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12 April 2023
31 Year-Old Yakima Man Sentenced to 7 Years Imprisonment for Being a Felon in Possession of Firearms Stolen from Fish and Wildlife BuildingRead the Press Release
Yakima, Washington – On April 4, 2023, United States District Judge Mary K. Dimke sentenced
Alexander Scott Stevens, 31, a resident of Yakima, Washington, to seven years in federal prison after his conviction for being a Felon in Possession of Firearms. Stevens will serve a three-year term of court supervision after he is released from custody.According to information disclosed during court proceedings, on January 2, 2022, Yakima Police
Department (“YPD”) officers responded to an alarm that had been activated at the Washington
Department of Fish and Wildlife. Officers observed that someone had severed the chain link fence and cut a hole in the exterior wall of the building. A subsequent inventory revealed that 18 firearms and a suppressor had been stolen from the Washington Department of Fish and
Wildlife. A YPD forensic investigator was able to develop a palm print impression that had been left just above the hole in the exterior wall, and detectives confirmed that Stevens was the source of the palm print impression. Given the number of firearms involved, YPD referred the case to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and the case was worked jointly. On January 24, 2022, Stevens was taken into custody by YPD. A criminal complaint was filed in federal court and Stevens was taken into custody. On February 15, 2022, a federal
Grand Jury returned an Indictment charging Stevens with being a Felon in Possession of
Firearms.“This case highlights the force multiplier effects of local and federal law enforcement agencies working closely together,” remarked Vanessa R. Waldref, United States Attorney for the Eastern
District of Washington. “I commend YPD and ATF, whose hard work and effective investigation resulted in Mr. Stevens being quickly apprehended, and 18 stolen guns being removed from the hands of a convicted felon. The consistent collaboration of YPD and ATF have made our neighborhoods and communities in Eastern Washington safer and stronger.”“ATF will do what it takes to get stolen firearms off the streets,” said ATF Seattle Field Division
Special Agent in Charge Jonathan T. McPherson. “The brazen actions of Mr. Stevens truly justify this sentence. It was no small thing to break into a state facility by cutting a hole in the building or to steal more than a dozen firearms. As a convicted felon, Mr. Stevens was not legally permitted to possess firearms in the first place.”“Gun violence is a prevalent and continuing threat to society,” stated Yakima Police Department
Chief Matthew Murray. “As we have seen all across the country, violent offenders are using firearms to perpetrate violent crimes that range from robbery to murder. As a result of the remarkable collaboration between state and federal partners in the Eastern District, justice has again been served. I commend and continue to appreciate the partnerships between YPD, ATF, the Washington Department of Fish and Wildlife, and the U.S. Attorney’s Office.”This case was prosecuted under the Project Safe Neighborhoods (PSN) program. PSN is a federal, state, and local law enforcement collaboration to identify, investigate, and prosecute individuals responsible for violent crimes in our neighborhoods. The U.S. Attorney’s Office is partnering with federal, state, local, and tribal law enforcement to specifically identify the criminals responsible for violent crime in the Eastern District of Washington and pursue criminal prosecution.
This case was investigated by the Yakima Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Union Gap Police Department, and the Washington State Patrol.
This case was prosecuted by Assistant United States Attorney Todd Swensen.1:22-CR-2017-MKD
11 April 2023
Windsor Locks Man Who Victimized Teens Through Snapchat Pleads Guilty to Child Exploitation ChargesRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Michael J. Krol, Acting Special Agent in Charge, Homeland Security Investigations (HSI), Boston, announced that JUSTIN McKENNEY, 29, formerly of Windsor Locks, waived his right to be indicted and pleaded guilty today in Hartford federal court to child exploitation offenses.
According to court documents and statements made in Court, in October 2021, Glastonbury Police began investigating the sexual assault of a 13-year-old girl by an individual she met on Snapchat. The investigation revealed that McKenney, posing as a high school student and using the Snapchat username “keepingupg,” began communicating with the minor victim in September 2021, and he subsequently enticed her to engage in sexual activity. In pleading guilty, McKenney also admitted that he received child pornography from three other minor females between the ages of 13 and 17.
McKenney pleaded guilty to one count of enticement of a minor to engage in illegal sexual activity, which carries a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life, and one count of receipt of child pornography, which carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years. He is scheduled to be sentenced by U.S. District Judge Jeffrey A. Meyer in New Haven on July 11.
McKenney has been detained since his arrest on March 17, 2022.
This matter has been investigated by Homeland Security Investigations (HSI), the Glastonbury Police Department, the Windsor Locks Police Department, the Manchester Police Department, and the Connecticut Center for Digital Investigations, with the assistance of the Hudson (Mass.) Police Department. The case is being prosecuted by Assistant U.S. Attorney Nancy V. Gifford.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
West Plains Man Indicted for Stealing Timber from Mark Twain National ForestRead the Press Release
SPRINGFIELD, Mo. – A West Plains, Mo., man was indicted by a federal grand jury today for stealing timber from Mark Twain National Forest.
Justin Lee Massey, 39, was charged in an indictment returned by a federal grand jury in Springfield.
Today’s indictment alleges that Massey stole timber from federal property in Howell County, Mo., between Dec. 15, 2020, and Jan. 20, 2021. The indictment also includes a forfeiture allegation, which would require Massey to forfeit to the government any property obtained from the alleged violation, including a money judgment of $30,000.
The charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge 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. Attorney Patrick Carney. It was investigated by the U.S. Forestry Service.
Urologist Charged with Sexually Abusing PatientsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing today of a four-count Indictment charging DARIUS A. PADUCH, a New York–area urologist, with inducement of a person to travel to engage in unlawful sexual activity and inducement of a minor to engage in unlawful sexual activity for his yearslong sexual abuse of two victims who were his patients and who were minors during part of the period of abuse. PADUCH was arrested this morning and will be presented before U.S. Magistrate Judge Sarah L. Cave this afternoon. The case has been assigned to U.S. District Judge Ronnie Abrams.
U.S. Attorney Damian Williams said: “As alleged, for years, Darius Paduch abused the trust of patients, including minors, who saw him for sensitive medical problems. Paduch took advantage of his victims for his own deviant satisfaction. Thanks to this morning’s arrest, Paduch’s abuse of his patients ends today.”
FBI Assistant Director in Charge Michael J. Driscoll said: “The indictment unsealed today against Paduch, a New York-area doctor, details alleged systemic abuse of a number of patients, to include minors, over the course of several years. Sexual abuse of anyone at any age for any reason is a horrific crime that carries strict penalties. If you have been victimized by Darius Paduch in any way or have any additional information about his alleged illegal behavior, please call us at 1-800-CALL-FBI, or reach out to us at tips.fbi.gov.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
Over the course of several years, PADUCH sexually abused multiple male patients, including minor male patients, while conducting purported urological examinations in his capacity as a medical doctor employed by a prestigious medical institution in New York, New York (“Medical Institution-1”).
From at least in or about 2015 through at least in or about 2019, PADUCH, while working as a urologist, enticed and induced multiple victims to travel to his medical offices at Medical Institution-1, so PADUCH could, among other things, sexually abuse the victims. In or about 2019, PADUCH began practicing at a different hospital located in Long Island, New York (“Medical Institution-2”), where he continued to sexually abuse patients. PADUCH used his position as a urologist at prominent medical institutions in New York to make or attempt to make the victims believe that the sexual abuse he inflicted on them was medically necessary and appropriate, when, in fact, it was not. PADUCH often directed the victims to schedule follow-up visits, and he instructed victims to return to see him again. As a result, some of the victims attended many appointments with PADUCH over the course of multiple years, at which PADUCH repeatedly abused them.
After appointments, PADUCH sent certain victims — including minor victims — text messages from his personal cellphone. In those messages, he made inappropriate and sexual comments and jokes, and he directed the victims to schedule follow-up appointments or to visit his office after regular business hours.
As alleged, PADUCH induced two victims to travel to New York, New York, from or through another state to engage in unlawful sexual activity — in other words, his abuse of the victims. PADUCH also used a telephone and other means of interstate commerce to induce two minor victims to engage in the unlawful sexual activity.
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PADUCH, 55, of North Bergen, New Jersey, is charged with inducement of a victim (“Minor Victim-1”) to travel to engage in unlawful sexual activity, which carries a maximum sentence of 20 years in prison; inducement of a victim (“Minor Victim-2”) to travel to engage in unlawful sexual activity, which carries a maximum sentence of 20 years in prison; inducement of Minor Victim-1 to engage in unlawful sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and inducement of Minor Victim-2 to engage in unlawful sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Marguerite B. Colson, Elizabeth A. Espinosa, and Jun Xiang are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Two Men Charged with 2012 Drug-Related Murder in HartfordRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, Robert Fuller, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Hartford Police Chief Jason Thody today announced the unsealing of an indictment charging MELKUAN SCOTT, also known as “Mel,” “Young God,” “Young,” and “YG,” 32, and ARTHUR STANLEY, also known as “Wig,” 33, with the drug-related murder of Serafin Velez in Hartford on February 16, 2012.
On February 14, 2023, a federal grand jury in New Haven returned a two-count indictment charging Scott and Stanley with the kidnapping of Velez resulting in his death, and with causing the death of Velez through the use of a firearm. The indictment alleges that Scott and Stanley murdered Velez during and in relation to a drug trafficking crime, and that they did so deliberately, maliciously, and with premeditation.
Scott and Stanley, both formerly of Hartford, have been detained in federal custody since April 2014 and are currently serving sentences for other offenses. They each appeared yesterday before U.S. Magistrate Judge Thomas O. Farrish in Hartford and entered pleas of not guilty, and Judge Farrish ordered the indictment unsealed.
If convicted of the charges, Scott and Stanley face a mandatory sentence of life imprisonment, or death if the government seeks the death penalty in the matter.
U.S. Attorney Avery stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorneys A. Reed Durham and Robert S. Ruff.
Two Brothers Charged with Trafficking Fentanyl and MethamphetamineRead the Press Release
BOSTON – Two brothers have been indicted by a federal grand jury in Boston for allegedly conspiring to traffic large quantities of methamphetamine and fentanyl.
Noel Haro, 48, of Shirley and Marcos Haro, 38, of Sacramento, Calif., were indicted on one count of conspiracy to distribute and to possess with intent to distribute 50 grams or more of methamphetamine and 40 grams or more of fentanyl; two counts of distribution of and possession with intent to distribute 50 grams or more of methamphetamine; aiding and abetting; and one count of distribution of and possession with intent to distribute 40 grams or more of fentanyl; aiding and abetting. Marcos Haro was arrested on April 4, 2023 in the Eastern District of California and remains in federal custody. He will appear in federal court in Boston at a later date.
“Law enforcement listens to calls made from carceral facilities. Despite this known fact, we allege these brothers conspired together to distribute alarmingly significant amounts of fentanyl and methamphetamine in our Commonwealth. Both of these defendants are very much aware of the risks and harm involved with selling drugs, with Marcos having spent seven years in prison for possessing a controlled substance while armed with an assault weapon and Noel engaging in this conduct while incarcerated and serving a life sentence for drug distribution, conspiracy and money laundering,” said United States Attorney Rachael S. Rollins. “This brazen behavior will be met with the full force of federal government resources and prosecution.”
“Despite being locked up behind bars, Noel Haro is still an influential leader in a large-scale international gang that is heavily involved in drug, weapons, and human trafficking, and now stands accused of conspiring with his brother, Marcos, to traffic large amounts of deadly fentanyl and methamphetamine into Massachusetts,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “These latest arrests in connection with ‘Operation Raising Arizona’ are a significant blow to this drug trafficking organization that has thrived on peddling poison, resulting in pain, violence, and destruction in our communities.”
“Partnerships with public safety agencies play an important part of the Department's mission and are crucial in protecting our communities,” said the Department of Correction’s Commissioner Carol Mici. “The Massachusetts Department of Correction is extremely proud of its investigators from the Office of Investigative Services and their role in this investigation."
According to the charging documents, Noel Haro is a member and influential leader of the “Border Brothers” gang – a large-scale international gang known to be heavily involved in drug, weapon and human trafficking in Southern Arizona with a presence in Nogales, Mexico and the Arizona prison system. Noel Haro is currently serving a life sentence at a Massachusetts Department of Correction facility in connection with convictions in Arizona for drug distribution, conspiracy and money laundering.
