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1 March 2023
Local couple admits to benefitting from forced laborRead the Press Release
McALLEN, Texas – Two Edinburg residents have pleaded guilty to benefitting from forced labor, announced U.S. Attorney Alamdar S. Hamdani.
From June 24, 2021 until July 8, 2021, Eduardo Javier Gomez, 32, and his former partner Margarita Alvarez, 40, benefitted from a victim’s free labor which allowed the couple to have gainful employment. In addition, Gomez additionally earned money from a fireworks stand where the victim provided free labor.
“Labor traffickers care about only one thing - money,” said Hamdani. “Those subjected to domestic servitude are robbed of their dignity and freedom. Thankfully, this victim was rescued quickly thanks to the efforts of law enforcement. Now, this couple will pay the price for their despicable crimes and we can begin to bring some closure to the victim.”
Law enforcement discovered that the victim had been illegally smuggled to the Rio Grande Valley. Gomez was holding her against her will. Gomez was requesting further payment from family members in exchange for the victim being moved further north. When the family was unable to pay, the victim’s phone was taken and she was forced to work as a nanny and housekeeper in the home Gomez and Alvarez shared. The victim also was forced to work in a fireworks stand Gomez managed.
The victim was never paid.
Two days after learning of the victim, authorities were able to locate and rescue her.
U.S. District Judge Ricardo H. Hinojosa accepted the pleas and has set sentencing for May 9. At that time, the former couple faces up to 20 years in federal prison.
Eduardo Javier Gomez has been and will remain in custody pending sentencing, while Margarita Alvarez was permitted to remain on bond.
Homeland Security Investigations conducted the investigation. Assistant U.S. Attorneys Eliza Carmen Rodriguez, Sherri Zack and Kim Leo are prosecuting the case.
Lenox Man Arrested for Child Exploitation OffensesRead the Press Release
BOSTON – A Lenox man has been arrested and charged in connection with attempting to transfer obscene material to a minor.
Paul J. Bruzzi, 35, was charged with attempt to transfer obscene material to a minor. Bruzzi will make an initial appearance in federal court in Springfield today.
According to the charging documents, starting in September 2022, Bruzzi used social media applications to communicate with an individual he believed to be a 14-year-old girl, but who was actually an undercover federal investigator. During these conversations, it is alleged that Bruzzi sent the purported minor nine photographs and videos of himself displaying his genitalia and attempted to pressure her into sending him photos of herself.
The charge of attempt to transfer obscene matter to a minor provides for a sentence of at least 10 years in prison, three years supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
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. Valuable assistance was provided by the Salisbury and Winchester Police Departments. Assistant U.S. Attorney Neil L. Desroches of Rollins’ Springfield Office is prosecuting 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.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Las Vegas Resident Sentenced to Prison for COVID Relief FraudRead the Press Release
LAS VEGAS – A Las Vegas man was sentenced yesterday by U.S. District Judge Gloria M. Navarro to 30 months in prison followed by one year of supervised release for submitting fraudulent Paycheck Protection Program (PPP) and Economic Injury Disaster Relief Loan (EIDL) loan applications seeking more than $1 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to court documents, from May 2020 to June 2020, Jeremy Lee Attebery (42) submitted two false PPP loan applications and one false EIDL application. Attebery provided false information on his loan applications, such as number of employees, amount of monthly payroll, and gross revenues. In total, he applied for approximately $1,043,000 in fraudulent loans. Furthermore, he falsely stated on each application that he had not been convicted of a felony within the past five years.
Attebery pleaded guilty in August 2022 to three counts of wire fraud.
United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.
The FBI investigated the case; and Assistant U.S. Attorney Jessica Oliva prosecuted the case.
In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Kouts Woman Convicted of Tax OffensesRead the Press Release
HAMMOND- Kathy Lynch, age 64, of Kouts, Indiana, was found guilty following a 3-day jury trial presided over by United States District Court Judge Philip P Simon, announced United States Attorney Clifford D. Johnson.
The jury found Lynch guilty of nine (9) counts of willful failure to pay over to the IRS, federal payroll taxes withheld from Kouts Health Care, Inc employees, between June 2013 and September 2015, in violation of Title 26, United States Code, Section 7202.
Lynch will be scheduled for sentencing by separate order of the Court. Any specific sentence to be imposed will be determined by the District Court Judge after consideration of federal statutes and the United States Sentencing Guidelines.
The case was investigated by the Internal Revenue Service-Criminal Investigation Division. This case was prosecuted by Assistant United States Attorneys Abizer Zanzi and Kevin Wolff.
KC Man Sentenced for Joplin Bank RobberyRead the Press Release
SPRINGFIELD, Mo. – A Kansas City, Mo., man was sentenced in federal court today for robbing a Joplin, Mo., bank with what appeared to be a handgun after he had just robbed a bank in Kansas earlier the same day.
Leland Scott Graham, 59, was sentenced by U.S. District Judge Brian C. Wimes to eight years in federal prison without parole.
On Aug. 2, 2022, Graham pleaded guilty to one count of bank robbery. Graham admitted he stole $24,478 from Great Southern Bank in Joplin on July 19, 2021. Graham displayed what appeared to be a handgun and told one of the tellers, “This is a gun, do you want me to shoot you?” He then turned to another employee and said, “Hurry up or I will shoot you.” Graham later told investigators he put a black-handled screwdriver in his waistband so that the tellers would think it was a firearm.
As he left the bank, Graham dropped more than $5,000 on the floor, which was recovered by law enforcement.
Several hours before he robbed the bank in Joplin, Graham had robbed Landmark National Bank in Louisburg, Kansas. Surveillance images from the banks indicated the same suspect was involved in both robberies. When the Joplin Police Department released surveillance images to the media and requested the public’s assistance to identify the bank robbery suspect, investigators received a tip identifying Graham. Investigators used Graham’s cell phone to trace his location to Kansas City, Mo.
On July 20, 2021, Kansas City, Mo., police officers attempted to conduct a traffic stop, but Graham fled from officers in a Dodge van, leading them on a pursuit at speeds up to 95 miles per hour through residential neighborhoods. Graham stopped the van he was driving and, while trying to run from the police, tripped and fell, breaking his arm. Graham had almost $2,000 in his pocket. Officers searched the van and recovered almost $9,000.
After he was arrested, Graham told officers he had been on a five-day meth binge and had just taken $50 worth of crack cocaine. Graham told investigators he used some of the money stolen from Great Southern Bank to purchase the van that he was driving when officers attempted to stop him in Kansas City.
Graham has two prior felony convictions for bank robbery. He was convicted in 2004 of robbing Great Southern Bank in Joplin and First State Bank of Joplin and sentenced to 20 years in state prison. He was paroled on Jan. 6, 2020, and less than a year later stole a truck. He was sentenced for felony theft on Jan. 20, 2021, and while on probation seven months later committed the two bank robberies in Joplin and Louisburg on July 19, 2021. State charges remain pending in the Louisburg bank robbery.
This case was prosecuted by Assistant U.S. Attorney Stephanie L. Wan. It was investigated by the FBI, the Joplin, Mo., Police Department, the Miami County, Kan., Sheriff’s Department, the Kansas City, Mo., Police Department and the Kansas City, Kan., Police Department.
KC Man Charged with Drug Trafficking, Illegal Firearm After Arrest During Police StandoffRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man who was arrested last night during the police standoff in the 2300 block of Blue Ridge Boulevard has been charged in federal court for offenses unrelated to the standoff.
Jimmie R. Lewis, Jr., 50, was charged in a three-count criminal complaint filed in the U.S. District Court in Kansas City, Mo. Lewis remains in federal custody pending a detention hearing pending a detention hearing on Monday, March 6.
Today’s federal criminal complaint charges Lewis with one count of possessing methamphetamine with the intent to distribute, one count of possessing a firearm in furtherance of a drug-trafficking crime, and one count of being a felon in possession of a firearm. These offenses allegedly occurred on Nov. 7, 2021.
