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31 May 2023
Raleigh County Man Sentenced to Prison for Federal Drug CrimeRead the Press Release
BECKLEY, W.Va. – David Jeffrey Edwards, 47, of Daniels, was sentenced today to seven years in prison, to be followed by three years of supervised release, for possession with intent to distribute methamphetamine and fentanyl.
According to court documents and statements made in court, on February 24, 2022, law enforcement officers executed a warrant at Edwards’ residence in Daniels. Edwards admitted to possessing 19 grams of methamphetamine packaged in nine separate small bags, 1 gram of fentanyl and $958 found during the search. Edwards further admitted that he intended to distribute the controlled substances.
Edwards also admitted to selling a half-gram of fentanyl to a confidential informant at his residence in December 2021. Edwards told officers during the February 24, 2022, search that he had been selling an average of a half-ounce of methamphetamine weekly for several weeks. Officers also found an improvised explosive device during the search, a glass bottle filled with gunpowder, metal spheres, projectiles and other objects with a length of cordage inserted in the bottle opening as a means of ignition. Edwards admitted that he made the improvised explosive device.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Beckley/Raleigh County Drug and Violent Crime Unit.
United States District Judge Frank W. Volk imposed the sentence. Assistant United States Attorney Andrew D. Isabell prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:22-cr-125.
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Plattsmouth Man Sentenced for Firearm and Drug Trafficking CrimesRead the Press Release
United States Attorney Steven Russell announced that Zachary Wichmann, 27, of Plattsmouth, Nebraska, was sentenced today in federal court in Omaha for possessing with intent to distribute fentanyl and possessing a firearm during a drug trafficking crime. United States District Judge Brian C. Buescher sentenced Wichmann to 57 months’ imprisonment on the drug charge and a consecutive 60 months’ imprisonment on the firearm charge, for a total sentence of 117 months. There is no parole in the federal system. After his release from prison, Wichmann will begin a three-year term of supervised release.
On October 28, 2020, law enforcement purchased 300 fentanyl pills from Wichmann utilizing an undercover officer in an Omaha parking lot. On November 6, 2020, law enforcement received information from the U.S. Postal Inspector that Wichmann was receiving a package from Oregon. As a result of that information, they obtained a court authorized search warrant for Wichmann’s residence.
On November 10, 2020, law enforcement executed the search warrant on Wichmann's residence. Officers located 1,029 fentanyl pills, two firearms, and $10,293 in U.S. Currency. Wichmann was buying drugs over the Dark Net and selling them in the Omaha metro area. The Drug Enforcement Administration administratively forfeited the $10,293.
This case was investigated by the Omaha Police Department, Drug Enforcement Administration, and United States Postal Inspection Service.
Piedmont Jail Escapee Pleads GuiltyRead the Press Release
RICHMOND, Va. – A North Carolina man pleaded guilty today to escaping from the Piedmont Regional Jail in Farmville, Virginia.
According to court documents, Bruce Carroll Callahan, Jr., 44, was detained at the Piedmont Regional Jail pending trial on federal drug distribution and firearms charges in the Eastern District of North Carolina. On the night of April 30, 2023, Callahan left his housing unit though an unsecured door and scaled the fences surrounding the jail. He remained at large until he surrendered to local law enforcement officers in Farmville on the morning of May 8, 2023.
Callahan is scheduled to be sentenced on June 27. He faces a maximum penalty of five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Shannon Saylor, Acting U.S. Marshal for the Eastern District of Virginia, made the announcement after U.S. District Judge Roderick C. Young accepted the plea.
Assistant U.S. Attorney Michael C. Moore is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:23-cr-065.
Phenix City Man Sentenced to 20 Years in Federal Prison Following Federal Gun and Drug ConvictionsRead the Press Release
Montgomery, Alabama – Today, United States Attorney Sandra J. Stewart announced that Dedrick Farold Smith, 40, from Phenix City, Alabama, received a sentence of 240 months in prison after pleading guilty to federal gun and drug charges.
According to Smith’s plea agreement and other court records, on May 25, 2021, the Dothan Police Department received information that Smith, who had outstanding arrest warrants, was staying at a hotel in town and had with him methamphetamine and a firearm. When officers attempted to apprehend Smith, he tried to flee by ramming a law enforcement vehicle and leading them on a short high-speed chase. Eventually, Smith crashed his vehicle and officers took him into custody. During the arrest, investigators located a black bag containing plastic baggies of methamphetamine and observed an empty holster on Smith’s left side. On the driver's side of Smith’s vehicle, law enforcement found two handguns. One of the guns had been reported stolen. The methamphetamine was 89 percent pure. Smith has prior felony convictions and is prohibited from possessing a firearm.
On November 29, 2022, Smith pleaded guilty to possession of methamphetamine with intent to distribute, possession of a firearm in furtherance of a drug trafficking crime and being a felon in possession of a firearm. Smith’s sentencing occurred on May 25, 2023.
The Dothan Police Department and the Drug Enforcement Administration investigated this case, which Assistant United States Attorney John J. Geer, III prosecuted.
Pasquotank County Man Sentenced to 7 Years in Prison for Child Pornography OffensesRead the Press Release
RALEIGH, N.C. – An Elizabeth City, N.C. man was sentenced today to 84 months in prison and 10 years of supervised release for the receipt and possession of child sexual abuse material (CSAM) between October 2011 and March 2021. On January 3, 2023, Brian Keith Corp, 59, pled guilty to one count of receipt of child pornography.
According to court documents and other information presented in court, investigators received a cyber tip in March of 2021 which indicated that a phone number, later confirmed to belong to Corp, had uploaded 5 files containing CSAM. Investigators obtained a search warrant and met Corp at his residence on March 10, 2021. Corp initially denied knowledge of any CSAM and consented to a search of his electronic devices. As the forensic preview examination was being conducted on-scene, Corp made several admissions. A full forensic examination revealed over 5,500 files containing CSAM, including images and videos depicting sexual abuse of toddlers. The forensic examination also revealed a carefully organized collection of CSAM that indicated Corp had been engaged in the offense conduct for nearly 10 years. While on pretrial release, Corp absconded and was on the run for several days before authorities ultimately located him in Virginia.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Department of Homeland Security, Pasquotank County Sheriff’s Office, and the North Carolina State Bureau of Investigation investigated the case and Assistant U.S. Attorney Bryan M. Stephany prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:22-CR-00007-BO.
Operation Smoke and Mirrors Update: Kanawha County Man Pleads Guilty to Role in Methamphetamine Trafficking OrganizationRead the Press Release
CHARLESTON, W.Va. – Nicholas Bradford Confere, 35, of Mammoth, pleaded guilty today to using a communications facility to facilitate a drug trafficking offense. Confere admitted to his role in a drug trafficking organization (DTO) that operated in the Charleston area.
According to court documents and statements made in court, on December 4, 2022, Confere used a land line telephone in Mammoth to arrange the purchase of methamphetamine from a co-defendant. During the call, Confere informed the co-defendant that other third-party individuals also had money to purchase methamphetamine from the co-defendant. The arranged meeting took place and Confere obtained a quantity of methamphetamine from the co-defendant.
Confere admitted that he obtained this methamphetamine partially on consignment, meaning he was expected to pay the co-defendant after he sold the methamphetamine. Confere further admitted to using a cellular phone to inform the co-defendant that he had sold the methamphetamine that he obtained, and therefore had the money to pay the co-defendant.
Confere is scheduled to be sentenced on September 20, 2023, and faces a maximum penalty of four years in prison, three years of supervised release, and a $250,000 fine.
Confere is 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 seized well over 200 pounds of methamphetamine as well as 28 pounds of cocaine, 20 pounds of fentanyl, 18 firearms and $747,000 in cash.
Eight other co-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 Nos. 2:23-cr-4 and 2:23-cr-68.
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Omaha Man Sentenced for Transporting Child PornographyRead the Press Release
United States Attorney Steven Russell announced that Derek A. Bailey, 40, of Omaha, Nebraska, was sentenced today in federal court in Omaha for transportation of child pornography. The Honorable Brian C. Buescher sentenced Bailey to 96 months’ imprisonment. There is no parole in the federal prison system. After his release from prison, Bailey will serve 7 years of supervised release. Bailey was also ordered to pay $3,000 in restitution.
In May 2019, law enforcement began investigating after receiving a Cybertip from Yahoo stating that a user had uploaded child pornography. An IP address associated with the uploads was associated with Bailey. Investigators searched Bailey’s electronic devices and observed more than 833 images and videos of child pornography on the devices. A witness reported that after the search warrant, Bailey had been looking for a MicroSD card, which the witness located. The MicroSD card was found to contain graphic files depicting Bailey in addition to child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Nebraska State Patrol.
Nigerian Woman Pleads Guilty to Money Laundering ConspiracyRead the Press Release
Hattiesburg, Miss. – A Nigerian citizen pleaded guilty to conspiracy to commit money laundering, announced U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation.
According to court documents and information presented to the Court, between 2018 and 2022, Uyoyo Mercy Abire, 28, and her coconspirators used online romance scams, online charity scams, and other types of fraud to defraud victims of their money. The money received as a result of these scams was then transferred between the conspirators, and ultimately, much of the money was transferred overseas. Between November 2018 and April of 2019, Abire herself transferred over $100,000.00 to coconspirators through her U.S. bank account.
Abire is scheduled to be sentenced on August 30, 2023. She faces a maximum sentence of 20 years imprisonment. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI investigated the case.
Former Assistant U.S. Attorney Andrew Eichner originally prosecuted the case, and it is currently being prosecuted by Assistant U.S. Attorney Jonathan Buckner.
New York Sex Offender Sentenced to 60 Years for Committing Multiple Offenses Against North Carolina MinorRead the Press Release
GREENSBORO – A New York man was sentenced today to 720 months in prison after pleading guilty to multiple offenses committed in North Carolina announced United States Attorney Sandra J. Hairston of the Middle District of North Carolina (MDNC).
According to court records, JOSHUA TIMOTHY MILLER, age 33, of Rochester, New York, traveled to North Carolina on two occasions, first in December 2021 and again in February 2022 and engaged in sexually activity with a fifteen-year-old minor. Miller also recorded videos of the minor engaged in sexually explicit conduct while communicating via video chat.
At the time of these offenses, MILLER was a registered sex offender in New York. In 2007, in Monroe County, New York, MILLER was convicted of three counts of first-degree sexual abuse: sexual contact with an individual less than eleven years old and four counts of first-degree attempted sexual act. For these crimes, Miller was sentenced to seven years in prison followed by five years of post-release supervision.
Today, MILLER was sentenced to a 720-month term of imprisonment by the Honorable Catherine C. Eagles, United States District Judge in the United States District Court for the MDNC. In addition to prison time, MILLER was ordered to serve a lifetime term of supervised release and to pay special assessments totaling $1,500.00. He pleaded guilty to two Informations on December 19, 2022. In case number 1:22CR396-1, he pleaded guilty to one violation of Title 18, United States Code Section 2252A(a)(5)(B), possession of child pornography. In case number 1:22CR390-1, he pleaded guilty to two violations of Title 18, United States Code Section 2423(b), traveling to meet a minor for sexual activity and two accompanying violations of Title 18, United States Code Section 2260A, committing a felony offense involving a minor while required to register as a sex offender.
The case was investigated by the Federal Bureau of Investigation with the assistance of a local law enforcement agency and was prosecuted by Assistant United States Attorneys Lindsey Freeman and Eric Iverson.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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New York Man Admits Transporting Minors to Engage in Illicit Sexual ConductRead the Press Release
TRENTON, N.J. – A New York man admitted transporting minors across state lines to engage in illicit sexual conduct, U.S. Attorney Philip R. Sellinger announced today.
Berry Norman, 35, of Bronx, New York, pleaded guilty before U.S. District Judge Zahid N. Quraishi in Trenton federal court on May 30, 2023, to an information charging him with interstate travel to engage in illicit sexual conduct.
“Sexual crimes involving children are among the most serious crimes we prosecute,” U.S. Attorney Sellinger said. “The conduct admitted by this defendant is reprehensible, and he will now face the appropriate punishment for his crime.”
“Berry Norman’s actions were despicable by luring innocent minors down a dark path of horrific abuse and emotional trauma,” Special Agent in Charge of the Department of Homeland Security, Homeland Security Investigations (HSI), Newark, Ricky J. Patel said. “The deceptive ways Norman and other human traffickers conspire to appear trustworthy to their victims has far-reaching consequences. Rescuing these victims is of utmost importance to HSI Newark and we remain committed to protecting and assisting victims while bringing traffickers to justice.”
According to documents filed in this case and statements made in court:
On Feb. 24, 2021, Norman invited two female victims, both minors, to travel with him from Ohio to New Jersey. Norman traveled from Ohio to New Jersey and from New Jersey to New York with victims with the intent to engage in a sexual act with them or for the purpose of producing child pornography. On Feb. 27, 2021, Norman engaged in sexual acts with one victim. On Feb. 28, 2021, Norman and the victims traveled to New York City.
The charge of interstate travel to engage in illicit sexual conduct carries a maximum penalty of 30 years in prison and a fine of $250,000. Sentencing is scheduled for Oct. 3, 2023.