Noel Haro was previously serving his sentence at a facility in Arizona but was transferred to serve his sentence in Massachusetts upon being deemed a security concern due to his alleged influence over other inmates and repeated introduction of cell phones and narcotics into Arizona facilities.
Beginning in or about April 2019, and investigation began into Noel Haro’s alleged attempts to facilitate the trafficking of narcotics to Massachusetts during his inmate phone calls. Specifically, during his inmate calls, Noel Haro allegedly attempted to solicit friends and family members to transport narcotics from Arizona to Massachusetts on his behalf. In April 2022, recorded inmate calls allegedly indicated that Noel Haro worked with his brother, Marcos Haro, to arrange drug deals outside of prison.
According to court documents, in June 2022, Marcos Haro agreed to supply an individual with samples of multiple narcotics – including fentanyl and methamphetamine. It is alleged that Marcos Haro later mailed the narcotics to the individual concealed in a purple teddy bear inside a postal package. It is alleged that, on July 13, 2022, the package was retrieved and found to contain suspected powdered fentanyl, five fentanyl pills, methamphetamine and approximately 3.1 grams of suspected heroin. On July 25, 2022, during a recorded inmate call, Noel Haro and Marcos Haro allegedly discussed selling one pound of methamphetamine to the same individual and agreed on a sale price of $5,000. It is alleged that, on July 27, 2022, a package sent from Marcos Haro was retrieved and found to contain approximately 446.6 grams of 99% pure methamphetamine.
During a recorded inmate call on Aug. 10, 2022, Noel Haro allegedly directed Marcos Haro to arrange the sale of five pounds of methamphetamine to the individual. Later, on Sept. 12, 2022, two packages allegedly sent from Marcos Haro were retrieved and each found to contain approximately 892.3 grams of 86% pure methamphetamine and approximately 1,320.2 grams of 95% pure methamphetamine.
In October 2022, the individual communicated with Marcos Haro to arrange the purchase of 2,000 fentanyl pills. On Oct. 16, 2022, Noel and Marcos Haro allegedly discussed the deal and pricing of the fentanyl pills during recorded inmate calls and on Nov. 17, 2022, Marcos sent the individual a photograph of a United States Postal Service shipping box and label, and a photograph of a shipping receipt. On Nov. 20, 2022, a package allegedly sent by Marcos Haro to the individual was seized and found to contain approximately 2,000 blue pills which tested positive for approximately 215.3 grams of fentanyl.
According to court documents, on April 2, 2023, Marcos Haro was arrested in Sacramento, Calif. following a motor vehicle stop. A 9mm handgun with eight live rounds in the magazine and approximately 2.9 grams of suspected fentanyl that field tested positive for the presence of opiates, were allegedly found during a subsequent search of Marcos Haro’s vehicle. Marcos Haro has a criminal history that includes a conviction in 2016 for possession of a controlled substance while armed and illegal possession of an assault weapon with a large capacity magazine, for which he was sentenced to seven years in prison.
The charge conspiracy to distribute and to possess with intent to distribute 50 grams or more of methamphetamine and 40 grams or more of fentanyl provides for a sentence of at least 10 years and up to life in prison, at least five years and up to a lifetime of supervised release and a fine of up to $10 million. The charges of distribution of and possession with intent to distribute 50 grams or more of methamphetamine; aiding and abetting each provide for a sentence of at least 10 years and up to life in prison, at least five years and up to a lifetime of supervised release and a fine of up to $10 million. The charge of distribution of and possession with intent to distribute 40 grams or more of fentanyl; aiding and abetting provides for a sentence of at least five years and up to 40 years in prison, at least four years and up to a lifetime of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
U.S. Attorney Rollins, FBI SAC Bonavolonta and Commissioner Mici made the announcement today. Assistant U.S. Attorneys Alathea E. Porter and Charles Dell’Anno of Rollins’ Narcotics & Money Laundering Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Troy Man Pleads Guilty to Mail Fraud in Federal CourtRead the Press Release
Montgomery, Alabama – Today, Jesse Morgan Hinson, 36, formerly of Troy, Alabama, pleaded guilty to mail fraud, announced United States Attorney Sandra J. Stewart. The Alabama Securities Commission provided valuable assistance in the investigation and prosecution of the case.
According to the plea agreement and other court documents, in 2022, Hinson engaged in schemes to defraud multiple victims by falsely representing himself to be a man of great wealth with the ability to conduct profitable real estate transactions. He convinced victims to give him money based on promises of future financial benefits. However, Hinson had no significant assets and intended to take his victims’ money for his own use. Hinson also failed to let his victims know that he had prior convictions for securities fraud, including convictions on Alabama securities fraud charges as recently as March and April of 2022. Hinson was in custody of the Alabama Department of Corrections as of April 30, 2022.
In his plea agreement, Hinson specifically admitted that, in March of 2022, he defrauded an individual in Butler County by claiming that Hinson could finance real estate purchases for a 10 percent down payment. This was not true. Hinson obtained approximately $66,500.00 from the Butler County victim despite Hinson having no ability to finance real estate purchases, and none of the proceeds were used for the victim’s benefit. Instead, Hinson used much of these funds to pay personal expenses and to pay the debts of a woman with whom he had a romantic relationship. After the Butler County victim began demanding his money back, to discourage him from speaking with law enforcement, Hinson, posing as a New York attorney, telephoned the victim, falsely stated that Hinson would be receiving the proceeds of an $11 million loan, and then threatened to bankrupt the victim by opening competing businesses.
Additionally, in April of 2022 and continuing after his incarceration on April 30 of that year, Hinson, as he admitted during his plea hearing, defrauded two other individuals from Tuscaloosa. Hinson told the victims that he would provide them with the profits from the sale of land that Hinson claimed to own to Auburn University if the victims would provide money upfront for taxes. During the course of discussions with the Tuscaloosa victims, Hinson had someone make false misrepresentations to the victims claiming that Hinson controlled assets in the range of $2 to $3 billion. This claim was also untrue. The Tuscaloosa victims provided multiple payments to Hinson’s attorney and to Hinson’s girlfriend totaling $124,028.80.
A sentencing hearing will be scheduled in the coming months. At that hearing, Hinson will face a maximum sentence of 20 years in prison, along with substantial fines and restitution.
“Mr. Hinson has a checkered history of engaging in securities fraud schemes,” said United States Attorney Stewart. “I commend the work of the investigators and prosecutors who unraveled the brazen schemes at issue in this case, thus protecting the public from falling victim to Hinson’s lies.”
“Jesse Morgan Hinson has worked hard to build a horrible reputation of deceiving folks,” said Alabama Securities Commission Chief Deputy Director Amanda Senn. “We encourage everyone to research who you invest your hard-earned money with to avoid career criminals like Hinson, who has left a path of financial devastation and destruction in his wake.”
The United States Secret Service and the Alabama Securities Commission investigated the case. Assistant United States Attorney Stephen K. Moulton and Special Assistant United States Attorneys Andrew O. Schiff and Amanda Senn of the Alabama Securities Commission are prosecuting the case.
Third Defendant in Pleads Guilty in Double Armed Carjacking CaseRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Dayon Hackett, 20, of Philadelphia, PA, pleaded guilty today to one count of carjacking and one count of attempted carjacking. Hackett and his co-defendants, Jaheym Newsome, 20, of Philadelphia, and Taquan Mershon, 19, of Philadelphia, were charged by Superseding Indictment with these offenses in connection with an armed carjacking they committed on December 22, 2021, in the Bridesburg section of Philadelphia, and an attempted armed carjacking in South Philadelphia later that same day. Newsome and Mershon pleaded guilty to these same charges on March 20, 2023.
As detailed in the Criminal Complaints previously filed in this case, in the first incident, Hackett, Newsome, and Mershon carjacked a man at gunpoint as he prepared to head to work in early morning hours of December 22, 2021. The three men then took the car they stole in Bridesburg and drove it South Philadelphia, where they attempted to carjack a man who was coming home from work and looking for a parking spot. Hackett and Newsome opened the door to that vehicle and attempted to pull the victim out of the car. Upon observing a firearm on the victim’s lap, Hackett and Newsome opened fire on the victim, striking him multiple times. The victim returned fire and Hackett was struck multiple times. Hackett and Newsome then returned to the waiting vehicle that Mershon was driving, and Mershon and Newsome dropped Hackett on the floor of a nearby emergency room, fleeing in the vehicle they had carjacked earlier that morning. All three individuals were subsequently identified, charged by federal Criminal Complaint, and taken into custody. A grand jury returned the Superseding Indictment on September 13, 2022.
“Today’s guilty plea is another fine example of the successful partnership that is the Philadelphia Carjacking Task Force,” said U.S. Attorney Romero. “If you commit a violent offense like a gunpoint carjacking, you can expect the federal authorities to come knocking at your door.”
“ATF is on the frontline in the fight against violent crime, particularly armed carjackings,” said Eric DeGree, Special Agent in charge of ATF’s Philadelphia Field Division. “While we hope this case deters those willing to use gun violence against American citizens, ATF investigators stand ready to work with our local, state and federal partners whenever gun crime occurs in our community.”
The swift and relentless action to investigate and federally charge these defendants is the result of the Philadelphia Carjacking Task Force, which is comprised of members of the U.S. Attorney’s Office’s Violent Crime Unit; the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Philadelphia Police Department. The goal of the Taskforce is to stem the wave of armed carjackings and violent crimes through investigative and enforcement techniques meant to identify and refer for federal prosecution all who terrorize innocent victims through commission of these offenses within Philadelphia and surrounding areas.
After pleading guilty, Newsome is set to be sentenced on July 12, 2023, Mershon is set to be sentenced on July 24, 2023, and Hackett is set to be sentenced on August 14, 2023, before the Honorable Nitza I. Quinones-Alejandro.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Robert E. Eckert.
Syracuse Man Sentenced to 138 Months for Distributing Fentanyl and Unlawfully Carrying a FirearmRead the Press Release
SYRACUSE, NEW YORK – Maurice Owens, age 22, of Syracuse, was sentenced today to serve 138 months in prison following his conviction for conspiring to distribute and possess with intent to distribute fentanyl, distributing and possessing with intent to distribute fentanyl, and using and carrying a firearm while drug-trafficking announced United States Attorney Carla B. Freedman and John B. DeVito, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
During his prior guilty plea, Owens admitted that he sold fentanyl to a customer on December 2, 2020, and December 7, 2020. On December 10, 2020, Owens was sitting in a car in a parking lot near where he previously had sold fentanyl. He saw police officers approaching, exited the car, and fled while carrying a loaded “ghost gun” that did not bear any serial number. Owens also had in his possession at the time three glassine envelopes containing fentanyl. Owens previously was convicted of a felony offense in state court and was prohibited under state law from possessing the gun.
From approximately December 10, 2020, until February 27, 2021, Owens was detained in a local jail. While incarcerated, Owens participated in multiple calls in which he arranged for associates to supply heroin and fentanyl to the customers to whom Owens no longer could sell because he was in jail. Owens received a share of the proceeds from these sales. Owens and his associates sold at least 81 grams of fentanyl.
United States District Judge Glenn T. Suddaby also sentenced Owens to a four-year term of supervised release to begin after he serves his term of imprisonment and ordered him to pay a forfeiture judgment in the amount of $6,200, which represented the proceeds from drug sales.
This case was investigated by ATF and the Syracuse Police Department Criminal Intelligence Section. Assistant U.S. Attorney Thomas Sutcliffe and former Assistant United States Attorney Andrew Beaty prosecuted this case as 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.
Suburban Nurse Pleads Guilty to Tampering with Patient MedicationsRead the Press Release
CHICAGO — A suburban Chicago nurse has pleaded guilty in federal court to one count of tampering with a consumer product.
SARAH DIAMOND, 30, of Woodstock was employed as the Assistant Director of Nursing at a Chicago-area medical rehabilitation center where she was responsible for dispensing medications to patients. In July and August 2021, Diamond removed morphine from bottles prescribed to patients and replaced it with another liquid, knowing the diluted substance would be dispensed to the patients. Diamond removed the morphine with reckless disregard and extreme indifference for the risk that the patients would be placed in danger of bodily injury.
