Former Georgia Used Motor Vehicle Dealer Pleads Guilty to Conspiracy to Commit Securities Fraud in Connection with Odometer Tampering SchemeRead the Press Release
A Georgia man pleaded guilty today in the U.S. District Court for the Northern District of Georgia for his role in falsifying vehicle titles as part of a scheme to roll back odometers on used motor vehicles.
According to court documents between 2011 and 2013, Andrew O. Elphic, 52, of Monroe, engaged in a scheme to sell high-mileage and used vehicles with false and low-mileage readings entered on the vehicles’ odometers and titles. Elphic purchased high-mileage vehicles from auctions outside the State of Georgia, altered or arranged to alter the vehicles’ odometers to reflect false and lower mileage readings, and then altered the vehicles’ titles to reflect false lower mileages for the vehicles. He then submitted the altered titles to co-conspirators employed at a Georgia Motor Vehicle Division office and made cash payments to the employees in order to obtain new motor vehicle titles reflecting the false and lower mileages. Elphic then used the fraudulent titles with the lower odometer readings to sell the vehicles at an automobile auction in Atlanta. By deceiving purchasers into believing the vehicles had fewer miles, Elphic was able to sell the vehicles at inflated prices — thereby causing unsuspecting buyers to pay more for vehicles than they would have paid had the buyers known the true mileages.
Elphic’s scheme misrepresented the mileage to the Georgia Motor Vehicle Division on at least 305 vehicles, resulting in consumer losses of more than $550,000. Consumers who ultimately purchased the vehicles at dealerships did not know of the mileage discrepancies and, as a result, paid inflated sales prices.
“The Department of Justice will continue to work with law enforcement partners to prosecute unscrupulous individuals who deceive consumers purchasing used motor vehicles,” said Principal Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Misrepresenting used car mileages defrauds buyers and conceals significant information about the safety and reliability of these vehicles.”
“Our top priority is safety, and odometer fraud schemes not only scam consumers, but keep unsafe vehicles on our roads,” said Acting Administrator Ann Carlson of the National Highway Traffic Safety Administration (NHTSA). “By actively prosecuting these crimes, we send a strong message that odometer scams, which affect the livelihood of Americans across this country, will not go unpunished. I thank our partners at the Department of Justice for working with us to deter odometer fraud.”
Elphic pleaded guilty to one count of conspiracy to commit securities fraud. He is scheduled to be sentenced on Oct. 24, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The NHTSA Office of Odometer Fraud Investigation investigated the case, with assistance from the Georgia Department of Revenue.
Senior Litigation Counsel Linda I. Marks and Trial Attorney Kathryn Schmidt of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Thomas J. Krepp for the Northern District of Georgia prosecuted the case.
NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually. Individuals with information relating to odometer tampering should call NHTSA’s odometer fraud hotline at (800) 424-9393 or (202) 366-4761.
More information on odometer fraud is available on the NHTSA website at www.nhtsa.gov/odometer-fraud, and tips on detecting and avoiding odometer fraud are available at www.nhtsa.gov/sites/nhtsa.gov/files/811284.pdf.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Georgia, visit www.justice.gov/usao-ndga.
Former Georgia Teacher Charged with Producing, Distributing, Receiving Child Sexual Abuse MaterialRead the Press Release
MACON, Ga. – A federal grand jury returned a 21-count indictment this week charging a former Sandersville, Georgia, high school teacher with producing, distributing, receiving and possessing child sexual abuse material (CSAM).
Michael Allen Dendy, 32, of Milledgeville, Georgia, is charged with five counts of production of child pornography, seven counts of distribution of child pornography, eight counts of receipt of child pornography and one count of possession of child pornography. If convicted, Dendy faces a mandatory minimum of 15 years in prison up to a maximum sentence of thirty years in prison for each count of production of child pornography; Dendy faces a mandatory minimum of five years in prison up to a maximum sentence of twenty years in prison for each count of distribution and receipt of child pornography; and Dendy faces a maximum sentence of ten years in prison for possession of child pornography. The indictment was returned by a federal grand jury on July 11.
The indictment alleges that Dendy enticed minor children to engage in sexually explicit acts which were filmed or photographed. In addition, Dendy allegedly distributed, received and possessed child sexual abuse material (CSAM) of minors.
Dendy was a teacher at Washington County High School in Sandersville, Georgia, from Aug. 2020 until his arrest on Jan. 20, 2023. Dendy taught at three schools previously: Griffin High School in Griffin, Georgia, from 2018-2020; St. Charles High School in Waldorf, Maryland, from 2017-2018; and Starkville High School in Starkville, Mississippi, from 2014-2016. Parents and guardians of children who may have encountered Dendy and have concerns related to this investigation can contact the Homeland Security Investigations (HSI) tip line at 1-866-347-2423.
The case is being investigated by Homeland Security Investigations (HSI) and the Washington County Sheriff’s Office with significant assistance from the Leesburg, Virginia, Police Department, the Charles County, Maryland, Sheriff’s Office and the Middle Judicial Circuit, Georgia, District Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorney Daniel Peach.
An indictment is only an allegation of criminal conduct, and all defendants are presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt.
Florida Man Sentenced to 10 Years in Federal PrisonRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Jeffrey L. Viken has sentenced a Jacksonville, Florida, man convicted of Attempted Enticement of a Minor Using the Internet. The sentencing took place on July 7, 2023.
James Dean Hanapel, 22, was sentenced to 10 years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. Hanapel will also be required to register as a sex offender under the Sex Offender Registration and Notification Act.
Hanapel was indicted by a federal grand jury in August of 2021. He was found guilty by a jury on April 13, 2023.
Evidence at trial established that Hanapel was arrested as a result of an undercover sex trafficking operation conducted during the 2021 Sturgis Motorcycle Rally, targeting internet predators. Following multiple chats and sexually explicit text messages with a person Hanapel believed to be a 14-year-old girl, but who was in fact an undercover agent, Hanapel proceeded to negotiate a time and place he would meet the minor to engage in unlawful sex acts. When Hanapel went to the pre-determined location to meet the minor, he was instead met by law enforcement agents and placed under arrest.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
This case was investigated by the South Dakota Division of Criminal Investigation, South Dakota Internet Crimes Against Children Taskforce, Homeland Security Investigations, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Hanapel was immediately remanded to the custody of the U.S. Marshals Service.
Federal jury convicts Billings man of trafficking methRead the Press Release
MISSOULA — A federal jury on Tuesday convicted a Billings man accused of possessing over 50 grams of pure methamphetamine for resale hidden in false bottom cans and illegally possessing ammunition, U.S. Attorney Jesse Laslovich said today.
After a two-day trial that began on July 10, the jury found Shane Edward Johnson, 54, guilty of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth and prohibited person in possession of ammunition. Johnson faces a mandatory minimum of 15 years to life in prison, a $20 million fine and at least 10 years of supervised release on the conspiracy conviction.
U.S. District Judge Dana L. Christensen presided. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factor. Sentencing was set for Dec. 6. Johnson was detained pending further proceedings.
“The jury’s verdict is yet another example of our office’s efforts to hold accountable those who seek to poison our communities with drugs, in this instance, methamphetamine. These convictions make Laurel and Billings safer, as another dangerous drug dealer like Johnson won’t be on our streets for a long period of time. I am grateful to Assistant U.S. Attorneys Julie R. Patten and Zeno B. Baucus, along with the U.S. Postal Service, FBI, Billings Police Department and Yellowstone County Sheriff’s Office for investigating and prosecuting this case,” U.S. Attorney Laslovich said.
In court documents and at trial, the government alleged that from about April 2020 until October 2021, Johnson, who has a prior federal drug conviction, conspired to distribute meth in the Laurel and Billings communities. In October 2021, law enforcement intercepted a package shipped through the U.S. Postal Service from California to Laurel. Officers executed a search warrant on the package and found two pounds of meth inside four plastic candles. Law enforcement made a controlled delivery of the package to a Laurel residence, and a co-defendant took possession of the package. Law enforcement converged on the residence to execute a search warrant and encountered Johnson and the co-defendant. Agents located a backpack, belonging to Johnson, that contained baggies of meth, a digital scale, approximately $1,000 and two loaded handgun magazines. Johnson was prohibited from possessing ammunition because of his prior felony conviction.
Assistant U.S. Attorneys Julie R. Patten and Zeno B. Baucus are prosecuting the case. The U.S. Postal Service, FBI West, Billings Police Department and Yellowstone County Sheriff’s Office 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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Federal Jury Convicts Santa Clara Man on Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Francisco B. Burrola, Special Agent in Charge of Homeland Security Investigations (HSI) El Paso, announced today that a federal jury returned a guilty verdict against Michael Rivera after less than 2 hours of deliberation. The jury convicted Rivera, 31, of Santa Clara, New Mexico, on one count of coercion and enticement of a minor and two counts of production of a visual depiction of a minor engaging in sexually explicit conduct. United States District Judge Margaret I. Strickland presided.
A federal grand jury indicted Rivera on Sept. 21, 2022. According to the evidence at trial and other publicly available court records, in 2020, Rivera befriended a minor identified as Jane Doe. Doe and Rivera became close. One day in March of 2021, when Doe was 12 years old, Rivera stopped at a convenience store and bought alcohol for both of them. He then drove to a secluded area of town and parked the car. Rivera then initiated sexual intercourse with Doe in the car. Afterward, Rivera told Doe that she could not tell anyone because he could get in trouble.
Following the incident, Rivera maintained contact with Doe by phone. Later that same year, Rivera began requesting that Doe send him naked photos and videos of herself via text message. Rivera received a number of items of child sexual abuse material from Doe.
“HSI is committed to combatting the global fight against child exploitation. HSI El Paso’s efforts are focused on protecting our children and holding the offenders of such heinous acts accountable,” said Francisco B. Burrola, special agent in charge of HSI El Paso. “Innocent children are irreparably harmed in the production of child pornography, and individuals who distribute such revolting material continue to victimize them. HSI works to identify, rescue, and provide services to children who have been subjected to sexual abuse and online exploitation and ultimately ensure those responsible are placed behind bars where they should remain.”
“Rivera exploited the vulnerability of a child less than half his age,” said U.S. Attorney Alexander M.M. Uballez. “Alongside our local partners, the United States will vigorously protect our community from such predators.”
Rivera faces a mandatory minimum of 10 years and up to life in prison for one count of coercion and enticement and a mandatory minimum of 15 years and up to 30 years in prison for each count of production of child pornography. Upon his release from prison, Rivera would be subject to registration as a sex offender.
Homeland Security Investigations investigated this case with the assistance of the Grant County Sheriff’s Office and the Las Cruces Police Department. Assistant United States Attorneys Marisa A. Ong and Eliot Neal are prosecuting the case.
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23-146
Federal Court finds Miami-Based Tax Return Preparer in Contempt and Orders Disgorgement of Ill-gotten Fees as a SanctionRead the Press Release
On July 11, 2023, a federal court in the Southern District of Florida found Rose M. Chazulle in contempt of court for violating a permanent injunction prohibiting her from preparing or filing federal tax returns or other tax-related documents and forms for any person or entity. The court ordered that she disgorge to the United States more than $48,000 in ill-gotten fees, which the parties agreed was a reasonable approximation of the fees that she earned for tax returns prepared in violation of the injunction.
In 2016, the court permanently enjoined Ms. Chazulle from preparing tax returns for others. Despite the court’s orders prohibiting her from preparing or assisting in the preparation of tax returns for others, Ms. Chazulle stipulated that she continued her return preparation activities preparing returns using the preparer tax identification numbers assigned to her daughter and brother-in-law and using the electronic filing identification numbers associated with their businesses. Ms. Chazulle further stipulated that she received at least $48,100 in fees for preparing returns in violation of the court’s injunction. Based on Ms. Chazulle’s stipulations, the court found her in contempt for violating the permanent injunction and ordered as a civil contempt sanction that she disgorge the fees she earned in violation of the injunction.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers as return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams. The IRS offers tips on how to accurately file returns and how to choose a tax return preparer, as well as steps taxpayers can take to get a jumpstart on filing. The IRS has launched a free directory of federal tax preparers and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $73,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found here.
Federal Bureau of Prisons Lieutenant Pleads Guilty to Violating the Civil Rights of an Inmate Resulting in His DeathRead the Press Release
A federal Bureau of Prisons (BOP) lieutenant pleaded guilty today to violating the civil rights of an inmate by showing deliberate indifference to the inmate’s serious medical needs, resulting in his death.