U.S. Attorney Sellinger credited special agents of HSI, under the direction of Special Agent in Charge Ricky J. Patel in Newark; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and the New York Police Department, under direction of Police Commissioner Keechant L. Sewell, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Sophie Kaiser of the General Crimes Unit in Newark.
norman.information.pdfNew Orleans Man Pleads Guilty to Federal Carjacking and Weapons ViolationsRead the Press Release
NEW ORLEANS, LOUISIANA – On May 30, 2023, TEVIS STANTON, age 22, a resident of Orleans Parish, pled guilty to two counts of a four-count indictment for carjacking and weapons violations announced U.S. Attorney Duane A. Evans. Count 1 charged STANTON with a March 22, 2022 carjacking, in the 1200 block of Fern Street in New Orleans, Louisiana. Count 2 charged STANTON with using a firearm in furtherance of a crime of violence. His sentencing is set for September 27, 2023.
In Count 1 of the indictment charging STANTON with carjacking, a violation of Title 18, United States Code, Section 2119(1), he faces a maximum sentence of 15 years of imprisonment, a fine of up to $250,000.00, and up to 3 years of supervised release. In Count 2, charging STANTON with using a firearm in furtherance of a crime of violence, a violation of Title 18, United States Code, Section 924(c)(1)(A)(ii), he faces a mandatory minimum of 7 years up to a maximum of life imprisonment, to run consecutive to any other sentence imposed, a fine of up to $250,000.00, and up to 5 years of supervised release. For each count, STANTON faces payment of a mandatory special assessment fee of $100.00.
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 the Bureau of Alcohol, Tobacco, Firearms and Explosives, as well as the New Orleans Police Department. The case is being prosecuted by Assistant United States Attorney Inga Petrovich of the Violent Crime Unit .
New Jersey Man Sentenced to 10 Years in Prison for Drug TraffickingRead the Press Release
CAMDEN, N.J. – A New Jersey man was sentenced to 120 months in prison for conspiring with others to obtain and distribute several kilograms of cocaine, U.S. Attorney Philip R. Sellinger announced today.
Carl Lee Holloway, 43, of Penns Grove, New Jersey, previously pleaded guilty before Chief U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to distribute cocaine. Judge Bumb imposed the sentence in Camden federal court.
According to documents filed in this case and statements made in court:
Holloway admitted that from June 2020 through July 13, 2021, he conspired with Lavinston Lamar, Marvin Murphy, and others, to distribute and to possess with intent to distribute cocaine. On July 13, 2021, Holloway drove to a hotel in Mount Laurel, New Jersey, with a bag containing $97,600 in cash. Holloway then met undercover agents in a hotel room at the hotel. Lamar and Murphy separately entered the hotel room with bags containing approximately $243,000. They briefly inspected one of the kilograms of cocaine previously brought into the room by undercover agents, after which agents entered the room and arrested Holloway, Lamar, and Murphy.
Chief Judge Bumb previously sentenced Lamar to 114 months in prison after Lamar pleaded guilty to his involvement in the same conspiracy and to violating the conditions of his supervised release from a prior conviction for conspiring to distribute cocaine.
Murphy is charged by indictment with the same conspiracy. The charges and allegations contained in the indictment are merely accusations, and he is presumed innocent unless and until proven guilty.
In addition to the prison term, Judge Bumb sentenced Holloway to five years of supervised release and ordered him to pay a $50,000 fine.
U.S. Attorney Sellinger credited special agents with the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Ricky J. Patel in Newark and Special Agent in Charge Chad Plantz in San Diego; and the Mount Laurel Police, under the direction of Chief Judy Lynn Schiavone, with the investigation leading to the sentencing.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
New Jersey Doctor Admits Buying and Selling Oncology Medication for ProfitRead the Press Release
NEWARK, N.J. – A New Jersey doctor today admitted using her medical license – and allowing others to use it – to purchase prescription oncology medications under false pretenses to sell them for profit, U.S. Attorney Philip R. Sellinger announced.
Anise Kachadourian, 55, of Towaco, New Jersey, a board-certified oncologist, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging her with unlawfully selling prescription cancer medication, which had been previously purchased using her medical license and under the representation that such medication was to be used to treat her patients.
According to documents filed in this case and statements made in court:
While working in her medical practice’s offices in various locations in New Jersey, Kachadourian was recruited by an individual who owned a pharmacy and also owned and operated two businesses that were wholesale distributors of prescription drugs. At the request of this individual and others working with him, in return for payment of approximately $5,000 per month, Kachadourian used her medical license – and allowed others to use it – to purchase expensive prescription drugs, primarily, cold-chain biologic infusion medications that typically are used to treat cancers, macular degeneration, and autoimmune diseases. By recruiting and using Kachadourian and her medical license to purchase the drugs, these individuals were able to obtain prescription drugs from the pharmaceutical manufacturers’ authorized distributors that they would not otherwise have been permitted to purchase. They were then able to sell them at a profit through their two businesses.
In purchasing the drugs, Kachadourian and the individuals made numerous false and misleading representations to the pharmaceutical manufacturers and authorized distributors, including that Kachadourian purchased the drugs to use to treat her patients, and that the drugs would not be resold or redistributed. In actuality, none of the drugs were administered to any of Kachadourian’s patients, but were ultimately sold to customers of the two businesses. Kachadourian was paid more than $170,000 for purchasing and allowing others to purchase in her name millions of dollars in prescription drugs during the scheme, which ran from October 2016 through January 2019.
Kachadourian is the third doctor who has pleaded guilty in connection with this fraudulent scheme.
The sale of prescription drugs purchased by a healthcare entity is punishable by a maximum of three years in prison and a $10,000 fine. In her plea agreement, Kachadourian also agreed to make restitution for the full amount of any loss resulting from her offense. Sentencing is scheduled for Feb. 6, 2024.
U.S. Attorney Sellinger credited special agents of the U.S. Food and Drug Administration’s Office of Criminal Investigations New York Field Office, under the direction of Special Agent in Charge Fernando P. McMillan; and special agents of U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Diana Vondra Carrig and Sara A. Aliabadi of the U.S Attorney’s Office in Camden.
kachadourian.information.pdfNavajo Man Charged with Firearms OffensesRead 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 Nathaniel Begay made an initial appearance in federal court on an indictment charging him with assault with a dangerous weapon and using a firearm during and in relation to a crime of violence. Begay, 29, an enrolled member of the Navajo Nation, will remain in custody pending a detention hearing scheduled for June 1.
According to the indictment, on April 28, 2022, using two handguns, Begay shot multiple rounds at three adult individuals and five juveniles with the intent to cause bodily harm.
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Begay faces up to life in prison.
FBI Farmington Agency investigated this case with assistance from the Navajo Police Department and Farmington Police Department. Assistant United States Attorney Matthew J. McGinley is prosecuting the case.
Monessen Man Sentenced to 96 Months in Prison for Receipt and Possession of Child Sexual Abuse MaterialRead the Press Release
PITTSBURGH, PA - A resident of Monessen, Pennsylvania, has been sentenced to 96 months’ imprisonment followed by 5 years’ supervised release on his conviction of receipt and possession of material depicting the sexual exploitation of a minor, Acting United States Attorney Troy Rivetti announced today.
U.S. District Judge Nicholas Ranjan imposed the sentence on Robert Haggerty, age 63.
According to information presented to the court during the change of plea hearing, Robert Haggerty knowingly possessed more than 92 images and 8 videos containing child sex abuse material, some of which depicted sadistic and masochistic conduct and the sexual abuse of infants and toddlers. Haggerty also knowingly received three images containing child sexual abuse material from an individual identified in communications as a 16-year old minor female.
Prior to imposing sentence, Judge Ranjan stated that “there is no question that the conduct in this case was serious” and that the “images at issue were, as described, disturbing.” Judge Ranjan further noted that “there are real victims in these cases,” explaining that “the reality is these crimes, whether it is a receipt or possession, have a real impact on people.” In addition to the terms of incarceration and supervised release, Judge Ranjan ordered Haggerty to pay restitution to one victim in the amount of $3,500.
Assistant United States Attorney Karen Gal-Or is prosecuting this case on behalf of the government.
Acting United States Attorney Rivetti commended Homeland Security Investigations and other members of the Western Pennsylvania Violent Crimes Against Children Task Force for the investigation leading to the successful prosecution of Haggerty.
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.justice.gov/psc.
Militia Members Indicted for Conspiracy to Murder Border Patrol Officers and Attempted Murder of FBI AgentsRead the Press Release
JEFFERSON CITY, Mo. – Two members of the self-styled 2nd American Militia who conspired to go “to war with border patrol” have been indicted by a federal grand jury on charges related to a conspiracy to murder Border Patrol officers, which ended in a shootout with FBI agents who arrested them on the eve of their planned trip to the United States – Mexico border.
Bryan C. Perry, 37, of Clarksville, Tennessee, and Jonathan S. O’Dell, 33, of Warsaw, Mo., were charged in a 44-count second superseding indictment returned by a federal grand jury in Jefferson City on Wednesday, May 30. The second superseding indictment replaces prior charges filed against Perry and O’Dell and contains additional charges. Perry and O’Dell remain in federal custody without bond following separate detention hearings in which the court ruled they pose a danger to the community.
The indictment alleges that Perry and O’Dell participated in a conspiracy to murder officers and employees of the United States government. They allegedly planned to travel to Texas to shoot at illegal immigrants crossing the United States – Mexico border. According to the indictment, they also planned to murder officers and employees of the U.S. Border Patrol who would attempt to stop them.
In addition, the indictment also alleges that Perry and O’Dell participated in a conspiracy to assault federal officers and employees and a conspiracy to injure federal officers and employees. The indictment also charges them together in seven counts of the attempted murder of FBI special agents, seven counts of assaulting FBI special agents with a deadly weapon, three counts of assaulting FBI special agents, 14 counts of using a firearm in furtherance of a crime of violence, and one count of damaging federal property.
Perry is also charged with two counts of being a felon in possession of a firearm, one count of possessing a firearm with an obliterated serial number, one count of the possession of body armor by a violent felon, one count of possessing an explosive, and one count of threatening to injure another person.
O’Dell is also charged with one count of possessing a firearm while subject to a court order of protection, one count of threatening to injure another person, and one count of making a false statement to the FBI.
Throughout the spring, summer, and fall of 2022, the indictment says, Perry and O’Dell recruited and attempted to recruit other individuals to join their militia group. They advertised a recruitment event in Warsaw prior to leaving for the United States – Mexico border.
On Sept. 5, 2022, Perry traveled from Tennessee to Warsaw to live with O’Dell. They allegedly used O’Dell’s residence as a staging site as they prepared for their trip to the border and collected firearms, paramilitary gear, ammunition, and other supplies.
The federal indictment cites a series of social media posts from Perry. On Sept. 12, 2022, Perry posted a video on TikTok in which he discussed illegal immigrants coming into the United States from Mexico. Perry stated that the U.S. Border Patrol was committing treason by allowing these illegal immigrants to enter the United States, and that the penalty for treason was death. Perry posted another video on TikTok the next day in which he stated that he was “ready to go to war against this government.”
On Sept. 22, 2022, Perry posted a video on TikTok in which he stated, “we’re out to shoot to kill” and that “our group is gonna go protect this country.” On Oct. 3, 2022, Perry posted a video on TikTok in which he stated, “we were going out huntin’,” that his group was taking their “full kits,” and that they were leaving for the United States – Mexico border on Oct. 8, 2022.
On Oct. 3, 2022, Perry held a phone conversation with an unidentified individual in which Perry stated they were going to go down to the United States – Mexico border to “start a war.” Perry expressed their plan to shoot people coming across the border and to shoot “federal agents” who would oppose them. Perry also stated they would acquire gear and supplies from federal agents after they “take a couple of ’em out.”
On Oct. 7, 2022, according to the indictment, Perry and O’Dell had amassed six firearms, 23 magazines filled with ammunition, 1,770 rounds of various other ammunition, two sets of body armor with corresponding plate carrier vests, a handheld radio, two sniper rests, two gas masks, two items that appeared to be ballistic helmets, and multiple containers of a binary explosive mixture commonly sold as an exploding target.
On Oct. 7, 2022, the FBI executed a search warrant at O’Dell’s residence and took O’Dell and Perry into custody. Federal agents approached the property in vehicles with red and blue lights activated. As the FBI approached, an agent utilized a loudspeaker on one of the vehicles, stating that they were with the FBI and that they had a search warrant for the residence. The FBI agent began to repeat the announcement, again stating that they were with the FBI, when gunshots were fired from a front window at the lead FBI vehicle. Several rounds hit the lead FBI vehicle. According to the indictment, Perry fired 11 shots from his Voodoo Innovations multi-caliber rifle with an AM-15 lower receiver. FBI special agents did not return fire and, after the gunshots ceased, the FBI established a perimeter and began communicating with the persons inside the residence to come out.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Casey Clark and Ashley Turner. It was investigated by the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
McAlester Resident Sentenced for Sexually Abusing A ChildRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announces that Bruce Lee Montes, age 34, of McAlester, Oklahoma, was sentenced today to 25 years in prison, followed by a lifetime term of supervised release, for sexually abusing a minor in Indian Country.
The charges arose from investigations by the McAlester Police Department and the Federal Bureau of Investigation.
On May 5, 2022, Montes pleaded guilty to one count of Sexual Abuse in Indian Country. At the plea hearing, the defendant admitted that in 2013 he engaged in a sexual act with a child under the age of twelve.
"The victim in this case should have never been made to suffer such torment at the hands of Bruce Montes,” said FBI Oklahoma City Special Agent in Charge Edward J. Gray. “His 25-year prison sentence is a testament to the dedication of the FBI and our law enforcement partners to bringing child predators to justice.”