According to an affidavit filed in support of the federal criminal complaint, Lewis was driving a Ford F-150 pickup truck eastbound on 23rd Street in Independence, Mo., on Nov. 7, 2021. Due to the truck matching the description of a stolen vehicle, an Independence police officer attempted to conduct a vehicle check. Lewis, however, led officers in a high-speed pursuit that reached speeds up to 100 miles per hour, passing other vehicles and running stop signs. Lewis’s vehicle struck a curb near Norledge and Evanston in Independence, flattening a tire. Lewis fled on foot but was apprehended.
Lewis, who had $2,084 in his pocket, was carrying a backpack while running from police officers. Inside the backpack, officers found a loaded Taurus 9mm handgun and nine plastic bags that contained a total of 395.64 grams of methamphetamine. Officers also found 19.17 grams of methamphetamine under the passenger’s seat of the Ford F-150.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Lewis has multiple prior felony convictions, the most recent being two counts of assault and one count of resisting/fleeing arrest in a Jackson County, Mo., case.
The charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Megan Baker. It was investigated by the Independence, Mo., Police Department.
Jury Convicts Ohio Man of Unlawfully Carrying Rifle and Ammunition into Washington, D.C.Read the Press Release
WASHINGTON – Brian Carruth, 45, currently of Rockport, Texas, was found guilty after a three-day jury trial on charges stemming from an incident in which he unlawfully carried an unregistered rifle and ammunition into the District of Columbia.
The announcement was made by U.S. Attorney Matthew M. Graves and Chief Alfonso Dyson, U.S. Secret Service Uniformed Division.
According to the government’s evidence at trial, on December 5, 2021, U.S. Secret Service officers stopped Mr. Carruth, who was then a resident of Burbank, Ohio, in his vehicle near the corner of 18th St. and G St. NW, roughly one block from the White House. Officers first took note of Mr. Carruth’s pickup truck because it had what appeared to be a rifle case mounted to the bed portion of the vehicle. After being stopped, Mr. Carruth told officers that he was in Washington, D.C., on a matter of national security with the Department of the Interior and had plans to visit the White House. He later informed officers that there was a hunting rifle in the backseat area of his truck. Upon searching Mr. Carruth’s vehicle, officers found a bolt-action rifle equipped with a scope and 38 rounds of live ammunition, as well as two spent shell casings. The rifle was not registered in Washington, D.C. In addition, officers discovered documents in Mr. Carruth’s truck that appeared to discuss fundamentally restructuring and resetting the U.S. federal government.
Mr. Carruth was found guilty of one count of Carrying a Rifle or Shotgun Outside Home or Place of Business, one count of Possession of an Unregistered Firearm, and one count of Unlawful Possession of Ammunition. The guilty verdict followed a three-day trial before the Honorable Michael O’Keefe in the Superior Court of the District of Columbia. The Honorable Andrea Hertzfeld scheduled sentencing for April 28, 2023.
In announcing the conviction, U.S. Attorney Graves and Chief Dyson commended the work of those who investigated the case from the U.S. Secret Service. They also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Paralegal Specialist Lashaune Briggs.
Finally, they commended the efforts of Assistant U.S. Attorney Thomas Derbish and Assistant U.S. Attorney Julian Ginos, who prosecuted the case, and Assistant U.S. Attorney Callie Hyde, who investigated the case.
Illinois Woman Admits Stealing $439,000 from BankRead the Press Release
ST. LOUIS – A former bank branch manager from Morrisonville, Illinois admitted on Wednesday that she’d embezzled about $439,000 from her employer.
Samantha J. Cherry, 35, pleaded guilty in front of U.S. District Judge Ronnie L. White to one felony count of theft or embezzlement by a bank officer.
Cherry admitted that between Jan. 1, 2021 and March 18, 2022, while a manager at a UMB Bank branch in St. Louis, she took cash directly from the vault and moved currency from other cash supplies into her cash drawer totals.
On March 18, 2022, Cherry told co-workers that she stole the money and gave it to her boyfriend, who she said had recently passed away.
Cherry is scheduled to be sentenced June 6. The charge carries a potential penalty of up to 30 years in prison, a $1 million fine or both, and she will be ordered to repay the money.
The FBI investigated the case. Assistant U.S. Attorney Jennifer Roy is prosecuting the case.
Hogansburg Man Sentenced for Alien Smuggling that Resulted in River Rescue OperationRead the Press Release
SYRACUSE, NEW YORK – Brian Lazore, age 45, of Hogansburg, New York, was sentenced today to 60 months in prison for conspiracy to commit alien smuggling and three counts of alien smuggling.
United States Attorney Carla B. Freedman and Chief Patrol Agent Robert N. Garcia, United States Border Patrol, Swanton Sector, made the announcement.
As part of his previous guilty plea, Lazore admitted to smuggling six Indian citizens from Cornwall, Ontario, into the United States using the St. Lawrence and St. Regis Rivers. During the smuggling event on April 28, 2022, Lazore’s boat sank in the St. Regis River, and Lazore and the Indian nationals were ultimately picked up by the St. Regis Mohawk Rescue Vessel. Lazore admitted to smuggling the aliens for his own financial gain.
Chief United States District Judge Brenda K. Sannes also imposed a 2-year term of supervised release to follow Lazore’s term of incarceration.
The United States Border Patrol and Homeland Security Investigations investigated this case. Assistant U.S. Attorney Jeffrey Stitt prosecuted the case.
Hartford Man Sentenced to 9 Years in Federal Prison for Role in Violent Robberies of AT&T StoresRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that DESHAWN BAUGH, 20, of Hartford, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 108 months of imprisonment, followed by three years of supervised release, for committing violent robberies of AT&T stores in Connecticut and western Massachusetts.
According to court documents and statements made in court, in 2021, Baugh, Alex Josephs, Ronaldo Smith and Shaquille Raymond committed several violent armed robberies of AT&T stores in Connecticut and western Massachusetts. The perpetrators typically entered the stores shortly before closing, pointed weapons at employees, and, at times, pistol-whipped, dragged and shoved employees toward the back inventory room. They then held the employees at gunpoint while loading large bags with cell phones and other electronics. The group stole hundreds of thousands of dollars in merchandise. A fifth co-conspirator, Saviana Bourne, helped plan the robberies, served as a getaway driver, and coordinated the sale of the stolen merchandise.
The investigation revealed that Baugh’s associates robbed AT&T stores in Newington on January 29, 2021, and Enfield on February 24, 2021. Baugh then joined the conspiracy and he and his associates robbed an AT&T store in Canton on April 15, 2021, and attempted to rob stores in Torrington and Glastonbury in May 2021, but were locked out of the stores.
On June 6, 2021, Baugh and his associates, armed with a semiautomatic pistol, two revolvers, and a semiautomatic rifle, robbed an AT&T store in West Springfield, Massachusetts. After the robbery, they fled in a vehicle driven by Bourne, who led police on a high-speed chase that ended when their vehicle collided with a Massachusetts State Police cruiser. Baugh, Josephs, Smith, Raymond and Bourne were arrested, and a search of the vehicle revealed more than $150,000 in stolen merchandise, as well as the firearms used during the robbery.
Baugh has been detained since his arrest. On November 29, 2022, he pleaded guilty to one count of Hobbs Act robbery and one count of brandishing a firearm during and in relation to a crime of violence.
Josephs, Smith, Raymond and Bourne have pleaded guilty and await sentencing.
Judge Underhill ordered Baugh to pay restitution of $124,842.45, which reflects the loss from the Canton robbery.
This matter has been investigated by the FBI's Connecticut Violent Crimes Task Force with the assistance of the Massachusetts State Police and the Newington, Enfield, Canton, Torrington, Glastonbury, and West Springfield Police Departments. The case is being prosecuted by Assistant U.S. Attorney Robert S. Ruff.
Four co-conspirators charged with bank fraudRead the Press Release
HOUSTON – The final of four charged in connection with the theft of $200,000 from a bank in Houston and allegedly transferred to New York has turned herself in to authorities, announced U.S. Attorney Alamdar S. Hamdani.
Janem Gibbs, 50, Missouri City, is expected to make her initial appearance before U.S. Magistrate Judge Andrew M. Edison at 2 p.m. today.
Arrested Friday, Feb. 24, were Munson P. Hunter III aka Paul Hunter, 48, Rosedale, New York, Gregory Thurman, 52, Richmond, and Travis Deon Wright, 51, Missouri City.