According to court documents, on Jan. 9 and 10, 2021, Michael Anderson, 52, was working in his official capacity as a BOP correctional officer, with a rank of lieutenant, at the Federal Correctional Institution at Petersburg, Virginia. In that capacity, Anderson was responsible for the care of federal inmates. On Jan. 9, 2021, a correctional officer notified Anderson that a 47-year-old inmate, W.W., was experiencing symptoms of an apparent medical emergency and asked the defendant to help W.W. obtain medical care. Anderson personally observed W.W.’s symptoms and stated that he would get medical help for W.W. Anderson nevertheless failed to notify medical staff, obtain a medical assessment, contact the facility’s on-call physician or notify any other staff members of W.W.’s condition. The next day, a correctional officer notified Anderson that W.W. had fallen to the ground in his cell. Even with this information, Anderson failed to obtain any assistance for W.W. whatsoever. W.W. then laid on the ground, dead or dying, for over an hour and a half before any correctional or medical staff entered his cell. By the time correctional and medical staff entered the cell, life-saving efforts failed, and W.W. was later pronounced dead.
“Correctional supervisors are responsible for the care and custody of inmates entrusted to their care, particularly those with serious medical needs,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold accountable those correctional officers who deliberately disregard inmates’ serious medical needs.”
“Despite Anderson’s knowledge of the victim’s medical condition and his knowledge of BOP policies, he failed to provide potentially life-saving medical care to an inmate in need,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “People have a constitutional right to basic care while incarcerated.”
“Anderson’s appalling indifference and disregard for his responsibility to provide a humane environment for inmates resulted in the needless loss of life,” said Special Agent in Charge Russell W. Cunningham of the Justice Department’s Office of the Inspector General Washington Field Office. “Incarcerated individuals should never be denied medical care, and the Department of Justice Office of the Inspector General will continue to aggressively investigate anyone who does so.”
Sentencing is scheduled for Nov. 28. Anderson faces a maximum penalty of life in prison. Any sentence will be determined by a federal district judge based on the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Clarke, U.S. Attorney Aber and Special Agent in Charge Cunningham made the announcement.
The Justice Department’s Office of the Inspector General investigated the case.
Special Litigation Counsel Kathryn E. Gilbert and Trial Attorney Matthew Tannenbaum of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Thomas Garnett for the Eastern District of Virginia are prosecuting the case.
Father and Son Charged in Manhattan Federal Court with Multimillion-Dollar Cryptocurrency-Related CrimesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the arrest of EUGENE WILLIAM AUSTIN, JR., a/k/a “Hugh Austin,” for charges in connection with a scheme to steal money from investors and other victims by offering a variety of fraudulent cryptocurrency-related investment services, including sales of multimillion-dollar batches of cryptocurrency, marketing and advertising services, and short-term investments and loans. EUGENE AUSTIN was arrested on July 5, 2023, and was presented that same day before U.S. Magistrate Judge Jennifer E. Willis. Mr. Williams also announced the guilty plea of EUGENE AUSTIN’s son, BRANDON P. AUSTIN, who pled guilty on April 13, 2023, before U.S. District Judge P. Kevin Castel to participating in a money laundering conspiracy with his father, EUGENE AUSTIN, relating to his involvement in conducting financial transactions with the intent to conceal proceeds of fraud.
U.S. Attorney Damian Williams said: “This is the third case we are announcing this week to shed light on fraud in the cryptocurrency and digital asset ecosystem. As alleged, the father-son duo of Hugh and Brandon Austin engaged in a cryptocurrency fraud and money laundering scheme that victimized both sophisticated and novice cryptocurrency investors alike out of millions of dollars. They used the money from victims to fund a lavish lifestyle of travel, luxury hotels, and fancy restaurants. Thanks to the tenacity of HSI and the career prosecutors of this Office, Hugh Austin is now facing serious criminal charges for his alleged crimes, and Brandon Austin has already pled guilty.”
HSI Special Agent in Charge Ivan J. Arvelo said: “The charging of Hugh and Brandon Austin reflects our ongoing commitment to thwarting individuals involved in all types of financial crimes, especially those that affect the digital environment and subsequently impact the security of our economy. As alleged, these sophisticated scammers exploited the novelty of digital currency to defraud unsuspecting investors out of millions of dollars, while utilizing it as a cover to engage in illicit activity. HSI commends the prosecutorial team at the Southern District of New York’s Complex Frauds and Cybercrime Unit for their unwavering support.”
According to the allegations in the Complaint, which was unsealed today in Manhattan federal court, as well as publicly filed court documents and statements made at public court proceedings:[1]
EUGENE WILLIAM AUSTIN, JR. participated in a scheme with his son BRANDON P. AUSTIN and others to steal money from investors and other victims by fraudulently offering to, among other things: (i) serve as a broker for sales of large quantities of cryptocurrency at below-market exchange rates; (ii) provide short-term investments in cryptocurrency for purportedly high returns; and (iii) provide marketing and advertising services to small businesses, while knowing that, in fact, EUGENE AUSTIN and BRANDON AUSTIN would not provide the promised cryptocurrency, returns, or services. EUGENE AUSTIN also frequently sought personal loans from friends and acquaintances in connection with his purported cryptocurrency and investment businesses, falsely promising to pay lenders back with interest. In each instance, investors and lenders lost their money, and EUGENE AUSTIN and BRANDON AUSTIN frequently spent investors’ funds on personal expenses, including airline travel, luxury hotels, restaurants, and shopping, as well as nominal payments to victims to prolong the scheme. In total, EUGENE AUSTIN and BRANDON AUSTIN have caused more than $10 million in losses to over 20 victims. Below are several examples of victims defrauded by AUSTIN and BRANDON:
- In or about February 2018, EUGENE AUSTIN and BRANDON AUSTIN fraudulently induced a Japanese cryptocurrency company to conduct an interstate cryptocurrency transaction for approximately $600,000 worth of cryptocurrency, for the purported purchase of fundraising and marketing services, which were never provided to the victim.
- In or about August 2018, EUGENE AUSTIN and BRANDON AUSTIN fraudulently induced a partner at a California-based investment firm to send an interstate wire transfer of approximately $5 million to a Manhattan-based attorney, for the purported purchase of cryptocurrency, which was never provided to the victim.
- In or about September 2018, EUGENE AUSTIN and BRANDON AUSTIN fraudulently induced a cryptocurrency start-up company to send an interstate wire transfer of approximately $100,000 for a purported cryptocurrency investment opportunity with high returns; instead of using the funds as promised, EUGENE AUSTIN and BRANDON AUSTIN spent the money on gas, restaurants, hotels, flights, and cash withdrawals.
- In or about January 2019, EUGENE AUSTIN and BRANDON AUSTIN fraudulently induced the founder and chairman of a New Jersey- and Hong Kong-based cryptocurrency investment firm to send an interstate wire transfer of approximately $4 million to a Georgia-based attorney for the purported purchase of cryptocurrency, which was never provided to the victim.
- In or about June 2020, EUGENE AUSTIN and BRANDON AUSTIN embezzled approximately $776,000 that had been sent via an interstate wire transfer to the trust account of a New York-based real estate attorney for the purported purchase of cryptocurrency.
- In or about October 2021, EUGENE AUSTIN and BRANDON AUSTIN embezzled approximately $574,000 that had been sent via an interstate wire transfer to the bank account of a Manhattan-based investment firm for the purported purchase of cryptocurrency.
In connection with BRANDON AUSTIN’s guilty plea, he forfeited his rights and interest in a 2022 E-Pace P250 Jaguar, depicted below:
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EUGENE WILLIAM AUSTIN, JR., 60, of Port Jefferson, New York, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 10 years in prison; and one count of conspiracy to commit interstate transportation of stolen property, which carries a maximum sentence of five years in prison.
BRANDON P. AUSTIN, 27, of Coram, New York, pled guilty to one count of conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison. In connection with the guilty plea, BRANDON AUSTIN also agreed to forfeit $3,406,450 and to make restitution to victims in the amount of $3,406,450. BRANDON AUSTIN is scheduled to be sentenced on September 6, 2023, at 12:00 p.m., by Judge Castel.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of each defendant will be determined by the judge.
Mr. Williams praised the investigative work of HSI.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Andrew K. Chan, Sarah Lai, and Olga I. Zverovich are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant, EUGENE WILLIAM AUSTIN, JR., a/k/a “Hugh Austin,” is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described herein should be treated as an allegation.
U.S. v. Eugene Austin Complaint U.S. v. Brandon Austin InformationDiversicare and Two Occupational Therapy Assistants to Pay over $1.3 Million to Resolve False Claims Act AllegationsRead the Press Release
MONTGOMERY, ALABAMA – Diversicare Healthcare Services, LLC, with related subsidiary Diversicare entities (Diversicare), along with Certified Occupational Therapy Assistants Kellie S. Lemons and Charles M. James, have agreed to pay the United States $1,377,696.00 to resolve allegations that they violated the False Claims Act (FCA) by submitting claims to Medicare for occupational therapy services that they did not provide, announced United States Attorney Sandra J. Stewart.
The FCA is a federal law that imposes civil liability on any persons or entities who submit false claims for payment to the federal government or its contractors. It imposes damages three times the loss caused by the false claims and a civil penalty between $13,508.00 to $27,018.00 per false claim. The FCA is the primary authority used by the Civil Division of the United States Attorney’s Office to redress fraud, waste, and abuse within federal programs, including Medicare.
Diversicare is a group of private companies providing long-term care and rehabilitation services in approximately 43 locations across five states — Alabama, Mississippi, Tennessee, Texas, and Kansas. Prior to March 1, 2023, Diversicare operated the Canterbury Health Care Facility in Phenix City, Alabama.
The civil settlement resolves a lawsuit that a former Diversicare employee brought under the qui tam, or whistleblower, provisions of the FCA. The complaint alleged that Lemons and James falsified occupational therapy records when they clocked into work at Diversicare’s Canterbury facility, left the premises, and “moonlighted” for other home health care companies in the area, meanwhile billing for services at Diversicare that they did not perform. The complaint also alleged that Diversicare permitted and even condoned these practices and knowingly submitted false claims to Medicare for reimbursement for these services.
The United States has intervened in the lawsuit for purposes of settlement. The settlement resolves the allegations that from March 1, 2018, through September 25, 2020, Diversicare, Lemons, and James submitted, or caused to be submitted, false claims to Medicare Part A for occupational therapy services that were not rendered to patients at Canterbury Health Care Facility.
The FCA permits private citizens to initiate a suit on behalf of the United States and share in any recovery. The whistleblower who brought the lawsuit will receive in excess of $200,000.00 of the settlement as his share of the government’s recovery in the matter.
The case was investigated by the United States Attorney’s Office for the Middle District of Alabama in cooperation with the Office of Inspector General for the United States Department of Health and Human Services. Assistant U.S. Attorneys MaryLou E. Bowdre and Samantha R. Miller represented the United States in the matter, assisted by Investigative Analyst Rita E. Richard, Paralegal Specialist Stacey H. VanAlst, and Investigator (Contractor) Gregory T. Holston.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
District Man Sentenced to Seven Years in Prison for Distributing Child PornographyRead the Press Release
WASHINGTON – Alexus Camero, 27, of Washington, D.C., was sentenced yesterday to 84 months in prison for distribution of child pornography, announced U.S. Attorney Matthew M. Graves, Acting Special Agent in Charge Emily Odom, and Interim Chief Ashan Benedict, of the Metropolitan Police Department (MPD). Cameron pleaded guilty on February 14, 2023.
According to court documents, in August of 2021, Camero met an individual online whom he believed was the father of a nine-year-old boy. In reality, this individual was a law enforcement officer, acting in an undercover capacity. Camero exchanged several messages with the undercover officer, and he expressed an interest in sexually abusing the child. At one point during this online chat, Camero asked the undercover officer if he and a friend could borrow the child for a night.
Throughout the course of this exchange, Camero sent the undercover two videos depicting the sexual abuse of very young children. On November 30, 2021, law enforcement executed a search warrant at Camero’s residence. When interviewed by law enforcement, the defendant admitted to chatting with the undercover and to distributing videos that depicted the sexual abuse of young boys. The defendant also admitted that he had additional videos depicting child pornography saved on his cell phone. Law enforcement recovered Camero’s cellular telephone and found at several images and videos depicting the sexual abuse of children. The National Center for Missing and Exploited Children confirmed that some of the children depicted in these images have been identified and rescued by law enforcement.