“The defendant violated the person and the trust of a child,” said United States Attorney Christopher J. Wilson. “The twenty-five-year prison sentence imposed by the Court holds the defendant accountable for the unspeakable physical and emotional trauma he inflicted on this innocent victim.”
The United States Attorney’s Office for the Eastern District of Oklahoma prosecuted this case because the defendant is a member of a federally recognized Indian tribe and the crime occurred in Pittsburg County, within the boundaries of the Choctaw Nation Reservation and the Eastern District of Oklahoma.
The Honorable David C. Joseph, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, sitting by assignment, presided over the hearing in Muskogee, Oklahoma. Montes 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 Caila M. Cleary represented the United States.
McAlester Resident Pleads Guilty to Distributing FentanylRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Dereak Lee Eubanks, age 33, of McAlester, Oklahoma entered a guilty plea to two counts of Distribution of Fentanyl, punishable by up to 20 years in prison and a fine of up to $1,000,000.
The superseding indictment alleged that on October 20, 2022, and again on January 19, 2023, Eubanks distributed fentanyl, a Schedule II controlled substance.
The charges arose from an investigation by the McAlester Resident Office of the Drug Enforcement Administration.
According to court documents, Eubanks sold counterfeit Roxicodone (M30) tablets containing fentanyl to an undercover DEA special agent on two occasions in McAlester, Oklahoma.
The Honorable Gerald L. Jackson, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. Eubanks will remain in custody of the U.S. Marshal pending sentencing.
Assistant United States Attorney Zachary W. Parsons represented the United States.
Madison Man Sentenced to 5 Years for Cocaine ConspiracyRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Larry Dotson, 41, Madison, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to five years in prison for attempted distribution of 500 grams or more of cocaine. Dotson pleaded guilty to this charge on November 1, 2022.
The government’s investigation revealed that Dotson purchased large amounts of cocaine from co-defendant Winfield Agee between 2018 and 2020. Dotson either drove to Chicago to pick up the cocaine or received it from one of Agee’s drug couriers in the Madison area.
On November 25, 2020, officers stopped a vehicle in Madison after the driver was seen meeting with Agee earlier that day in Chicago. Officers searched the vehicle and found one kilogram of cocaine. The subsequent investigation, including text messages between the driver and Dotson, revealed that the driver planned to deliver the cocaine to Dotson.
On January 12, 2022, officers went to an apartment building located at 2824 Landmark Place in Madison to arrest Dotson. When officers arrived, they observed Dotson in the parking lot transferring items from the trunk of one car to the trunk of another car. As officers approached Dotson, he pulled an item out of his pocket and threw it under a parked vehicle. Officers searched under the car and located approximately two grams of cocaine. During a search of Dotson’s vehicle, officers found $22,000. Officers also found $3,560 in Dotson’s coat pocket. As part of his plea agreement in the case, Dotson agreed to forfeit the seized cash to the United States because it was proceeds from drug trafficking.
After Dotson was arrested, officers executed a search warrant of his apartment at 2824 Landmark Place. During the search, officers found 79 grams of powder cocaine, 163 grams of crack cocaine, and 11 grams of methamphetamine.
A total of eight individuals have been charged with and pleaded guilty to participating in the cocaine distribution scheme. Agee’s sentencing hearing is scheduled for June 2, 2023, at 9:00 a.m.
The charge against Dotson is the result of a joint investigation by the Drug Enforcement Administration, Federal Bureau of Investigation, Wisconsin Department of Justice Division of Criminal Investigation, Madison Police Department, and the Dane County Narcotics Task Force. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force (OCDETF), a multi-agency task force that coordinates long-term narcotics trafficking investigations. The prosecution of the case is being handled by Assistant U.S. Attorney Aaron Wegner.
Kemper County Men Found Guilty of Conspiring to Possess with Intent to Distribute MethamphetamineRead the Press Release
Jackson, Miss. – Three Kemper County men were found guilty of conspiring to possess with intent to distribute methamphetamine, announced U.S. Attorney Darren J. LaMarca and Acting Special Agent in Charge Eric Delaune of Homeland Security Investigations in New Orleans.
Donovan Sherill Bourrage, 45, of DeKalb, Orlando Bourrage, 48, of DeKalb, and Cordaryl Ford, 36, of Porterville, were charged in a federal indictment with conspiracy to possess with intent to distribute methamphetamine. Donovan Bourrage was also charged in an additional count of conspiracy to possess with intent to distribute methamphetamine for his actions on a separate occasion. Cordaryl Ford entered a plea of guilty to his charge on the first day of trial in U.S. District Court in Jackson. After a week-long trial, Donovan Bourrage was found guilty of both counts and Orlando Bourrage was found guilty of his charge.
According to court documents, in May 2020, Donovan Sherill Bourrage, Orlando Bourrage, and Cordaryl Ford, conspired with others to distribute methamphetamine in and around the Kemper County area. Specifically, on May 28, 2020, agents intercepted a package shipped from California to Mississippi destined for delivery to Cordaryl Ford, who had previously agreed to sell methamphetamine to Donovan Bourrage and Orlando Bourrage. Both Donovan and Orlando intended to resell the methamphetamine in the Kemper County area. The package contained marijuana, cocaine and approximately 9 pounds of methamphetamine. Then in July of 2020, after the anticipated delivery was thwarted, Donovan Bourrage reached out to a known narcotics trafficker in federal custody at the Stone County Detention Center in Wiggins, Mississippi to obtain methamphetamine. The detainee elicited the help of his cousin, who ultimately met Donovan Bourrage to deliver the negotiated pound of methamphetamine. Donovan Bourrage would meet the detainee’s cousin again to obtain an additional half-pound of methamphetamine.
Cordaryl Ford will be sentenced on August 28, 2023. Donovan Bourrage and Orlando Bourrage will both be sentenced on September 5, 2023. Each defendant faces a maximum penalty of life in prison. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
“HSI will continue to direct its full range of investigative authorities toward those who smuggle deadly drugs into our communities,” said HSI New Orleans acting Special Agent in Charge Eric Delaune. “This verdict demonstrates the resolve of HSI and all our law enforcement partners to hold those who traffic in drugs accountable for their actions.”
The case is the result of an extensive investigation, dubbed “Orlando Land,” which began as an operation targeting illegal drug trafficking in the Neshoba and Kemper County, Mississippi areas. “Orlando Land” is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The case was investigated by Homeland Security Investigations, the Drug Enforcement Administration, Mississippi Bureau of Narcotics, Mississippi Attorney General’s Office, Kemper County Sheriff’s Office, Neshoba County Sheriff’s Office, Philadelphia Police Department, Mississippi Department of Wildlife, Fisheries and Parks, Mississippi National Guard Counterdrug Task Force, and the Madison Police Department. It was prosecuted by Assistant United States Attorneys Keesha Middleton and Carla Clark.
Justice Department Secures over $3 Million Redlining Settlement Involving ESSA Bank & Trust in PhiladelphiaRead the Press Release
The Justice Department announced today that ESSA Bank & Trust (ESSA) has agreed to pay over $3 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in and around Philadelphia. Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin of the residents in those communities.
The complaint filed in federal court today alleges that from at least 2017 to 2021, ESSA failed to provide mortgage lending services and did not serve the credit needs of majority-Black and Hispanic neighborhoods in the Philadelphia metropolitan area.
“For too long, residents of communities of color have been unlawfully denied equal access to credit and shut out of economic opportunities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When banks engage in redlining, they perpetuate existing patterns of segregation and widen the racial wealth gap in our country. This resolution makes clear our commitment to holding banks and financial institutions accountable for modern day redlining while ensuring access to fair lending in communities of color.”
“Accessing the American dream of owning your own home is possible only when there is equality for all in their opportunities to access lending in the residential mortgage markets,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “Redlining in Greater Philadelphia has deep roots; it’s led to decades of disinvestment in communities of color. We appreciate ESSA’s prompt cooperation with the department’s investigation and their efforts that will aim to infuse lending resources and help build wealth in neighborhoods of color.”
Under the proposed consent order, which is subject to court approval, ESSA has agreed to invest at least $2.92 million in a loan subsidy fund to increase access to credit for home mortgage, improvement and refinance loans, as well as home equity loans and lines of credit, in majority-Black and Hispanic neighborhoods in the bank’s lending area. ESSA has also agreed to spend an additional $125,000 on community partnerships and $250,000 on advertising, outreach, consumer financial education and credit counseling, in an effort to expand the bank’s services in majority-Black and Hispanic communities. The consent order also requires the bank to hire two new mortgage loan officers to serve its existing branches in West Philadelphia and conduct a research-based market study to help identify the needs for financial services in communities of color.
The department opened its investigation into ESSA’s lending practices after receiving a referral from the Federal Deposit Insurance Corporation. ESSA fully cooperated with the department’s investigation and worked expeditiously to resolve these allegations.
In October 2021, the department launched its Combating Redlining Initiative as a coordinated enforcement effort to address this persistent form of discrimination against communities of color. Since the initiative was launched, the department has announced seven redlining cases and settlements and secured $87 million in relief for communities of color that have been victims of lending discrimination across the country.
More information about the department’s fair lending enforcement can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.
Justice Department Reaches Agreement with ESSA Bank & Trust to Resolve Philadelphia-Area Lending Discrimination AllegationsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that the U.S. Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania filed a proposed consent order today to resolve allegations that Stroudsburg, Pennsylvania-based ESSA Bank & Trust (ESSA) engaged in a pattern or practice of lending discrimination by “redlining” majority-Black and Hispanic neighborhoods around Philadelphia.
“Redlining” is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of residents there. The Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) prohibit financial institutions from discriminating on such bases when providing mortgage lending services.
The Department began investigating ESSA’s lending practices after receiving a Federal Deposit Insurance Corporation (FDIC) referral. ESSA fully cooperated with the investigation.
The consent order is subject to court approval and was filed, together with the United States’ complaint, in the U.S. District Court for the Eastern District of Pennsylvania. The complaint alleges that:
- From at least 2017 to 2021, and in violation of the FHA and ECOA, ESSA failed to provide mortgage lending services to (and did not serve the credit needs of) majority-Black and Hispanic neighborhoods in and around Philadelphia;
- ESSA inadequately staffed loan officers to cover the Bank’s branches in such neighborhoods; and
- ESSA’s residential lending advertising targeted majority-white areas while avoiding Philadelphia County.
ESSA worked expeditiously with the Department to resolve these allegations. Under the consent order, ESSA agrees to invest over $3 million to increase credit opportunities in majority-Black and Hispanic neighborhoods in the Bank’s lending area—including within a five-mile radius around ESSA’s Upper Darby and Lansdowne branches, which encompasses West Philadelphia and the City’s Grays Ferry section. Specifically, ESSA will invest in and for residents of those neighborhoods at least:
- $2.92 million in a loan subsidy fund to increase access to home mortgage, home improvement, home refinance, and home equity loans and lines of credit;
- $125,000 on community partnerships to provide services that increase residential mortgage credit access within a five-mile radius of the Upper Darby and Lansdowne branches; and
- $250,000 on advertising, outreach, consumer financial education, and credit counseling to expand the Bank’s services within that radius.
ESSA also agrees: to assess and report on its fair lending program; to train staff on the Bank’s obligations under the consent order; to complete a community credit needs assessment and remedial plan; to maintain a Fair Lending Committee and a Community Development Officer; and to hire two new mortgage loan officers to serve its Upper Darby and Lansdowne branches.
Announced in October 2021, the Department of Justice’s Combatting Redlining Initiative coordinates the efforts of the FDIC and other enforcement agencies to address this persistent form of discrimination. To date, under the Initiative, the Department has announced seven redlining cases and settlements, and secured $87 million in relief for communities of color that have been victims of lending discrimination. This includes last year’s $20 million settlement with Trident Mortgage Company of its alleged redlining in the Philadelphia metropolitan area.
"Accessing the American dream of owning your own home is possible only when there is equality for all in their opportunities to access lending in the residential mortgage markets," said U.S. Attorney Romero. “Redlining in Greater Philadelphia has deep roots; it's led to decades of disinvestment in communities of color. We appreciate ESSA's prompt cooperation with the Department's investigation and their efforts that will aim to infuse lending resources and help build wealth in neighborhoods of color."
“For too long, residents of communities of color have been unlawfully denied equal access to credit and shut out of economic opportunities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When banks engage in redlining, they perpetuate existing patterns of segregation and widen the racial wealth gap in our country. This resolution makes clear our commitment to holding banks and financial institutions accountable for modern-day redlining while ensuring access to fair lending in communities of color.”
The matter is being handled in the Department’s Civil Rights Division by Special Counsel for Fair Lending Varda Hussain and Trial Attorney Audrey Yap, both of the Housing and Civil Enforcement Section, and in the United States Attorney’s Office by Assistant United States Attorney Gerald B. Sullivan.
A copy of the complaint and information about the Department’s fair lending enforcement can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Department’s Housing Discrimination Tip Line at 1-833-591-0291, or submitting a report online.
Citizens in the Eastern District of Pennsylvania who believe that they may have been victims of lending discrimination may also contact the U.S. Attorney’s Office for the Eastern District of Pennsylvania at 215-861-8200 or via email at [email protected].
Jury finds Maryland man guilty of sexually exploiting Ohio teensRead the Press Release
COLUMBUS, Ohio – A federal jury has convicted a 72-year-old Annapolis, Maryland, man of numerous child exploitation and pornography crimes.