Hunter was arrested in New York where he made his appearance, while Thurman and Wright appeared in Houston.
Hunter, Thurman, Wright and Gibbs are charged with the theft of $200,000. The charges allege Gibbs was a former assistant branch manager at Capital One N.A. in Houston. She allegedly wire transferred money from a customer’s account at Capital One without his knowledge to an account at a New York City bank.
Hunter, Thurman and Wright were also charged with wire fraud for moving the stolen money through a series of other accounts at banks in New York, Virginia and Texas. The accounts were opened using fictitious names, according to the charges.
All four are charged with bank fraud. All but Gibbs are also charged with two counts of wire fraud. If convicted, each faces up to 30 years in prison and a possible $1 million maximum fine on each count.
The FBI conducted the investigation. Assistant U.S. Attorney John R. Lewis is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Former Executive Director of Ardmore Charitable Foundation Pleads Guilty to Fraud ChargesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Roslyn Melodie Haile, age 64, of Ardmore, Oklahoma entered a guilty plea to an Information charging her with one count of Bank Fraud in violation of Title 18, United States Code, Section 1344(2) and one count of Tax Fraud, in violation of Title 26, United States Code, Section 7206(1). Bank Fraud is punishable by up to 30 years of imprisonment, a fine up to $1,000,000.00, or both. Tax Fraud is punishable by up to 3 years of imprisonment, a fine up to $250,000.00, or both.
The Information alleged that on or about June 27, 2018, in the Eastern District of Oklahoma, the defendant, Roslyn Melodie Haile, for the purpose of executing or attempting to execute a scheme or artifice to obtain money, funds, credits, assets, securities, or other property under the custody and control of BancFirst, the defendant knowingly embezzled funds from the More Foundation’s BancFirst account by means of false or fraudulent pretenses, representation or promises. The Information further alleged that on September 9, 2019, in the Eastern District of Oklahoma and elsewhere, the defendant willfully made and subscribed a false 2018 Form 1040, U.S. Individual Tax Return, which contained and was verified by a written declaration that it was made under the penalties of perjury and which the defendant did not believe to be true and correct as to every material matter, in that she knowingly failed to report $63,490.54 of income.
As part of the plea hearing, the defendant acknowledged that beginning prior to 2017 and continuing through in and around June 2021, she served as the Executive Director of the More Foundation, a charitable foundation based in Ardmore, Oklahoma. The defendant admitted that between in and around 2017 and in and around May 2021, she embezzled funds from the More Foundation and that her actions resulted in a total loss of $428,271.26 to the More Foundation. The defendant further acknowledged that her failure to report her true income on her taxes resulted in loss to the U.S. Treasury of $120,777.02.
The charges arose from an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigations.
The Honorable Jason A. Robertson, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Kara Traster represented the United States.
Former Employee Federally Charged with Embezzling $150,000 from Jasper Healthcare Nonprofit over Nearly a DecadeRead the Press Release
EVANSVILLE- A federal grand jury indicted Michele Rose, 61, of Jasper, Indiana, on twelve counts of wire fraud and twelve counts of forging checks related to an alleged near-decade-long scheme to embezzle over $150,000 from a nonprofit healthcare organization headquartered in Jasper. The indictment was unsealed on February 28, 2023, following Rose’s arrest and initial appearance.
According to court documents, Rose served as the Medical Staff Coordinator for a nonprofit for many years. During her employment, Rose would occasionally make business-related purchases with her personal funds, for which she would be reimbursed by the business upon proof of receipt. From March 2011 to December 2020, Rose allegedly used her position to embezzle $153,769.00 by writing 165 fraudulent checks to herself for reimbursement of purchases that she never made. Rose made numerous false representations to organization leadership to obtain signed, blank checks to reimburse herself for nonexistent expenses. Once the blank checks were signed, Rose wrote them to herself for various amounts and deposed the funds into her personal account. Rose then fraudulently concealed the fake reimbursements by omitting them from financial reports to organization leadership.
If convicted, Rose faces up to 30 years’ imprisonment. A federal district court judge will determine the actual sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, Jeffrey R. Adams, Special Agent in Charge of the USSS Indianapolis Field Office, and Nathan Schmitt, Chief of Police for the Jasper Police Department made the announcement.
U.S. Attorney Myers thanked Assistant United States Attorney Matthew B. Miller, who is prosecuting this 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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Former Bank Employee Charged with Million-Dollar Fraud and Embezzlement SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of KEVIN CHIU, a former business relationship manager at a financial institution headquartered in Manhattan, for a years-long bank fraud and embezzlement scheme to steal over $2 million from his former clients’ accounts. CHIU was arrested this morning in Brooklyn and will be presented today before U.S. Magistrate Judge James L. Cott.
U.S. Attorney Damian Williams said: “As alleged, for years, Chiu abused his position as a business relationship manager at a financial institution to steal millions from his clients, including elderly clients. Today’s arrest is yet another example of this Office’s commitment to holding accountable those who commit financial frauds, especially those who are in positions of trust within financial institutions.”
FBI Assistant Director Michael J. Driscoll said: “The complaint today alleges that Chiu exploited his access to facilitate a years-long scheme to embezzle more than two million dollars from his clients. Financial crimes like this ultimately undermine the public’s confidence in the financial system. Today’s arrest should serve as reminder to anyone willing to take advantage of their employment to steal funds - the FBI will ensure you are held accountable in the criminal justice system.”
As alleged in the Complaint:[1]
From at least on or about October 28, 2020, through on or about June 29, 2022, CHIU engaged in a scheme to steal from his clients’ accounts by using fraudulent transaction forms to transfer funds out of their accounts. He asked at least one elderly client to sign blank transaction forms when she was meeting with CHIU in person and provided that client with fake account statements so she would not know the true balance of her account, which CHIU had largely drained.
In addition, CHIU transferred stolen funds from some client accounts to others from which he already had stolen to conceal the fraud. In total, CHIU stole over $2 million from his former clients, several of whom were elderly individual clients.
CHIU used the money he stole to purchase securities and trade in the market. He also used the funds for personal expenses.
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CHIU, 32, of Brooklyn, New York, is charged with one count of bank fraud, which carries a maximum sentence of 30 years in prison; one count of embezzlement by a bank employee, which carries a maximum sentence of 30 years in prison; one count of money laundering, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.
The maximum potential sentences 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 of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Lisa Daniels is in charge of the prosecution.
The charges contained in the Complaint 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 Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Florida Man Sentenced to Federal Prison for Possession with Intent to Distribute a Quantity of MethamphetamineRead the Press Release
NEW ORLEANS, LOUISIANA – DANTE BOWMAN, age 23, a resident of Florida, was sentenced today to 108 months imprisonment, 3 years of supervised release, and a mandatory $100 special assessment fee by U.S. District Judge Jane Triche Milazzo, after pleading guilty to a one-count indictment which charged him with possession with the intent to distribute five hundred grams or more of a mixture or substance containing a detectable amount of methamphetamine in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A), announced U.S. Attorney Duane A. Evans.
According to court documents, following a traffic stop on Interstate-10, law enforcement officers located approximately 3.1 pounds of methamphetamine within locked canvas bags hidden in the spare tire area of a vehicle rented by BOWMAN.
This case was investigated by Homeland Security Investigations and the Louisiana State Police. The prosecution was handled by Assistant United States Attorney Lynn E. Schiffman of the Narcotics Unit.
Felon Sentenced to 65 Months for Federal Gun ChargeRead the Press Release
NEW ORLEANS, LA – United States Attorney Duane A. Evans announced that SHAWN RABATHALY, age 23, of New Orleans, Louisiana, pleaded guilty on February 28, 2023 to a violation of the Federal Gun Control Act, Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
The single count indictment charged RABATHALY with being a convicted felon in possession of a firearm. Court documents reveal that RABATHALY was under surveillance by investigators, who saw him place an Anderson Model AM-15, 5.56 caliber assault rifle into a vehicle he occupied. RABATHALY is prohibited from possessing a firearm due to his criminal history. He was previously convicted of a felony offense in Orleans Parish for illegal possession of a controlled substance.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Jefferson Parish Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Charles Dustin Strauss of the Violent Crimes Unit.