Following his prison term, Camero will be place on supervised release for 15 years and must register as a sex offender for a period of 25 years. He will be ordered to pay restitution to the minor victims who are depicted in the child sex abuse images and videos that he distributed and possessed.
In announcing the sentence, U.S. Attorney Graves, Acting SAC Odom, and Interim Chief Benedict commended the work of the agents and detectives who investigated the case. They also acknowledged the work of Assistant U.S, Attorneys Amy Larson and Rachel Forman who investigated and prosecuted the case.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Distribution and Possession of Controlled Substances and Illegal Possession of Firearm Leads to Federal Prison Time for Two MenRead the Press Release
SHREVEPORT/LAKE CHARLES, La. – United States Attorney Brandon B. Brown announced the sentencing of two men in Shreveport and Lake Charles for their role in the trafficking of drugs in those cities.
United States District Judge S. Maurice Hicks, Jr. sentenced Paul Vincent Williams, 38, of Bossier City, Louisiana, to 216 months (18 years) in prison, followed by 5 years of supervised release. According to evidence introduced in court, law enforcement agents working with the Federal Bureau of Investigation (FBI), Drug Enforcement Administration (DEA) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were involved in an ongoing investigation of drug trafficking activities in the Shreveport/Bossier City area. Through their investigation, agents had specific information that Williams had sold and distributed various amounts of methamphetamine in February and March 2021. These amounts of methamphetamine were confirmed through testing by the DEA laboratory to be a total of 1,250 grams of pure methamphetamine. Agents conducted surveillance of Williams in February 2022 and subsequently conducted a traffic stop of Williams. A federal search warrant was obtained for Williams’ vehicle and inside agents recovered approximately 232.2 grams of suspected methamphetamine, 4.4 grams of suspected heroin, 37.4 grams of suspected marijuana, 56.3 grams of assorted pills, as well as five firearms, ammunition and over $8,500 in cash. The seized narcotics were sent to the DEA laboratory for testing and the methamphetamine was confirmed to be 216.9 grams of pure substance, while the suspected heroin was found to be fentanyl, containing 0.5 grams of the purse substance. Williams pleaded guilty on March 13, 2023, to possession with intent to distribute controlled substances and possession of a firearm in furtherance of a drug trafficking crime.
The case was investigated by the FBI and ATF and prosecuted by Assistant U.S. Attorney Brian C. Flanagan.
Trevor Selwyn Daniel, Jr., 50, of Decatur, Georgia, was sentenced by United States District Judge James D. Cain, Jr. to 120 months in prison, followed by 5 years of supervised release, for possession with intent to distribute cocaine. On February 12, 2020, Daniel was stopped by a Louisiana State Police trooper while traveling along Interstate 10. A K-9 officer arrived on the scene to assist and alerted to the presence of narcotics in the vehicle. A search of the vehicle was then conducted by law enforcement officers, and they found over five kilograms of cocaine wrapped in bricks and stored in duffel bags in the cargo area. Daniel admitted that the cocaine belonged to him and pleaded guilty to the charge on April 12, 2023.
This case was investigated by the Homeland Security Investigations-U.S. Immigration and Customs Enforcement and Louisiana State Police and was prosecuted by Assistant U.S. Attorney Daniel J. Vermaelen.
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Cuban nationals sentenced in relation to sex trafficking in area strip clubsRead the Press Release
HOUSTON – Three Cuban nationals have been ordered to prison for sex trafficking and related crimes.
Rasiel Gutierrez Moreno, 38, Hendry Jimenez Milanes, 39, and Rafael Mendoza Labrada, 29, were sentenced to 210, 120 and 34 months in federal prison, respectively. Moreno was ordered to pay $451,298 in restitution, while Milanes was ordered to pay $359,108.
Gutierrez Moreno pleaded guilty to sex trafficking and interstate travel in aid of racketeering Oct. 28, 2021. As part of his plea agreement, he admitted to bringing women from Cuba to the United States and charging them inflated smuggling debts as high as $30,000. Gutierrez Moreno forced the women to work in Houston-area strip clubs, such as Michaels’ International, where they danced and engaged in commercial sex acts with club patrons. They then had to provide all the proceeds to Gutierrez Moreno to pay down their debt.
Gutierrez Moreno further acknowledged smuggling and extracting a debt from approximately 20 other women in this manner.
Gutierrez Moreno admitted that to keep a specific victim under his control while she worked for him, he bragged about his acts of violence against other women and their families. On one occasion, Gutierrez Moreno beat another woman shortly before the other victim arrived at his home and ensured she observed that woman’s injuries. When the first victim escaped Gutierrez Moreno, he contacted her family in both Miami and Cuba to demand she return to work and finish paying her debt to him.
Jimenez Milanes pleaded guilty Jan. 10, 2022, to coercion and enticement, while Mendoza Labrada pleaded guilty April 30, 2021, to interstate travel in aid of racketeering.
“These defendants cruelly used violence, threats of violence, and false debts to force vulnerable victims to engage in commercial sex,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This kind of sex trafficking scheme is unlawful, dehumanizing and terrorizing to the women unable to break free. The Justice Department is committed to the vigorous prosecution of those who prey upon, abuse, and exploit others for their own financial benefit.”
“These human smugglers terrorized female migrants, using Houston’s strip clubs combined with psychological threats and sexual violence for their personal financial gain,” said U.S. Attorney Alamdar S. Hamdani. “The victims came to the United States in search of a new life, were especially vulnerable, and the defendants took advantage of that. The sentences imposed today send a strong message that the Southern District of Texas will not tolerate those who smuggle, threaten and abuse the vulnerable.”
“The court’s sentence today sends a strong message: The Diplomatic Security Service (DSS) is committed to making sure that those who commit sex trafficking face consequences for their criminal actions,” said Special Agent in Charge John Keith of the Department of State's DSS - Houston Field Office. “DSS’ strong relationship with the Department of Justice and other law enforcement agencies around the world continues to be essential in the pursuit of justice.”
DSS conducted the investigation as part of the Human Trafficking Rescue Alliance (HTRA), with the assistance of the Homeland Security Investigations of Miami, Florida, and the Department of Labor Wage and Hour Division.
Established in 2004, the U.S. Attorney’s Office in Houston formed HTRA to combine resources with federal, state, and local law enforcement agencies and prosecutors, as well as non-governmental service organizations to target human traffickers while providing necessary services to those survivors who the traffickers victimized. Since its inception, HTRA has been recognized as both a national and international model in identifying and assisting victims of human trafficking and prosecuting those engaged in trafficking offenses.
Assistant U.S. Attorney Sherri Zack for the Southern District of Texas and Trial Attorney Kate Hill of the Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.
Crystal Lake Woman Sentenced to Federal Prison for Conspiring to Distribute MethamphetamineRead the Press Release
A woman who conspired to distribute methamphetamine in the Crystal Lake area was sentenced June 29, 2023, to more than 5 years in federal prison.
Ashley Dawn Henken, age 39, from Crystal Lake, Iowa, received the prison term after a January 5, 2023, guilty plea to one count of conspiracy to distribute a controlled substance.
At the plea hearing, Henken admitted that between 2020, and continuing to May 2021, she did knowingly and intentionally conspire with others to distribute 500 grams or more of a methamphetamine mixture, and/or 50 grams of actual (pure) methamphetamine, commonly called “ice” methamphetamine. Henken was stopped by law enforcement on May 10, 20221, with a pound of methamphetamine.
Henken was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Henken was sentenced to 60 months’ imprisonment. She must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Henken is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Jack Lammers and investigated by the Cerro Gordo Sheriff’s Office, Clear Lake Police Department, Mason City Police Department, Iowa Department of Narcotics Enforcement, and the North Central Iowa Drug Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22-CR-3032.
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Covington Man to Serve Nine Years for Possession of Child Sex Abuse MaterialRead the Press Release
ROANOKE, Va. – A Covington, Virginia, man was sentenced yesterday to nine years in federal prison for using the peer-to-peer filesharing software Freenet to download images and videos of child sex abuse.
Jerald Gray, 51, pleaded guilty in December 2022 to one count of knowingly possessing one or more matters containing visual depictions of minors engaging in sexually explicit conduct, including prepubescent minors and minors who had not attained 12 years of age.
According to court documents, in July 2021, Gray began downloading child sex abuse videos depicting prepubescent girls, some under the age of 12, engaged in sexually explicit conduct.
Based on information obtained through the course of their investigation, agents with the Federal Bureau of Investigation obtained and executed a search warrant at Gray’s residence on December 8, 2021, and seized his computer and cell phone, among other items. Analysis of his computer revealed at least 65 movie or image files that contained child sex abuse material. In addition, Gray’s cellphone contained at least 11 images that depicted child sexual abuse material.
United States Attorney Christopher R. Kavanaugh and Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Division, made the announcement.
The FBI investigated the case and Assistant U.S. Attorneys Matthew Miller, Rachel Barish Swartz, and Jason Scheff prosecuted the case.
Connecticut Sex Offender Indicted in Jacksonville for Committing Multiple Child Sexual Exploitation OffensesRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces the return of an indictment charging Andrew Thomas Bull (35, Tolland, Connecticut), formerly known as Andrew Thomas Picard, with the attempted production and distribution of child sex abuse materials. If convicted, Bull faces a minimum mandatory sentence of 25 years, up to 170 years, in federal prison and a lifetime term of supervised release. On July 7, 2023, Bull was arraigned in Jacksonville and ordered detained pending his trial.
Bull is a registered sex offender, having been convicted in Connecticut in 2013 of importation and illegal possession of child pornography. On May 25, 2023, FBI agents executed a search warrant at Bull’s home in Connecticut and Bull was arrested and later transported to Jacksonville for prosecution.
An indictment is only an allegation, and every defendant is presumed innocent until proven guilty.
This case was investigated by the Federal Bureau of Investigation in Jacksonville and New Haven, Connecticut. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Clinton Man Pleads Guilty to Employment Tax Fraud, Mail Fraud and False Statements; Leominster Man Pleads Guilty to Filing False Tax ReturnsRead the Press Release
BOSTON – A Clinton man and Leominster man pleaded guilty today in federal court in Worcester in connection with their involvement in tax and mail fraud, and other offenses.
Juliano Fernandes, 42, of Clinton, pleaded guilty to 11 counts of employment tax fraud, two counts of mail fraud, and two counts of making false statements to a federal agency. Anderson Dos Santos, 39, of Leominster, pleaded guilty to four counts of filing a false tax return. U.S. District Court Judge Margaret R. Guzman scheduled sentencings for October 2023.
Fernandes exercised financial control over Force Corporation and AB Construction, both Massachusetts-based construction companies. Between 2015 and 2017, Fernandes willfully failed to account for and pay over employment taxes for these companies to the United States Internal Revenue Service. In addition, from approximately April 2013 through January 2017, Fernandes defrauded worker’s compensation insurance companies by misrepresenting the number of employees at Force Corporation and AB Construction, and the amount of wages paid to the employees. Fernandes also, in August 2017, made materially false statements to the U.S. Department of Labor regarding the value of property he owned in Lunenburg, Mass., and that he never had responsibility or control over the payroll of Force Corporation. These statements related to the Department of Labor’s efforts to collect funds from Fernandes and his businesses in connection with alleged civil wage violations.
Dos Santos, who worked for AB Construction, signed and filed individual tax returns for tax years 2013, 2014, 2016 and 2017, in which he materially under-reported his income.
The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charges of failure to pay over employment taxes and making a false statement each provide for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of filing a false tax return provides for a sentence of up to three years in prison, three years of supervised release and a fine of $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Joshua S. Levy; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations, Boston Field Office; Jonathan Mellone, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Office of Investigations, Labor Racketeering and Fraud, Northeast Region; and Anthony DiPaolo, Executive Director of the Insurance Fraud Bureau of Massachusetts made the announcement. Assistant U.S. Attorneys Brendan D. O’Shea and Danial Bennett of the Worcester Branch Office, and John T. Mulcahy of the Narcotics & Money Laundering Unit, are prosecuting the case.
Bedford County Man Pleads Guilty to Wire FraudRead the Press Release
LYNCHBURG, Va. – A Forest, Virginia man, who falsely obtained a $25,000 Paycheck Protection Program (PPP) loan in 2021, pleaded guilty last week in federal court to wire fraud.
Emmett Rudell Staton waived his right to be indicted and pleaded guilty to a one-count Information charging him with wire fraud. At sentencing, Staton faces up to twenty years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Paycheck Protection Program (PPP) was a COVID-19 pandemic relief program administered by the Small Business Administration (SBA) that provided forgivable loans to small businesses for job retention and certain other expenses.