The jury announced their guilty verdicts on all eight counts yesterday after deliberating for approximately 45 minutes following the trial against Bernhard Jakits. The trial began on May 22 before U.S. District Judge Edmund A. Sargus, Jr.
According to court documents and trial testimony, in January 2019, the Belmont County Sheriff’s Office received information relating to two potential exploitation victims. Forensic examination of cell phones and other electronic devices revealed that Jakits had communicated via text message with two teenaged victims and coerced them to send nude photographs of themselves.
In December 2018 and January 2019, Jakits sexually exploited a 15-year-old female to create child pornography. Jakits also attempted to exploit a 13-year-old female in January 2019.
The defendant coerced the two teenaged victims and used the chat app TextNow to obtain pornographic images of the minors in exchange for money. Jakits sought to video chat with the victims and offered them thousands of dollars, but the minors declined.
Jakits met the minor victims based on his relationship with their mother, during which he paid the mother to engage in sex acts via video chats.
Jakits owned homes in both Maryland and California. He traveled extensively around the world on his yacht after running and selling a yacht brokerage business.
The defendant was indicted in a superseding indictment by a federal grand jury in January 2023.
Jakits faces a minimum prison sentence of 15 years and up to life in prison. Congress sets the minimum and maximum statutory sentences. Sentencing of the defendant will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
Kenneth L. Parker, United States Attorney for the Southern District of Ohio; J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; and Belmont County Sheriff David M. Lucas announced the verdict. Senior Litigation Counsel Heather A. Hill and Assistant United States Attorneys Emily K. Czerniejewski and Kevin A. Koller are representing the United States in this case.
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Jacksonville Man Sentenced to More Than 24 Years in Prison for Producing Child PornographyRead the Press Release
RALEIGH, N.C. – A Jacksonville man was sentenced today to 292 months in prison and 20 years of supervised release for production of child pornography. William Austin Strawn, 30, pled guilty to the charge on January 3, 2023.
According to court documents and other information presented in court, in November 2021, the Federal Bureau of Investigation (FBI) infiltrated a Kik chat group that was dedicated to sharing and discussing original videos of child pornography. A member of the group with the username “Craig Shellston” began communicating with an undercover FBI agent about the sexual abuse of a child with whom he had contact. “Craig Shellston” sent multiple videos that depicted him sexually abusing a child.
Emergency court orders were issued to find the lessee of the IP address used by “Craig Shellston” since the FBI believed a child was in immediate danger. The IP address belonged to a residence in Jacksonville where Strawn lived. A search warrant was executed at the residence and Strawn was arrested.
Strawn gave a statement to law enforcement wherein he admitted to being a part of the Kik chat group and admitted to receiving child pornography depicting children between the ages of 5 and 10. He admitted to committing sexual acts with the child with whom he had access. During jail telephone conversations he admitted to others to producing child pornography.
"Strawn's crimes are heinous, and the long-term impact on his victim is immeasurable. The lengthy sentence he must serve in federal prison should send a powerful message. The FBI will do everything possible to hold those accountable who abuse the most vulnerable members of our communities. Protecting children should be everyone's priority," said Robert M. DeWitt, the FBI Charlotte Special Agent in Charge.
“We value our partnership with the federal agencies and that partnership has made Jacksonville a safer place,” said Jacksonville Police Chief Mike Yaniero.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after the sentencing was concluded. U.S. District Judge Terrence W. Boyle presided over the sentencing. The Jacksonville Police Department, the North Carolina State Bureau of Investigation and the Federal Bureau of Investigation investigated the case and Assistant U.S. Attorney Charity Wilson prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:22-cr-000196-BO.
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Illegal Possession of Drugs and Guns Lead to Years in Prison for Three MenRead the Press Release
LAFAYETTE/ALEXANDRIA, La. – Three defendants have been sentenced in the Lafayette and Alexandria Divisions in the Western District of Louisiana today for drug trafficking and firearms charges, announced United States Attorney Brandon B. Brown.
United States District Judge Dee D. Drell sentenced Damien Romain Lavalais, 42, of Bunkie, Louisiana, to 262 months (21 years, 10 months) in prison, followed by 5 years supervised release, for distribution of methamphetamine. This charge is the result of an investigation by agents with the Federal Bureau of Investigation (FBI) into the drug trafficking activities of Lavalais. In July 2021, an undercover controlled purchase of methamphetamine was coordinated by agents with Lavalais. The meeting with him was monitored and recorded wherein he sold approximately 50 grams of methamphetamine to the individual. The narcotics were sent to the crime lab for analysis and confirmed to be methamphetamine with a purity level of 98%. Lavalais pleaded guilty to the charge on January 3, 2023.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney John W. Nickel.
United States District Judge Robert R. Summerhays sentenced Courtney Nacol Smith, 48, of Katy, Texas, to 60 months in prison, followed by 5 years of supervised release, for possession with intent to distribute cocaine and cocaine base. Evidence introduced in court revealed that Smith conspired with others from August 2019 through January 2021 to distribute narcotics, including cocaine and cocaine base in south Louisiana. Agents with the U.S. Drug Enforcement Administration (DEA) began their investigation into this drug trafficking organization in 2018 through the use of controlled purchases of narcotics with confidential sources, as well as the interception of wire communications between the defendants in this organization, including Smith. Surveillance by law enforcement agents observed one of Smith’s co-conspirators, Shawn D. White, travel to Texas from Louisiana to obtain drugs from Smith at his residence and another residence in the Houston area. White departed Smith’s residence in Texas and upon crossing the state line back into Louisiana, was stopped for a traffic violation. During a search of his vehicle, officers found one kilogram of cocaine wrapped in cellophane, electrical tape, and in a vacuum sealed bag concealed inside the car. Smith admitted to knowingly and willfully making an agreement with White and others to possess with intent to distribute cocaine and cocaine base. Smith pleaded guilty to the charge on February 16, 2023.
The case was investigated by the DEA, Bureau of Immigration and Customs Enforcement and Louisiana State Police, and prosecuted by Assistant U.S. Attorney Daniel J. Vermaelen.
These cases are part of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
In a separate case, Scotty Latiolais, 51, of Erath, Louisiana was sentenced by United States District Judge S. Maurice Hicks, Jr. to 110 months (9 years, 2 months) in prison, followed by 3 years of supervised release for being a convicted felon in possession of a firearm. This charge stems from a discovery made by a law enforcement agent of a firearm in an outside area near the residence of Latiolais wherein a search warrant had been executed the day before. On June 17, 2020, law enforcement officers executed an arrest warrant for Latiolais and a search warrant for his residence. When officers first encountered Latiolais on the property, he led them on a brief foot chase before being apprehended. During the subsequent search of his residence, officers found and seized suspected methamphetamine, a digital scale, and a Night Owl 16 channel digital video recorder (DVR). Officers obtained a search warrant for the DVR device and later found a video of Latiolais handling a pistol on the property. Latiolais pleaded guilty on February 2, 2023, and admitted to possessing the firearm on June 17, 2020, despite the fact that he has a prior felony conviction for possession with intent to distribute methamphetamine in 2019 and knew that he was prohibited from possessing any firearm or ammunition.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Vermilion Parish Sheriff’s Office, and prosecuted by Assistant U.S. Attorney Craig R. Bordelon.
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Herkimer County Man Pleads Guilty to Crop Insurance Fraud ChargesRead the Press Release
SYRACUSE, NEW YORK – Craig Spofford, age 48, of Dolgeville, New York, pled guilty today to three counts of federal crop insurance fraud in connection with schemes in which he obtained more than $179,000 in crop insurance benefits for claimed losses on crops that he did not in fact suffer.
The announcement was made by United States Attorney Carla B. Freedman and Bethanne M. Dinkins, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General.
In pleading guilty, Spofford admitted that he fraudulently obtained $179,051 in crop insurance benefits from the Rural Community Insurance Services a company that is reinsured by the Federal Crop Insurance Corporation. As part of his fraud scheme, Spofford claimed to lease and organically plant crops on three separate parcels totaling over 500 acres in Herkimer County that he did not in fact lease and plant. He then falsely claimed to suffer losses on the 3 parcels totaling $179,051.
As part of his plea agreement, Spofford agreed to pay restitution in the amount of $179,051 to the U.S. Department of Agriculture-Risk Management Agency.
The fraud convictions each carry a maximum term of 30 years in prison, a fine of up to $1,000,000, and a term of supervised release of up to 5 years. Spofford is scheduled to be sentenced on October 11, 2023 by United States District Judge Glenn T. Suddaby. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
The case was investigated by U.S. Department of Agriculture (USDA), Office of Inspector General, with assistance from the USDA Risk Management Agency, Eastern Regional Compliance Office. The case is being prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown.
Hawaii Man Pleads Guilty to Intentionally Disturbing Wildlife in Yellowstone National ParkRead the Press Release
Clifford Walters of Hawaii pleaded guilty to one count of feeding, touching, teasing, frightening, or intentionally disturbing wildlife on May 31, 2023 before U.S. Magistrate Judge Stephanie A. Hambrick. Walters was charged a $500 fine, a $500 Community Service payment to Yellowstone Forever Wildlife Protection Fund, a $30 special assessment, and a $10 processing fee.
According to the violation notice, on May 20, 2023, Walters approached a struggling newborn bison calf in Lamar Valley near the confluence of the Lamar River and Soda Butte Creek. The calf had been separated from its mother when the herd crossed the Lamar River. As the calf struggled, the man pushed the calf up from the river and onto the roadway. Visitors later observed the calf walk up to and follow cars and people. Park rangers tried repeatedly to reunite the calf with the herd, but their efforts were unsuccessful. The calf was later euthanized by park staff because it was abandoned by the herd and causing a hazardous situation by approaching cars and people along the roadway. There was nothing in the report that revealed Mr. Walters acted maliciously.
Yellowstone National Park wants to remind the public that approaching wild animals can drastically affect their well-being and, in this case, their survival. Park regulations require that people stay at least 25 yards (23 m) away from all wildlife (including bison, elk and deer) and at least 100 yards (91 m) away from bears and wolves. Disregarding these regulations can result in fines, injury and even death. The safety of these animals, as well as human safety, depends on everyone using good judgment and following these simple rules. Follow these links to learn more information on wildlife preservation in the park including when Yellowstone staff intervene in a natural process and why and why the bison calf was euthanized.This case was investigated by Yellowstone National Park law enforcement officers and prosecuted by Assistant United States Attorney Christyne M. Martens. For questions relating to Yellowstone National Park, please contact the Public Affairs Office at 307-344-2015 or [email protected].
Hattiesburg Man Sentenced to over 17 Years in Prison for Possession of Child PornographyRead the Press Release
Hattiesburg, Miss. -- A Hattiesburg man was sentenced to 211 months in federal prison followed by a lifetime of supervised release for possession of child pornography, announced U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation.
According to court documents, Zane Michael Bonner, 44, was found to be in possession of a cellular telephone at his rehabilitation center residence in Hattiesburg from which forensics recovered over 2,500 visual depictions of child sexual abuse material of minors engaging in sexually explicit conduct. Bonner had a previous conviction for possession of child pornography in the United States District Court for the Southern District of Alabama.
Bonner was indicted by a federal grand jury and pled guilty on January 10, 2023 to possession of child pornography.
In addition to his term of imprisonment, Bonner was ordered to pay $11,000 to victims and a $5,000 fine, as well as $5,000 under the Amy, Vicky, and Andy Child Pornography Victim Assistance Act.
The case was investigated by the Federal Bureau of Investigation with the assistance of the Mississippi Attorney General’s Cyber Crimes Division, and the Forest County Sheriff’s Office.
Assistant U.S. Attorney Andrea Jones prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Grant County Man Sentenced to 18 Years for Producing Child PornographyRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that James C. Gibson, 54, Fennimore, Wisconsin was sentenced today by U.S. District Judge William M. Conley to 18 years in federal prison for using minors to engage in sexual activity and recording the activity. Judge Conley also ordered a life term of supervised release to follow the prison sentence. Gibson pleaded guilty to this charge on January 31, 2023.
In early November 2021, the mother of a minor born in 2010 contacted the Fennimore Police Department about inappropriate content she found on a phone that had been used by the minor. The investigation revealed that James Gibson had been regularly exchanging inappropriately affectionate messages with the minor. Law enforcement interviewed Gibson, who revealed that he previously had a video depicting child pornography on his phone. As a result, the officer seized Gibson’s phone and searched it pursuant to a warrant.
The search revealed that within Gibson’s phone were sexually explicit images of the minor, and those of a second minor, also born in 2010. In addition, the phone contained sexually explicit videos of unknown minors. After finding the images of the known minors, law enforcement interviewed them and both confirmed that the defendant took nude pictures of them at his residence in Fennimore. Finally, according to one of the minors, the defendant took nude pictures of them from the summer of 2020 through September 2021.
In sentencing Gibson, Judge Conley observed that the defendant groomed multiple 11 and 12-year old children by using their interests to get close to them, showered them with gifts, and paid for their phone and phone plans. Gibson then coerced two into producing child pornography, and sexually assaulted at least one of them. Judge Conley found that Gibson manipulated the victims and their families leading to abhorrent abuse, and that he posed a significant risk to minors in the community.
The charge against Gibson was the result of an investigation conducted by the Fennimore Police Department, with the assistance of Wisconsin Department of Justice Division of Criminal Investigation and the Office of the Grant County District Attorney. Assistant U.S. Attorney Laura A. Przybylinski Finn prosecuted this case.