Diamond diluted a bottle of morphine intended for one of the patients, so that it contained only approximately 26% of the declared amount of morphine; and diluted a bottle of morphine intended for another patient so that it contained only approximately 53% of the declared amount of morphine. Diamond then administered liquid morphine to these patients using the diluted bottles, withholding the remainder of the pain medication intended for them for her own personal use. In total, Diamond removed liquid morphine intended for use by at least five patients at the rehabilitation center, each of whom had been prescribed liquid morphine to manage their pain.
A sentencing date has not yet been scheduled. Diamond faces up to a maximum of ten years in federal prison.
The plea is announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; and Ronne G. Malham, Special Agent-in-Charge of the Chicago Field Office of the U.S. Food and Drug Administration, Office of Criminal Investigations. Valuable assistance was provided by the Crystal Lake Police Department. The government is represented by Assistant U.S. Attorney Heidi Manschreck.
Springfield Man Sentenced to 35 Years for Child Sexual Abuse, Child PornographyRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Mo., man was sentenced in federal court today for sexually assaulting a child victim and recording the abuse on his cell phone.
William Shane Berg, 50, was sentenced by U.S. Chief District Judge Beth Phillips to 35 years in federal prison without parole. The court also sentenced Berg to spend the rest of his life on supervised release following incarceration.
On June 2, 2022, Berg pleaded guilty to one count of the sexual exploitation of a minor and one count of receiving child pornography over the internet. Berg admitted that he sexually abused a minor victim, identified in court documents as John Doe 2.
Law enforcement officers executed a search warrant at Berg’s residence on April 12, 2020, and seized a laptop computer, VHS tapes, CDs, two laptop hard drives, a portable hard drive, a CD writer, USB drives, a camera and media card, three Chromebooks, and a cell phone. Investigators found multiple files on the cell phone and the laptop computer that depicted Berg sexually abusing John Doe 2. They also found additional files of child pornography that Berg downloaded from the internet.
When the victim was interviewed at the Springfield Child Advocacy Center, he told investigators that Berg started sexually abusing him when he was in the fifth grade. He said Berg took videos on his cell phone during the sexual abuse.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Southwest Missouri Cyber Crimes Task Force, the FBI and the Springfield, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
South Florida Marketer Sentenced to Prison Term for Buying and Selling over 2.6 Million Medicare Beneficiary Identification NumbersRead the Press Release
MIAMI – A Palm Beach County man was sentenced on Friday in federal court to 41 months in prison following his earlier guilty plea to buying and selling more than 2.6 million Medicare beneficiary identification numbers, along with other personal identifiers.
In one of the first prosecutions brought under The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Charles William McElwee, 36, was sentenced to 41 months imprisonment following his guilty plea to one count of conspiracy to violate MACRA by buying and selling beneficiary identification numbers.
Among other things, MACRA makes it illegal to buy, sell, or distribute without lawful authority Medicare or Medicaid beneficiary numbers. (Title 42, United States Code, Section 1320a-7b(b)(4)).
As part of his plea, McElwee admitted that he and his co-conspirators used “data mining” and “social engineering techniques” to collect Medicare beneficiary information, which McElwee then advertised and sold online. The trafficked information included beneficiary names, addresses, dates of birth, social security numbers, and Medicare beneficiary identification numbers. According to the indictment, some of the illicit transactions involved foreign actors, including sellers in the Philippines and buyers in Egypt.
U.S. Attorney Markenzy Lapointe for the Southern District of Florida; Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Miami Region; and Special Agent in Charge Jeffrey B. Veltri of the FBI, Miami Field Office, announced the sentence.
HHS-OIG Miami and FBI Miami investigated the case. Assistant U.S. Attorney Jon Juenger prosecuted it. Assistant U.S. Attorney Daren Grove is handling asset forfeiture.
Medicare beneficiaries who believe they have been a victim of medical identity theft can file a complaint with the HHS-OIG hotline by calling 1-800-HHS-TIPS (800-447-8477) or with the Centers for Medicare and Medicaid Services by calling 1-800-MEDICARE (1-800-633-4227).
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov under case number 22-cr-60202.
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Sophisticated Sinaloa Cartel Money Laundering Organization DismantledRead the Press Release
NEWS RELEASE SUMMARY – April 11, 2023
SAN DIEGO – A two-year investigation by FBI and DEA has resulted in the indictment of twelve people, the takedown of a transnational criminal organization that allegedly laundered at least $16.5 million for the Sinaloa cartel, and the rescue of two victims of an extortion plot.
Defendant Cristian Amaya Nava was the first to be sentenced in federal court yesterday to 60 months in prison in connection with the extortion and money laundering charges. In his plea agreement, he admitted that in February of 2021, he forced two victims to withdraw funds from their own accounts to repay a drug debt, under threat of harm to themselves and their families. In addition, he admitted that he laundered over $2.4 million for the cartel.
According to the superseding indictment, an investigation was initiated in the fall of 2020 after FBI agents identified a complex money laundering organization allegedly led by Enrique Daan Esparragoza Rosas of Culiacan, Sinaloa, Mexico. The indictment said Esparragoza’s organization used a network of shell companies incorporated in Wyoming to launder millions of dollars in cash belonging to the Sinaloa Cartel. The shell companies and a sophisticated financial network were created and overseen by Luis Ramirez, a U.S. citizen residing in Mesa, Arizona, the indictment said.
Ramirez and Esparragoza allegedly directed and facilitated employees of the money laundering organization to travel to cities throughout the United States to pick up bulk cash belonging to narcotics traffickers. The employees picked up the bulk cash in Chicago, Omaha, Boston, New York City, Baltimore, Charlotte, Philadelphia and other cities. Narcotics traffickers delivered bulk cash in amounts of up to $200,000 to the employees in hotel rooms and parking lots. Following the delivery of the illegal money, the criminal organization laundered the funds through the shell companies and then transferred the laundered funds to bank accounts in Mexico. In total, dozens of bank accounts used by the organization were targeted, resulting in the seizure of $1 million from those accounts plus about $197,430 in bulk cash.
In November 2020, the FBI worked with the DEA Chicago Field Office to conduct an operation using information from the investigation which resulted in the seizure of 368 pounds of crystal methamphetamine and 10 kilograms of heroin, allegedly from defendants Sugey Caro Salazar and Idsel Valenzuela in LaPorte, Indiana. They are accused of delivering cash to an employee of the money laundering organization.
According to the indictment, funds laundered by the organization were used to purchase a Volvo tractor-trailer that FBI agents seized near Las Vegas; and aircraft and aircraft engines for export to Mexico, among other things.
In the extortion plot, the FBI’s efforts resulted in a successful rescue of two victims who were being extorted by the money laundering organization in February 2021. Prior to the extortion, one of the victims, an employee of the money laundering organization, began stealing illicit funds from a bank account that he controlled for the organization. Under pressure from the organization to return the stolen funds, the victim and his family member concocted an unsuccessful scheme to repay the debt: He stole an additional $30,000 from the money laundering organization to purchase a tortilla machine, intending to resell it for a profit. The pair owed a substantial debt to the money laundering organization.
According to the indictment, when Esparragoza and Ramirez learned of the theft, they conspired to threaten and extort the pair to repay the funds. Esparragoza sent defendant Amaya Nava to threaten the men and their families. Amaya Nava has admitted that he drove the two men around Imperial and San Diego County to collect money from bank accounts they controlled. According to admissions in Amaya Nava’s plea agreement, Esparragoza also directly threatened the men and their families during several phone conversations that day, telling them that two truckloads of men from Tijuana would “take care of them” if they did anything stupid.
The FBI learned of the ongoing extortion after being alerted by an informant and began tracking the victims and Amaya Nava’s movements. Amaya Nava drove with the men from El Centro to San Diego in an effort to collect additional money from an associate of one of the victims. FBI agents coordinated with the National City Police Department to conduct a traffic stop wherein Amaya Nava was arrested and the two victims were rescued.
To date the investigation has resulted in the arrests of Amaya Nava and Luis Ramirez, who were charged with extortion and money laundering charges; Ivan Correia Zamora, Ricardo Torres, Kimberlly Reyes, Hector Francisco Vizcaino Moreno, Luis Armando Avila, and Cheliann Rivera Vazquez who are facing money laundering charges; Melvin Rosado (aka) Cristian Cruz Polanco has been arrested on money laundering and aggravated identity theft charges. Sugey Caro Salazar and Idsel Valenzuela have been arrested and charged with narcotics trafficking and money laundering. Enrique Daan Esparragoza Rosas has been charged with money laundering and extortion offenses. Enrique Daan Esparragoza Rosas has been charged with money laundering and extortion offenses. All but two defendants are pending trial. Enrique Daan Esparragoza Rosas and Ivan Correia are fugitives.
“Mexican drug cartels cannot succeed without money launderers,” said U.S. Attorney Randy Grossman. “Our office will prosecute not only those who traffic in drugs but also those who enable the drug traffickers through sophisticated shell corporations and multiple bank accounts.” Grossman thanked the prosecution team and the FBI for their excellent work on this case.
“This operation highlights how the FBI and our law enforcement partners are joining efforts to dismantle organized, violent, criminal enterprises,” said Special Agent in Charge Stacey Moy of the FBI San Diego Field Office. “These enterprises create a space for cartels to exist and we will spare no resources when it comes to addressing the criminals who enable the flow of poison to our communities.”
“Drug cartels exist to profit from the sale of poison to our communities,” said Special Agent in Charge Shelly Howe. “The DEA and our law enforcement partners will continue to target and dismantle money laundering organizations operating in the Imperial Valley that facilitate the movement of drug proceeds from the United States to Mexico-based drug cartels.”
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS Case Number 22cr2185-BAS
Enrique Daan Esparragoza Rosas Age: 37 Culiacan, Sinaloa, Mexico
Luis Ramirez Age: 41 Mesa, Arizona
Ricardo Torres Age: 30 El Centro, California
Kimberlly Reyes Age: 24 Mexicali, Mexico
Hector Francisco Vizcaino Moreno Age: 33 Calexico, California
Cristian Jose Polanco Age: 52 Philadelphia, Pennsylvania
Cheliann Rivera Vazquez Age: 29 Philadelphia, Pennsylvania
Luis Armando Avila Age: 22 Ontario, CA
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison and $500,000 fine
Esparragoza Rosas and Luis Ramirez - Only
Hobbs Act Extortion - Title 18, U.S.C., Section 1951(a)
Maximum penalty: Twenty years in prison and $250,000 fine
Cristian Jose Polanco – Only
Title 18, U.S.C., Section 1028A(a)(1) – Aggravated Identity Theft
Maximum penalty: Two years in prison and $250,000 fine
Case Number 21cr1693
Cristian Amaya Nava Age: 37 Calexico, CA
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison and $500,000 fine
Hobbs Act Extortion - Title 18, U.S.C., Section 1951(a)
Maximum penalty: Twenty years in prison and $250,000 fine
Case Number 22cr1477
Ivan Correia Zamora Age: 37 San Diego, California
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison and $500,000 fine
Case Number 22cr0612 and 22cr0776
Sugey Caro-Salazar Age: 46 La Porte, Indiana
Idsel Valenzuela Age: 27 La Porte, Indiana
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison and $500,000 fine
Conspiracy to Distribute Methamphetamine – Title 21, U.S.C., Section 846 and 841(a)(1)
Maximum penalty: Life in prison; mandatory minimum 10 years in prison and $10,000,000 fine
AGENCIES
Federal Bureau of Investigation
Drug Enforcement Administration
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Social Security Benefit Fraud Ring Participant from Florida Sentenced to PrisonRead the Press Release
SACRAMENTO, Calif. — Jenice Nicholas, 35, of Pompano Beach, Florida, was sentenced today to one year and one day in prison for her participation in a conspiracy to steal from the Social Security Administration (SSA), U.S. Attorney Phillip A. Talbert announced.