Federal Jury Convicts West Monroe Man of Drug TraffickingRead the Press Release
MONROE, La. – A federal jury in Monroe returned a guilty verdict late yesterday afternoon convicting Paul Anthony Lewis, 50, of West Monroe, on numerous drug trafficking charges, announced United States Attorney Brandon B. Brown. United States District Judge David C. Joseph presided over the trial.
According to evidence presented at trial, agents with the U.S. Drug Enforcement Administration (DEA) and Metro Narcotics Unit of Ouachita Parish began an investigation into the suspected drug trafficking activities of Lewis. While conducting surveillance of Lewis’ stash house, agents observed large packages that were delivered by the U.S. Postal Service to that address. A subsequent search of the house revealed large quantities of methamphetamine, fentanyl, cocaine, cocaine base also known as crack cocaine, and promethazine in the house. Testimony at trial revealed that Lewis used his telephone to negotiate drug trafficking transactions with unindicted co-conspirators in Texas and in the Western District of Louisiana.
“This defendant was a trafficker of almost any type of illicit substance he could get his hands on, with ‘was’ being the operative word here,” said U.S. Attorney Brandon B. Brown. “This jury verdict ensures that the citizens of Ouachita Parish will not have to worry about Mr. Lewis’ drug dealing for many years. Lastly, it is a priority in this district that there will be zero tolerance here for the trafficking of fentanyl.”
Lewis faces a sentence ranging from 10 years to life in prison, three years of supervised release, and a fine of up to $250,000. His sentencing will be set by the court at a later date.
The case was investigated by the DEA, Metro Narcotics Unit of Ouachita Parish, U.S. Postal Inspection Service, and prosecuted by Assistant U.S. Attorney William Gaskins and Alexander C. Van Hook, Special Counsel to the U.S. Attorney.
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Dominican Man Pleads Guilty to Illegal ReentryRead the Press Release
BOSTON – A Dominican man pleaded guilty yesterday to illegally reentering the United States following a prior removal.
Juan Nova-Nivar, 35, pleaded guilty to one count of illegal reentry before U.S. District Court Judge Denise J. Casper, who scheduled sentencing for April 5, 2023. Nova-Nivar was indicted by a federal grand jury in March 2017 after being arrested on unrelated state charges in Essex County. He remains in state custody.
In 2012, Nova-Nivar was encountered by immigration officials in Texas, determined to be illegally present in the United States and placed into removal proceedings. He was deported to the Dominican Republic on June 6, 2012.
Sometime after his 2012 removal, Nova-Nivar illegally reentered the United States. In 2015, Nova-Nivar was arrested in Lawrence under an alias on drug distribution charges. Nova-Nivar failed to appear for a number of scheduled pre-trial hearings and a warrant was issued for his arrest.
Fingerprints obtained at the time of Nova-Nivar’s arrest provided a positive match with those from his 2012 removal and Nova-Nivar, leading to his March 2017 indictment for illegal reentry in this case.
In May 2022, Novar Nivar — while still in warrant status for the state drug distribution charges — was arrested in Lawrence again using the same alias. He was later transferred into federal custody.The charge of unlawful reentry of a deported alien provides for a sentence of up to two years in prison, one year of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Rachael S. Rollins; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in New England; and Todd M. Lyons, Field Office Director of U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations in Boston made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Rollins’ Major Crimes Unit is prosecuting the case.
District Man Sentenced to 40 Years for First-Degree Murder While Armed for Killing a 15-Year-Old in Southeast WashingtonRead the Press Release
WASHINGTON – Malik Holston, 21, of Washington, D.C., was sentenced today to 40 years in prison for first-degree murder while armed for the fatal shooting of a 15-year-old boy, announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department. Holston had been found guilty on November 2, 2022. In addition to the prison term, the Honorable Rainey R. Brandt ordered five years of supervised release. Holston was also sentenced to five years in prison and three years of supervised release for the unlawful possession of a firearm, and 24 months in prison and three years of supervised release for carrying a pistol without a license, with those sentences ordered to run concurrently with the murder sentence
According to the government’s evidence, on Dec. 13, 2018, at approximately 3:40 p.m., Holston and a second assailant – both armed and wearing masks – pursued 15-year-old Gerald Watson through the parking lot area near buildings in the 2900 block of Knox Place SE. Mr. Watson ran inside a multi-unit apartment building, followed by Holston, while the second gunman waited outside. Inside the building, Holston cornered Mr. Watson at the top landing and shot him 16 times with a .40-caliber revolver. Holston and the second gunman then fled the scene. Mr. Watson was taken to a hospital, where he died from the injuries.
The shooting took place shortly after Mr. Watson returned home from school and headed outside to play basketball. Within about five minutes of leaving home, the shooting occurred.
Holston was arrested on Dec. 18, 2018. The second assailant was himself killed by gunfire on Sept. 10, 2019.
In announcing the sentence, U.S. Attorney Graves and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the assistance provided by the Capital Area Regional Fugitive Task Force and the District of Columbia Department of Forensic Sciences. They acknowledged the efforts of those who provided assistance in the U.S. Attorney’s Office, including Special Agents Durand Odom and Mark Crawford of the Criminal Investigations Unit; Paralegal Specialists Stephanie Gilbert and Kelly Blakeney; Victim/Witness Advocate Jennifer Allen; Witness Security Coordinators Marlon Hernandez-Quijano, Maenylie Watson, and Katina Adams-Washington; former Witness Security Coordinator La June Thames; Intelligence Analyst Zachary McMenamin; Supervisory Litigation Technology Specialist Leif Hickling and Litigation Technology Specialist Claudia Gutierrez; Chrisellen Kolb, Chief of the Appellate Division, and Assistant U.S. Attorneys Suzanne Curt, Daniel Lenerz, and Peter Roman.
Finally, they commended the work of Assistant U.S. Attorneys Michael C. Liebman and Andrea Coronado, who investigated and prosecuted the case.
Davenport Man Sentenced to Federal Prison for Child Pornography ChargesRead the Press Release
DAVENPORT, IA – A Davenport man was sentenced on February 27, 2023, to 210 months in prison for Receiving Child Pornography and Possession of Obscene Visual Representation of the Sexual Abuse of Children.
The investigation of Adam Carney Conn, 40, began when the National Center of Missing and Exploited Children (NCMEC) received a cybertip that images and videos of child pornography were downloaded to two of Conn’s Google accounts. Conn’s Google accounts had over 1,100 images of child pornography, which were categorized and organized. When law enforcement arrested Conn, he was in possession of electronic devices that contained several hundred more images of child pornography.
Prior to this investigation, a child disclosed that Conn had sexually abused her. The government submitted evidence of the sexual abuse at sentencing, which the Court found to be credible.
Conn’s sentence was ordered to be served consecutively to a sentence he is currently serving in the Iowa Department of Corrections. Following his prison term, Conn was ordered to serve ten years of supervised release and pay $24,000 of restitution.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Davenport Police Department investigated the case.
This case was brought as part of Project Safe Childhood (PSC). In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorney’s Offices and the Department of Justice’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 www.projectsafechildhood.gov.
Davenport Man Sentenced to 27 Months in Prison for Lying to a Federal Grand JuryRead the Press Release
DAVENPORT, IA – A Davenport man was sentenced yesterday to 27 months in federal prison for lying to a federal grand jury.
According to court documents and evidence presented at sentencing, Kaleb Bentley, 23, was called to testify as a witness before a federal grand jury in May 2021. While under oath, Bentley provided multiple false statements to the grand jury about a felony investigation involving multiple shots fired incidents and drug trafficking. Bentley’s false statements substantially interfered with the grand jury’s investigation.
After Bentley completes his prison sentence, he will be required to serve three years of supervised release. There is no parole in the federal system.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was investigated by the Davenport Police Department.
Cumberland Man Sentenced to Federal Prison for Possessing Child PornographyRead the Press Release
PROVIDENCE – A Cumberland man who accessed and downloaded images and videos of child pornography, including images of prepubescent children, was sentenced today to nearly three years in federal prison, announced United States Attorney Zachary A. Cunha.