Grand Island Man Sentenced for Firearm and Drug Trafficking CrimesRead the Press Release
United States Attorney Steven Russell announced that William Eugen Packer, 47, of Grand Island, Nebraska, was sentenced today in federal court in Omaha, Nebraska, for possessing with intent to distribute methamphetamine and possessing a firearm during a drug trafficking crime. United States District Judge Brian C. Buescher sentenced Packer to 151 months’ imprisonment on the drug charge and a consecutive 60 months’ imprisonment on the firearm charge, for a total sentence of 211 months. There is no parole in the federal system. After his release from prison, Packer will begin a five-year term of supervised release.
On April 6, 2021, officers in Norton, Kansas initiated a traffic stop. Packer, a passenger in the vehicle, immediately took off running and dropped a backpack that was found to contain 4.5 pounds of methamphetamine. Co-defendants Amanda Schnoor, who was the driver, and Clint Younger knew Packer was transporting the drugs and identified him as the person who took off running. The methamphetamine was being brought to Nebraska for them to sell and distribute. On October 7, 2021, when Packer was arrested on the federal warrant for the April 6 offense, he was found in possession of three firearms, another 1.6 pounds of methamphetamine, and $16,060 in U.S. currency that was drug proceeds and forfeited to the United States.
Schnoor pleaded guilty to drug conspiracy and will be sentenced on June 7, 2023. Clint Younger pleaded guilty to drug conspiracy and will be sentenced June 29, 2023.
This case was investigated by the Trident Drug Task Force, which is made up of officers from the Grand Island Police Department, Hall County Sheriff, Hastings Police Department, Adams County Sheriff, Kearney Police Department, Buffalo County Sheriff, Nebraska State Patrol, Homeland Security Investigations, and the Federal Bureau of Investigation.
Goldsboro “Blood” Gang Member Who Shot at Vehicle with Stolen Gun Sentenced to More than 8 Years in PrisonRead the Press Release
RALEIGH, N.C. – Sir Calvin Johnson, 26, of Goldsboro, was sentenced to 102 months in prison for possession of a firearm by a convicted felon. He pled guilty to the charge on February 7, 2023. Johnson was on federal supervised release for possession of a firearm by a felon at the time of this offense.
“Senseless gun violence in Eastern North Carolina is claiming too many young lives,” said U.S. Attorney Michael Easley. “We are partnering with ATF and local law enforcement to get illegal guns off the streets and putting those who drive violence behind bars. This Blood gang member stole a gun and recklessly fired at the victim’s car before being arrested. The Goldsboro Police Department should be credited for their swift action in this case to keep the community safe, and their commitment to our ongoing partnership.”
According to court documents and other information presented in court, on July 23, 2022, Johnson stole a 9mm handgun from a friend and the theft was captured on camera. When the friend found that the gun had been stolen, they left the residence looking for Johnson. The friend found Johnson and confronted him about the gun. Johnson fired the gun and hit the friend’s car. Law enforcement responded to the shots fired call. They found Johnson in the area, and he threw the gun as they approached. Johnson was arrested and the firearm was recovered.
According to law enforcement, Johnson was a Blood gang member. Johnson has prior state conviction for firearm by a felon (2017) and a federal conviction for firearm by a felon (2019).
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Goldsboro Police Departments investigated the case and Assistant U.S. Attorney Timothy Severo prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:22-CR-00218-BO.
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Former West Haven Employee and State Representative Sentenced to Prison for Stealing COVID Relief and Other City FundsRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that MICHAEL DiMASSA, 32, of West Haven, was sentenced today by U.S. District Judge Omar A. Williams in Hartford to 27 months of imprisonment, followed five years of supervised release, for his involvement in schemes that resulted in the theft of more than $1.2 million dollars in COVID relief funds and other funds from the City of West Haven. Judge Williams also ordered DiMassa to perform 100 hours of community service while on supervised release.
According to court documents and statements made in court, DiMassa was a Connecticut State Representative who was also employed by the City of West Haven, most recently serving as the Administrative Assistant to the City Council. In April 2020, the State of Connecticut was allocated money by the U.S. Department of the Treasury through the Coronavirus Relief Fund (“CRF”), which was established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) for the purpose of helping local governments pay costs incurred in responding to the COVID-19 pandemic. From July 2020 through September 2021, the City of West Haven received approximately $1,150,257 in financial assistance from this fund. DiMassa, who was authorized to approve the designated relief funds for the reimbursement of COVID-related expenditures incurred by West Haven, conspired with others to steal these funds and other West Haven funds through the submission of fraudulent invoices, and subsequent payment, for COVID relief goods and services that were never provided.
In one scheme, DiMassa conspired with John Bernardo, who was employed by the City of West Haven as a Housing Specialist in the office of Community Development Administration. In January 2021, DiMassa and Bernardo formed Compass Investment Group, LLC. Beginning in February 2021, Compass Investment Group LLC fraudulently billed the City of West Haven and its “COVID-19 Grant Department” for consulting services purportedly provided to the West Haven Health Department that were not performed. From February 2021 through September 2021, the City of West Haven paid Compass Investment Group a total of $636,783.70. DiMassa made several large cash withdrawals from the Compass Investment Group LLC bank account, some of which were made shortly before or after he made a large cash “buy-in” of gaming chips at the Mohegan Sun Casino.
DiMassa also conspired with his now wife, Lauren DiMassa, formerly known as Lauren Knox, through the submission of numerous fraudulent invoices to West Haven for services related to a Youth Violence Prevention Program and for Youth Violence COVID-19 Associated Expenses. These invoices listed charges for in-home counseling, cleaning supplies, special needs hourly service, wi-fi assistance for low/moderate income families, counseling services, license fees, a fall youth clinic, meals, support group supplies, equipment rental, and youth clinic support group. West Haven made at least 16 payments totaling approximately $147,776.10 to Lauren DiMassa, who never provided any services to the City of West Haven.
In a third scheme, DiMassa conspired with John Trasacco, of West Haven, through the submission of fraudulent invoices from L & H Company and JIL Sanitation Services, two companies controlled by Trasacco, to West Haven for goods and services, including thousands of units of Personal Protective Equipment (PPE), HVAC maintenance at multiple municipal locations, COVID supplies for the Board of Education, and cleaning services for various municipal and school buildings, including one school building that had been vacant and abandoned for several years. Trasacco’s companies received approximately $431,982 through this scheme.
Judge Williams ordered Michael DiMassa to pay $856,844.45 in restitution.
Judge Williams noted the sentence takes into account extensive testimony DiMassa provided during Trasacco’s trial.
DiMassa was arrested on October 20, 2021. On November 1, 2022, he pleaded guilty to three counts of conspiracy to commit wire fraud.
DiMassa, who is released on a $250,000 bond, is required to report to prison on July 31.
On June 14, 2022, Bernardo pleaded guilty to one count of conspiracy to commit wire fraud. On March 22, 2023, he was sentenced to 13 months of imprisonment and ordered to pay $58,927.25 in restitution.
On July 14, 2022, Lauren DiMassa pleaded guilty to one count of conspiracy to commit wire fraud. On March 23, 2023, she was sentenced to six months of imprisonment and ordered to pay $147,776 in restitution.
On December 2, 2022, a jury found Trasacco guilty of one count of conspiracy to commit wire fraud and one count of wire fraud. On April 3, 2023, he was sentenced to 96 months of imprisonment and ordered to pay $143,994 in restitution.
This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General for Investigations. The case was prosecuted by Assistant U.S. Attorneys Ray Miller and David Sheldon.
Individuals with information about allegations of attempted fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721, or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former Texas Sheriff’s Office Chief Deputy Sentenced for Using Excessive ForceRead the Press Release
A former Van Zandt County, Texas, Sheriff’s Office Chief Deputy was sentenced today to 44 months in prison for violating an arrestee’s civil rights by using excessive force against him.
According to court documents, Steven “Craig” Shelton, 62, previously pleaded guilty and admitted that on or about Sept. 21, 2021, while acting as the Chief Deputy and second-in-command of the Van Zandt County Sheriff’s Office, he repeatedly struck a handcuffed and compliant arrestee in the face. Shelton admitted that his acts, which occurred in front of several other officers in the Rolling Oaks area of Wills Point, Texas, caused bodily injury to the arrestee. Shelton admitted that he hit the arrestee because Shelton was frustrated, even though Shelton knew that there was no legitimate, law enforcement need to use force against the arrestee.
“This defendant abused his authority as a law enforcement officer by violently assaulting and injuring a handcuffed arrestee, violating the victim’s civil rights and the public’s trust,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold accountable those officers who abuse their authority, wherever such abuses occur.”
“It is an unacceptable abuse of authority for a police officer to strike a handcuffed arrestee who poses no threat,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “Public trust in law enforcement is eroded when officers do not follow the laws they are sworn to enforce. While recognizing that a vast majority of law enforcement officers protect the constitutional rights of individuals on a daily basis, the U.S. Attorney’s Office remains committed to protecting the public from officers who violate those rights.”
“The FBI regards the protection of civil rights as one of our most solemn responsibilities,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “We will continue to investigate any law enforcement officer who violates these rights, and pursue justice for victims.”
The FBI Dallas Field Office investigated the case.
Assistant U.S. Attorney Tracey Batson for the Eastern District of Texas and Special Litigation Counsel Kathryn E. Gilbert and Trial Attorney Matthew Tannenbaum of the Civil Rights Division’s Criminal Section prosecuted the case.
Former Social Media Influencer Pleads Guilty to Federal Charges for Scheming to Obtain More Than $1.2 Million in COVID-19 Cares Act LoansRead the Press Release
Greenbelt, Maryland – Denish Sahadevan, a/k/a “Danny Devan,” age 31, of Potomac, Maryland, pleaded guilty today to wire fraud, aggravated identity theft and money laundering, relating to his scheme to defraud lenders and the Small Business Administration (“SBA”) of more than $1.2 million in Paycheck Protection Program (“PPP”) loans and Economic Injury Disaster Loans (“EIDL”).
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and John T. Perez, Special Agent in Charge, Headquarters Operations, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the PPP, as well as EIDLs to help small businesses meet their financial obligations, both administered through the SBA.
According to the plea agreement, beginning in about March 2020, Sahadevan submitted EIDL and PPP application on behalf of four Maryland entities that he controlled, often creating fraudulent and fabricated documents, such as tax forms and bank statements, to be used in the applications. In addition, Sahadevan used the identifying information belonging to a tax preparer that he knew, without that person’s knowledge or agreement, to legitimize the fabricated tax forms he created and submitted.
Specifically, Sahadevan admitted that he used his home in Rockville, Maryland to create the fabricated documents and electronically apply for EIDL and PPP loans. Sahadevan applied for approximately 71 PPP loans totaling approximately $941,794.75, and successfully obtained approximately $146,000 in PPP benefits. Sahadevan applied for and received eight EIDLs totaling $283,900. On the EIDL loans, Sahadevan induced his father into becoming a co-signer for the loan, then forged his father’s signature on the loan application. Sahadevan’s father would not have agreed to sponsor the loan had he known of its fraudulent nature and contents.
As detailed in the plea agreement, Sahadevan caused the fraud proceeds to be deposited into bank accounts he opened specifically for that purpose, then laundered the funds by engaging in several monetary transactions, including purchasing and trading securities and cryptocurrency, settling personal debts and making payments to his girlfriend.
In addition, between December 16, 2021 and January 10, 2022, Sahadevan applied to a financial institution for a $1,336,000 loan to purchase a property in Potomac, Maryland. In the loan application, Sahadevan failed to disclose the $283,900 he owed to the United States for the EIDL benefits he fraudulently received. Relying on Sahedevan’s representations, the financial institution approved the loan, which was used to purchase the Potomac property.
On February 24, 2023, law enforcement executed a search warrant at Sahadevan’s Potomac residence and recovered multiple electronic devices, a can containing approximate 18 driver’s licenses belonging to other individuals, what appeared to be a gold physical Bitcoin in a black case, and approximately $17,043 in cash found in a suitcase in a bedroom closet. The cash and Bitcoin constitute proceeds of the fraud scheme.
As part of his plea agreement, Sahadevan will forfeit the cash and Bitcoin seized during the search on February 24, 2023 and will be required to pay restitution and a forfeiture money judgement of at least $429,906.
Sahadevan faces a maximum sentence of 20 years in federal prison for wire fraud; a maximum of 10 years in federal prison for money laundering; and a mandatory sentence of two years in federal prison, consecutive to any other sentence imposed for aggravated identity theft. U.S. District Judge Deborah L. Boardman has scheduled sentencing for September 21, 2023 at 2:00 p.m.
The District of Maryland Strike Force is one of three strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
United States Attorney Erek L. Barron commended the FBI and the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Bijon A. Mostoufi, who is prosecuting the case. He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.
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Former President and Former Financial Advisor of Law Enforcement Union Convicted of Defrauding Union’s Annuity FundRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction of KENNETH WYNDER Jr., a former New York State Trooper and the president of the Law Enforcement Employees Benevolent Association (“LEEBA”), a labor union for law enforcement officers employed by the City of New York (the “City”), and ANDREW BROWN, a/k/a “Drew Brown,” the former financial advisor for LEEBA, for defrauding union members by misappropriating money from LEEBA’s Annuity Fund. WYNDER was also convicted of personal income tax evasion and conspiring to evade federal taxes, including payroll taxes owed by LEEBA and its employees. Steven Whittick, LEEBA’s former treasurer and a former police officer for New York City’s Department of Environmental Protection (“DEP”), previously pled guilty to conspiring to commit tax evasion and making false statements to law enforcement. WYNDER and BROWN were convicted after a five-day jury trial before U.S. District Judge P. Kevin Castel and are scheduled to be sentenced on October 18, 2023, by Judge Castel.