According to court documents, on January 21, 2021, Staton submitted an application for a $25,000 loan through the PPP for a lawncare business he purported to own. On the application, Staton falsely certified that the business had not permanently closed when in actuality he had never operated such a business. In his application, Staton also falsely claimed the business had four employees and an average monthly payroll of $10,000. Although he stated that the loan would be used only for authorized purposes, Staton instead used the loan proceeds for personal expenses, including significant online gambling expenditures.
In addition, Staton caused a second PPP loan application to be submitted in January 2021 using the name of another individual who was purported to be the owner of a daycare business. The application sought $14,000 in PPP funds to cover its three employees and average monthly payroll of $5,600 when, in fact, no such daycare business existed.
United States Attorney Christopher R. Kavanaugh and Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Division, made the announcement.
The FBI investigated the case, and the Office of the United States Bankruptcy Trustee referred the case to the United States Attorney’s Office for prosecution.
Assistant U.S. Attorney Michael Baudinet is prosecuting the case
Baton Rouge Man Sentenced for Being a Felon in Possession of a Firearm While Under IndictmentRead the Press Release
NEW ORLEANS, LOUISIANA – TEREROI THORNTON, a resident of Baton Rouge, was sentenced on Julu 11, 2023 by U.S. District Judge Wendy B. Vitter to twenty-four (24) months incarceration, three (3) years of supervised release and a mandatory $100 special assessment fee, announced U.S. Attorney Duane A. Evans. THORNTON had previously pled guilty to being a felon in possession of a firearm while under indictment, in violation of Title 18, United States Code, Sections 922(n) and 924(a)(1)(D).
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
U.S. Attorney Evans praised the work of Federal Bureau of Investigation and the Louisiana State Police in this matter. The case was prosecuted by Assistant United States Attorney Mike Trummel of the Violent Crime Unit.
Barrio Azteca Gang Member Sentenced to 10 Years in Prison for Holding Migrants HostageRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Francisco B. Burrola, Special Agent in Charge of Homeland Security Investigations (HSI) El Paso, announced today that Alfredo Ochoa-Munoz was sentenced to 120 months years in prison. Ochoa-Munoz, 37, of Cuidad Juarez, Chihuahua, Mexico, pled guilty to conspiracy to take a hostage and three counts of hostage taking on Jan. 10, 2023.
According to court records, between Feb. 5 and Feb. 17 of 2022, three migrants were picked up after crossing illegally into the United States and dropped off at two trailers in Vado, New Mexico that were rented by Ricardo Barrientos-Noriega. En route, the driver took the migrants’ phones and transferred them to Ochoa-Munoz when they arrived at the trailers. Ochoa-Munoz, Barrientos-Noriega, and a third co-defendant, Luis Roberto Arturo Meza-Marin, informed the migrants that they were not allowed to leave the trailers until their families paid more money for their release. Ochoa-Munoz, at the order and direction of Barrio Azteca gang member, Eduardo Sarellano-Garcia, a.k.a. “Padrino,” contacted the migrants’ families and demanded payment for their release. The migrants were threatened with death, injury and continued detainment until such payments were received.
On Feb. 17, after Ochoa-Munoz and his co-defendants received full payments from the migrants’ families, the migrants were picked up by Michael Ryan Ratliff and told that they would be driven to their next destination. En route, the group encountered Border Patrol agents at the I-10 checkpoint located between Las Cruces and Deming, New Mexico. Based on their knowledge and experience, agents detained the group for questioning at which time the migrants admitted to being in the United States illegally and had been held against their will at the location at which they were harbored. Ratliff was arrested at the checkpoint. During subsequent interviews, the three migrants were able to provide agents with the location of the trailers they had been held in. Agents went to the trailers where they encountered and arrested Ochoa-Munoz, Meza-Marin and Barrientos-Noriega.
Ochoa-Munoz, Sarellano-Garcia, Meza-Marin, Barrientos-Noriega and Ratliff, were indicted by a federal grand jury on May 19, 2022. Meza-Marin, 33, of Chihuahua, Mexico, pled guilty to conspiracy to take a hostage and three counts of hostage taking on June 16, 2022, and will remain in custody pending sentencing, which has not been scheduled. Barrientos-Noriega, 24, of Torreon, Mexico, pled guilty to conspiracy to take a hostage and three counts of hostage taking on Sept. 29, 2022, and will remain in custody pending sentencing, which has not been scheduled. Ratliff, 33, of Corinth, Texas, pled guilty to conspiracy to transport illegal aliens and three counts of transporting illegal aliens on June 9, 2022, and was sentenced to 12 months in prison or time served, whichever was longer, and three years of supervised probation.
Homeland Security Investigations investigated this case with assistance from U.S. Border Patrol. Assistant United States Attorneys Matthew Ramirez is prosecuting the case.
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Attorney and Former Bank Director Convicted at Trial of Bank FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that yesterday a federal jury found MENDEL ZILBERBERG guilty of five counts — conspiracy to commit bank fraud, bank fraud, conspiracy to make false statements to a bank, making false statements to a bank, and misapplication of bank funds — in connection with a scheme to obtain a fraudulent loan from Park Avenue Bank. The defendant was found guilty following a one-week trial before U.S. District Judge George B. Daniels. Sentencing is scheduled for November 29, 2023, before Judge Daniels.
U.S. Attorney Damian Williams said: “Mendel Zilberberg, while working as a practicing lawyer and serving as a director of Park Avenue Bank, ignored his duties and took advantage of the bank, viewing it as the object of his fraud scheme. Far from helping the bank through a tenuous moment in its existence, Zilberberg was focused on squeezing money out of it for himself, on the basis of lies. The bank collapsed just months after Zilberberg defrauded it.”
According to the allegations contained in the Indictment, the evidence offered at trial, and matters included in public filings:
In or about 2009, ZILBERBERG conspired with Aron Fried and others to obtain a fraudulent loan from Park Avenue Bank (the “Bank”). Knowing that the conspirators would not be able to obtain the loan directly, the conspirators recruited a straw borrower (the “Straw Borrower”) to make the loan application. The Straw Borrower applied for a $1.4 million loan from the Bank on the basis of numerous lies directed by ZILBERBERG and his coconspirators.
ZILBERBERG used his privileged position at the bank to ensure that the loan was processed promptly. Based on the false representations made to the Bank and ZILBERBERG’s involvement in the loan approval process, the Bank issued a $1.4 million loan to the Straw Borrower, which was quickly disbursed to the defendants through multiple bank accounts and transfers. In total, ZILBERBERG received more than approximately $500,000 of the loan proceeds. The remainder of the loan was split between Fried and another conspirator. The Straw Borrower received nothing from the loan. The loan ultimately defaulted, resulting in a loss of over $1 million.
On November 15, 2022, Fried pled guilty to conspiracy to commit bank fraud. On April 10, 2023, Judge Daniels sentenced Fried to one year and one day in prison.
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ZILBERBERG, 65 of Monsey, New York, was convicted of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; bank fraud, which carries a maximum sentence of 30 years in prison; conspiracy to make false statements to a bank, which carries a maximum sentence of five years in prison; making false statement to a bank, which carries a maximum sentence of 30 years in prison; and misapplying bank funds, which carries a maximum sentence of 30 years in prison. The maximum sentence ZILBERBERG faces on all of these charges is 125 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of the Inspector General.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Dina McLeod, Daniel G. Nessim, and Kimberly Ravener, with the assistance of Paralegal Specialist Joseph Carbone, are in charge of the prosecution.
Arkansas Resident Pleads Guilty to Shooting at Police Officers While Holding InfantRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Elbert Andrew Fuller, Jr., age 24, of Fort Smith, Arkansas entered a guilty plea to a seven-count indictment which includes: one count of Assault with Intent to Commit Murder in Indian Country; one count of Child Abuse in Indian Country; one count of Child Neglect in Indian Country; three counts of Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country; and one count of Use, Carry, Brandish, and Discharge of a Firearm During and in Relation to a Crime of Violence.
The charges arose from an investigation by the Roland Police Department, the Sequoyah County Sheriff’s Department, the Cherokee Nation Marshal Service, and the Federal Bureau of Investigation.
According to investigators, on October 8, 2022, Fuller fired a pistol at a family member. When Roland Police Department officers responded to the scene, Fuller – while holding an infant child – opened fire on them as well. The crimes occurred in Sequoyah County, within the boundaries of the Cherokee Nation Reservation, in the Eastern District of Oklahoma.
The Honorable Gerald L. Jackson, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the plea and ordered the completion of a presentence investigation report. Fuller will remain in custody of the U.S. Marshal pending sentencing.
Assistant United States Attorney Zachary W. Parsons represented the United States.
Andover Man Pleads Guilty to Role in Northern New England Fentanyl Trafficking OperationRead the Press Release
BOSTON – An Andover man pleaded guilty yesterday in federal court in connection with a fentanyl trafficking operation that spanned across northern New England.
Randell Starlin Medina Rodriguez, 27, pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute fentanyl and p-Fluorofentanyl, a fentanyl analogue. U.S. District Court Judge Indira Talwani scheduled sentencing for Oct. 5, 2023.
Medina Rodriguez was arrested and charged in February 2022 along with five other co-defendants. All six defendants were subsequently indicted by a federal grand jury in March 2022.
Beginning in mid-2021, Medina Rodriguez conspired with others to deliver hundreds of grams of fentanyl throughout Massachusetts, New Hampshire and Maine. Specifically, Medina Rodriguez and others served as Massachusetts-based dealers who delivered large quantities of fentanyl to wholesale customers who in turn would distribute those substances in Maine and/or New Hampshire.
The charge of conspiracy to distribute and to possess with intent to distribute fentanyl and p-Fluorofentanyl, a fentanyl analogue, provides for a maximum sentence of 20 years’ imprisonment, at least three years of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting United States Attorney Joshua S. Levy and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division made the announcement. Assistant U.S. Attorneys Stephen Hassink and Lauren Graber of the Narcotics & Money Laundering Unit are prosecuting the case.
The operation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Allianz Global Investors U.S. Sentenced in Connection with Multibillion-Dollar Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that Allianz Global Investors U.S. LLC (“AGI”) was sentenced today by U.S. District Judge Colleen McMahon for a multi-year securities fraud involving a series of private investment funds managed by AGI. Those funds ultimately collapsed, leading to billions of dollars of investor losses. AGI previously pled guilty to one count of securities fraud.
U.S. Attorney Damian Williams said: “Telling the truth to investors is the core duty of an investment adviser. AGI violated that central tenet and deceived investors by materially understating the risk to which their assets were exposed. This Office and our law enforcement partners will be relentless in protecting investors, and this sentence should send a message to the industry: companies will be held responsible when they fail to implement safeguards and ensure that they uphold their duties to investors.”
According to court filings and statements made in court proceedings:
From at least in or about 2014 up through and including at least in or about March 2020, AGI, an investment adviser registered with the Securities and Exchange Commission (“SEC”), headquartered in New York City, and an indirect, wholly owned subsidiary of Allianz SE – one of the world’s largest financial services companies and one of the world’s largest insurance companies – engaged in a scheme to defraud investors in multiple private funds within AGI’s “Structured Alpha Funds.” The Structured Alpha Funds (the “Funds”) were among the most profitable groups of funds AGI managed and, at their height, held over $11 billion in assets under management. The Funds employed a complex options trading strategy that sought to provide investors with guaranteed returns, while managing risk. AGI deceived the Funds and their investors by understating the risk to which investors’ assets were exposed, and therefore how the returns they touted were actually generated.
In particular, in order to generate the Funds’ positive returns and attract and retain capital, AGI fraudulently misled investors regarding the risk taken on by the funds. Among other things, AGI misrepresented the hedging and other risk-mitigation strategies that were undertaken to protect investor funds. Investors also received documents altered to hide the riskiness of the Funds’ investments. Instead of managing the Funds as promised to investors, AGI deployed an investment strategy that prioritized returns over risk management in ways that were fundamentally inconsistent with representations made to investors. As a result of this scheme to defraud, investors’ funds were exposed to higher risk than promised, and investors were deprived of information about the true risks to which their investments were exposed.
After the market dislocations following the onset of the COVID-19 pandemic (the “COVID Crash”) in March 2020, the Funds lost in excess of $8 billion in market value and $3 billion in principal, faced margin calls and redemption requests, and ultimately were shut down. More than 100 investors were victims of this scheme, including, among others, pension funds for teachers, religious organizations, bus drivers, engineers, and other individuals, universities, and charitable organizations.