According to court documents, between February 2018 and June 2021, Nicholas participated in a conspiracy that sought to steal Social Security benefits intended for beneficiaries. Her co‑conspirators contacted SSA customer service representatives posing as Social Security beneficiaries by using personally identifiable information. They would convince the customer service representative to change the direct deposit account number associated with the true beneficiary’s account to that associated with drop accounts, i.e., expendable accounts used to funnel or transfer proceeds of a crime. For many of the direct deposit account changes that her co-conspirators caused, the SSA deposited monthly payments into the drop accounts, thus depriving the actual beneficiaries of their monthly benefits.
Debit cards connected to these drop accounts were then mailed to Nicholas and other co‑conspirators. On several occasions, Nicholas withdrew the stolen Social Security benefit payments from the drop accounts and deposited at least a portion of the money into one or more bank accounts that were accessible to her co-conspirators. The loss to the SSA and the United States resulting from the conspirators’ offenses exceeded $234,000. As part of her sentence, Nicholas was also ordered to pay $234,378 in restitution to the SSA.
This case was the product of an investigation by the SSA’s Office of the Inspector General and the U.S. Postal Inspection Service. Assistant U.S. Attorney Dhruv M. Sharma prosecuted the case.
Sioux Falls Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Karen E. Schreier has sentenced a Sioux Falls, South Dakota, man convicted of Failure to Register as a Sex Offender. The sentencing took place on April 10, 2023.
Steven Flood, age 38, was sentenced to two years in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Flood was indicted by a federal grand jury in November of 2022. He pleaded guilty on January 17, 2023.
The conviction stems from Flood failing to register as a sex offender as required by federal law between June 15, 2022, and August 4, 2022. Flood had previously been convicted of a sex offense in federal court which requires him to register for the rest of his life.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Jeffrey C. Clapper 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 the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Flood was immediately remanded to the custody of the U.S. Marshals Service.
San Antonio Man Sentenced for Assault on National Park Service RangerRead the Press Release
SAN ANTONIO – A San Antonio man was sentenced in a federal court in San Antonio today to three months in prison and one year of supervised release for assault on a federal officer.
According to court documents, Daniel Ignacio Lizcano, 26, resisted arrest during an encounter with a National Park Service Ranger at the San Antonio Missions National Historic Park. Lizcano had been reported along with a female for suspicious activity at the San Jose Visitor Center bathroom within the park and was located with a vape tool and glass pipe. During an initial interview at the scene, Lizcano began to reach into his pocket, where a personal stun gun was later located. Lizcano refused to follow the park ranger’s instructions to drop what was in his hands, the park ranger attempted to place him under arrest and a struggle ensued. The park ranger called for support from additional officers and received assistance from a civilian passerby to gain control of Lizcano. Lizcano pleaded guilty March 28 to one count of assault on a federal officer.
“Our national parks are protected land where everyone should be able to enjoy the beauty of America and the unique heritage of the region,” said U.S. Attorney Jaime Esparza of the Western District of Texas. “I appreciate the efforts our law enforcement partners at the National Park Service make to keep our parks safe, accessible and welcoming to all.”
"National Park Service law enforcement rangers serve a critical visitor and resource protection role, and as Superintendent of San Antonio Missions National Historical Park, I am committed to ensuring the safety of our employees and visitors,” said Christine Jacobs, Superintendent of San Antonio Missions National Historical Park. “The National Park Service appreciates the support from the United States Attorney's Office through prosecution of this individual who assaulted a federal officer and for the court holding him accountable.”
The National Park Service investigated the case.
Assistant U.S. Attorney Fidel Esparza III prosecuted the case.
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Sacramento Attorney and Filer of ADA Lawsuits Sentenced for Filing False Tax ReturnRead the Press Release
SACRAMENTO, Calif. — Scott Norris Johnson, a Sacramento attorney and filer of thousands of disability discrimination lawsuits, was sentenced today to 18 months home detention as part of a 30-month term of probation, and ordered to pay $250,000 in restitution and a $50,000 fine, for filing a false tax return on which he underreported the income he earned from many of those lawsuits, U.S. Attorney Phillip A. Talbert and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division announced.
The sentence included the terms that while on probation Johnson may not reapply for reinstatement to the California Bar, and that during the period of home detention he may not leave home for the purpose of seeking violations of the ADA or Unruh Act in order to file suits in federal or state courts.
According to court documents and statements made in court, Johnson, 61, of Carmichael, owned and operated Disabled Access Prevents Injury Inc. (DAPI), a legal services corporation. First using DAPI, and later using a law firm, Johnson filed thousands of lawsuits in the Eastern District of California and elsewhere under the Americans with Disabilities Act of 1990 and related California statutes, naming himself as the plaintiff.
Under the Small Business Job Protection Act of 1996, payments related to lawsuit settlements or awards are taxable unless paid on account of personal physical injury or physical sickness. Johnson, who worked as an attorney at the IRS earlier in his career, was required to report the taxable portion of the lawsuit settlements and awards he received. He nonetheless intentionally underreported this income on his 2012, 2013, and 2014 tax returns. By understating the lawsuit settlements and awards, Johnson and DAPI paid little to no income tax for tax years 2012, 2013 and 2014. Johnson caused a loss to the IRS of more than $250,000.
This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Katherine T. Lydon and Assistant Chief Matthew J. Kluge of the Tax Division prosecuted the case.
Richmond man convicted for making illegal referralsRead the Press Release
HOUSTON – A federal jury has returned a guilty verdict against a 44-year-old health care marketer in a conspiracy to pay and receive health care kickbacks, announced U.S. Attorney Alamdar S. Hamdani.
The jury deliberated for 15 minutes following a two-day trial before finding Patrick Osemwengie, Richmond, guilty of a one-count conspiracy to pay and receive kickbacks.
“Health care peddlers like Osemwengie prey on the elderly and are part of the larger health care fraud problem,” said Hamdani. “Illegal kickbacks and related crimes damages Medicare’s ability to help those that truly need it. We will continue to prosecute these individuals and work to preserve the system designed to protect and insure our nations’ most vulnerable citizens.”
At trial, the jury heard from witnesses from Ebra Home Health who testified Osemwengie would sell them Medicare patients. He charged $500 a kickback for an initial home health certification and a $250 kickback for a recertification.
A Medicare representative testified that Medicare prohibits payment of kickbacks for home health services.
The jury also heard from an elderly Medicare beneficiary who explained how Osemwengie paid him money to sign up for home health care companies including Ebra Home Health. He testified he was not able to get home health when he actually needed it because of the past fraudulent billings Osemwengie helped facilitate.
Evidence revealed Osemwengie received $13,000 in kickback payments from Ebra Health Care Services.
The defense attempted to convince the jury Osemwengie was being paid $50 an hour for passing out flyers and not that the money was a result of kickbacks. However, the owner of Ebra Home Health refuted that assertion at trial and testified Osemwengie was paid per patient, in violation of the anti-kickback statute. The jury did not believe the defense and found Osemwengie guilty as charged.
U.S. District Judge Sim Lake presided over the trial and has set sentencing for July 7. At that time, Osemwengie faces up to five years in federal prison as well as a possible $250,000 maximum fine.
Osemwengie was permitted to remain on bond pending that hearing.
The Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services - Office of Inspector General and FBI conducted the investigation. Special Assistant U.S. Attorney Abdul Farukhi and Assistant U.S. Attorney Christian Latham prosecuted the case.
Return Preparer and Former Owner of National Tax Preparation Franchise Pleads Guilty to Tax EvasionRead the Press Release
A Georgia man pleaded guilty today to evading the proper assessment of his personal federal income taxes.
According to court documents, from 1999 to 2021, Samir Patel of Statesboro, Georgia, was a tax return preparer at a national return preparation business. In 2015, Patel purchased a franchise of the business in Claxton, Georgia. As the owner, he hired, trained and supervised tax preparers, and continued to prepare returns for customers. Patel, however, willfully filed false income tax returns that underreported his income and evaded proper assessment of his personal taxes for years 2015, 2016, and 2017.
He faces a maximum penalty of five years in prison, as well as a period of supervised release, restitution and monetary penalties. U.S. District Court Chief Judge J. Randal Hall for the Southern District of Georgia will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Jill E. Steinberg for the Southern District of Georgia made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Matthew C. Hicks and Richard J. Hagerman of the Justice Department’s Tax Division and Assistant U.S. Attorney John P. Harper III of the Southern District of Georgia are prosecuting the case.
Restaurateur Sentenced to 57 Months in Prison for over $6 Million Pandemic Loan Fraud and Interstate ThreatsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that restaurateur BESIM KUKAJ was sentenced to 57 months in prison for orchestrating a sprawling loan fraud scheme, including while he was on pretrial release, whereby he fraudulently sought at least $6.14 million and received $1.5 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic. KUKAJ was also sentenced for attempting to intimidate a creditor as part of an interstate threats scheme with his already sentenced co-defendant Abduraman Iseni, a/k/a “Diamond.” U.S. District Judge Andrew L. Carter imposed today’s sentence.
U.S. Attorney Damian Williams said: “Manhattan restaurateur Besim Kukaj took advantage of the hardships created by the COVID-19 pandemic and the federal government’s efforts to help those in need by lining his own pockets with seven figures of illegally obtained funds. He did this out of pure greed, sending some of this money to a Florida real estate developer and using it to buy luxury items from Cartier and Hugo Boss. He even continued to commit the same crimes while he was on bail. And he didn’t stop there. He directed his co-conspirator to physically threaten a victim to whom he owed money. For his brazen crimes, Kukaj will serve meaningful time in prison.”
According to court filings and statements made in court proceedings:
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Small Business Administration’s Paycheck Protection Program (“PPP”) and additional billions for the separate Economic Injury Disaster Loan program (“EIDL”). Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined in significant part by the number of employees employed by the business and their average payroll costs. The amount of a loan under the EIDL program is determined in part by a formula based on the date the borrower began operating and the borrower’s gross revenue and cost of goods sold during a period before the pandemic. The loans can be used only for working capital and other normal operating expenses. Businesses applying for loans under the PPP and EIDL program must confirm the accuracy of their loan statements.
From at least in or about April 2020 through at least in or about July 2020, KUKAJ, working with others, submitted applications for loans under the EIDL program and the PPP to multiple banks on behalf of various restaurants KUKAJ or a relative of his owned. He did so on behalf of restaurants that were no longer operating or that had far less revenue and far fewer employees than were listed on the loan applications. KUKAJ and his co-conspirators applied for dozens of loans, totaling at least $6.14 million, from numerous financial institutions, using many different corporate entities, and they successfully received at least $1.5 million in loans.
KUKAJ was arrested in October 2020 and charged with bank fraud conspiracy and later indicted for the same charges in December 2020. He was released on pretrial release under a court order that notified him of the potential effect of committing a crime while on pretrial release. KUKAJ violated the terms of his bail for continuing to file false loan applications while on pretrial release for the same conduct. Specifically, in 2021, while on pretrial release, KUKAJ filed additional false loan applications that inflated the businesses’ number of employees and payrolls and falsely claimed that he was not under indictment.
Separately, on November 6, 2019, at the urging of KUKAJ, co-defendant Abduraman Iseni placed a telephone call to a victim, in which Iseni threatened physical violence against the victim. KUKAJ instructed Iseni to place this call because KUKAJ owed money to the victim.
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In addition to the prison sentence, KUKAJ, 43, of Fort Lee, New Jersey, was ordered to pay forfeiture of $1,500,000 and restitution in the amount of $1,500,000 to the U.S. Small Business Administration.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation New York’s Balkans and Middle East Organized Crime Squad, as well as the Small Business Administration Office of the Inspector General, the Social Security Administration Office of the Inspector General, and the New York State Liquor Authority for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys David R. Felton and Samuel L. Raymond are in charge of the case.
Repeat Sex Offender Sentenced to Ten Years in Federal Prison Following Third Conviction for Possession of Child Sexual Abuse ImagesRead the Press Release
INDIANAPOLIS- Jasmine Marshall, 41, of Indianapolis, Indiana, formerly known as Wesley Marshall, was sentenced to 10 years in federal prison after pleading guilty to possession of child sexual abuse material.
According to court documents, in 2011, Marshall was convicted of possession of child sexual abuse material in Hamilton County and was sentenced to 3 years in the Indiana Department of Corrections. In 2014, Marshall was again convicted of possession of child sexual abuse material and sentenced to 10 years in federal prison, followed by a lifetime of supervised release. Marshall has been a registered sex offender since December of 2011.