U.S. Attorney Damian William said: “As the jury unanimously found, Kenneth Wynder and Andrew Brown raided a union-sponsored retirement plan for years, placing their personal interest over the union members they were duty bound to look out for. The jury also found that Wynder then evaded taxes on income he obtained from the union, including as a product of their theft from the union members’ retirement accounts.”
According to the Indictment, Superseding Indictment, the underlying complaints filed in this case, as well as other publicly available information, prior court filings, and evidence presented during the trial in Manhattan federal court:
Law Enforcement Employees Benevolent Association and the Annuity Fund
LEEBA is a labor union that has acted as the collective bargaining representative principally for law enforcement personnel at various City agencies and has entered into agreements on behalf of those law enforcement employees, including agreements for insurance and retirement benefits. The City agencies whose employees LEEBA represented included, at various times, DEP, the Department of Sanitation (“Sanitation”), and the Department of Transportation (“Transportation”).
The Annuity Fund is a LEEBA fund that received monthly contributions from the City for the benefit of LEEBA’s members and maintained separate accounts for each fund member. These accounts were functionally similar to employer-sponsored 401(k) retirement accounts. WYNDER was a Trustee of the Annuity Fund and signatory to agreements that governed the fund, and BROWN was a Plan Administrator and Financial Advisor of the Annuity Fund. Under the relevant agreements and plans, the money in the Annuity Fund could be used for no purpose other than funding individual members’ retirement accounts and defraying reasonable administrative expenses of the Annuity Fund itself.
WYNDER
WYNDER, a former New York State Trooper, is the founder and former President of LEEBA and a former member of LEEBA’s board of directors. WYNDER also formerly served as the Fund Administrator of the Annuity Fund and as a member of the board of trustees of the Annuity Fund, pursuant to which he owed a fiduciary duty to act in the best interests of the Annuity Fund and its account holders. WYNDER also was on the board of trustees of the LEEBA Welfare Fund (the “Welfare Fund,” and collectively with the Annuity Fund, the “LEEBA Funds”), which provided supplemental insurance benefits to its members. While occupying those positions, WYNDER centralized and controlled major decision-making authority for LEEBA and the LEEBA Funds, often acting without the proper approval of their respective boards of directors or trustees. WYNDER’s de facto dominance of LEEBA and the LEEBA Funds enabled him to make decisions in his own self-interest and contrary to the interests of the Annuity Fund and individual members.
BROWN
BROWN, the founder of a Westchester-based financial services company, is the former Benefits Administrator and insurance broker for LEEBA and the LEEBA Funds. As a LEEBA Annuity Fund Plan Administrator and Financial Advisor, BROWN helped manage the investments in the Annuity Fund, receiving a commission for his services, and had a responsibility to act in the best interest of LEEBA’s members.
WYNDER’s and BROWN’s Fraud Scheme
From at least in or about 2012 up to and including 2020, WYNDER and BROWN participated in a scheme to steal, embezzle, and misappropriate money from the Annuity Fund and individual members’ retirement accounts. Specifically, WYNDER and BROWN made hundreds of thousands of dollars of fraudulent transfers from the Annuity Fund to LEEBA’s operating account, which WYNDER controlled, and WYNDER regularly used the funds, once transferred from the Annuity Fund, to enrich himself at union members’ expense, including through unauthorized and excessive checks to himself and cash withdrawals for his own benefit and to pay insurance benefits for which BROWN received commissions. In addition, WYNDER caused the union to pay for various personal expenses such as the purchase of a Lexus automobile, travel expenses to Dallas to watch a Dallas Cowboys football game, and a sailing trip, all paid for by the union, and none of which were contemporaneously reported to the Internal Revenue Service (“IRS”), as required.
To accomplish this fraudulent scheme, WYNDER and BROWN, acting in their capacity as the Annuity Fund’s Plan Administrators, repeatedly made false and misleading statements to a third-party retirement plan manager that served as the custodian for the Annuity Fund and the retirement accounts of individual union members, including through emails and faxes that WYNDER and BROWN used to withdraw increasingly large sums of money from the Annuity Fund, effectively causing such withdrawals to be made from the retirement accounts of individual members. From in or about 2014 through in or about 2019, WYNDER and BROWN caused the withdrawal of more than $500,000 from the individual retirement accounts that constitute the Annuity Fund, thereby wiping out the entire balance of certain members’ accounts. Without these improper withdrawals from the Annuity Fund, the LEEBA operating account would have been insolvent and would have had insufficient funds to pay for WYNDER’s excessive checks to himself and cash withdrawals and the personal expenses he caused to be charged to that account, as well as to pay for benefits for which BROWN made commissions as an insurance broker.
In addition, throughout the duration of this scheme, WYNDER and BROWN repeatedly made and approved false and misleading statements to LEEBA’s members and prospective members about how they were purportedly using and protecting their retirement accounts and the LEEBA Annuity Fund. WYNDER further concealed the scheme by causing LEEBA to fail to timely file mandatory reports and financial disclosures with the City and public reports to the Annuity Fund’s members and by making false statements to the Annuity Fund’s auditors and accountants.
WYNDER’s Tax Evasion
From at least in or about 2015 through 2019 WYNDER participated in a conspiracy with LEEBA’s then-Treasurer, Steven Whittick, to cause LEEBA to make payments to WYNDER and Whittick, by check and in cash, and to conceal those payments from the IRS. WYNDER further conspired to ensure that such payments were made outside of LEEBA’s payroll processor. WYNDER then concealed these payments from the IRS — including off-the-books payments of more than $400,000 — in order to evade his own personal income taxes and to evade the payroll taxes that were owed by LEEBA and certain LEEBA employees.
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WYNDER, 59, of Stroudsburg, Pennsylvania, and BROWN, 55, of Putnam Valley, New York, were each convicted of one count of conspiracy of commit wire fraud and one count of wire fraud, each of which carry a maximum penalty of 20 years in prison. WYNDER was also convicted of one count of conspiracy to defraud the United States and four counts of tax evasion, each of which carry a maximum penalty of five years in prison.
On November 17, 2021, Whittick was sentenced to 28 months in prison for conspiring to commit tax evasion and making false statements and was ordered to pay $179,766.80 in restitution to the IRS.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the Department of Labor Office of Labor-Management Standards, and IRS-Criminal Investigations. Mr. Williams also thanked the New York City Comptroller’s Office and the New York City Department of Investigation for their assistance.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Eli J. Mark, Kedar S. Bhatia, Andrew Rohrbach, and David R. Lewis were assigned to the prosecution, with the assistance of Paralegal Specialists Connor Hamill and Lauren Scarff.
Former Owner of Plymouth Restaurant Agrees to Plead Guilty to Tax EvasionRead the Press Release
BOSTON – The former owner of a beachfront restaurant and bar in Plymouth has been charged and has agreed to plead guilty to concealing business income from the Internal Revenue Service (IRS) and paying restaurant employees under the table.
Rudolph Ferrucci, 65, of Plymouth, has agreed to plead guilty to one count of tax evasion and one count of failure to collect and pay over employee taxes. A plea hearing has not yet been scheduled by the Court.
According to the charging documents, Ferrucci owned and operated Sandy’s, a seasonal, cash-only restaurant and bar. It is alleged that, from 2016 through 2020, Ferrucci diverted a portion of Sandy’s sales receipts for cash payments to suppliers and employees and to personal income for himself and his spouse. Ferrucci allegedly kept two sets of financial records for Sandy’s, including one omitting diverted sales receipts, which Ferrucci’s tax return preparer used to report Sandy’s income to the IRS. As a result of this alleged conduct, Ferrucci underreported his and his spouse’s personal income tax obligations by $1.2 million over those four years, causing a loss to the IRS of over $250,000.
It is also alleged that Ferrucci paid Sandy’s employees more than $315,000 in cash wages, memorialized in a handwritten “second set of books” and not recorded in Sandy’s payroll records or tax returns. By not reporting these cash wages to the IRS, Ferrucci allegedly caused Sandy’s to fail to pay over $75,000 in employment taxes owed to the IRS.
The charge of tax evasion provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. The charge of failure to collect and pay over employee taxes provides for a sentence of up to five years in prison, three years of supervised release, a fine of up to $250,000 and restitution to the IRS. 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 Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. Assistant U.S. Attorney David M. Holcomb of Levy’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Operator of Payza.com Charged with Laundering 450 BitcoinRead the Press Release
WASHINGTON – Firoz Patel, 48, of Canada, was ordered detained today following indictment on charges of laundering 450 Bitcoin (BTC), valued at $24,020,699.83 at the time of the transaction, shortly before he reported to prison in another case in 2021. The two-count indictment, unsealed on May 17, 2023, charges Patel with money laundering and engaging in monetary transactions in property derived from specified unlawful activity. U.S. District Court Judge Dabney L. Friedrich, of the U.S. District Court for the District of Columbia, ordered Patel be detained pending trial.
The announcement was made by U.S. Attorney Matthew M. Graves and Special Agent in Charge Derek W. Gordon of Homeland Security Investigations (HSI) Washington, D.C.
Previously, Patel, his brother, Ferhan, and their company, MH Pillars, Inc., d/b/a Payza, were prosecuted in the United States District Court for the District of Columbia for operating an Internet-based unlicensed money service business that processed more than $250 million in transactions. Through Payza.com, the defendants ran a money transmitting business that operated without the necessary state licenses and knowingly transmitted funds that were derived from illegal activity. The brothers each pled guilty to conspiracy to commit crimes against the United States by operating an unlicensed money transmitting business and by laundering monetary instruments. As part of his plea agreement, Firoz Patel was required to disclose all known assets to the U.S. government. On November 10, 2020, Patel was sentenced to 36 months in prison and was given a reporting date. The court also entered a forfeiture judgment for “any property, real or personal, involved in” the offense to which Firoz Patel had pled guilty.
According to court documents, between his sentencing and reporting dates, Patel transferred 450 BTC, traceable to Payza.com, to an account at a virtual currency exchange in the United Kingdom. The 450 Bitcoin would have been subject to forfeiture in Patel’s previous criminal case. The virtual currency exchange account was opened using the name and date of birth of Patel’s father, but with an email address and phone number controlled by Firoz Patel. When the virtual currency exchange requested additional information about the account and the large deposit, it received a response in the name of an employee of a company in India affiliated with Payza. The account containing the 450 Bitcoin was ultimately frozen.
This matter is being investigated by the Homeland Security Investigations (HSI) Washington, D.C. Field Office. The case is being prosecuted by Assistant U.S. Attorneys Arvind K. Lal and Christopher B. Brown.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless proven guilty.
Former New York Resident Indicted on Drug ChargesRead the Press Release
Erie, Pa. - A former resident of Jamestown, New York has been indicted by a federal grand jury in Erie on a charge of violating federal narcotics laws, Acting United States Attorney Troy Rivetti announced today.
The one-count Indictment named Andre Richards, 23, as the sole defendant.
According to the indictment presented to the court, in or around March 2023, Richards possessed with the intent to distribute approximately 9.5 kilograms of methamphetamine.
The law provides for a maximum total sentence of life in prison, a fine of $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Molly W. Anglin is prosecuting this case on behalf of the government.
The Warren County Drug Task Force, the Warren County District Attorney’s Office, the Attorney General’s Office Bureau of Narcotics, the U.S. Department of Homeland Security, Homeland Security Investigations, and the Drug Enforcement Administration conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former New Mexico House of Representatives Candidate Charged for Shooting SpreeRead the Press Release
An indictment was unsealed today in the District of New Mexico charging a former candidate for the New Mexico House of Representatives for a shooting spree targeting the homes of four elected officials.
According to court documents, Solomon Peña, 40, ran for District 14 of the New Mexico House of Representatives during the November 2022 mid-term elections. After his November 2022 electoral defeat, Peña allegedly organized the shootings on the homes of two Bernalillo County commissioners and two New Mexico state legislators. The shootings, one of which involved a machine gun, were carried out between Dec. 4, 2022, and Jan. 3, with assistance from co-conspirators Demetrio Trujillo, 41; Jose Trujillo, 22; and others.
Before the shootings, Peña visited the homes of at least three Bernalillo County commissioners and allegedly urged them not to certify the election results, claiming that the election had been “rigged” against him. Following the Bernalillo County board of commissioners’ certification of the vote, Peña allegedly hired others to conduct the shootings and carried out at least one of the shootings himself. At least three of the shootings occurred while children and other relatives of the victims were at home.
“There is no room in our democracy for politically motivated violence, especially when it is used to undermine election results,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “As alleged, Solomon Peña orchestrated four shootings at the homes of elected officials, in part because of their refusal to overturn his election defeat. Such violent actions target not only the homes and families of elected officials, but also our election system as a whole. The department will not hesitate to hold individuals accountable for acts of politically motivated violence.”
“In America, the integrity of our voting system is sacrosanct,” said U.S. Attorney Alexander M.M. Uballez for the District of New Mexico. “These charges strike at the heart of our democracy. Voters, candidates, and election officials must be free to exercise their rights and do their jobs safely and free from fear, intimidation, or influence, and with confidence that law enforcement and prosecuting offices will lead the charge when someone tries to silence the will of the people. To those who try to sow division, chaos, and fear into our democratic process, these charges should send a message that we are unified, organized, and undaunted.”