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AGI was sentenced to financial penalties comprised of over $463 million in forfeiture, over $3.23 billion in restitution, and over $2.33 billion in fines. These amounts include restitution to the victims, the forfeiture of proceeds traceable to the fraud, and the forfeiture by AGI’s corporate parent of the dividends that were paid from AGI to its corporate parent that are traceable to the fraud. AGI has paid these financial penalties in full and has compensated victims of the conduct through settlements in civil litigation filed against AGI in an aggregate amount of over $5 billion.
Mr. Williams praised the outstanding work of the U.S. Postal Inspection Service. Mr. Williams further thanked the SEC, which is pursuing parallel civil actions.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Nicholas Folly, Margaret Graham, and Allison Nichols are in charge of the prosecution.
Aliquippa Resident Sentenced to One Day of Imprisonment for Bank Fraud and ConspiracyRead the Press Release
PITTSBURGH, PA - A resident of Aliquippa, Pennsylvania, has been sentenced in federal court to one (1) day of imprisonment and three (3) years of supervised release on her conviction of bank fraud and conspiracy, United States Attorney Eric G. Olshan announced today.
United States District Judge Marilyn J. Horan imposed the sentence on Lee Ann Benninghoff, age 45, Aliquippa.
According to information presented to the court, Benninghoff owned and operated Complete Escrow and Bella Casa Realty. From February 2014 through March 2017, Benninghoff used her position and connections in real estate financing, and conspired with others in the industry, to submit fraudulent gift letters in support of mortgage loan applications. The gift letters misrepresented the source of the funds and their purported purpose.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
United States Attorney Olshan commended the Federal Housing Finance Agency Office of Inspector General, the U.S. Department of Housing and Urban Development Office of Inspector General, and the U.S. Secret Service for the investigation leading to the successful prosecution of Benninghoff.
Alaska Military Servicemember indicted for allegedly molesting teens on flights through SeattleRead the Press Release
Seattle – A 41-year-old Chief Warrant Officer in the Army, currently stationed in Alaska, was indicted last week for two counts of abusive sexual contact while on board an aircraft, announced Acting U.S. Attorney Tessa M. Gorman. James Benecke was taken into custody at Joint Base Elmendorf-Richardson outside of Anchorage, Alaska and will make his initial appearance in U.S. District Court in Alaska today at 2:00 PM (Alaska Time – 3:00 Pacific Time). He will be scheduled to appear in U.S. District Court in Seattle later this month.
According to the indictment, on April 12, 2023, on an Alaska Airlines flight from Anchorage to Seattle, Benecke allegedly intentionally touched the buttocks of a 16-year-old teen who was seated next to him. The indictment charges that the contact was intentional for his sexual arousal.
Two months later, on June 12, 2023, on an Alaska Airlines flight from Dallas to Seattle, Benecke allegedly touched the buttocks and inner thigh of the 18-year-old woman who was seated next to him. In this instance, the contact was reported to the flight crew by the teen and her boyfriend and Benecke was moved to a seat at the rear of the plane. He was interviewed by law enforcement upon arrival in Seattle.
Due to the heavy travel schedule of the defendant, the investigation is ongoing and law enforcement is interested in speaking with anyone who may have been seated near to Benecke on an aircraft. Those with information should call: 1-800-CALL-FBI (225-5324)
Abusive Sexual Contact is punishable by up to two years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI.
The case is being prosecuted by Assistant United States Attorney Jocelyn Cooney.
11 July 2023
“Wrecking Ball” lands LPR in federal prisonRead the Press Release
GALVESTON, Texas - A 56-year-old legal permanent resident from Mexico has been sentenced in a cocaine and heroin conspiracy, announced U.S. Attorney Alamdar S. Hamdani.
A federal jury convicted Juan Gonzalez-Cardebas following an 11-day trial in August 2022. He was convicted of conspiracy to possess with intent to distribute five or more kilograms of cocaine and one or more kilograms of heroin as well as possession with intent to distribute 18 kilograms of cocaine.
U.S. District Judge Jeffrey Brown has now ordered him to serve a total of 120 months in federal prison. He could also lose his status to reside in the United States.
The investigation focused upon a group of distributors and their associates, primarily citizens of the Dominican Republic, who used common sources of drugs in Mexico to supply their customers in numerous states other than Texas. This group of distributors sold cocaine and heroin throughout the United States but operated out of the Houston area.
Gonzalez worked within the drug trafficking organization by transporting cocaine from the Dallas and Houston areas to other states such as Virginia. He received shipments of cocaine and used his son-in-law’s moving company to deliver the cocaine to drug customers.
The defense attempted to convince the jury that he was an honest hard-working man trying to provide for his family and that his son-in-law set him up. They did not believe those claims and found Gonzalez guilty as charged.
Gonzalez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration and Homeland Security Investigations conducted the Organized Crime Drug Enforcement Task Forces (OCDETF) operation dubbed “Wrecking Ball” with the assistance of the Houston Police Department. Assistant U.S. Attorney Kenneth Cusick is prosecuting the case.
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 on the Department of Justice’s OCDETF webpage.
Yakima Man Sentenced to 300 Months Imprisonment and Lifetime Supervised Release for Production and Attempted Production of Child Pornography and Possession of Child PornographyRead the Press Release
Yakima, Washington – Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced today that Miguel Urbina, age 38 of Yakima, Washington was sentenced after pleading guilty to two counts of Production and Attempted Production of Child Pornography and one count of Possession of Child Pornography. United States District Judge Mary K. Dimke imposed a sentence of 300 months imprisonment to be followed by a life term of supervised release. Urbina will also be required to register as a sex offender.
According to Court documents, Urbina and another person produced child pornography in February 2007, by surreptitiously making an audio/video recording with a digital video camera concealed in a woman’s purse that was placed inside a bathroom in the Union Gap Mall. This camera captured explicit images and video of minor children using the bathroom. These images and videos were saved to Urbina’s computer hard drive. Then, between November 2008 and November 2009, Urbina, produced and attempted to produce child pornography with an individual who was under the age of eighteen.
On April 23, 2020, FBI agents executed a federal search warrant on Urbina’s residence in Yakima, Washington and seized a hard drive containing thousands of images of child pornography. The search warrant also recovered the audio/video recording from the device that was placed inside the bathroom at the Union Gap Mall as well as the explicit recordings Urbina made in 2008 and 2009.
“Mr. Urbina’s exploitation of minor children spanned two decades, warranting the strict sentence the Court imposed today,” stated U.S. Attorney Vanessa R. Waldref. “Mr. Urbina surreptitiously recorded unsuspecting children and preserved those materials for his own gratification. Later, he exploited another child, making sexually explicit recordings of that child. I am grateful for the FBI’s intervention and for the incredible efforts of investigators and prosecutors, who devote their careers to keeping children in Eastern Washington safe from those who would prey on the most vulnerable members of our community.”
“As a parent and as a law enforcement officer, I am horrified at Mr. Urbina’s blatant pattern of exploiting and victimizing children,” said Richard A. Collodi, Special Agent in Charge of the FBI Seattle field office. “His crimes, which dated back for years, included the use of a concealed camera to produce and store thousands of child sexual abuse images. The digital images child predators create are as lasting as the harm they cause, and we continue to fight with the hope that the consequences will deter a future offender.”
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative (“PSC”) has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
This case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Michael Murphy, Assistant U.S. Attorney for the Eastern District of Washington.
1:20-CR-2049-MKD
Winamac Woman Sentenced to 80 Months in PrisonRead the Press Release
SOUTH BEND – Laci Lindsey, 49 years old, of Winamac, Indiana, was sentenced yesterday by United States District Court Judge Robert L. Miller, Jr. after pleading guilty to distributing over 50 grams of methamphetamine, announced United States Attorney Clifford D. Johnson.
Lindsey was sentenced to 80 months in prison followed by 5 years of supervised release.
According to documents in the case, between May 2021 and April 2022, Lindsey sold methamphetamine multiple times in an amount totaling approximately 295 grams. A search of her residence resulted in the recovery of more methamphetamine, a scale, drug ledger, packaging material and other drug paraphernalia.
This case was investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Porter County Multi-Enforcement Group and the DEA North Central Laboratory. This case was prosecuted by Assistant United States Attorney Joel Gabrielse.
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Wewoka Resident Sentenced for Sexually Abusing A Child in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Eduardo Chapa, age 35, of Wewoka, Oklahoma, was sentenced to 75 months imprisonment for one count of Abusive Sexual Contact in Indian Country.
The charges arose from investigations by the Seminole County Sheriff’s Department and the Federal Bureau of Investigation.
On April 4, 2022, Chapa pleaded guilty to one count of Abusive Sexual Contact in Indian Country. At the plea hearing, Chapa admitted to sexually abusing a minor under the age of 16 between 2018 and 2019. The crime occurred in Seminole County, within the Seminole Nation Reservation, in the Eastern District of Oklahoma.
The Honorable Timothy D. DeGiusti, U.S. District Judge for the Western District of Oklahoma, sitting by assignment, presided over the hearing in Muskogee. Chapa 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 Jarrod Leaman represented the United States.
West L.A. Man Charged with Running Decade-Long $4.5 Million Timeshare Telemarketing Scheme that Scammed Elderly VictimsRead the Press Release
LOS ANGELES – A federal grand jury today returned an indictment against a West Los Angeles man who allegedly ran a decade-long telemarketing scam primarily targeting elderly victims that fraudulently obtained more than $4.5 million via false promises to help victims sell or rent their timeshare properties.
Michael Alexai Dragunov, 44, whose aliases include “Michael Anthony Farole,” “Michael LeFleur,” “Victor Romano,” and “James Logan,” is charged in the 10-count indictment along with Christopher Michael Lang, 42, of Hays, Kansas, whose aliases include “Scott Graham,” “Don Lewis,” and “Jack Morgan.”
Both defendants are charged with one count of conspiracy to commit wire fraud and nine counts of wire fraud in connection with telemarketing and email marketing targeting the elderly.
Dragunov was arrested on a federal criminal complaint in this matter on June 28 and was ordered jailed without bond. His arraignment is scheduled for July 18 in United States District Court in downtown Los Angeles. Lang was arrested in Kansas on June 28 and is expected to be arraigned in Los Angeles in the coming weeks.
According to the indictment, from August 2013 to June 2023, Dragunov and Lang purported to represent companies that provided advertising and other services to current or former timeshare owners. The companies included Premier Marketing LLC, CML Marketing Specialists Inc., Condo Rental Associates LLC, and Paramount Media LLC.
Dragunov and Lang allegedly contacted victims, many of whom were elderly, and, to conceal the fraudulent scheme and their true identities, the defendants also used Skype messaging service phone numbers and used aliases instead of their true names.
Victims allegedly were induced to enter into agreements with the defendants’ telemarketing companies – agreements that were formalized in documents that were faxed or sent electronically – by falsely representing that the telemarketing companies would assist the victims with selling or renting their timeshare properties for a “one time” advertising fee.
Despite the recurring fees that each victim paid, often reaching the hundreds of thousands over several years, no victim received the timeshare-related services or proceeds promised, the indictment alleges.
To dupe victims into sending them more money, Dragunov and Lang allegedly told their victims a series of lies, including that the fees being requested would be refunded or reimbursed to the victims upon completion of the sale or rental of the victims’ timeshare, that the victims still owed taxes on the timeshare properties, and if the victims tried to dispute their payments to the telemarketing companies, the victims would automatically lose their disputes and lose all funds paid and any proceeds from a sale or rental of their timeshares.
To create the false impression that the telemarketing companies were legitimate, Dragunov and Lang pretended to be the companies’ customers and engaged in hundreds of phony small transactions with the companies’ payment processing accounts, according to the indictment.
Dragunov and Lang also allegedly concealed material facts from the victims, including the fact that their money was being used to personally enrich themselves.
If convicted of all charges, Dragunov and Lang would face a statutory maximum sentence of 30 years in federal prison for each count.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and IRS Criminal Investigation are investigating this matter. The Los Angeles County Sheriff’s Department; the Henry County (Ohio) Sheriff’s Department; Hays (Kansas) Police Department; and United States Marshals Service provided substantial assistance.
Assistant United States Attorney Julia Hu of the Major Frauds Section is prosecuting this case.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 3 a.m. to 8 p.m. Pacific Time. English, Spanish, and other languages are available.
Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
Watertown Man Sentenced to 14 Months for Unlawfully Possessing Sawed-Off ShotgunRead the Press Release
SYRACUSE, NEW YORK – Rafael Rondon, age 25, of Watertown, New York, was sentenced today to 14 months in prison for possessing an unregistered sawed-off shotgun.
United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.
As part of his previously entered guilty plea, Rondon admitted to possessing an unregistered Iver Johnson’s Arms & Cycle Works 12-gauge sawed-off shotgun. The shotgun, which had a barrel length of less than 18 inches and an overall length of less than 26 inches, was not registered to the defendant in the National Firearms Registration and Transfer Record, as required by law.
Senior United States District Judge Frederick J. Scullin, Jr. also sentenced Rondon to a 3-year term of supervised release, to begin after his imprisonment, and ordered forfeiture of the sawed-off shotgun.
Rondon also pled guilty on December 5, 2022, in the United States District Court for the District of Columbia, to obstruction of an official proceeding, a felony, for his activities inside the U.S. Capitol Building on January 6, 2021. Sentencing in that case is scheduled for September 12, 2023 in Washington, D.C., at which time he faces up to 20 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years.
The Northern District of New York case was investigated by the FBI Albany Joint Terrorism Task Force, with assistance from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the New York State Police. Assistant U.S. Attorneys Stephen Green and Richard Southwick prosecuted the case.
Walter Pierluisi Isern, Eduardo Pierluisi Isern, and American Management and Administration Corporation Sentenced for Federal Program Theft in Excess of $3.7 MillionRead the Press Release
SAN JUAN, Puerto Rico –Today, United States District Court Judge Camille Vélez Rivé sentenced Walter Pierluisi Isern, Eduardo Pierluisi Isern, and American Management and Administration Corporation (AMAC). The defendants pleaded guilty in April to one count of Theft of Federal Program Funds in relation to the misappropriation of operational funds provided by the United States Department of Housing and Urban Development (HUD) for the administration of public housing projects (PHPs) in Puerto Rico.
Defendant Walter Pierluisi Isern was sentenced to serve 43 months of imprisonment, two years of supervised release, and to pay the restitution amount of $2,035,498.86, jointly and severally with AMAC. Defendant Eduardo Pierluisi Isern was sentenced to serve 24 months of imprisonment, two years of supervised release, and to pay the restitution amount of $363,202.28, jointly and severally with AMAC. Defendant AMAC was sentenced to 3 years on probation and to pay the restitution amount of $3,712,000.00, jointly and severally with the co-defendants. All restitution amounts are to be paid to the United States.
According to court documents, the defendants were convicted of knowingly and intentionally stealing money from HUD federal assistance programs from 2014 to August 2022 for their own use and the use of others. The total amount of theft was approximately $3,712,000.00.
The defendants admitted in their plea agreements that despite AMAC’s fiduciary obligations, Walter Pierluisi Isern and Eduardo Pierluisi Isern used their executive positions within AMAC to operate a fraudulent scheme designed to circumvent that prohibition. In furtherance of that scheme, they illegally caused operational funds from the federal assistance programs to be routed via corporations and individuals they controlled, all to personally enrich themselves.
As detailed in the proceedings, Walter Pierluisi Isern created contracts for FiveStar Pest Control, Inc. (FiveStar) and CoolBreeze Air Conditioning, Inc. (CoolBreeze) to provide services to PHPs under AMAC’s management. He then caused multiple payments to be made by FiveStar and CoolBreeze to funnel money to Docu Warehouse, Pier Property, and XY Enterprises, companies controlled and owned by Walter Pierluisi Isern. Through this scheme, Walter Pierluisi Isern illegally obtained approximately $2,035,498.86 in HUD funding that was earmarked for PHP operational expenses.
The admissions included the recognition that Eduardo Pierluisi Isern caused checks from FiveStar and CoolBreez to be issued to the names of others, which he then cashed and deposited into his personal bank account for his personal use and benefit. Through this scheme, Eduardo Pierluisi Isern illegally obtained approximately $363,202.28 in HUD funding that was earmarked for PHP operational expenses.
AMAC, through its executives and officials, was convicted of illegally diverting a total of $3,712,000 in HUD funding that was earmarked for PHP operational expenses.
“As today’s sentences demonstrate, those who attempt to defraud federal programs will be held accountable,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “The defendants and their company harmed the integrity of a program designed to help underprivileged homeowners. Today’s sentences send a clear message that any time federal dollars are misused and regardless of who steals taxpayer monies, we will work tirelessly to pursue justice.”
“Safeguarding taxpayer funded programs and resources that benefit low-income families in our communities is vital to the success of HUD’s programs,” said HUD OIG Special Agent in Charge, Jerome Winkle. “HUD OIG remains steadfast in its commitment to work closely with Federal prosecutors and law enforcement agencies and state and local partners to aggressively investigate those who threaten HUD programs.”
“When unscrupulous individuals scheme to create a contract monopoly, everyone loses,” said Joseph González, Special Agent in Charge of the FBI San Juan Field Office. “The federal government loses because the money, destined to better communities in need, ends up in the pockets of criminals with inflated contract rates. The local government loses because every time federal funds are stolen in this manner; more stringent measures must be implemented to avoid future fraud. But the saddest of losses is the one suffered by the honest entrepreneur. The hard worker with a small maintenance company who puts his savings and the sweat of his brow into his business and doesn’t even get a chance to compete against these criminals for a government contract. The FBI will not allow this to happen without consequence. No one is above the law.”
Their co-defendant, David Vélez Hernández, former Director of Finance for AMAC, is scheduled to be sentenced on August 28, 2023.
The United States Department of Housing and Urban Development Office of Inspector General investigated this case with the assistance of the Federal Bureau of Investigation.
Assistant U.S. Attorney Marie Christine Amy is prosecuting the case.
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Violent York Home Invasion Lands Hooksett, NH Man in Federal Prison for 12 YearsRead the Press Release
PORTLAND, Maine: A Hooksett, New Hampshire man was sentenced in U.S. District Court in Portland today for conspiracy to commit Hobbs Act robbery and interference with commerce by violence. The charges stemmed from a violent home invasion in York, Maine.
Chief U.S. District Judge Jon D. Levy sentenced Derek DaPrato, 35, to 144 months in prison followed by three years of supervised release. DaPrato pleaded guilty on December 28, 2022.
According to court records, in August 2019, DaPrato and three other co-conspirators met in Hooksett and planned a home invasion of a York residence to rob marijuana and marijuana sale proceeds from the home’s resident. The group traveled to the York residence where two co-conspirators, armed with handguns and wearing masks, waited in the woods for the victim to return home. When the victim arrived, accompanied by two others, a violent physical altercation ensued. During the fight, a firearm was discharged, and a bullet struck the victim in the lower abdomen. The two co-conspirators fled. Police arrived approximately 15 minutes later, and the victim was rushed to the hospital where he underwent surgery to remove a .45 caliber bullet from his lower abdomen.
FOUR CONSPIRATORS SENTENCED TO A TOTAL OF 44+ YEARS: On March 27, 2023, Jason Candelario, 34, was sentenced to 175 months in prison and Luis Carpio, 33, was sentenced to 120 months for their roles in the home invasion. On March 17, 2023, the fourth co-conspirator, Andrew Soboleski, 30, was sentenced to 96 months for his role in the crime. All four men resided in New Hampshire.
The FBI, in conjunction with the York Police Department and the York County Sheriff’s Office, investigated the case.
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Ulster County Sex Offender Sentenced to 10 Years for Child Pornography PossessionRead the Press Release
ALBANY, NEW YORK – Shawn Wetzel, age 39, of Highland, New York, was sentenced today to 10 years in prison for possession of child pornography. United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.
Wetzel previously pled guilty before Senior United States District Judge Gary L. Sharpe. Wetzel admitted that he had previously pled guilty in Georgia to receipt of child pornography and was sentenced to 67 months of incarceration, to be followed by 5 years of post-release supervision. In September 2021, approximately 16 months after his release from prison, and while he was under supervised release, Probation officers conducted an inspection of Wetzel’s residence in Ulster County. In the course of that inspection, Wetzel was found to be in possession of approximately 10 child pornography image files and one child pornography video, depicting children as young as 7 years old.
After Wetzel is released from prison, he will be required to serve a 30-year term of post-release supervision.
This case was investigated by the FBI and its Child Exploitation Task Force, which includes members of federal, state, and local law enforcement agencies, including the Colonie Police Department and New York State Police. Former Assistant United States Attorney Rachel L. Williams and Assistant U.S. Attorney Benjamin S. Clark prosecuted the case as part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Two Navajo Men Charged with Carjacking Resulting in Serious Bodily InjuryRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office, announced today that Brian Levi and Daryl Levi were arraigned on an indictment charging them with carjacking resulting in serious bodily injury. Brian, 37, of Shiprock, and his brother, Daryl, 40, of Shiprock, enrolled members of the Navajo Nation, will both remain in custody pending trial, which has not been scheduled.
A federal grand jury indicted the Levi brothers on Nov. 23, 2022. According to the indictment and other court records, on May 17, 2020, the victim, John Doe, was parked in his car at the Gulf Gas Station in Shiprock when Brian and Daryl attacked Doe through the car window and removed him from the car before one of them got into the driver’s seat and drove away. Doe suffered serious bodily injury including a stab wound.
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, both brothers face up to 25 years in prison.
The Farmington Resident Agency of the FBI Albuquerque Field Office investigated this case with assistance from the Navajo Police Department. Assistant United States Attorney Alexander F. Flores is prosecuting the case.
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Tax preparer gets 12 years for illegally filing tax returnsRead the Press Release
HOUSTON – A local woman has been ordered to federal prison following her convictions on seven counts of aiding and assisting in preparing false tax returns, announced U.S. Attorney Alamdar S. Hamdani.
A federal jury sitting in Houston returned a guilty verdict April 3 against Cheryl Christin Kissentaner following a four-day trial.
Today, U.S. District Judge David Hittner ordered her to serve 144 months in federal prison to be immediately followed by one year of supervised release. She was also ordered to pay restitution of $71,180.
At the hearing, the court heard additional evidence describing her history of failing to pay her own personal taxes, civil fraud penalties associated with them and penalties for failing to use due diligence in preparing tax returns.
The total amount Kissentaner owes to the United States from her criminal and civil cases is in excess of $1.9 million. She used some of the monies accrued from the scheme to purchase a Bentley and Maserati as well as for cosmetic surgery. In addition, the court also heard about Kissentaner’s violation of her conditions of release and her failure to cooperate with pre-trial services.
“Kissentaner was convicted by a jury for preparing fraudulent tax returns on behalf of her clients and will now spend significant time behind bars,” said Assistant Special Agent-in-Charge Lucy Tan, of IRS Criminal Investigation’s (IRS-CI) Houston Field Office. “She criminally abused her role as a tax return preparer and violated the trust that the American taxpayers have bestowed upon her. We all pay our taxes, but when you decide to cheat, remember, we have a 100-percent conviction rate in our office for criminal tax cases over the past 20 years.”
At trial, the jury heard from federal agents as well as five of Kissentaner’s clients.
Testimony and evidence revealed individuals paid Kissentaner to prepare tax returns from 2016 through 2019 through her company First Financial Tax Services. However, she was not legally allowed to do so. The jury heard that a paid tax preparer is required to have paid all of his or her own tax returns, but Kissentaner had failed to pay her 2012-2017 tax returns until late 2019. This was after the tax returns she prepared and filed for a fee.
From 2016 through 2019, Kissentaner prepared at least nine tax returns in which she created fake businesses that allegedly operated at losses. They also claimed false fuel tax credits, state income tax deductions for Texas residents (who did not pay a state income tax), false medical expenses, unemployed reimbursement expenses, false contributions to charity, other false expenses for businesses and failed to report IRA distributions.
Kissentaner also claimed that, pursuant to an engagement letter she prepared for her clients, she owed no duty to examine their returns for fake claims. However, Kissentaner filed numerous certificates under oath with the IRS in which she promised the government she would exercise due diligence in examining the tax returns she prepared and filed. She also charged tax preparer fees well in excess of other firms that provided the same services and asked potential clients to identify a reference and offered them a fee if they referred individuals themselves.
At trial, evidence showed that 98 percent of her clients obtained a refund even though several owed as much as $25,000 and did not pay any income taxes throughout the year. One such client had been obtaining a refund in excess of $8,000 each year. However, after Kissentaner became aware she was under investigation, that client was informed she owed over $10,000. When she inquired as to the change, Kissentaner untruthfully claimed that it was due to a change in the tax law and due to the client’s son now attending college on a full-time basis.