On, October 29, 2021, Marshall was released from federal prison to lifetime supervision. On August 25, 2022, Indianapolis Metropolitan Police Department Task Force Officers assisted Marion County Probation officers, State Parole Agents, and Federal Probation Agents in a search of apartments of sex offenders living in Indianapolis. At the time of the search, Marshall was living in a halfway house.
During a search of Marshall’s apartment, agents located a Motorola cell phone hidden inside a bag on the floor of a closet. At the time of this search, Marshall was prohibited from owning a computer or internet-enabled device that did not comply with the U.S. Parole & Probation Office’s Computer Restriction and Monitoring Program.
When questioned by agents, Marshall admitted using the cell phone to view and download child sexual abuse material. Specifically, Marshall described a hidden folder on the phone that was only accessible by her fingerprint. The folder contained pictures of the sexual abuse of children as young as nine-years-old.
Zachary A. Myers, United States Attorney for the Southern District of Indiana, Herbert J. Stapleton, Special Agent in Charge of the FBI’s Indianapolis Field Office, and Randall Taylor, Chief of Indianapolis Metropolitan Police Department made the announcement.
“Undeterred by two prior prison sentences, this defendant persisted in seeking out these vile images of child sexual abuse,” said U.S. Attorney Myers. “Pedophiles traffic in child sexual abuse materials online because gratifying their sexual interest in children is more important to them then the safety or dignity of survivors. Circulation of abuse images exacerbates the trauma already inflicted on child victims and is deserving of significant punishment. The sentence imposed today demonstrates the commitment of our Office, the FBI, and IMPD, to make our children safer by ensuring that these dangerous offenders are in prison where they belong.”
The Federal Bureau of Investigation and IMPD investigated this case. The sentence was imposed by U.S. District Court Judge James R. Sweeney. Judge Sweeney also ordered that Marshall be supervised by the U.S. Probation Office for life following her release from federal prison.
U.S. Attorney Myers thanked Assistant U.S. Attorney Adam Eakman, who prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
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Rapid City Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
PIERRE - United States Attorney Alison J. Ramsdell announced today that Chief Judge Roberto A. Lange, U.S. District Court, has sentenced a Rapid City, South Dakota, man convicted of Failure to Register as a Sex Offender. The sentencing took place on April 7, 2023.
Sonny Ray Escarsega, a/k/a Sonny Ray Ruiz, age 40, was sentenced to two years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Escarsega was indicted by a federal grand jury in November of 2022. He pleaded guilty on January 9, 2023.
Escarsega was convicted of Aggravated Sexual Abuse in 2003. As a result of this conviction, he is required to register as a sex offender and to update his registration within three business days of relocation or changing employment. In August of 2022, Escarsega was released from prison and began a period of supervised release. Escarsega initially registered and resided at an address in Rapid City, but he subsequently moved from his registered address and did not update his registration. His whereabouts were unknown until his arrest near Mission, South Dakota, on October 25, 2022.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Kirk Albertson 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 the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Escarsega was immediately remanded to the custody of the U.S. Marshals Service.
Queen City Motors Owner Sentenced for $783,000 Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – A Nixa, Mo., man who used his business to steal customers’ identity information in a scheme to obtain hundreds of thousands of dollars in fraudulent car loans was sentenced in federal court today.
Chris R. King, 48, was sentenced by U.S. Chief District Judge Beth Phillips to four years in federal prison without parole. The court also ordered King to pay $646,597 in restitution to his victims and to forfeit the same amount to the government.
On Nov. 20, 2021, King pleaded guilty to one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of aggravated identity theft.
King, formerly the co-owner of Queen City Motors, a used car business in Springfield, Mo., admitted that he stole the identity information of individuals who were interested in obtaining loans to purchase vehicles from him. King used that information, without the knowledge or authorization of the potential customers, to fraudulently submit loan applications and receive funds wired to his bank account from Credit Acceptance, a company that dealt specifically in the approval of subprime loans for individuals with poor credit ratings.
King fraudulently submitted at least 30 automobile loan applications and received cash deposits of approximately $783,475 between Nov. 1, 2018, and Nov. 8, 2020.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service and the Springfield, Mo., Police Department.
Pittsburgh-Area Business Owner Sentenced to Prison for Selling Stolen Health and Beauty ProductsRead the Press Release
PITTSBURGH, PA – A former resident of Pittsburgh, Pennsylvania, currently a resident of Parkland, Florida, has been sentenced in connection with his plea of guilty to charges of wire fraud and money laundering, Acting United States Attorney Troy Rivetti announced today.
According to the information presented to the Court, Thach Duc Le, had pled guilty in November of 2022 to counts of wire fraud and money laundering for his role in selling stolen goods, mostly health and beauty aids and over the counter medications, through his Bellevue business, called Last Call Entertainment, which was supposedly in the business of selling used electronics.
Chief Judge Mark Hornak imposed a sentence of 19 months in federal prison, a fine of $8000 and three years of supervised release in addition to a $200 special assessment. In imposing sentence Judge Hornak noted the seriousness of the offense, what he characterized as a “consequential crime,” a long term fencing operation for goods stolen from local merchants in the Bellevue area. Judge Hornak noted that Le was aware that the persons who brought the goods into his store to sell to him were known to him to be drug addicts and that his activity was instrumental in perpetuating a cycle of criminal activity that damaged the community and made Le a “mountain of money.”
The Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection Service conducted the investigation leading to the Indictment and the guilty plea in this case. Police departments from the City of Pittsburgh, Ross Township and Shaler Township also assisted in the overall investigation.
Pittsburgh Man Sentenced to more than 5 Years in Prison for Drug and Gun Law ViolationsRead the Press Release
PITTSBURGH, PA - A resident of the Beechview neighborhood of Pittsburgh was sentenced to 67 months and a term of three years of supervised release by United States District Judge for the Western District of Pennsylvania, Nora Barry Fischer, Acting United States Attorney Troy Rivetti announced today.
Prior to imposing this sentence, Stephen Morgan, age 28, pleaded guilty to a two-count Information related to trafficking narcotics and felony possession of a firearm in December 2022. Morgan’s conviction and sentence stemmed from an incident on or about Jan. 12, 2019, where Morgan possessed with intent to distribute heroin and acetyl fentanyl, Schedule I controlled substances, and cocaine base and fentanyl, Schedule II controlled substances.
When imposing this sentence, Judge Fischer expressed her concern regarding the seriousness of trafficking offenses and the fatalities that controlled substances, including fentanyl, cause in this district.
Assistant United States Attorney Nicole A. Stockey prosecuted this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the City of Pittsburgh Bureau of Police conducted the investigation leading to the Indictment in this case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Pittsburgh Man Gets 12-Year Prison Sentence for Drug Distribution and Illegal Possession of a Firearm and AmmunitionRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to 12 years of imprisonment on his convictions Possession with the Intent to Distribute Heroin and Crack Cocaine, Possession of Firearms and Ammunition by a Convicted Felon, and Possession of Contraband in Prison, Acting United States Attorney Troy Rivetti announced today.
United States District Judge Robert J. Colville imposed the sentence on Kris Johnson, age 32, of the City’s Knoxville neighborhood.
According to information presented to the court, Johnson used the third-floor bedroom of a relative’s house located on Antrim Street, which is in the Northside neighborhood of Pittsburgh, as a place to store his controlled substances and firearms. On Nov. 9, 2017, the Allegheny County Sheriff’s Office executed a Family Division arrest warrant at that home unrelated to Johnson. During the protective sweep of the residence and a later search warrant, officers from the Allegheny County Sheriff’s Office found, in a third-floor bedroom used by Johnson, distribution quantities of heroin and crack cocaine, two guns, numerous boxes of ammunition, two digital scales, rubber bands consistent with the packaging of drugs, two cellular telephones and evidence linking the defendant to the bedroom. The Allegheny County Medical Examiner’s Office recovered Johnson’s fingerprints from a digital scale and a box of ammunition found in the bedroom. Johnson is prohibited from possessing firearms and ammunition under federal law because of he has prior felony convictions, which include prior drug trafficking and illegal firearm possession charges.
While awaiting trial for those offenses, Johnson was incarcerated at the Allegheny County Jail. Officials from the Allegheny County Jail received some information that Johnson’s cell contained drugs, and they conducted a search of the cell on Aug. 12, 2018. During the search, Johnson was found in possession of a ripped off glove finger that contained more than 150 small pieces of paper consistent with a “hit” of K-2. Subsequent laboratory analysis by the Allegheny County Medical Examiner’s Office determined that the substance was 5-F ADB, which is a synthetic cannabinoid and a Schedule I controlled substance.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
Acting United States Attorney Rivetti commended the Allegheny County Sherriff’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the Allegheny County Medical Examiner’s Office for the investigation leading to the successful prosecution of Johnson.
Pine Ridge Man Charged with Second Degree MurderRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced that a Pine Ridge, South Dakota, man has been charged with Second Degree Murder.
Trent Brewer, age 20, was recently charged, and appeared before U.S. Magistrate Judge Daneta Wollman on April 7, 2023, and pleaded not guilty to the charge.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, five years supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
In April of 2023, at Pine Ridge, Brewer shot and killed another man during an argument. The charge is merely an accusation and Brewer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the FBI and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Brewer was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been scheduled for June 13, 2023.
Omaha Man Sentenced to 87 Months for Distribution of MethamphetamineRead the Press Release
United States Attorney Steven Russell announced that Massey Allen, 42, of Omaha and South Sioux City, Nebraska, was sentenced today in federal court in Omaha for distribution of methamphetamine. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Allen to 87 months’ imprisonment. There is no parole in the federal system. After his release from prison, he will begin a four-year term of supervised release.
On June 21, 2022, Allen sold methamphetamine to a cooperating witness working with law enforcement. Forensic testing by a crime laboratory confirmed 139 grams of methamphetamine.
This case was investigated by the Drug Enforcement Agency, the Omaha Police Department, and the Southwest Iowa Narcotics Task Force.
Omaha Man Sentenced for Theft of FirearmsRead the Press Release
United States Attorney Steven Russell announced that Terry Barfield, 19, of Omaha, Nebraska, was sentenced today in federal court in Omaha for stealing firearms from a federally licensed dealer. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Barfield to imprisonment for 36 months to be followed by a 3-year term of supervised release.
On August 8, 2022, forty-four (44) firearms were stolen during a break-in of the store front of Frontier Justice, a Federal Firearms Licensee (FFL), in Omaha. Investigators determined that three suspects broke exterior windows of the store and entered wearing face coverings and gloves. They were observed to be driving a white sedan.
On August 19, 2022, Omaha Police Department (OPD) detectives observed a car matching the description of the sedan used during the break-in of Frontier Justice. OPD officers stopped the car at North 35th and Jaynes Streets and the four occupants fled on foot. A detective observed Barfield in possession of a black handgun which he (Barfield) placed in his waistband while he was fleeing. Three suspects were arrested including Barfield, and Barfield’s cell phone was seized. Detectives searched the area and recovered a Glock 34 9mm handgun. The Glock was later confirmed to have been stolen from Frontier Justice during the August 8, 2022, break-in. Another firearm was found near the car. OPD later obtained a warrant to search Barfield’s cell phone which yielded additional evidence of his involvement in the break-in.
On August 30, 2022, OPD officers executed a warrant to search Barfield’s residence. Investigators recovered another firearm during the search (a CZ P-10c 9mm handgun) which was also confirmed to have been stolen from Frontier Justice. Barfield was arrested and interviewed and admitted the CZ P-10c firearm found at his residence was his, though he falsely claimed he found it at a party. He denied knowing about the break-in at Frontier Justice.
This case was part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
This case was investigated by the Omaha Police Department and the Bureau of Alcohol, Tobacco, and Firearms.
Omaha Man Sentenced for Mail TheftRead the Press Release
United States Attorney Steven Russell announced the Jorge Felix Morejon, 25, of Omaha, Nebraska, was sentenced today in federal court in Omaha for theft of mail. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Morejon to five months’ imprisonment. There is no parole in the federal system. After his release from prison, Morejon will begin a 3-year term of supervised release. Chief Judge Rossiter ordered Morejon to pay restitution in the amount of $25.