“The FBI and our partners are committed to ensuring violent crime investigations remain a priority,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “We will continue to pursue justice in cases like these in the name of safety for the American people.”
Peña, Demetrio Trujillo, and Jose Trujillo are charged with conspiracy, interference with federally protected activities, and several firearms offenses, including the use of a machine gun. If convicted, Peña faces a mandatory minimum of 60 years in prison. Jose Trujillo was also charged with possession with intent to distribute fentanyl and firearms offenses, including possession of a machine gun.
The FBI and the Albuquerque Police Department investigated the case.
Senior Litigation Counsel Victor R. Salgado of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Jeremy Peña and Patrick E. Cordova for the District of New Mexico are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Erie Resident Indicted on Drug ChargesRead the Press Release
Erie, Pa. - A former resident of Erie, Pennsylvania has been indicted by a federal grand jury in Erie on charges of violating federal narcotics laws, Acting United States Attorney Troy Rivetti announced today.
The three-count Indictment named Delvon Sanders, 33, as the sole defendant.
According to the Indictment presented to the court, Sanders sold a quantity of fentanyl that caused the death of J.B. on April 17, 2023. The Indictment also charges Sanders with possession with intent to distribute fentanyl on or about April 18, 2023 and possession of fifty grams or more of methamphetamine on that same date.
The law provides for a maximum total sentence of life in prison, a fine of $7,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Molly W. Anglin is prosecuting this case on behalf of the government.
The Millcreek Police Department, the Erie County Drug Task Force, the Erie County District Attorney’s Office, and the Drug Enforcement Administration conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Bellevue, Washington, resident sentenced to 12 years in prison for securities fraudRead the Press Release
Seattle – A 42-year-old former Bellevue, Washington, man was sentenced today in U.S. District Court in Seattle to 12 years in prison for securities fraud, announced U.S. Attorney Nick Brown. Justin Costello victimized marijuana business owners, private investors, and investors who purchased stock in the public market. Costello used fraud proceeds for an expensive lifestyle, including an elaborate wedding with a James Bond theme. At the sentencing hearing, U.S. District Judge Ricardo S. Martinez said the frauds “caused a severe impact financially, and a severe emotional impact…. People felt betrayed and violated by (Costello’s) actions.
"Mr. Costello had ‘big dreams’ -- building a lifestyle that emulated his hero, 007 James Bond — but he did so by victimizing dozens of people and businesses who entrusted their personal savings to him,” said U.S. Attorney Nick Brown. “When he was indicted, he fled with fake ID, cash, gold, and jewelry to finance a life on the run. But his story is not fiction and the $35 million damage to his victims is all too real. This prison sentence is fully appropriate.”
“After finally having to answer for his crimes, Mr. Costello went on the run” said Richard A. Collodi, Special Agent in Charge of the FBI’s Seattle field office. “His flight to avoid prison demonstrates that is exactly where he belongs. I applaud the work of our investigators and prosecutors who finally put an end to his elaborate fraud, and to our partners who were able to apprehend him before he could leave the country.”
As part of his securities fraud scheme, Costello purchased two companies that were trading for pennies on the over-the-counter market and renamed them GRN Holding Corporation and Hempstract Inc. Costello recruited investors in these companies, allegedly making numerous false statements. Costello told potential private investors that he had an MBA from Harvard, that his personal wealth was significantly larger than it was, and that GRN Funds LLC, a private equity and hedge fund he owned, had over $1 billion in assets under management. None of that was true.
With these falsehoods, Costello convinced various investors across the country to invest in his companies.
Today., some of those recruited investors told the court how Costello preyed on their friendship to get them to invest. One told the court “Nothing with Costello was real… We were groomed by this predator… The stage was set for this big con.”
Another told the court “He is a liar, a financial psychopath, and a human wrecking ball.”
A third told the court that her husband was a changed man after losing all of their money investing with Costello. She described how her husband became depressed and took his own life.
Costello did not just defraud friends, he also committed fraud on those investing on public markets. He had press releases and securities filings made with multiple false representations. Between July 1, 2019, and May 18, 2021, over 7,500 investors purchased and sold GRN Holding Corp. securities while Costello was making, and causing to be made, material misrepresentations concerning GRN Holding Corp. Collectively, these investors lost approximately $25 million. Similarly, with Hempstract Inc., he made false statements and defrauded investors. Between November 2018 and June 2021, 29 private investors lost about $6 million.
Between October 2019, and January 2021, Costello hired an unindicted coconspirator to use Twitter in a pump and dump stock scheme. Costello would acquire the penny stock of a company and then instruct his prolific Twitter user to tweet falsehoods about the company that would drive up the stock price. The coconspirator would tweet about the stock as often as 90 times a day. In one instance Costello didn’t just use Twitter, he also instructed some of his “investors” to purchase stock in the company, driving the share price from a nickel to $2 per share. After driving the share price up, Costello sold the shares for a profit of more than $355,000. The prolific Twitter user was given a share of Costello’s profits from the pump and dump scheme. In all Costello made $625,092 in the pump and dump scheme.
Along with the securities fraud, in 2017 Costello owned and operated a company called Pacific Banking Corp that provided banking services to marijuana businesses in Washington, Colorado, California, Illinois, and Alaska. Costello sent false account statements to the marijuana businesses, so that they were lulled into thinking their money was secure. However, between 2019 and 2021, Costello diverted money from three marijuana business to benefit himself and his other companies. The three marijuana businesses lost about $3.7 million.
Costello was apprehended October 6, 2022, by law enforcement in Southern California. He had fake identification documents, cash, and valuables indicating he hoped to flee to Mexico to avoid prosecution.
In addition to the financial harm, prosecutors noted that Costello’s investors suffered a betrayal that stays with them to this day. “Costello’s deceit – about his background, his education, and his purported success – was designed to convince unwitting investors to trust him. And trust him they did. But when lies and fraud are exposed, victims are left with significant emotional and psychological damage. They blame themselves for being gullible and overly trusting. The resulting stress, anxiety, and sense of betrayal causes great emotional and psychological harm, and damages the victims’ relationships with friends, family, and others,” prosecutors wrote in their sentencing memo.
Judge Martinez recognized that harm in imposing the sentence saying, “in many financial crimes the victims are not known to the fraudster… Financial crimes where the defendant befriends the individual and uses them to entice others to the scheme has a completely different emotional impact. It leaves victims feeling helpless and hopeless.”
In his Plea Agreement, Costello agreed to pay no less than $35 million in restitution, but the Court will enter the final restitution amount in August 2023. Costello is forfeiting assets that were seized at the time of his arrest including $60,000 in cash, gold bars, Mexican pesos, two designer watches, and gem encrusted jewelry.
The case was investigated by the FBI.
The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Michael Dion.
Five Jersey City Gang Members and Associates Sentenced to Prison for Gang-Related StabbingRead the Press Release
NEWARK, N.J. – Five members and associates of a neighborhood street gang in Hudson County, New Jersey, have been sentenced to prison for their respective roles in a gang-related stabbing, U.S. Attorney Philip R. Sellinger announced today.
Yahsier Brown, 21, was sentenced today to 51 months in prison. Jaylen Boone, 22, was sentenced on May 2, 2023, to 56 months in prison. Jamil Bowens, 22, was sentenced on April 5, 2023, to 53 months in prison. Divine Abraham, 22, was sentenced on March 3, 2023, to 51 months in prison. Jermaine Jennings, 22, was sentenced on Jan. 4, 2023, to 57 months in prison. All of the defendants were also sentenced to three years of supervised release. All of the defendants are Jersey City residents, and all were sentenced by U.S. District Judge Kevin McNulty in Newark federal court
According to documents filed in this case and statements made in court:
On Aug. 3, 2020, Brown, Jennings, Abraham, Bowens, Boone, and three others, all of whom are associated with a street gang operating in and around the Curries Woods Public Housing Complex in Jersey City – identified as “Curries Woods” or the “Tay Tay Shrimp Gang” or the “Sharks” – assaulted a rival gang member in retaliation for a prior gang-related assault. As the victim was walking down a street in Jersey City, Brown, Jennings, Abraham, Bowens, Boone, and the others approached in two cars, parked in the middle of the street, and violently assaulted the victim, who was punched, kicked, and stabbed and suffered life-threatening injuries.
U.S. Attorney Sellinger credited the special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Bryan Miller; the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and the Hudson County Department of Corrections with the investigation leading to sentencings.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Tracey Agnew of the U.S. Attorney’s Office Criminal Division in Trenton.
Drug Traffickers Found with Large Quantities of Methamphetamine Sentenced to Federal PrisonRead the Press Release
MONROE, La. - United States Attorney Brandon B. Brown announced the resolution of two separate drug trafficking cases from the Monroe Division in the Western District of Louisiana today. Chief United States District Judge Terry A. Doughty sentenced the following defendants:
Jacque Pierre Young, 30, of Arcadia, was sentenced to 324 months (27 years) in prison, followed by 5 years of supervised release, for possession with intent to distribute methamphetamine and possession of a firearm during a drug trafficking crime. Agents with the Lincoln Parish Narcotics Enforcement Team obtained a search warrant for an apartment on East California Avenue in Ruston, Louisiana, based on evidence they had obtained. When officers arrived at the house, they found Young in a bedroom in the apartment. Inside that bedroom, agents found a total of 80 grams of methamphetamine, as well as 54 grams of crack cocaine. A loaded EAA Girsan MC28 9mm handgun was also located in an open storage bin in the bedroom. The narcotics were submitted to the DEA lab for testing and the results indicated the methamphetamine to be 97% pure and the crack cocaine to be 54 grams of cocaine base. Young admitted that the drugs and firearm belonged to him and that he intended to sell the drugs. He pleaded guilty to the charges on February 2, 2023.
The case was investigated by the U.S. Drug Enforcement Administration (DEA) and the Lincoln Parish Narcotics Enforcement Team, and prosecuted by Assistant U.S. Attorney William Gaskins.
In a separate and unrelated case, Marianno Goldsmith, 37, and Thomas Boswell, 32, both of Florida, were each sentenced to 151 months in prison, followed by 3 years of supervised release, for possession with intent to distribute methamphetamine. Both defendants pleaded guilty in January 2023 to the charge. Evidence presented to the court revealed that on May 16, 2022, a trooper with the Louisiana State Police conducted a traffic stop of a vehicle on I-20 near Richland Parish which was being driven by Goldsmith and Boswell was the sole passenger. The traffic stop led to a search of the vehicle and law enforcement officers found two duffle bags in the trunk containing suspected methamphetamine. The narcotics were submitted to the lab for testing and the results confirmed that the substance was methamphetamine with a net weight of approximately 29,213 grams.
The case was investigated by the DEA and Louisiana State Police and prosecuted by Assistant U.S. Attorney Jessica D. Cassidy.
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Detroit Medical Center, Vanguard Health Systems, and Tenet Healthcare Corporation Agree to Pay over $29 Million to Settle False Claims Act AllegationsRead the Press Release
VHS of Michigan Inc., doing business as, The Detroit Medical Center Inc. (DMC), Vanguard Health Systems Inc. (Vanguard), and Tenet Healthcare Corporation (Tenet), has agreed to pay $29,744,065 to the government to resolve allegations that they violated the False Claims Act by providing kickbacks to certain referring physicians.
DMC operates hospitals in and around Detroit, including Sinai Grace Hospital and Harper University Hospital. In October 2013, Tenet acquired Vanguard owned-and-operated hospitals and outpatient facilities, including DMC.
The settlement announced today resolves the government’s allegations that DMC, Vanguard, and Tenet caused the submission of false or fraudulent claims to Medicare. Specifically, the government alleged that from Jan. 1, 2014, through Dec. 31, 2017, Sinai Grace Hospital and Harper University Hospital provided the services of DMC-employed mid-level practitioners to 13 physicians at no cost or below fair market value in violation of the Anti-Kickback Statute (AKS). The government further alleged that the physicians were selected because of their large number of patient referrals to Sinai Grace Hospital and Harper University Hospital and that the purpose of these arrangements was to induce the physicians to refer additional Medicare patients to DMC facilities.
The AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
“The Justice Department will pursue improper arrangements that have the potential to compromise physicians’ medical judgment,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “Physicians should evaluate where to send patients for medical services based on the quality of care the patients will receive, not the financial benefits that the physicians will reap.”
“This outcome makes clear that when doctors refer patients for care at hospitals, they must do so based on their own professional judgment and the medical needs of their patients, not personal financial benefit,” said U.S. Attorney Dawn N. Ison for the Eastern District of Michigan. “Our office stands ready to scrutinize even the most complicated financial arrangements and to pursue justice wherever appropriate.”
“Paying and accepting kickbacks encourages providers to put personal financial gain before the needs of their patients,” said Special Agent in Charge Mario Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “As this case demonstrates, those who enter into such improper arrangements and put the safety of their patients at risk will be held accountable.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Dr. Jay Meythaler, a former employee of Wayne State University Medical School, which is affiliated with DMC. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. In this case, Dr. Meythaler will receive $5,205,211.37 as part of the settlement. The qui tam case is captioned U.S. ex rel. Meythaler v. Detroit Medical Center, Inc., et al., No. 5:15-cv-12333 (E.D. Mich.).
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the HHS-OIG and the FBI.