In January 2022, the National Center for Missing and Exploited Children provided Homeland Security Investigations (HSI) with information that they obtained from a Canadian-based online messaging and chat service that, on multiple dates, an IP address and email, later determined by law enforcement to belong to Patrick K. Newton, 27, was used on multiple dates to access and view child pornography.
On March 30, 2022, HSI agents and members of the Rhode Island State Police Internet Crimes Against Children Task Force executed a court-authorized search of Newton’s residence and found that electronic media storage devices possessed by Newton contained videos and images of child pornography.
Newton pleaded guilty on October 17, 2022, to a charge of possession of child pornography. He was sentenced today by U.S. District Court Judge Mary S. McElroy to thirty-three months in federal prison to be followed by five years of federal supervised release.
The case was prosecuted by Assistant United States Attorney Paul F. Daly, Jr.
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Convicted Felon Pleads Guilty to Drug TraffickingRead the Press Release
ALEXANDRIA, Va. – A Fairfax man pleaded guilty today to conspiracy to distribute 400 grams or more of fentanyl and 500 grams or more of methamphetamine.
According to court documents, in March and April 2022, Calvin Ray Brown, 50, and a co-conspirator sold counterfeit pressed pills containing fentanyl to a Fairfax County Police Department confidential source and undercover detective on multiple occasions. When a search warrant was executed on Brown’s residence, officers recovered 999 counterfeit pressed pills containing fentanyl, approximately 723 grams of methamphetamine, over 500 grams of cocaine, and 665 grams of N,N-dimethylpentylone, a federally unscheduled substance similar to MDMA.
Officers also recovered $25,001 in cash, a loaded semi-automatic “ghost” gun, and a bulletproof ballistics vest. During an interview, Brown admitted that he and his co-conspirator had been distributing fentanyl pills, methamphetamine, MDMA, and crack cocaine since January 2021. He stated that, over the course of the conspiracy, they obtained about 1000 fentanyl pills every two weeks, and had also obtained 1 kilogram of methamphetamine and 8 kilograms of cocaine. Brown has a lengthy criminal history, which includes numerous convictions for drug trafficking, as well as a conviction for possession of a firearm by a convicted felon.
Brown is scheduled to be sentenced on June 26. He faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of life imprisonment. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division; and Kevin Davis, Fairfax County Chief of Police, made the announcement after U.S. District Judge Rossie D. Alston accepted the plea.
Special Assistant U.S. Attorney Lauren Hahn is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:23-cr-30.
Columbus man sentenced for drug traffickingRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced today that Sergio Ruiz was sentenced to 240 months in prison. A federal jury convicted Ruiz, 58, of Columbus, New Mexico, on one count each of conspiracy to distribute 500 grams and more of a mixture and substance containing methamphetamine, possession with intent to distribute 500 grams and more of a mixture and substance containing methamphetamine, and importation of 500 grams and more of a mixture and substance containing methamphetamine into the United States on June 8.
A federal grand jury indicted Ruiz on March 23. According to the indictment and other court records, on April 28, 2021, Ruiz attempted to cross into the United States at the Columbus Port of Entry, coming from Palomas, Chihuahua, Mexico. Ruiz, a regular crosser at Columbus, was carrying a large amount of cinder blocks and two 55-gallon drums and was directed to the secondary inspection area. A scan revealed an anomaly in the spare tire, prompting inspection by a U.S. Customs and Border Protection (CBP) canine unit that resulted in a positive alert.
CBP officers removed and inspected the spare tire. Inside the tire, inspectors found five packages containing a substance that tested positive for methamphetamine. The total weight of the five packages was 20.8 kilograms (45.76 pounds).
Upon his release from prison, Ruiz will be subject to 5 years of supervised release.
Homeland Security Investigations and Customs and Border Protection investigated this case. Assistant United States Attorneys Joni Autrey Stahl and Randy M. Castellano are prosecuting the case.
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Clinton Man Sentenced to Federal Prison for Drug ChargesRead the Press Release
DAVENPORT, IA – A Clinton man was sentenced on February 28, 2023, to 178 months in prison following his guilty plea to conspiracy to distribute methamphetamine and distribution of methamphetamine.
According to court documents, Jovan Fedrick, 38, was identified as part of a large-scale methamphetamine drug trafficking organization operating in California, Iowa, and Illinois. Fedrick and a co-defendant traveled to California to have large quantities of ice methamphetamine transported to Chicago. As part of the investigation, agents seized more than 15 pounds of “ice” methamphetamine and conducted a half-pound purchase of methamphetamine from Fedrick at his residence in Clinton. Following his prison term, Fedrick was ordered to serve a five-year term of supervised release.
In December 2021, co-defendant Brent White, 52, of Chicago, Illinois, was sentenced to 135 months in prison. In January 2022, co-defendant Michaelene Damian Rojas, 50, of Hemet, California, was sentenced to 135 months in prison. Rojas served as a source of supply for the methamphetamine.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was investigated by the Iowa Division of Narcotics Enforcement and the United States Drug Enforcement Administration.
Child Predator Sentenced to 10 Years in Prison for Following a Child on the Street and Later Communicating with her OnlineRead the Press Release
WASHINGTON – Marcus Douglas, 53, of Washington, D.C., was sentenced today to 10 years in prison for the coercion and enticement of a minor. Douglas pleaded guilty to the charge on August 31, 2022.
In July of 2021, Douglas approached a 14-year-old girl he saw walking on a sidewalk in downtown Washington, D.C. He placed a note on her cell phone suggesting that he wanted to pay her to engage in sexual activity with him. The note contained his first name, Marcus, and his cell phone number. The victim immediately went to a nearby firehouse and reported the incident. Police officers with the Metropolitan Police Department responded, interviewed the victim, and quickly traced the phone number to Douglas. An undercover officer then initiated a text conversation with Douglas, pretending to be the 14-year-old girl. During messaging with the individual he believed was a minor, Douglas asked for pictures of the victim, told her about his sexual fantasies, and asked for an opportunity to meet the minor victim in person. A location for this meeting was discussed during this text conversation. When Douglas arrived at the agreed upon meeting location, he was arrested.
In addition to the prison term, the Honorable Judge Florence Y. Pan ordered 10 years of supervised release and ordered Douglas to register as a sex offender for 25 years. She also ordered Douglas to pay the minor victim $36,956 in restitution.
In announcing the sentence, U.S. Attorney Matthew M. Graves, and Metropolitan Police Chief Robert J. Contee, III commended the work of the detectives and patrol officers of the Metropolitan Police Department’s Child Exploitation and Human Trafficking Task Force. They also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office, including Yvonne Bryant, the Victim/Witness Specialist assigned to this matter, and paralegal Alexis Spencer-Anderson. Finally, they commended the work of Assistant U.S. Attorney Amy Larson, who investigated and prosecuted the case.
If you have information that a child is being physically or sexually abused or neglected, you can help by reporting the abuse to the Child and Family Service Agency for the District of Columbia (CFSA). CFSA takes reports of child abuse and neglect 24 hours a day, seven days a week at (202) 671-SAFE or (202) 671-7233.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Caldwell Man Sentenced to 6 Years in Federal Prison for Possessing Child PornographyRead the Press Release
BOISE – David Daniel Lynn Bowden, 21, of Caldwell was sentenced to 72 months in federal prison for possession of child pornography, U.S. Attorney Josh Hurwit announced today.
According to court records, in April 2021, the Idaho Internet Crimes Against Children (ICAC) Task Force received an investigative lead that Bowden possessed child pornography. ICAC is an investigative task force within the Idaho Office of the Attorney General funded by the State of Idaho and federal grants.
ICAC further investigated the tip and found corroborating evidence that Bowden possessed child pornography. Based on ICAC’s investigation, law enforcement secured a search warrant for Bowden’s residence in Caldwell to search for evidence of child pornography crimes. During the search of Bowden’s residence, law enforcement discovered 187 images of child pornography on Bowden’s phone. Some of the child pornography depicted prepubescent children.
“The collaborative efforts in Idaho to prosecute those who possess and distribute child pornography is second to none,” said U.S Attorney Hurwit. “Those who engage in this reprehensible conduct should know they have nowhere to hide.”
“Thank you to ICAC, the Caldwell Police Department and the US Attorney’s Office for their outstanding work that led to this sentencing. I am proud to work beside these agencies as they strive to keep Idaho’s children safe," Attorney General Raúl Labrador said.