In July 2022, United States Postal Inspectors found duct tape rings inside the snorkel of a mail collection box located in Omaha. Postal Inspectors determined that the tape rings were used to collect mail without knowledge of the mailer. The mail could then be manually retrieved from the tape within the mail collection box. Found on the tape were eight fingerprints that were identified as the prints of Morejon. As part of their investigation, Postal Inspectors placed a test mailing containing two gift cards on the tape found in the mail collection box. Surveillance showed Morejon using the gift cards at various locations in Omaha.
Morejon was convicted in 2017 in Miami, Florida, of mail theft using a similar means.
This case was investigated by the United States Postal Inspection Service.
NoHo Man Admits Lying to FBI about His Role in Creating Fake Basquiat Paintings Seized Last Summer from Florida MuseumRead the Press Release
LOS ANGELES – A one-time auctioneer has agreed to plead guilty to lying to FBI agents about the origins of paintings attributed to Jean-Michel Basquiat that were seized last year from the Orlando Museum of Art, admitting in court papers filed today that he and another man created the fake art and that he falsely attested to the paintings’ provenance.
Michael Barzman, 45, of North Hollywood, was charged today in federal court with making false statements to the FBI during an interview in August 2022. In a plea agreement also filed today, Barzman agreed to plead guilty to the felony offense and made a series of admissions about the fake paintings.
Barzman has agreed to surrender to federal authorities for a court appearance that has not yet been scheduled.
The plea agreement and a criminal information filed today outline how Barzman and a second man – identified in the court documents as “J.F.” – created the fake Basquiats in 2012 after hatching a plan to market the bogus artwork.
“J.F. spent a maximum of 30 minutes on each image and as little as five minutes on others, and then gave them to [Barzman] to sell on eBay,” according to the plea agreement. “[Barzman] and J.F. agreed to split the money that they made from selling the Fraudulent Paintings. J.F. and [Barzman] created approximately 20-30 artworks by using various art materials to create colorful images on cardboard.”
Barzman, who in 2012 ran an auction business focused on purchasing and reselling the contents from unpaid storage units, further admitted that he attempted to create a false provenance – or history of the ownership of a piece of art – for the purported Basquiats by claiming in a notarized document that the fraudulent paintings were found inside a storage unit that a well-known screenwriter had rented.
The bogus art was sold and made its way through the art market, forming the basis of an exhibition that opened in February 2022 at the Orlando Museum of Art. “Most of the featured works had, in fact, been created by [Barzman] and J.F.,” Barzman admitted in his plea agreement.
The FBI executed a search warrant at the Orlando Museum of Art in June 2022 and seized 25 pieces that Basquiat purportedly had created.
During an August 18, 2022 interview with special agents of the FBI, Barzman denied making the paintings himself.
“At the time of the interview, [Barzman] knew that he and J.F. had created the paintings and that his statements to the contrary were untruthful,” Barzman admitted in his plea agreement. “His statement that he did not make the paintings or have someone make them for him were material to the activities and decisions of the FBI and were capable of influencing the agency’s decisions and activities.”
In another FBI interview in October 2022, Barzman admitted “it was a lie” that the artwork had come from the storage locker, but he continued to deny making the fraudulent paintings – even after agents showed him the back of a painting on cardboard seized from the Orlando Museum of Art in which his name appears on a mailing label that had been painted over.
The crime of making false statements to a government agency carries a statutory maximum penalty of five years in federal prison.
The FBI’s Art Crime Team is investigating this matter.
Assistant United States Attorneys Mark A. Williams, Chief of the Environmental and Community Safety Crimes Section; Matthew W. O’Brien of the Environmental and Community Safety Crimes Section; and Alix L. McKenna of the General Crimes Section are prosecuting this case. Assistant United States Attorney Daniel Boyle of the Asset Forfeiture and Recovery Section is handling the forfeiture of seized artwork.
Nigerian Man Pleads Guilty to Online Fraud SchemesRead the Press Release
BOSTON – A Nigerian man pleaded guilty yesterday to his role in online fraud schemes after being extradited from the United Kingdom.
Happy Chukwuma, 30, pleaded guilty to one count of wire fraud conspiracy. U.S. Senior District Court Judge Douglas P. Woodlock scheduled sentencing for May 5, 2023. Chukwuma was indicted by a federal grand jury in August 2019. He was arrested and detained in the United Kingdom at the request of the United States in September 2022 and extradited to the United States in March 2023.
Between November 2015 and January 2019, Chukwuma and his co-conspirators participated in a variety of online fraud schemes, including “phishing” and romance scams. They exchanged victims’ personally identifiable information, including identification and financial documents, and engaged in financial transactions with that information. Several of the victims whose information was compromised were from Massachusetts.
Phishing schemes mimic the appearance of legitimate websites to gather victims’ online credentials, including usernames, passwords, financial account information, social security numbers and other types of personal identifiable information. In romance scams, perpetrators generally create fictitious online personas to develop online romantic relationships with individuals in the United States, and then leverage those relationships to obtain money and property.
The charge of wire fraud conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Rachael S. Rollins and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistant U.S. Attorney Mackenzie A. Queenin of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case. The Justice Department’s Office of International Affairs and the United Kingdom’s Metropolitan Police National Extradition Unit provided critical assistance in securing the arrest and extradition of Chukwuma.
Methamphetamine Dealer Sentenced to 10 Years in Federal PrisonRead the Press Release
EAST ST. LOUIS, Ill. – In a U.S. District courtroom on Monday, a federal judge sentenced a Cahokia Heights man to 120 months in prison after he admitted to distributing methamphetamine in 2021.
Carlos M. Johnson, 49, received a concurrent sentence of 87 months’ imprisonment for a separate possession with intent to distribute a controlled substance charge, and another concurrent sentence of 87 months’ imprisonment for being a felon in possession of a firearm. He was fined $300 and must also pay $300 in special assessments. Following his release from federal prison, Johnson must complete five years of supervised release.
“Drug dealers selling harmful and dangerously addictive drugs gamble with their freedom by the decade,” said U.S. Attorney Rachelle Aud Crowe. “Federal law enforcement agents will work alongside state and local partners to pursue drug distributors wherever they are located and bring them to justice.”
According to court documents, Johnson’s offenses occurred in January 2021. Based on evidence of drug dealing activity, federal agents executed a search warrant of Johnson’s home. As a result, federal agents seized six different kinds of controlled substances and multiple firearms from Johnson’s home.
A federal grand jury indicted Johnson on March 22, 2022, for distribution of a controlled substance, possession with intent to distribute a controlled substance, and felon in possession of a firearm. Johnson pled guilty on Dec. 1, 2022.
The Drug Enforcement Administration conducted the investigation, and Assistant U.S. Attorney John Trippi prosecuted the case.
This case was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Mason City Woman Sentenced to Federal Prison for Distributing MethamphetamineRead the Press Release
A Mason City woman was sentenced April 10, 2023, to more than 7 years in federal prison.
Kari Ann Peters, age 36, from Mason City, Iowa, received the prison term after an August 31, 2023, guilty plea to distribution of methamphetamine.
In a plea agreement, Peters admitted to distributing methamphetamine around the Mason City, Iowa area.
Peters was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Peters was sentenced to 84 months’ imprisonment. She must also serve a 4-year term of supervised release after the prison term. There is no parole in the federal system.
Peters is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Jack Lammers and investigated by the Cerro Gordo Sheriff’s Office, Mason City Police Department, Iowa Department of Narcotics Enforcement, and the North Central Iowa Drug Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 21-3033.
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Manchester Man Sentenced for Possessing a Firearm as a FelonRead the Press Release
A man who possessed a firearm as a felon was sentenced today to almost five years in federal prison.
Timothy Tirrell Brown, age 34, from Manchester, Iowa, received the prison term after a November 14, 2022, guilty plea to one count of possession of a firearm by a felon.
At the guilty plea, Brown admitted that, on July 24, 2021, he knowingly possessed a firearm, a Smith & Wesson M&P-15, 5.56 NATO AR pistol with an attached 30-round magazine, as a prohibited person. A Hardin County deputy sheriff found the loaded firearm behind the front passenger seat of the car Brown was driving following a traffic stop. Brown was prohibited from possessing a firearm because he was previously convicted in Jackson County, Mississippi, of one count of Felony Sale or Transfer of Cocaine and two counts of Felony Possession of Cocaine in July 2007, and one count of Felony Hindering Prosecution in the First Degree in May 2014.
Brown was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Brown was sentenced to 57 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Brown is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and was investigated by the Hardin County Sheriff’s Department and the Iowa Department of Public Safety.
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.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22-CR-40.
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Kennewick Man Sentenced to over 22 Years in Prison for Producing Child PornographyRead the Press Release
Richland, WA – Chief United States District Judge Stanley A. Bastian sentenced James Patrick Wertman, age 53, of Kennewick, Washington, to 270 months in federal prison today for Production of Child Pornography. At the conclusion of his prison term, Wertman will spend the rest of his life on federal supervision. Chief Judge Bastian ordered restitution to the victims of Wertman’s offenses in the amount of $19,601.10. Wertman had entered a guilty plea to two counts of Production of Child Pornography, on January 10, 2023.
In announcing today’s sentence, Chief Judge Bastian observed that Wertman victimized a young child for several years and that in victimizing the child, he also victimized her family. Judge Bastian further indicated his sentence needed to recognize for the victim, the victim’s family, and the public that Wertman’s crime was serious and deserving of a serious sentence.
According to publicly available court documents, this case stemmed from a complaint from Defendant’s former fiancé, who reported she had located an iPad containing naked images of children, including the fiancé’s daughter, who was seven years old at the time.
Law enforcement obtained a search warrant and searched all of Wertman’s devices to include the iPad provided by the child’s mother and the iCloud account associated with that device. The search revealed child pornography images and videos Defendant produced of the child from the time she was 4 years old, up through the date her mother located the images, when the child was 7. During the investigation, law enforcement interviewed Wertman, who stated he had been in a dating relationship with the child’s mother for several years. Wertman further claimed that he believed he had deleted the nude photographs of the child.
The videos recovered from the iPad and Wertman’s iCloud depict him setting up a recording device (a phone) prior to capturing the child, who was not wearing any clothing. Wertmen then proceeded to sexually molest the child. These images and videos are the subject of the federal case against Wertman for which he was sentenced today. Following today’s sentencing, Wertman will be transferred to Benton County Superior Court, where he has agreed to plead guilty to two counts of first-degree child molestation.
While the gravity of Wertman’s crimes and the impact on his victim are immediately apparent, Wertman’s actions also have impacted, and will continue to impact, the victim’s family. Wertman’s crimes left a mother believing she is incapable of protecting her own children. As the victim’s mother explained in a victim impact letter, she now questions every relationship, distrusts everyone, and lives in a state of constant worry and fear, all as a result of Wertman’s betrayal of trust. This grieving mother further notes she thought she was doing all of the right things to protect her children, but believes she failed her daughter. The victim’s other family members expressed the same feelings regarding the harm they experienced as a result of Wertman’s crimes against an innocent child.
After today’s sentencing hearing, U.S. Attorney Vanessa R. Waldref stated, “Child abuse devastates entire families and our community. While we all need to take great care in selecting our children’s caretakers, this crime was the fault of one man only, the Defendant, James Wertman, who chose to victimize an innocent child who trusted him.” U.S. Attorney Waldref reiterated, “My office prioritizes these offenses against our community’s youngest and most vulnerable and will continue to aggressively prosecute those who harm children.”
“Mr. Wertman exploited a position of trust to abuse an innocent child. I applaud the investigative work to put this child predator behind bars,” said SAC Robert Hammer, who oversees HSI operations in the Pacific Northwest. “Child exploitation cases will remain a priority for HSI, and we ask that parents remain alert to anyone that would pose a threat to children.”
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative (“PSC”) has five major components: · Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children; · Participation of PSC partners in coordinated national initiatives; · Increased federal enforcement in child pornography and enticement cases; · Training of federal, state, and local law enforcement agents; and
· Community awareness and educational programs.For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The federal case was investigated by Homeland Security Investigations through the Southeast Regional Internet Crimes Against Children Task Force, which includes detectives from the Kennewick and Richland Police Departments as well as the Benton County Sheriff’s Office. This case was prosecuted by Alison L. Gregoire, Assistant United States Attorney for the Eastern District of Washington, and Laurel Holland, Deputy Prosecuting Attorney for Benton County.