Further, a large percentage of Kissentaner’s clients claimed fuel tax credits despite the fact that only 0.2 percent of all tax payers would be eligible for that benefit.
She has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Adam Laurence Goldman and Tyler White prosecuted the case.
St. Louis County Man Sentenced to 10 Years in Prison, Ordered to Pay $66,000 to Child Pornography VictimsRead the Press Release
ST. LOUIS – U.S. District Judge Ronnie L. White on Tuesday sentenced a man from St. Louis County, Missouri who possessed more than 63,000 images and videos containing child pornography to 10 years in federal prison.
Judge White also ordered Christopher D. Cotton, 33, to pay $66,000 in restitution to known victims who appeared in Cotton’s collection.
In letters to the court, victims wrote about the pain that defendants like Cotton continue to cause them and the fear that they will be recognized by someone who has seen the pictures.
One who uses the pseudonym Andy wrote, “My sexual abuse occurred from the ages of 6-12. During this time my victimization was documented and shared across the country, and is continuously being shared.”
“I feel that every single criminal that is found with mine or another child’s images should be held accountable for the highest amount possible to help us victims repair our lives,” Andy wrote.
The parents of another wrote, “Aside from the horrible truth that my daughter was horrifically abused from the ages of four to seven and her innocence was literally stolen, one of the ongoing concerns that plagues my child is that literally any person she meets on the street (or any teenage boy in her class) might have seen photos of her being cruelly debased and abused.”
The victims are notified when their photos are found in the possession of a defendant. One victim said 22,000 notifications had been received in her case. Another wrote, “Each victim notification envelope represents someone who sexually enjoys seeing me hurt…. When a market exists for child pornography, it will continue. I am constantly victimized, knowing the awful truth that I can never escape these photos.”
“I am so angry that the images are out there and can’t be taken down. I feel like the images will always be out there. I think I am too broken to be fixed,” another wrote.
Cotton pleaded guilty in U.S. District Court in St. Louis in April to one count of receiving child pornography and admitted uploading files containing child pornography to Dropbox. That triggered a report to the National Center for Missing and Exploited Children and sparked an investigation.
On July 13, 2022, law enforcement officers executed a court-approved search warrant at Cotton’s home in St. Louis County near Florissant. Cotton admitted both viewing and collecting child pornography. He also told officers that he’d received child pornography from “maybe fifteen or more” minors with whom he had contact via social media, the youngest of which Cotton said was 13 years old.
Investigators would later find a total of at least 16,677 images and 46,414 videos of child pornography stored online and on Cotton’s electronic devices, including a laptop and three cell phones.
The case was investigated by the St. Louis County Special Investigations Unit, the St. Charles County Cybercrime Task Force and the FBI. Assistant U.S. Attorney Jillian Anderson prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Springfield Man Sentenced to 15 Years for Sexual Exploitation of a ChildRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Mo., man was sentenced in federal court today for the sexual exploitation of a 14-year-old victim.
Jared Neal Gonzales, 26, was sentenced by U.S. District Judge M. Douglas Harpool to 15 years in federal prison without parole. The court also sentenced Gonzales to 10 years of supervised release following incarceration. Gonzales will be required to register as a sex offender upon his release from prison and will be subject to federal and state sex offender registration requirements, which may apply throughout his life.
On Nov. 8, 2022, Gonzales pleaded guilty to one count of using a minor to produce child pornography. Gonzales admitted he was in a sexual relationship with a 14-year-old girl. Gonzalez also admitted they used a cell phone to record themselves having sexual intercourse. On at least two occasions, at Gonzales’s request, the child victim used her cell phone to send him videos of the couple engaged in sexual intercourse.
Gonzales has also been charged in the Circuit Court of Greene County, Mo., for sexual misconduct involving a child and attempted statutory sodomy in the second degree in relation to this conduct.
This case was prosecuted by Assistant U.S. Attorney Stephanie L. Wan. It was investigated by the FBI and the Springfield, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
South Bend Man Sentenced to 228 in PrisonRead the Press Release
SOUTH BEND – Archie Taylor, 37 years old, of South Bend, Indiana, was sentenced by United States District Court Judge Damon R. Leichty after pleading guilty to 3 counts of robbery affecting commerce, 1 count of bank robbery, and 1 count of brandishing a firearm during a crime of violence, announced United States Attorney Clifford D. Johnson.
Taylor was sentenced to 228 months in prison, 3 years of supervised release and ordered to pay $5999 in restitution.
According to documents in the case, over the course of a week in September 2022, Taylor robbed 3 convenience stores and a bank in the Elkhart and Mishawaka areas. During all of the robberies, Taylor pointed a handgun at the convenience store clerks and bank employees. He robbed each location of either cash or merchandise.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Elkhart Police Department and the Mishawaka Police Department. This case was prosecuted by Assistant United States Attorney Joel Gabrielse.
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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Shannon Man Sentenced to 63 Months for Armed Bank RobberyRead the Press Release
Verona, MS – A Shannon, Mississippi man was sentenced yesterday to 63 months in prison for the armed bank robbery of the Renasant Bank located in Verona, Mississippi.
According to court documents, Antonia Cannon, 57, entered the Renasant Bank in Verona on December 30, 2022, wearing a hoodie and a “Covid” mask, approached the teller, and demanded money while brandishing what appeared to be a black firearm. The teller provided Cannon $4,700 from the teller drawer and Cannon fled from the bank with the money. Cannon was later apprehended by law enforcement officers on the Natchez Trace Parkway. The $4,700 taken by Cannon was recovered in his automobile still wrapped in the bank’s money wrappers with the teller’s initials on them. The gun used by Cannon during the robbery was later determined to be a black Daisy .177 caliber BB gun modeled after a Beretta M9.
Cannon has a lengthy criminal history of committing armed robberies that spans decades from the Mississippi Delta to North Mississippi. Cannon also has a previous armed bank robbery conviction in the United States District Court for the Northern District of Mississippi from 1998 for which he served 70 months.
U.S. Attorney Clay Joyner of the Northern District of Mississippi and FBI Special Agent in Charge Jermicha Fomby made the announcement.
The Federal Bureau of Investigations, along with the Verona Police Department, Tupelo Police Department, and the United States National Park Service investigated the case.
Assistant U.S. Attorney Feleica Wilson prosecuted the case.
Senior Adviser to the Operator of the Silk Road Online Black Market Sentenced to 20 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ROGER THOMAS CLARK, a/k/a “Plural of Mongoose,” a/k/a “Variety Jones,” a/k/a “VJ,” a/k/a “cimon,” was sentenced to 20 years in prison today for conspiring to distribute massive quantities of narcotics, arising out of his role as the top adviser to Ross Ulbricht, a/k/a “Dread Pirate Roberts,” the owner and operator of the “Silk Road” online illicit black market. During its operation from 2011 until 2013, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute illegal drugs and other illicit goods and services to more than 100,000 buyers and to launder hundreds of millions of dollars derived from those unlawful transactions. CLARK advised Ulbricht on all aspects of the enterprise, including urging and facilitating an attempted murder-for-hire. CLARK’s sentence was imposed by U.S. District Judge Sidney H. Stein. CLARK previously pled guilty before the late U.S. District Judge William H. Pauley III on January 30, 2020.
U.S. Attorney Damian Williams said: “Silk Road was a secret online marketplace for illegal drugs, computer hacking services, and a host of other criminal activity. Roger Thomas Clark was a central figure in helping to lead Silk Road and in advocating violence, even murder, to protect this digital drug empire. Today’s sentence is another reminder that criminal marketplaces, like Silk Road, are a road to prison.”
According to the allegations in the Superseding Indictment, court filings, statements made in court, and evidence presented during the 2015 trial of Ross Ulbricht, Silk Road’s founder:
Ulbricht created Silk Road in approximately January 2011 and owned and operated the underground website until it was shut down by law enforcement in October 2013. Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet at the time and one of the first online marketplaces to exclusively use cryptocurrency to facilitate illegal transactions. Silk Road was massive in scope; there were more than 1.5 million transactions on the site, involving more than 115,000 buyer accounts and 3,000 seller accounts. These transactions had a total value of approximately $213 million, including more than $183 million in drug sales. The drugs sold on Silk Road included more than 82 kilograms of cocaine and 26 kilograms of heroin. Silk Road was also used to launder hundreds of millions of dollars deriving from these unlawful transactions. Silk Road was specifically designed to allow its users to buy and sell drugs and other illegal goods and services anonymously and outside the reach of law enforcement through the use of the Tor network and a Bitcoin-based payment system.
In his journal, Ulbricht described CLARK as a “real mentor” who advised Ulbricht about, among other things, security vulnerabilities in the Silk Road site, technical infrastructure, the rules that governed Silk Road users and vendors, and the promotion of sales on Silk Road, including the sales of narcotics. CLARK also provided advice to Ulbricht on developing a “cover story” to make it appear as though Ulbricht had sold Silk Road. In addition, CLARK assisted Ulbricht with hiring a programmer to help improve and maintain the infrastructure of Silk Road. CLARK also was responsible for gathering information to counter law enforcement’s efforts to investigate Silk Road. CLARK advised Ulbricht on how to protect the Silk Road criminal empire. For instance, when a Silk Road staff member was suspected of stealing approximately $350,000 in Bitcoin from the site, CLARK suggested to Ulbricht that Ulbricht commission a murder-for-hire. Ulbricht took that suggestion. Although the attempted murder-for-hire did not result in any harm to the intended target, Ulbricht paid the purported hitman $80,000 for the job.
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In addition to his prison sentence, CLARK, 61, a citizen of Canada, was sentenced to three years of supervised release and ordered to forfeit $1,606,150.
Mr. Williams praised the outstanding joint efforts of the Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation’s New York Field Office, Homeland Security Investigations (“HSI”) Chicago-O’Hare, the Drug Enforcement Administration’s New York Field Division, and the New York City Police Department. Mr. Williams also thanked the HSI Attaché Bangkok, the Royal Thai Police, and the U.S. Department of Justice’s Office of International Affairs for their support and assistance.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Michael D. Neff and Vladislav Vainberg are in charge of the prosecution.
School Employee Sentenced to Prison for Stealing over $130,000 from Barnstead and Hampton School DistrictsRead the Press Release
CONCORD – A bookkeeper from Barnstead was sentenced today in federal court for stealing money from both Barnstead and Hampton School Districts, U.S. Attorney Jane E. Young announces.
Amy Burley, 48, was sentenced by U.S. District Court Judge Paul J. Barbadoro to 12 months and one day in federal prison and 2 years of supervised release. Burley was also ordered to pay $131,261.81 in restitution. On February 23, 2023, Burley pleaded guilty to two counts of Theft from a Program Receiving Federal Funds.
“These public-school districts placed trust in Burley as their bookkeeper, and she blatantly abused that trust by stealing funds intended for the school children in these districts,” U.S. Attorney Jane E. Young said. “I’m proud that we were able to bring restitution to the taxpayers while sending a deterrent message that this type of thievery will result in incarceration.”
“Instead of working honestly on behalf of two financially struggling school districts, Amy Burley took advantage of them, betraying the trust they placed in her, by stealing tens of thousands of dollars to line her own pockets,” said Christopher DiMenna, Acting Special Agent in Charge of the FBI Boston Division. “Her selfish greed is an affront to all the hard-working students and taxpayers struggling to make ends meet, and today’s sentence ensures she’s held accountable for her criminal conduct.”
Burley was employed as a bookkeeper for Barnstead School District and then Hampton School District. In her role, Burley processed payroll and handled the payment of invoices.
Burley used her access at Barnstead School District to alter her payroll information, make personal student loan payments and payments to personal creditors, and pay for an Amazon account charged to Barnstead but controlled by Burley, totaling $110,295.26. Following her termination from Barnstead, Burley was hired as a bookkeeper at Hampton School District, where she used again her position to use district funds to pay student loans and credit cards belonging to her or her family members, totaling $20,966.52
Federal Bureau of Investigation led the investigation. Valuable assistance was provided by the Department of Education Office of the Inspector General, the Barnstead Police Department, and the Hampton Police Department. Assistant U.S. Attorney John J. Kennedy prosecuted the case.
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Romanian National Pleads Guilty to $5 Million Covid Relief FraudRead the Press Release
NEWS RELEASE SUMMARY – July 11, 2023
SAN DIEGO – Constantin Sandu of Romania pleaded guilty in federal court today, admitting that he masterminded a scheme to steal more than $5 million in California unemployment insurance benefits intended to help workers impacted by the pandemic.