Senior U.S. District Judge Lynn B. Winmill also ordered Bowden to serve ten years of supervised release following his prison sentence and ordered restitution to the victims. Bowden pleaded guilty to the charges on December 8, 2022.
U.S. Attorney Hurwit thanked the Idaho Internet Crimes Against Children Task Force, the Idaho Office of the Attorney General, and the Caldwell Police Department for their cooperative efforts that led to the prosecution.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. As part of Project Safe Childhood, the U.S. Attorney’s Office for the District of Idaho and the Idaho Attorney General’s Office partner to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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CEO of Publicly Traded Health Care Company Charged for Insider Trading SchemeRead the Press Release
An indictment was unsealed today charging Terren S. Peizer, the CEO and Chairman of the Board of Directors of Ontrak Inc., a publicly traded health care company, for allegedly engaging in an insider trading scheme in which he fraudulently used Rule 10b5-1 trading plans to trade Ontrak stock.
“Today’s groundbreaking insider trading indictment demonstrates that the Department of Justice, together with our law enforcement partners, will not allow corrupt executives to misuse 10b5-1 plans as a shield for insider trading,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “As this case shows, we have embraced the use of data to proactively identify and investigate fraud as we continue to ensure that ordinary investors are on an equal playing field with corporate insiders.”
According to court documents, between May and August 2021, Peizer, 63, a resident of Puerto Rico and Santa Monica, California, allegedly avoided more than $12.5 million in losses by entering into two Rule 10b5-1 trading plans while in possession of material, nonpublic information concerning the serious risk that Ontrak’s then-largest customer would terminate its contract. In May 2021, Peizer allegedly entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the customer was deteriorating and that the customer had expressed serious reservations about continuing its contract with Ontrak. The indictment alleges that Peizer later learned that the customer informed Ontrak of its intent to terminate the contract. Then, in August 2021, Peizer allegedly entered into his second 10b5-1 trading plan approximately one hour after Ontrak’s chief negotiator for the contract confirmed to Peizer that the contract likely would be terminated.
In establishing his 10b5-1 plans, Peizer allegedly refused to engage in any “cooling-off” period – the time between when he entered into the plan and when he sold stock – despite warnings from two brokers. Instead, Peizer allegedly began selling shares of Ontrak on the next trading day after establishing each plan. On Aug. 19, 2021, just six days after Peizer adopted his August 10b5-1 plan, Ontrak announced that the customer had terminated its contract and Ontrak’s stock price declined by more than 44%.
“Mr. Peizer is accused of using his insider knowledge as CEO of a publicly traded company to line his own pockets in violation of his duty to his company and its shareholders,” said U.S. Attorney Martin Estrada for the Central District of California. “Mr. Peizer allegedly exploited material nonpublic information and tried to shield himself with a rule designed to ensure a fair and level playing field for all investors. With this indictment, we again affirm that the law applies equally to all and that corporate executives who unlawfully denigrate the integrity of our financial markets will be held accountable.”
“The FBI and our partners are committed to holding insiders accountable at all levels, including those who act in bad faith when establishing trading plans in order to evade regulations,” said Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office. “Americans must have trust in the marketplace and that can only be achieved when offenders who violate their obligations are held responsible.”
Peizer is charged with one count of engaging in a securities fraud scheme and two counts of securities fraud for insider trading. If convicted, he faces a maximum penalty of 25 years in prison on the securities fraud scheme charge and 20 years in prison on each of the insider trading charges.
The indictment represents the first time that the Department of Justice has brought criminal insider trading charges based exclusively on an executive’s use of 10b5-1 trading plans. The investigation is part of a data-driven initiative led by the Fraud Section to identify executive abuses of 10b5-1 trading plans.
Rule 10b5-1 trading plans can offer an executive a defense to insider trading charges. However, the defense is unavailable if the executive is in possession of material, nonpublic information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5-1.
The FBI is investigating the case.
Trial Attorneys Matthew Reilly and Christina McGill of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ali Moghaddas for the Central District of California 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]. For additional information and case event updates, please visit www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
CEO of Nevada-Based Publicly Traded Health Care Company Charged with Federal Crimes for Alleged Insider Trading SchemeRead the Press Release
LOS ANGELES – An indictment was unsealed today charging Terren S. Peizer, the CEO and Chairman of the Board of Directors of Ontrak Inc., a Henderson, Nevada-based publicly traded health care company, for allegedly engaging in an insider trading scheme in which he fraudulently used Rule 10b5-1 trading plans to trade Ontrak stock.
“Mr. Peizer is accused of using his insider knowledge as CEO of a publicly traded company to line his own pockets in violation of his duty to his company and its shareholders,” said United States Attorney Martin Estrada. “Mr. Peizer allegedly exploited material nonpublic information and tried to shield himself with a rule designed to ensure a fair and level playing field for all investors. With this indictment, we again affirm that the law applies equally to all and that corporate executives who unlawfully denigrate the integrity of our financial markets will be held accountable.”
According to court documents, between May and August 2021, Peizer, 63, a resident of Puerto Rico and Santa Monica, allegedly avoided more than $12.5 million in losses by entering into two Rule 10b5-1 trading plans while in possession of material, nonpublic information concerning the serious risk that Ontrak’s then-largest customer would terminate its contract. In May 2021, Peizer allegedly entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the customer was deteriorating and that the customer had expressed serious reservations about continuing its contract with Ontrak.
The indictment alleges that Peizer later learned that the customer informed Ontrak of its intent to terminate the contract. Then, in August 2021, Peizer allegedly entered into his second 10b5-1 trading plan approximately one hour after Ontrak’s chief negotiator for the contract confirmed to Peizer that the contract likely would be terminated.
In establishing his 10b5-1 plans, Peizer allegedly refused to engage in any “cooling-off” period – the time between when he entered into the plan and when he sold stock – despite warnings from two brokers. Instead, Peizer allegedly began selling shares of Ontrak on the next trading day after establishing each plan. On Aug. 19, 2021, just six days after Peizer adopted his August 10b5-1 plan, Ontrak announced that the customer had terminated its contract and Ontrak’s stock price declined by more than 44%.
“Today’s groundbreaking insider trading indictment demonstrates that the Department of Justice, together with our law enforcement partners, will not allow corrupt executives to misuse 10b5-1 plans as a shield for insider trading,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “As this case shows, we have embraced the use of data to proactively identify and investigate fraud as we continue to ensure that ordinary investors are on an equal playing field with corporate insiders.”
“The FBI and our partners are committed to holding insiders accountable at all levels, including those who act in bad faith when establishing trading plans in order to evade regulations,” said Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office. “Americans must have trust in the marketplace and that can only be achieved when offenders who violate their obligations are held responsible.”
Peizer is charged with one count of engaging in a securities fraud scheme and two counts of securities fraud for insider trading. If convicted, he faces a maximum penalty of 25 years in prison on the securities fraud scheme charge and 20 years in prison on each of the insider trading charges.
The indictment represents the first time that the Department of Justice has brought criminal insider trading charges stemming from an executive’s use of a 10b5-1 trading plan. The investigation is part of a data-driven initiative led by the Fraud Section to identify executive abuses of 10b5-1 trading plans.
Rule 10b5-1 trading plans can offer an executive a defense to insider trading charges. However, the defense is unavailable if the executive is in possession of material, nonpublic information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5-1.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI is investigating the case.
Assistant U.S. Attorney Ali Moghaddas of the Major Frauds Section and Justice Department Trial Attorneys Matthew Reilly and Christina McGill of the Criminal Division’s Fraud Section 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]. For additional information and case event updates, please visit www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer.
Baraboo Man Sentenced to 6 Years for Methamphetamine TraffickingRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Paul R. Ripp, 50, of Baraboo, Wisconsin was sentenced today by U.S. District Judge William M. Conley to 6 years in prison for possessing more than 50 grams of methamphetamine with the intent to distribute it. Ripp pleaded guilty to this charge on December 8, 2022.