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Inmate Indicted for Assaulting Warden at Medical CenterRead the Press Release
SPRINGFIELD, Mo. – An inmate at the U.S. Medical Center for Federal Prisoners in Springfield, Mo., was indicted by a federal grand jury today for assaulting the warden.
Omar Romero-Morales, 36, was charged in an indictment returned by a federal grand jury in Springfield.
According to the indictment, Romero-Morales punched the medical center’s warden in the face.
The charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge 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. Attorney Patrick Carney. It was investigated by the FBI, the U.S. Medical Center for Federal Prisoners, and the Bureau of Prisons.
Illinois Man Pleads Guilty to Being a Felon in Possession of a FirearmRead the Press Release
A felon who possessed a firearm pled guilty today in federal court in Cedar Rapids, Iowa.
Jamie Swanson, age 32, of Colona, Illinois, was convicted of one count of being a felon in possession of a firearm. At the plea hearing, Swanson admitted that, in March 2022, he possessed a pistol after having been convicted of a felony.
Sentencing before Chief United States District Court Judge Leonard T. Strand will be set after a presentence report is prepared. Swanson remains in custody of the United States Marshal pending sentencing. Swanson faces a possible maximum sentence of ten years’ imprisonment, a $250,000 fine, and three years of supervised release following any imprisonment.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Anamosa Police Department, the Jones County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 22-100.
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Honduran citizen admits to two federal feloniesRead the Press Release
HOUSTON – A 23-year-old non-U.S. citizen illegally residing in Houston has pleaded guilty to illegally re-entering the country and to unlawfully possessing a firearm, announced U.S. Attorney Alamdar S. Hamdani.
Jairon Odair Pineda-Gomez is a citizen of Honduras and is an alleged member of the 18th Street gang.
In January 2021, Pineda-Gomez was arrested for illegally re-entering the country. Released on bond, he later cut off his ankle monitor and absconded while charges were pending.
Authorities arrested him for the bond violation in September 2022, at which time he had a Smith & Wesson .40 caliber pistol in his backpack. Records indicate Pineda-Gomez had pointed the pistol at multiple people, including a 9-year-old child, in July 2022. He was also seen on surveillance video shooting a gun in the air.
Chief U.S. District Judge Randy Crane accepted the plea and set sentencing for June 21. At that time, Pineda-Gomez faces up to 15 years for the firearms conviction as well as another two for the illegal re-entry as well as a possible $250,000 maximum fine.
He has been and will remain in custody pending that hearing.
U.S. Marshals Service and Immigrations and Customs Enforcement Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorney Stephanie Bauman is prosecuting the case.
Hamilton felon sentenced to five years in prison for illegal possession of firearms, including “ghost gun”Read the Press Release
MISSOULA — A Hamilton man who admitted to illegally possessing firearms and ammunition, including a “ghost gun,” after having been convicted of felonies, was sentenced today to five years in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.
Kevin Michael Jakub, 38, pleaded guilty in November 2022 to prohibited person in possession of a firearm and ammunition.
U.S. District Judge Dana L. Christensen presided.
The government alleged in court documents that in January 2022, law enforcement executed a search warrant on a storage unit of Jakub’s and recovered two semi-automatic rifles with large capacity magazines, one pistol, three suppressors, various firearm parts and thousands of rounds of ammunition. In July 2022, law enforcement contacted Jakub after receiving a report of him possibly discharging a firearm. Jakub admitted to firing his pistol, and agents recovered a pistol described as a “ghost gun,” which means it had no identifiable markings. Jakub, who had three previous felony convictions in Colorado and Montana for drug offenses, was prohibited from possessing firearms and ammunition.
Assistant U.S. Attorney Tara J. Elliott prosecuted the case, which was investigated by the Missoula High Intensity Drug Trafficking Area Task Force, Homeland Security Investigations, U.S. Postal Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, Montana Highway Patrol and Ravalli County Sheriff’s Office.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Great Falls man sentenced to four years in prison for illegal possession of firearmsRead the Press Release
GREAT FALLS — A Great Falls man who admitted to illegally possessing firearms while on supervision for prior felony convictions was sentenced today to four years in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.
Zachary Paul Potts, 26, pleaded guilty in November 2022 to prohibited person in possession of a firearm and ammunition.
Chief U.S. District Judge Brian M. Morris presided.
The government alleged in court documents that in the fall of 2021, Potts was on state supervision for multiple felony convictions when he was stopped while driving a vehicle in Great Falls with a suspended license. During a probation search of the vehicle, law enforcement found a .357-caliber revolver in a backpack and a 9mm pistol under the driver’s seat. Potts told the officer he knew about the pistol and that he had used it in the past. The government further alleged that the backpack also contained a small amount of suspected methamphetamine, more than four grams of fentanyl powder, a scale and empty plastic baggies.
Assistant U.S. Attorney Ethan R. Plaut prosecuted the case, which was investigated by the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration and Great Falls Police Department.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Government Contractors Indicted in San Antonio for Wire Fraud, Money LaunderingRead the Press Release
SAN ANTONIO – A federal grand jury in San Antonio returned an indictment last week charging four members of a San Antonio family with conspiracy to commit wire fraud and money laundering.
According to court documents, Kenneth Flores, Christopher Flores, Antonio Flores Jr., and Irma Flores, are alleged to have conspired together to defraud the United States by eliminating competition and fixing contract awards and prices on Army contracts for the housekeeping and janitorial services at Army Hospitals and Medical Centers. The alleged scheme involved a corrupt partnership between the Floreses and co-conspirator government employees Karisa Waysepappy Kelley and John Jordan “Chip” Mathes, involving millions of dollars in work on Army healthcare housekeeping and janitorial services contracts in return for bribes and kickbacks, eliminating the Flores’ competition in the process.
The defendants made their initial court appearances Monday, April 10, before U.S. Magistrate Judge Richard B. Farrer of the U.S. District Court for the Western District of Texas.
The four defendants are each charged with one count of conspiracy, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering. If convicted on all charges, they each face a maximum penalty of 45 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Floreses are currently released on a $50,000 bond each. An arraignment hearing is scheduled for April 19.
U.S. Attorney Jaime Esparza of the Western District of Texas made the announcement.
The Defense Criminal Investigative Service; Department of the Army Criminal Investigation Division; U.S. General Services Administration Office of Inspector General; and IRS Criminal Investigation are investigating the case.
Assistant U.S. Attorney William Lewis is prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Fox Valley Man Indicted for Child Pornography Production and DistributionRead the Press Release
United States Attorney Gregory J. Haanstad of the Eastern District of Wisconsin announced that on April 11, 2023, a federal grand jury indicted John D. Schaefer (age: 34) of Menasha and Oshkosh, Wisconsin, on a count of production of child pornography, in violation of Title 18, United States Code, Section 2251(a), and a count of distribution of child pornography in violation of Title 18, United States Code, Section 2252A(a)(2)(A).
The indictment alleges that on or about August 2, 2020, Schaefer “employed and used a minor” for the purpose of creating a “visual depiction of a minor engaged in sexually explicit conduct.” It further alleges that on or about September 21, 2021, Schaefer distributed a digital video depicting the sexual assault of a prepubescent child.
If convicted of the production charge, Schaefer faces a mandatory minimum 15 years’ imprisonment and a maximum of 30 years’ imprisonment. He faces up to 40 years’ imprisonment on the distribution charge. He also faces up to a $250,000 fine on each count.
This case was investigated by the City of Menasha Police Department and the City of Oshkosh Police Department. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
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 U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the 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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For Additional Information Contact:
Public Information Officer
414-297-1700
Former St. Louis Letter Carrier Sentenced to Probation, Restitution for Stealing ChecksRead the Press Release
ST. LOUIS – U.S. District Judge Audrey G. Fleissig on Tuesday sentenced a former U.S. Postal Service letter carrier who stole two checks in St. Louis, Missouri to five years of probation and ordered him to repay $33,996.
Judge Fleissig also ordered Marquan Long, 28, to complete 40 hours of community service. The advisory sentencing guidelines ranged from probation to six months behind bars.
Long pleaded guilty in January to theft of mail by an employee of the U.S. Post Office. He admitted that on May 30, 2019, while working as a carrier in St. Louis, he stole two envelopes containing checks from the mail. A Long associate deposited a $29,019 check into an account belonging to Long’s girlfriend at a credit union. That check was mailed to an address in south St. Louis.
The second check, for $4,977, was originally mailed by a St. Louis woman and deposited into an account in Chicago about two weeks later.
Assistant U.S. Attorney Linda Lane, who prosecuted the case, told Judge Fleissig in court Tuesday that Long had violated the trust of the public, who rely on the mail to conduct business.
The U.S. Postal Service Office of Inspector General conducted the investigation.
Former Investment Banker and Registered Broker Charged with Operating Cryptocurrency Investment Fraud SchemeRead the Press Release
Today, in federal court in Brooklyn, Rashawn Russell, a former investment banker and registered broker, will be arraigned on an indictment charging him with perpetrating a cryptocurrency investment fraud scheme. Russell was arrested yesterday in Brooklyn and will be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.
Breon Peace, United States Attorney for the Eastern District of New York; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; and Eric Shen, Inspector-in-Charge, U.S. Postal Inspection Service, Criminal Investigations Group (USPIS), announced the arrest and indictment.
“As alleged, Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle,” stated United States Attorney Peace. “This Office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets.”
As alleged in court documents, Russell engaged in a scheme to defraud multiple investors by falsely promising that their money would be used for cryptocurrency investments that would generate large—and sometimes “guaranteed”—returns. In truth, much of the investors’ money was misappropriated by Russell and used for his personal benefit, to gamble, and to repay other investors. Russell formerly worked as an investment banker and was a registered broker with the Financial Industry Regulatory Authority.
As part of the scheme, Russell lied to investors about the status of their investments and fabricated multiple documents that he sent to investors. As alleged, Russell sent one investor an altered image of a bank balance displayed on a bank website that purported to show Russell’s substantial liquidity. When another investor sought to recoup their investment, Russell never sent the money and instead sent the investor a fabricated bank wire transfer confirmation that purported to show the return of the investor’s money.
The charge in the indictment is an allegation and Russell is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, he faces a maximum of 20 years in prison.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected].
The government’s case is being handled by Assistant United States Attorney Drew Rolle from the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York and. Assistant Chief Scott Armstrong and Trial Attorney Kyle Crawford from of the Department of Justice’s Criminal Division, Fraud Section.
The Defendant:
RASHAWN RUSSELL
Age: 27
Brooklyn, New YorkE.D.N.Y. Docket No.: 23-CR-152 (HG)
Former Investment Banker and Registered Broker Arrested for Operating Cryptocurrency Investment Fraud SchemeRead the Press Release
A former investment banker, who was a registered broker with the Financial Industry Regulatory Authority, was arrested yesterday in Brooklyn, New York, on criminal charges related to his alleged role in operating a cryptocurrency investment fraud scheme.
According to court documents, Rashawn Russell, 27, of Brooklyn, New York, allegedly engaged in a scheme to defraud multiple investors by inducing them to invest with him based on false promises that, among other things, he would use their funds for cryptocurrency investments and that the investors would earn large – and sometimes guaranteed – returns from those investments. Russell allegedly misappropriated much of the investors’ assets and used them for his personal benefit, to gamble, and to repay other investors.
In addition, the indictment alleges that Russell repeatedly failed to repay investors’ principal investments and failed to provide investors with promised rates of return. After certain investors requested to be repaid their investments, Russell also allegedly falsely represented that he had wired them money.
Russell is charged with one count of wire fraud. If convicted, he faces a maximum penalty of 20 years in prison.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group made the announcement.
The USPIS is investigating the case.
Trial Attorney Kyle Crawford and Assistant Chief Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Drew Rolle for the Eastern District of New York are prosecuting the case.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected].
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Executives of Outcome Health Convicted in $1B Corporate Fraud SchemeRead the Press Release
A federal jury convicted three former executives of Outcome Health, a Chicago-based health technology start-up company, for their roles in a fraud scheme that targeted the company’s clients, lenders, and investors and involved approximately $1 billion in fraudulently obtained funds.