The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Trial Attorney Kristen Murphy of the Civil Division and Assistant U.S. Attorney Anthony Gentner for the Eastern District of Michigan handled the case.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Detroit Medical Center, Vanguard Health Systems, and Tenet Healthcare Corporation Agree to Pay over $29 Million to Settle False Claims Act AllegationsRead the Press Release
Detroit Medical Center, Vanguard Health Systems, and Tenet Healthcare Corporation Agree to Pay Over $29 Million to Settle False Claims Act AllegationsWASHINGTON – VHS of Michigan Inc., doing business as, The Detroit Medical Center Inc. (DMC), Vanguard Health Systems Inc. (Vanguard), and Tenet Healthcare Corporation (Tenet), has agreed to pay $29,744,065 to the government to resolve allegations that they violated the False Claims Act by providing kickbacks to certain referring physicians.
DMC operates hospitals in and around Detroit, including Sinai Grace Hospital and Harper University Hospital. In October 2013, Tenet acquired Vanguard owned-and-operated hospitals and outpatient facilities, including DMC.
The settlement announced today resolves the government’s allegations that DMC, Vanguard, and Tenet caused the submission of false or fraudulent claims to Medicare. Specifically, the government alleged that from Jan. 1, 2014, through Dec. 31, 2017, Sinai Grace Hospital and Harper University Hospital provided the services of DMC-employed mid-level practitioners to 13 physicians at no cost or below fair market value in violation of the Anti-Kickback Statute (AKS). The government further alleged that the physicians were selected because of their large number of patient referrals to Sinai Grace Hospital and Harper University Hospital and that the purpose of these arrangements was to induce the physicians to refer additional Medicare patients to DMC facilities.
The AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
“The Justice Department will pursue improper arrangements that have the potential to compromise physicians’ medical judgment,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “Physicians should evaluate where to send patients for medical services based on the quality of care the patients will receive, not the financial benefits that the physicians will reap.”
“This outcome makes clear that when doctors refer patients for care at hospitals, they must do so based on their own professional judgment and the medical needs of their patients, not personal financial benefit,” said U.S. Attorney Dawn N. Ison for the Eastern District of Michigan. “Our office stands ready to scrutinize even the most complicated financial arrangements and to pursue justice wherever appropriate.”
“Paying and accepting kickbacks encourages providers to put personal financial gain before the needs of their patients,” said Special Agent in Charge Mario Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “As this case demonstrates, those who enter into such improper arrangements and put the safety of their patients at risk will be held accountable.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Dr. Jay Meythaler, a former employee of Wayne State University Medical School, which is affiliated with DMC. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. In this case, Dr. Meythaler will receive $5,205,211.37 as part of the settlement. The qui tam case is captioned U.S. ex rel. Meythaler v. Detroit Medical Center, Inc., et al., No. 5:15-cv-12333 (E.D. Mich.).
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the HHS-OIG and the FBI.
The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Trial Attorney Kristen Murphy of the Civil Division and Assistant U.S. Attorney Anthony Gentner for the Eastern District of Michigan handled the case.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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D.C. Man Held on Charges He Distributed Lethal Dose of Fentanyl to an 18-Year Old Army PrivateRead the Press Release
WASHINGTON – Jaron Johnson, 22, of Washington, D.C., was ordered held today pending trial in a drug distribution case that resulted in death. Johnson is charged by indictment, filed May 9, 2023, with distribution of fentanyl resulting in death and possession with intent to distribute fentanyl, announced U.S. Attorney Matthew M. Graves, Special Agent in Charge Jarod Forget of the Drug Enforcement Administration’s (DEA) Washington Division, and Special Agent in Charge Timothy Eckersley of the Army Criminal Investigation Division’s Washington Field Office.
According to documents filed in U.S. District Court, in May of 2022, Johnson purposefully distributed what he knew to contain fentanyl to a U.S. Army private (the “decedent”). The fentanyl the defendant sold to the decedent killed him within hours. His cause of death was determined to be a mixture of fentanyl, dextromethorphan (cough medicine), and chlorpheniramine (allergy medicine), with an enlarged heart as a contributing factor, and the manner ruled accidental. The examiner, however, indicated that had the decedent ingested only the fentanyl, he would have died.
When the decedent’s phone was searched, investigators found a text message conversation between the decedent and a specific phone number which was linked to Johnson. The messages show that the decedent discussed meeting with Johnson to purchase “blues” and “30s,” which is slang known to be used for pills containing fentanyl. On May 23, 2022, Johnson sent a message to the decedent which included a picture of a hand holding a bag of light blue pills, with the marking’s “M” and “30” on them. The decedent died on May 26, 2022.
On May 25, 2023, Johnson was arrested at an airport upon his return from California. A search of his checked luggage revealed he had been carrying approximately 33 pounds of suspected marijuana.
This case is being investigated by the DEA’s Washington Division and Army’s Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Solomon Eppel and Will Hart, of the Violence Reduction and Traffic Offenses Section (VRTO) of the U.S. Attorney’s Office for the District of Columbia.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Court Permanently Bars Five Defendants from Promoting Charitable Remainder Annuity Trust Tax SchemeRead the Press Release
On May 23, the U.S. District Court for the Western District of Missouri permanently barred Rhonda Eickhoff from organizing, promoting, selling or marketing a tax scheme involving the use of charitable remainder annuity trusts (CRATs).
On May 17, the court likewise permanently barred John Eickhoff Jr. and Hoffman Associates LLC from organizing, promoting, selling or marketing a tax scheme involving the use of CRATs. In addition, the court ordered Hoffman Associates LLC, the company allegedly used to promote the scheme, to disgorge $1.1 million and John Eickhoff Jr. to disgorge $400,000. The court previously entered injunctions against defendants John William Gray II and Damon Thomas Eisma stemming from their roles in this scheme. Each defendant agreed to the court orders. The case against two additional defendants for their roles in this scheme remains pending.
According to the United States’ amended complaint, defendants falsely claimed that customers following their CRAT scheme could sell property in a way that eliminated the federal income tax on the gain generated from the sale. The government alleged each defendant took part in one or more of the following steps involved in the scheme: (1) recruiting customers to contribute property to a CRAT (usually real property that has gained value over time); (2) unlawfully inflating (stepping-up) the cost basis in the property on tax documents; (3) selling the property and using the proceeds to purchase an annuity; and (4) falsely reporting the annuity payments received by the customers as tax-free distributions from the CRAT. The government alleged that the defendants promoted, sold, or established at least 70 CRATs, resulting in an estimated $40 million of unreported taxable income.
Abusive arrangements using Charitable Remainder Annuity Trusts remain a concern of the IRS, which recently warned taxpayers about the misuse of this trust arrangement as part of the IRS’s Dirty Dozen series.
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. 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 also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information. Taxpayers seeking assistance can access the IRS’s free directory of federal tax preparers.
In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and promoters. 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 on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Corvallis Sex Offender Sentenced to 15 Years in Federal Prison for Attempted Online Enticement of a ChildRead the Press Release
PORTLAND, Ore.—On May 30, 2023, a previously convicted sex offender residing in Corvallis, Oregon was sentenced to federal prison for attempting to entice a minor online and being a convicted felon in possession of a firearm.
Thomas Anthony Lanier, 24, a resident of Corvallis, was sentenced to 15 years in federal prison and a life term of supervised release.
According to court documents, in November 2019, Lanier, a convicted sex offender since he was 18, was charged in Sunnyside, Washington with second degree kidnapping and domestic violence after he tried to kidnap the one-year-old child of a woman he met online. Lanier is alleged to have grabbed the infant while the child’s mother was in the shower. When the woman ran outside and yelled for help, Lanier wrapped his arm around her neck and threatened to kill her. Lanier was later released pending trial in Yakima County Superior Court.
In June 2020, Lanier met a Keizer, Oregon, woman online. Lanier pressured the woman to solicit babysitting jobs on Craigslist so he could have access to children. Lanier later expressed his desire to have sex with the woman’s 12-year-old cousin who he had seen in a photo. After these exchanges, the woman reported Lanier to law enforcement.
On July 9, 2020, at the direction of a police detective from the Salem Police Department, the woman gave Lanier the address of a house in Salem, Oregon where she claimed her minor cousin lived. The house was, in fact, vacant and owned by the City of Salem. Lanier planned to meet the woman and her cousin at the residence, purchase alcohol with them, and engage in sexual activity with both of them. When Lanier arrived at the house, he was met by law enforcement and arrested.
On July 8, 2021, a federal grand jury in Portland returned a four-count indictment charging Lanier with attempting to entice a minor online, accessing with intent to view child pornography, illegally possessing a firearm as a convicted felon, and committing a felony offense involving a minor as a registered sex offender.
On January 5, 2023, Lanier pleaded guilty to attempting to entice a minor online and illegally possessing a firearm as a convicted felon.
This case was investigated by the FBI with assistance from the Keizer and Salem Police Departments. It was prosecuted by Gary Y. Sussman, Assistant U.S. Attorney for the District of Oregon.
Anyone who has information about the physical or online exploitation of children are encouraged to call the FBI at 1-800-CALL-FBI (1-800-225-5324) or submit a tip online at tips.fbi.gov.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Justice Department to combat the growing epidemic of child sexual exploitation and abuse. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Container Home Charlatans Sentenced to a Combined 34 Years in Federal PrisonRead the Press Release
EL PASO, Texas – Two men were sentenced in a federal court in El Paso Tuesday to 25 years and nine years in prison for wire fraud and money laundering.
According to court documents, Leslie Robert Burk, 55, of El Paso, and Ethan Sturgis Day, 59, of Idyllwild, California, conspired, engaged, and participated in defrauding customers/victims through a business, Atomic Container Homes, Incorporated (ACHI) and other similarly named businesses. As the principals of ACHI, Burk and Day, using the business website, enticed people into contracts for the manufacture of container homes and other shipping container products, many of which were never delivered and many of which were sub-par. The two were arrested following an investigation through which the FBI found multiple individuals who, as former clients of Burk and Day believed they had been defrauded. The investigation revealed that the co-conspirators defrauded at least 41 victims for a combined total of more than $2.5 million. Several people spent thousands of dollars and never received anything they contracted for.
The two defendants were named in various counts of a 33-count indictment filed in April 2019. A federal jury convicted Burk and Day on 23 counts and 22 counts, respectively, on June 22, 2022. At Tuesday’s sentencing hearings, Burk received a sentence of 25 years in federal prison. Day was sentenced to nine years in prison. A restitution hearing is currently scheduled for July 11.
“Claiming to own a legitimate business for the sake of defrauding unsuspecting victims is a reprehensible crime and one that my office will continue to prosecute in order to protect our citizens from fraud and financial exploitation,” said U.S. Attorney Jaime Esparza of the Western District of Texas. “This sentencing holds the defendants accountable for their fraudulent scheme while providing restitution to the victims. I appreciate the efforts of our partners at the FBI for their role in the investigation, ultimately leading to the successful outcome of this case.”
“Out of pure greed, Burk and his co-conspirator, Day, defrauded consumers of a basic and essential product which is providing homes to families. They victimized many hardworking people and businesses, not only from El Paso, but across the nation,” said Special Agent in Charge Jeffrey R. Downey of the FBI El Paso Field Office. “Their sentencing shows the FBI will not tolerate financial predators living off empty promises for their own personal gain, and we will seek justice for all financial fraud victims, regardless of whether they are located in El Paso or the rest of the country.”
The FBI investigated the case.
Assistant U.S. Attorney Stanley Serwatka prosecuted the case.
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Construction Company Operator Sentenced to Federal Prison for Role in Payroll Tax Evasion SchemeRead the Press Release
PORTLAND, Ore.—A Portland area construction company operator was sentenced to federal prison today for his role in a multiyear scheme to evade the payment of payroll and income taxes on the wages of construction workers.
Melesio Gomez-Rivera, 49, of Aloha, Oregon, was sentenced to 30 months in federal prison and three years’ supervised release. He was also ordered to pay $29.9 million in restitution to the IRS.
According to court documents, Gomez-Rivera owned and operated a residential construction company called Novatos Construction. From January 2014 until December 2017, Gomez-Rivera and several other construction company owners conspired with each other and David A. Katz, 47, of Tualatin, Oregon, the operator of Check Cash Pacific, Inc., a check cashing business with locations in the Portland area and Vancouver, Washington, to defraud the United States by facilitating under-the-table cash wage payments to construction workers. Their actions, individually and collectively, impeded and obstructed the IRS’s ability to compute, assess, and collect payroll and income taxes due on the cash wages.
To carry out the scheme, Gomez-Rivera and the other company owners cashed or had other individuals cash millions of dollars in payroll checks at various locations of Katz’s check cashing business, used the cash to pay construction workers under-the-table, and filed false business and payroll tax returns. In total, the group cashed approximately $192 million in payroll checks, causing a combined employment and individual income tax loss of $68 million.
On December 2, 2021, a federal grand jury in Portland returned a five-count indictment charging Gomez-Rivera, Katz and four other individuals with conspiring with one another to defraud the United States. Katz was additionally charged with four counts of filing false currency transaction reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
On March 1, 2023, Gomez-Rivera became the first of the six co-conspirators to plead guilty. All others are awaiting a 10-day jury trial scheduled to begin on December 5, 2023.
This case was investigated by IRS-Criminal Investigation. Assistant U.S. Attorneys Seth D. Uram and Gavin W. Bruce of the District of Oregon are prosecuting the case.