On March 28, 2022, Columbia County Sheriff’s deputies attempted to stop Ripp driving a truck near a hotel in Portage off the interstate highway, pursuant to an arrest warrant for state offenses. Ripp fled from officers in a high-speed chase that reached speeds of 100 miles per hour. Ripp avoided apprehension, then abandoned his truck and fled on foot. The following day, Sauk County Sheriff’s deputies located Ripp at a hotel in Wisconsin Dells. At the time Ripp was encountered and arrested by deputies outside the hotel, he was carrying a bag that contained multiple individually packaged bags of methamphetamine that totaled 111 grams of the drug. In the months prior to his arrest, Ripp was involved in multiple sales of methamphetamine in both Columbia and Sauk Counties.
Judge Conley said that a significant period of incarceration was necessary because Ripp had been trafficking methamphetamine in the community for an extended period of time and, further, endangered both officers and the public by engaging in high-speed flight when police attempted to apprehend him. Judge Conley also considered the fact that Ripp had been convicted of drug trafficking in recent years with little deterrence from sentences that had not imposed meaningful terms of incarceration.
The charge against Paul Ripp was the result of an investigation conducted by the Sauk and Columbia County Sheriffs’ Offices. Assistant U.S. Attorney Robert A. Anderson prosecuted this case.
Assistant United States Attorney Lindsey Mitcham Lorence Admitted to American College of Trial LawyersRead the Press Release
LITTLE ROCK—Lindsey Mitcham Lorence, an Assistant United States Attorney for the Eastern District of Arkansas, is now a Fellow of the American College of Trial Lawyers, one of the premier legal associations in North America.
The induction ceremony at which Lindsey became a Fellow took place recently before an audience of approximately 525 during the Spring Meeting of the College in Key Biscayne, Florida.
Founded in 1950, the College is composed of the best of the trial bar from the United States, Canada and Puerto Rico. Fellowship in the College is extended by invitation only and only after careful investigation, to those experienced trial lawyers of diverse backgrounds, who have mastered the art of advocacy and whose professional careers have been marked by the highest standards of ethical conduct, professionalism, civility and collegiality. Lawyers must have a minimum of fifteen years trial experience before they can be considered for Fellowship.
Membership in the College cannot exceed one percent of the total lawyer population of any state or province. There are currently approximately 5,800 members in the United States, Canada and Puerto Rico, including active Fellows, Emeritus Fellows, Judicial Fellows (those who ascended to the bench after their induction) and Honorary Fellows. The College maintains and seeks to improve the standards of trial practice, professionalism, ethics, and the administration of justice through education and public statements on independence of the judiciary, trial by jury, respect for the rule of law, access to justice, and fair and just representation of all parties to legal proceedings. The College is thus able to speak with a balanced voice on important issues affecting the legal profession and the administration of justice.
Lindsey has been practicing in Little Rock for twenty-six years. The newly inducted Fellow is an alumna of the William H. Bowen University of Arkansas at Little Rock School of Law, where she is now an adjunct professor. Before joining the United States Attorney’s Office as an Assistant United States Attorney in the civil division, Lindsey was a law clerk for retired Pulaski County Circuit Judge Chris Piazza, worked as a Deputy Prosecuting Attorney for the 6th Judicial District and was a Partner at Friday, Eldredge & Clark, LLP.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
Arizona man pleads guilty to extorting Georgia TechRead the Press Release
ATLANTA - Ronald Bell, who conspired to extort money from Georgia Institute of Technology, has pleaded guilty to a charge of conspiracy to commit extortion.
“The defendant tried to extort Georgia Tech and egregiously tarnish the reputation of the university’s coach with a false claim of sexual assault,” said U.S. Attorney Ryan K. Buchanan. “By his guilty plea he acknowledged the lie and his criminal conduct, and will now face the consequences for his crime.”
“Bell sought to severely damage the reputation of the institution and their coach solely for his own financial gain,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The FBI will not tolerate false allegations and will do everything in our power to seek the truth and hold individuals who commit these type of crimes accountable for their selfish actions.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: Ronald Bell pleaded guilty to conspiring with his co-defendant, Jennifer Pendley, and a security guard at Georgia Tech, to falsely accuse the coach of Georgia Tech men’s basketball team of sexual assault. Bell admitted he recruited the security guard to falsely claim that the guard witnessed an assault. Bell told the security guard that the false accusation of sexual assault could be worth $20 million and promised the guard a share of the money.
Bell also communicated with representatives of Georgia Tech and demanded money in exchange for not reporting the claimed sexual assault. For example, he texted a representative of Georgia Tech that: “This is going to get very ugly. GT has made no effort . . . to amicably resolve this . . . I guess this has to get ugly. I tried to resolve this without damaging GT’s reputation . . . .”
After Georgia Tech refused to pay the bribe, Pendley filed a lawsuit claiming sexual battery, sexual assault, and intentional infliction of emotional distress. These claims falsely alleged that the guard witnessed the coach sexually assault Pendley. Ultimately, the security guard admitted that his statements were false and that Bell asked him to lie to support the false sexual assault claim.
Pendley previously pled guilty to conspiracy to commit extortion on February 22, 2023.
Sentencing for Ronald Bell, 56, of Oro Valley, Arizona, is scheduled for June 8, 2023 at 11:00 a.m., before U.S. District Judge Thomas W. Thrash.
This case is being investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Christopher J. Huber is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Albany Felon Sentenced to 85 Months for Possessing Cocaine and Heroin for Distribution, and Possessing a Firearm in Furtherance of Drug TraffickingRead the Press Release
ALBANY, NEW YORK – Rodney Matthews, age 50, of Albany, was sentenced today to 85 months in prison for possessing and intending to distribute cocaine and heroin, and for possessing a firearm in furtherance of a drug trafficking crime.
United States Attorney Carla B. Freedman; Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI); and Chief Eric Hawkins of the Albany Police Department (APD) made the announcement.
When he pled guilty in this case, Matthews admitted to possessing 306 grams of cocaine and 95 grams of heroin at his apartment in Albany, which he intended to distribute, as well as $11,966, which represented the proceeds of his drug trafficking. Matthews, a previously convicted felon, further admitted to possessing a loaded, privately manufactured .357 caliber semi-automatic pistol (aka a “ghost gun”) to guard against the potential theft of his drugs and proceeds. Matthews was initially arrested by APD officers after he was observed firing the pistol into a telephone pole outside his residence.
Senior United States District Judge Gary L. Sharpe also ordered that Matthews forfeit the $11,966 seized from his apartment, and that he serve a 3-year term of supervised release following his release from prison.
This case was investigated by the FBI and its Capital District Safe Streets Gang Task Force, which includes FBI Special Agents and members of federal, state and local law enforcement agencies, including APD. Assistant U.S. Attorney Emmet O’Hanlon prosecuted this case.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
16 Defendants Charged in 112-Count Indictment Alleging Bank Fraud and Aggravated Identity Theft in Stolen Mail SchemeRead the Press Release
ALBANY, Ga. – Sixteen individuals are facing federal bank fraud and aggravated identity theft charges alleging their participation in a stolen mail scheme in and around the Americus, Georgia, community and Florida amounting to more than $165,000.