The individuals convicted by jury verdict today were:
- Rishi Shah, 37, the co-founder and former CEO of Outcome Health (Outcome), which was founded in 2006 and known as Context Media prior to January 2017;
- Shradha Agarwal, 37, the former president of Outcome, who was described as a co-founder; and
- Brad Purdy, 33, the former chief operating officer and chief financial officer.
Outcome installed television screens and tablets in doctors’ offices around the United States and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies. According to evidence presented at trial, Shah, Agarwal, and Purdy sold advertising inventory the company did not have to Outcome’s clients, then under-delivered on its advertising campaigns. Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full. Shah, Agarwal, and Purdy lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts. Purdy and others at Outcome also inflated metrics that purported to show how frequently patients engaged with Outcome’s tablets installed in doctors’ offices. According to the trial evidence, the scheme targeting Outcome’s clients began in 2011, lasted until 2017, and resulted in at least $45 million of overbilled advertising services.
Shah, Agarwal, and Purdy were also convicted of defrauding Outcome’s lenders and investors. The under-delivery to Outcome’s advertising clients resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016. The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy caused others to fabricate data to conceal the under-deliveries from the auditor. Shah, Agarwal, and Purdy then used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017.
Shah, Agarwal, and Purdy lied to investors and lenders to conceal their ongoing under-delivery of advertising campaigns for clients. Shah and Purdy also misrepresented to investors the efficacy of Outcome’s advertising campaigns by concealing the fact that it had failed to meet return-on-investment commitments to clients.
The $110 million debt financing resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million in equity financing resulted in a $225 million dividend to Shah and Agarwal.
Three other former employees of Outcome pleaded guilty prior to trial. Ashik Desai, the former chief growth officer pleaded guilty to one count of wire fraud; and Kathryn Choi, a former senior analyst, and Oliver Han, a former analyst, both pleaded guilty to conspiracy to commit wire fraud. Desai, Choi, and Han will be sentenced at a date to be determined.
Shah was convicted of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering. Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud. Purdy was convicted on five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of false statements to a financial institution. The defendants face a maximum penalty of 30 years in prison for each count of bank fraud and 20 years in prison for each count of wire fraud and mail fraud. Purdy faces a maximum penalty of 30 years in prison for the count of false statements to a financial institution. Shah faces a maximum penalty of 10 years in prison for each count of money laundering. A sentencing hearing will be scheduled at a date to be determined. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois, Assistant Inspector General for Investigations Shimon Richmond of the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG), and Robert W. Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the Federal Bureau of Investigation.
Assistant Chiefs William E. Johnston and Kyle C. Hankey of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Matthew F. Madden and Saurish Appleby-Bhattacharjee for the Northern District of Illinois are prosecuting the case.
“The defendants’ vast scheme damaged the clients, investors, and lenders who supported their business. Although they sought to hide the fraud by silencing whistleblowers and duping auditors, the jury today rightly held the defendants accountable for the losses they caused, which total hundreds of millions of dollars,” said Acting U.S. Attorney Pasqual. “Today’s verdicts demonstrate that this Office and its law enforcement partners will work tirelessly and dedicate the resources necessary to deliver justice for the victims of complex fraud schemes.”
“The scope of this fraud scheme is staggering, with almost $1 billion in victim losses. Today’s conviction is a fitting reminder that deceptive and illegal business practices have very real consequences" said Special Agent-in-Charge Wheeler.
"Today's conviction holds these defendants accountable for deceiving Outcome Health's clients, and fraudulently obtaining approximately $1 billion from its lenders and investors," said Assistant Inspector General Richmond. "The FDIC-OIG remains committed to working with our law enforcement partners to investigate and bring to justice those who harm lenders, investors, and clients by committing such fraudulent acts."
Former Executives of Outcome Health Convicted in $1B Corporate Fraud SchemeRead the Press Release
A federal jury convicted three former executives of Outcome Health, a Chicago-based health technology start-up company, for their roles in a fraud scheme that targeted the company’s clients, lenders, and investors and involved approximately $1 billion in fraudulently obtained funds.
The individuals convicted by jury verdict today were:
- Rishi Shah, 37, the co-founder and former CEO of Outcome Health (Outcome), which was founded in 2006 and known as Context Media prior to January 2017;
- Shradha Agarwal, 37, the former president of Outcome, who was described as a co-founder; and
- Brad Purdy, 33, the former chief operating officer and chief financial officer.
Outcome installed television screens and tablets in doctors’ offices around the United States and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies. According to evidence presented at trial, Shah, Agarwal, and Purdy sold advertising inventory the company did not have to Outcome’s clients, then under-delivered on its advertising campaigns. Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full. Shah, Agarwal, and Purdy lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts. Purdy and others at Outcome also inflated metrics that purported to show how frequently patients engaged with Outcome’s tablets installed in doctors’ offices. According to the trial evidence, the scheme targeting Outcome’s clients began in 2011, lasted until 2017, and resulted in at least $45 million of overbilled advertising services.
Shah, Agarwal, and Purdy were also convicted of defrauding Outcome’s lenders and investors. The under-delivery to Outcome’s advertising clients resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016. The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy caused others to fabricate data to conceal the under-deliveries from the auditor. Shah, Agarwal, and Purdy then used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017.
Shah, Agarwal, and Purdy lied to investors and lenders to conceal their ongoing under-delivery of advertising campaigns for clients. Shah and Purdy also misrepresented to investors the efficacy of Outcome’s advertising campaigns by concealing the fact that it had failed to meet return-on-investment commitments to clients.
The $110 million debt financing resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million in equity financing resulted in a $225 million dividend to Shah and Agarwal.
Three other former employees of Outcome pleaded guilty prior to trial. Ashik Desai, the former chief growth officer pleaded guilty to one count of wire fraud; and Kathryn Choi, a former senior analyst, and Oliver Han, a former analyst, both pleaded guilty to conspiracy to commit wire fraud. Desai, Choi, and Han will be sentenced at a date to be determined.
Shah was convicted of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering. Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud. Purdy was convicted on five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of false statements to a financial institution. The defendants face a maximum penalty of 30 years in prison for each count of bank fraud and 20 years in prison for each count of wire fraud and mail fraud. Purdy faces a maximum penalty of 30 years in prison for the count of false statements to a financial institution. Shah faces a maximum penalty of 10 years in prison for each count of money laundering. A sentencing hearing will be scheduled at a date to be determined. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Morris Pasqual for the Northern District of Illinois, and Assistant Inspector General for Investigations Shimon Richmond of the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG) made the announcement.
The FBI and FDIC-OIG investigated the case.
Assistant Chiefs William E. Johnston and Kyle C. Hankey of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Matthew F. Madden and Saurish Appleby-Bhattacharjee for the Northern District of Illinois are prosecuting the case.
Former Champaign, Illinois, Pastor Sentenced to 10 Months of Imprisonment for Misapplying Federal Funds and Bankruptcy FraudRead the Press Release
URBANA, Ill. – A Champaign, Illinois, man, Lekevie C. Johnson, formerly of the 2000 block of Clayton Boulevard, was sentenced on April 10, 2023, to 10 months of imprisonment and ordered to pay $59,358.90 restitution following his December 2022 guilty pleas to financial crimes including federal program misapplication, student loan misapplication, and false statement in bankruptcy.
Johnson was formerly the pastor of Mount Calvary Missionary Baptist Church, previously known as Jericho Missionary Baptist Church, on Bloomington Road in Champaign, Illinois. Johnson also served for years as the head football coach at Centennial High School in Champaign. Between 2012 and 2019, Johnson operated a not-for-profit corporation, Life Line Champaign, Inc., which received federal grant funds from the United States Department of Housing and Urban Development, through the City of Champaign, to provide summer enrichment programs for low-income students in the Garden Hills neighborhood. Johnson previously admitted misapplying $25,700.74 of HUD program grant funds for his own benefit, including by making numerous ATM cash withdrawals at various casinos.
Johnson also admitted that he had obtained federal student loans between 2017 and 2019 to attend Liberty University’s online Master of Arts program. Prior to receiving the loans, Johnson certified that he would use the loans only for authorized educational expenses. Nonetheless, Johnson used $31,291.62 of the loans for various non-educational expenses, including to gamble at casinos.
Finally, Johnson admitted to committing bankruptcy fraud. On January 31, 2020, Johnson and his wife filed for Chapter 7 bankruptcy in the Central District of Illinois. In his petition, Johnson claimed that he received only $42,900 from his church in 2019, even though he received tens of thousands of additional monies from the church that year. On March 5, 2020, Johnson testified under oath at a bankruptcy hearing that he had disclosed all the payments he received from the church and had no control over the church’s finances. In fact, Johnson controlled the church’s finances and had received tens of thousands of dollars in payments from the church that he had not disclosed in bankruptcy.
In sentencing Johnson to 10 months of imprisonment and ordering full restitution to both HUD and the U.S. Department of Education, United States District Judge Michael M. Mihm found that, although Johnson suffered from a gambling addiction, his crimes were the result of his voluntary choices and hurt many people, including the disadvantaged children in the Garden Hills neighborhood who did not benefit as intended from the federal grant.
Judge Mihm ordered Johnson to report to the federal Bureau of Prisons to begin serving his sentence on June 6, 2023. After pleading guilty to these offenses, Johnson left Champaign and relocated to the Dallas, Texas, area.
“Abuse of the bankruptcy system by making false statements, utilizing federal program monies for gambling purposes, and concealing those acts strikes at the very core of the integrity of the bankruptcy system and undermines public confidence in that system,” stated Nancy J. Gargula, United States Trustee for Indiana, Central and Southern Illinois (Region 10). “Today’s sentencing sends a strong message that these actions will not be tolerated. I am grateful to U.S. Attorney Harris and our law enforcement partners for their strong commitment to combating fraud and abuse in bankruptcy cases.”
The case investigation was conducted by the Federal Bureau of Investigation, Springfield Field Office; Department of Housing and Urban Development—Office of Inspector General; and the Department of Education – Office of Inspector General in collaboration with the Central District of Illinois Bankruptcy Fraud Working Group coordinated by the United States Trustee for Central and Southern Illinois and Indiana (Region 10). The bankruptcy fraud charge was referred for criminal prosecution by the United States Trustee for Region 10. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in Peoria, Illinois, and South Bend, Indiana. Supervisory Assistant U.S. Attorney Eugene L. Miller represented the government in the prosecution.
Federal Court Shuts Down Detroit-Area Father-and-Son Tax Return Preparers Until Further NoticeRead the Press Release
On April 10, 2023, the U.S. District Court for the Eastern District of Michigan entered a preliminary injunction against Detroit-area tax return preparers Herman “Eddie” Simmons, Richmond Simmons, and the business Profile Income Tax Co., doing business as Simmons Income Tax Company, enjoining Defendants from preparing federal income tax returns for others through the resolution of their case on the merits.
In issuing the preliminary injunction after holding a hearing and taking evidence, the Court noted that the government supported its motion with twelve sworn declarations in which Defendants’ customers disavowed various aspects of the returns that Defendants prepared for them, in particular, false and inflated deductions for charitable contributions. Defendants’ customers’ declarations repeatedly stated that they had never discussed the deductions at issue with Defendants, and that they had no idea why their returns contained the reported figures. Based on that customer testimony, and the similarities across all the fraudulent returns, the Court found that “filing tax returns with falsified deductions plainly qualifies as acting in willful or reckless disregard of the tax code,” and “that Defendants engaged in a pattern of willfully claiming false or inflated deductions to understate their clients’ liabilities.” The Court also rejected Defendants’ contention that they had made “honest mistakes” in the returns they prepared, finding that their claim that they simply reported whatever their customers told them was not credible. According to the Court, “no reasonable tax preparer would proceed in such a grossly uninformed and willfully ignorant manner.”
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Shady tax return preparers remain a concern of the IRS, which recently warned taxpayers about unscrupulous tax return preparers as part of the IRS’s Dirty Dozen series. As the 2023 tax season continues, taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS offers tips on how to accurately file returns and how to choose a tax return preparer, as well as steps taxpayers can take to get a jumpstart on filing. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information.
In the past decade, the Department of Justice Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found 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.