According to his plea agreement, Sandu conspired with an uncharged co-conspirator identified as “D.C.” plus 213 unnamed Romanian co-conspirators across California and in Romania to fraudulently obtain millions of dollars in California unemployment insurance benefits by fabricating documents, creating fictitious accounts and businesses, and filing bogus claims with California’s Economic Development Department, which administers the state’s unemployment benefits. Sandu wired $16,000 of proceeds from the fraud to Romania to renovate his house.
In a forfeiture addendum, Sandu agreed to forfeit $214,950 of proceeds that he personally received from the offenses.
“This defendant has admitted to presiding over a vast network of people who exploited a program that was meant to help Californians during the pandemic,” said U.S. Attorney Randy Grossman. “The scheme alleged in this case diverted millions of dollars from those who truly needed it. We will continue to zealously prosecute perpetrators of COVID relief fraud.” Grossman thanked the prosecution team and the investigating agencies for their excellent work on this case.
“I am extremely proud that San Diego’s law enforcement partners were able to successfully apprehend Sandu,” said FBI San Diego Field Office Special Agent in Charge, Stacey Moy. “Unfortunately, this was an elaborate scheme that involved many alleged fraudsters. We will continue to tirelessly work to bring all those involved to justice.”
“Millions of dollars of unemployment benefits and pandemic-related aid were fraudulently obtained by individuals who falsified information and redirected the funds for their own personal gain,” said Tyler Hatcher, Special Agent in Charge of IRS Criminal Investigation Los Angeles Field Office. “Constantin Sandu is now being held accountable for this $5 million scheme. IRS-CI will not tolerate criminal networks that prey on vulnerable communities and exploit resources meant for those in need. IRS-CI is committed to working with our law enforcement partners locally and internationally to locate and hold criminal organizations accountable for their crimes.”
The plea agreement said that beginning in July 2020 and continuing until late summer of 2022, Sandu and hundreds of unnamed co-conspirators, including the one identified as D.C., learned and developed a process to receive the most benefits possible by using fraudulent identifications, falsified utility bills, falsified earnings statements, falsified W2s, fraudulent health insurance cards and non-existent companies. Additionally, Sandu learned to “backdate” or modify the EDD applications with an earlier unemployment start date to generate even bigger pay days.
Co-conspirators across California would share information, knowledge and resources with Sandu, for Sandu to file claims for regular unemployment insurance and expanded pandemic unemployment insurance benefits from California EDD. Co-conspirators communicated with Sandu via Facebook or other electronic means or met with him in person to provide their Personal Identifying Information, known as PII.
According to the California Franchise Tax Board, none of the companies named in the various W2s submitted for conspirators’ EDD applications was real. According to Blue Cross Blue Shield, none of the member identification numbers submitted for conspirators’ EDD applications was real.
In total, Sandu conspired with D.C. and unnamed co-conspirators to fraudulently obtain no less than $5,207,687 in California unemployment insurance benefits.
Sandu is scheduled to be sentenced on October 16, 2023, at 10 a.m. before U.S. District Judge Larry Burns.
DEFENDANT Case Number: 23-cr-00386-LAB
Constantin Sandu, aka Bobi Sandu, aka Ionut Mihai Age: 33 Transient, Romanian
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 and 1343 - Conspiracy to Commit Wire Fraud
Maximum penalty: Thirty years in prison, a fine of $1 million or both;
Title 18 U.S.C. § 1956(a)(2)(A) — Laundering Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;
Title 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and Title 28, U.S.C. § 2461(c) - Criminal Forfeitures
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
Internal Revenue Service
California Employment Development Department Investigative Division
Homeland Security Investigations
Department of Labor Office of Investigator General
Rochester Man Going to Prison on Drug and Gun ChargesRead the Press Release
ROCHESTER, N.Y.-U.S. Attorney Trini E. Ross announced today that Janard D. Warnick, 30, of Rochester, NY, who was convicted of conspiracy to distribute cocaine and possession of firearms in furtherance of a drug trafficking crime, was sentenced to serve 72 months in prison by U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorney Cassie Kocher, who handled the case, stated that Warnick sold cocaine for profit and maintained a Clifford Avenue residence for the purposes of his drug trafficking activities. On February 23, 2022, investigators executed a search warrant at the residence and recovered approximately 61 grams of cocaine, 1.8 grams of fentanyl and acetyl fentanyl, 2 grams of crack cocaine, and drug paraphernalia. In addition, three firearms and a variety of ammunition were also recovered.
The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief David Smith and Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino.
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Pittsburg County Resident Pleads Guilty to Distribution of FentanylRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Damian Michael Murguia, age 20, of McAlester, Oklahoma, entered a guilty plea to one count of Distribution of Fentanyl.
The superseding indictment alleged that on October 20, 2022, Murguia distributed fentanyl, a Schedule II controlled substance.
The charges arose from an investigation by the Drug Enforcement Administration.
According to investigators, Murguia sold counterfeit Roxicodone (M30) tablets containing fentanyl to an undercover DEA special agent in McAlester, Oklahoma.
The Honorable Gerald L. Jackson, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the plea and ordered the completion of a presentence investigation report. Murguia will remain in custody of the U.S. Marshal pending sentencing.
Assistant United States Attorney Zachary W. Parsons represented the United States.
Parkersburg Man Sentenced to Prison for Federal Gun CrimeRead the Press Release
CHARLESTON, W.Va. – Shawn David White, 41, of Parkersburg, was sentenced today to three years and 10 months in prison, to be followed by three years of supervised release, for being a felon in possession of a firearm.
According to court documents and statements made in court, on November 8, 2018, law enforcement officers visited White’s residence while investigating a firearm theft and found a Winchester Model 12, 12-gauge shotgun, in White’s bedroom. White admitted to the officers that he possessed the shotgun.
Federal law prohibits a person with a prior felony conviction from possessing a firearm or ammunition. White is prohibited from possessing a firearm because of his convictions for grand larceny and driving while his license was suspended or revoked for DUI-third offense in Wood County Circuit Court on February 10, 2017.
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 Parkersburg Police Department.
Senior United States District Judge David A. Faber imposed the sentence. Assistant United States Attorney Joshua Hanks 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. 2:22-cr-150.
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Operation Smoke and Mirrors Update: Two Kanawha County Men Plead Guilty to Role in Methamphetamine Trafficking OrganizationRead the Press Release
CHARLESTON, W.Va. – Michael Allen Roberts Jr., 40, of St. Albans, pleaded guilty today to conspiracy to distribute 500 grams or more of a mixture containing methamphetamine, and Les Van Bumpus, 34, of Charleston, pleaded guilty to conspiracy to distribute fentanyl. Roberts and Bumpus each admitted to their roles in a drug trafficking organization (DTO) that operated in the Charleston area.
According to court documents and statements made in court, between November 2022 and March 15, 2023, Roberts conspired with other individuals to distribute quantities of methamphetamine. Roberts admitted to purchasing methamphetamine from a co-defendant who often fronted the methamphetamine to him and allowed Roberts to pay him back after he sold it. Roberts further admitted that he typically paid $2,000 for a pound of methamphetamine, and used his cell phone to arrange transactions with the co-defendant.
Roberts admitted that this co-defendant delivered 50 pounds of methamphetamine to Roberts’ residence a couple of weeks prior to March 15, 2023. Roberts further admitted that he intended to sell this methamphetamine to other people.
On March 15, 2023, law enforcement officers searched a property on Smith Street in St. Albans and seized approximately 44 pounds of methamphetamine. Roberts admitted that he had placed the methamphetamine at the property a day or two before the search.
Between December 2022 and March 22, 2023, Bumpus was living in Dunbar and conspired with others to distribute what he believed was heroin but now knows was fentanyl. Bumpus admitted to purchasing fentanyl from a co-defendant who often fronted the fentanyl to him and allowed Bumpus to pay him back after he sold it.
On March 22, 2023, law enforcement officers executed a search warrant at Bumpus’ Dunbar residence and found approximately 89 grams of fentanyl and a loaded Smith & Wesson .40-caliber pistol.
Roberts is scheduled to be sentenced on November 8, 2023, and faces a mandatory minimum of 10 years and up to life in prison, five years to a lifetime of supervised release, and a $10 million fine. Bumpus is scheduled to be sentenced on November 6, 2023, and faces a maximum penalty of 20 years in prison, three years of supervised release, and a $1 million fine.
Roberts and Bumpus are among 30 individuals indicted as a result of Operation Smoke and Mirrors, a major drug trafficking investigation that has yielded the largest methamphetamine seizure in West Virginia history. Law enforcement has seized of well over 200 pounds of methamphetamine as well as 28 pounds of cocaine, 20 pounds of fentanyl, 18 firearms and $747,000 in cash.
More than a dozen of the defendants have pleaded guilty. Indictments against the other defendants are pending. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the U.S. Department of Homeland Security-Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Postal Inspection Service, the Metropolitan Drug Enforcement Network Team (MDENT), the West Virginia State Police, the West Virginia National Guard Counter Drug program, the Kanawha County Sheriff’s Office, the Charleston Police Department, the Putnam County Sheriff’s Office and the Raleigh County Sheriff's Office. MDENT is composed of the Charleston Police Department, the Kanawha County Sheriff’s Office, the Putnam County Sheriff’s Office, the Nitro Police Department, the St. Albans Police Department and the South Charleston Police Department.
Chief United States District Judge Thomas E. Johnston presided over the hearing. Assistant United States Attorney Jeremy B. Wolfe is prosecuting the case.
The investigation was part of the Department of Justice’s Organized Crime Drug Enforcement Task Force (OCDETF). The program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations and is the keystone of the Department of Justice’s drug reduction strategy. OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking organizations, transnational criminal organizations and money laundering organizations that present a significant threat to the public safety, economic, or national security of the United States.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:23-cr-31.
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Oklahoma City Man Pleads Guilty to Causing Two Deaths During DUI Hit-and-Run in Indian CountryRead the Press Release
OKLAHOMA CITY – Yesterday, ANTONIO MARQUES MITCHELL, 25, of Oklahoma City, pleaded guilty to two counts of involuntary manslaughter in Indian Country, announced U.S. Attorney Robert J. Troester.
On December 20, 2022, a federal grand jury returned an indictment charging Mitchell with two counts of involuntary manslaughter. The indictment alleges that Mitchell caused the death of two people while in the commission of multiple misdemeanor offenses—including, fleeing the scene of an accident and driving under the influence.
According to an affidavit filed in the case, Mitchell was driving westbound on NW 16th St in Newcastle, Oklahoma, on December 30, 2021, when he collided with another vehicle at the intersection of Highway 76 and NW 16th St. The affidavit alleges that a witness told a 911 operator that Mitchell was smoking marijuana and that other witnesses also told police that Mitchell fled the scene of the collision after being asked for proof of insurance. Minutes after leaving the scene of the first collision, the affidavit alleges Mitchell swerved into oncoming traffic and again collided with a second car while Mitchell was driving approximately 80 mph eastbound on Highway 37 in a 55-mph zone. It is alleged that the driver of the second car died at the scene, as did Mitchell’s own passenger. A sample of Mitchell’s blood tested positive for a combination of alcohol, amphetamine, and marijuana.
At a hearing before United States District Judge Stephen P. Friot yesterday, Mitchell pleaded guilty to two counts of involuntary manslaughter, as charged in the indictment. As part of his plea, Mitchell admitted that he was driving approximately 77 mph in a 55 mph zone eastbound when his car collided with another car in the westbound lane, causing the death of his passenger and the driver of the other car. Mitchell further admitted that it was foreseeable that his conduct was a threat to the lives of others.
A sentencing hearing will be scheduled in approximately 90 days. At sentencing, Mitchell faces up to eight years in federal prison for each count and a fine of up to $250,000 for each count.
This case is in federal court because Mitchell is a citizen of the Seminole Nation of Oklahoma and the alleged crime occurred within the boundaries of the Chickasaw Nation.
This case is a result of an investigation by the FBI Oklahoma City Field Office Safe Trails Task Force, the Oklahoma Highway Patrol, the Chickasaw Nation Lighthorse Police Department, the Newcastle Police Department, the Oklahoma Bureau of Investigation, and the McClain County District Attorney’s Office. Assistant U.S. Attorneys Allison B. Christian and Mark R. Stoneman are prosecuting the case.
Reference is made to public filings for more information.