The federal indictment was returned on Feb. 15 charging the following defendants:
Jalen Tylee Hill aka “Roscoe Hill,” 24, of Americus, is charged with 68 counts of bank fraud, one count of fraud in connection with identification documents, 42 counts of aggravated identity theft and one count of conspiracy to possess stolen mail. On each count if convicted, Hill faces a maximum sentence of 30 years in prison and a $1,000,000 fine for bank fraud, a maximum sentence of five years in prison and a $250,000 fine for fraud in connection with identification documents, two years in prison and a $250,000 fine for aggravated identity theft and a maximum sentence of five years in prison and a $250,000 for possession of stolen mail;
Tyavia Deashia Richardson, 21, of Edison, Georgia, is charged with three counts of bank fraud. If convicted, Richardson faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Quontavius Markee Hill, 31, of Americus, is charged with six counts of bank fraud. If convicted, Hill faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Laquashia Nichole French, 25, of Americus, is charged with six counts of bank fraud. If convicted, French faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Accacia Gordon, 25, of Americus, is charged with 13 counts of bank fraud. If convicted, Gordon faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Dekeyvia Moasha Blackshear, 22, of Leslie, Georgia, is charged with two counts of bank fraud. If convicted, Blackshear faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Jenetta Small, 27, of Columbus, Georgia, is charged with four counts of bank fraud. If convicted, Small faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Jazmon Lace Whitehead, 29, of Oglethorpe, Georgia, is charged with seven counts of bank fraud. If convicted, Whitehead faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Chasity Lacole Wellons, 28, of Cordele, Georgia is charged with three counts of bank fraud. If convicted, Wellons faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Kelbresha Danielle Thomas, 28, of Montezuma, Georgia, is charged with four counts of bank fraud. If convicted, Thomas faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Kimbreyanna Andranique Peeples, 21, of Butler, Georgia, is charged with two counts of bank fraud. If convicted, Peeples faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Victoria Carter, 23, of Americus, is charged with one count of bank fraud. If convicted, Carter faces a maximum sentence of 20 years in prison and a $250,000 fine;
Chelsea Ja’Nay Tullis, 26, of Americus, is charged with one count of bank fraud. If convicted, Tullis faces a maximum sentence of 20 years in prison and a $250,000 fine;
Janita Bre’Shaye Terry, 22, of Columbus, is charged with four counts of bank fraud. If convicted, Terry faces a maximum sentence of 20 years in prison and a $250,000 fine per count;
Shaneria Sharae Murray, 31, of Ellaville, Georgia, is charged with two counts of bank fraud. If convicted, Murray faces a maximum sentence of 20 years in prison and a $250,000 fine per count; and
Mercedes Lashon Brown, 24, of Americus, is charged with three counts of bank fraud. If convicted, Brown faces a maximum sentence of 20 years in prison and a $250,000 fine per count.
Defendant Jalen “Roscoe” Hill remains at-large; the remaining defendants were taken into custody on Feb. 23. Those defendants had initial appearances before U.S. Magistrate Judge Thomas Q. Langstaff on Feb. 23. Quontavius Hill was ordered detained today, Feb. 28. Individuals with information regarding Jalen “Roscoe” Hill’s whereabouts can contact the FBI’s Atlanta Field Office at (770) 216-3000 or submit a tip online at tips.fbi.gov.
According to the indictment, Jalen Hill and others would allegedly steal checks out of residential and commercial mailboxes around Americus, as well as other locations in Georgia and Florida. Jalen Hill is alleged to have recruited his co-defendants via social media to cash the checks at various banks and used other people’s means of identification to commit bank fraud on 14 occasions. In addition, Jalen Hill is alleged to have used the stolen identities of 28 people. The total amount of theft alleged in the indictment is $165,743.68.
The case is being investigated by the U.S. Postal Inspection Service, the FBI, the U.S Secret Service (USSS) and the Sumter County Sheriff’s Office. Assistant U.S. Attorney Matthew Redavid 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.
28 February 2023
Watertown Man Charged with Several Counts of Child PornographyRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell announced that a federal grand jury has indicted a Watertown, South Dakota, man for two counts of Production of Child Pornography and one count of Receipt and Distribution of Child Pornography.
Ted Jeffrey Hurkes, age 44, was indicted in February of 2023. He appeared before U.S. Magistrate Judge Mark A. Moreno on February 24, 2023, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is up to 30 years in federal prison and/or a $250,000 fine, life years of supervised release, and $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on October 2, 2022, and again on November 12, 2022, Hurkes knowingly employed, used, persuaded, induced, enticed, and coerced a minor female to engage in sexually explicit conduct for the purpose of producing visual depictions of such conduct.
The Indictment also alleges that between on or about October 2, 2022, and January 13, 2023, Hurkes knowingly received and distributed, and attempted to receive and distribute, any child pornography that had been mailed, shipped, and transported in or affecting interstate or foreign commerce by any means, including by computer.
The charges are merely accusations and Hurkes is presumed innocent until and unless proven guilty.
The investigation is being conducted by Homeland Security Investigations and the Watertown Police Department. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting 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.
Hurkes was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for May 2, 2023.
WFBMC Agrees to Pay U.S. $754,585 Following Documentation Issues Relating to Therapy Services at Wilkesboro Skilled Nursing FacilityRead the Press Release
GREENSBORO, N.C. - Wake Forest University Baptist Medical Center (WFBMC) has agreed to pay the government $754,585 to resolve an overpayment resulting from improper documentation at the Wilkes Medical Center Skilled Nursing Unit (“Wilkes SNU”), announced U.S. Attorney Sandra J. Hairston.
WFBMC acquired Wilkes Medical Center, including the Wilkes SNU, on July 1, 2017. The United States contends that between January 1, 2015 and September 30, 2019, the Wilkes Medical Center submitted or caused to be submitted claims to Medicare for physical and occupational therapy services provided to patients at the Wilkes SNU that were not supported by documentation.
The United States initiated its investigation when a whistleblower filed a lawsuit under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. WFBMC cooperated with the United States’ investigation and took remedial actions to address the issues discovered during the investigation.
“Medical facilities that submit claims to Medicare must ensure that those claims are supported by documentation and are medically necessary,” said Sandra J. Hairston, United States Attorney for the Middle District of North Carolina. “This office is dedicated to protecting federal health care programs and ensuring that the government does not pay for unsupported claims.”
This case was handled by the U.S. Attorney’s Office for the Middle District of North Carolina with assistance from Office of Inspector General of the United States Department of Health and Human Services.
The lawsuit is captioned United States ex rel. Cook v. Wake Forest Baptist Medical Center et al., No. 20-CV-386 (M.D.N.C.). The claims settled by this agreement are allegations only, and there has been no determination of liability. The Settlement Agreement is not an admission of liability or wrongdoing by WFBMC.
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Visalia Man Charged with Assault on a Federal OfficerRead the Press Release
FRESNO, Calif. — A federal magistrate judge issued an arrest warrant based on a complaint for Angel Uriarte, 35, of Visalia, charging him with assault on a federal officer involving a weapon, discharging a firearm during and in relation to a crime of violence, and being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.
“The shots fired at the ATF agents executing the search and arrest warrants in this case underscore the dangers that our men and women in law enforcement face,” said U.S. Attorney Talbert. “We are forever in the debt of the federal agents who willingly serve and protect us every day. Those who attempt to use deadly force against a federal officer engaged in his or her duties should expect to face a federal prosecution that employs the full resources of the U.S. Department of Justice.”
“The FBI is committed to thoroughly investigate any assault on a federal officer, a violation of federal law that falls within our jurisdiction,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “Assaults on federal agents and/or task force officers are serious crimes that deserve our full attention. We appreciate the support of all investigative agencies involved to ensure a thorough investigation in pursuit of justice.”
“Personnel with the ATF San Francisco Field Division and ATF’s Special Response Team 4 were serving a search and arrest warrant for a defendant connected to the recent six-person homicide in Goshen,” said ATF Acting Special Agent in Charge Joshua Jackson. “During service of these warrants, the defendant responded by shooting at ATF agents. Our team responded with an appropriate level of force and professionalism to disarm and take the defendant into custody, and protect the community from further harm. ATF remains committed to working with our law enforcement partners to protect the community from violent crime and hold those accountable who choose to commit violent crime.”
Sheriff Mike Boudreaux stated, “As the Sheriff of Tulare County, I am thankful that all aspects of the Goshen mass shooting are being identified, and the egregious felony acts, including this shooting at agents, are being addressed.”
According to court documents, on Feb. 3, 2023, agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) assisted in serving warrants related to a January 2023 murder in Goshen in which six victims were killed. One of the warrants was for the arrest of Angel Uriarte on murder charges arising from those murders. The other was for a residence in Visalia where evidence showed Uriarte was located.
The ATF Special Response Team (SRT) began efforts to serve the warrant. Prior to making entry into the residence, the SRT announced their presence over a public address system and directed that the residents come out with their hands up. Several residents exited the residence, but Uriarte was not one of them. After a period of time passed, agents began to prepare to make entry into the residence. As this occurred, Uriarte ran through the yard and fired a gun in the direction of the home and ATF agents. He then fired three rounds at an ATF agent, who returned fire striking and wounding Uriarte. Agents rendered medical aid.
Agents found a Bersa .380 semi-automatic pistol near where Uriarte fell. Uriarte has a 2014 felony conviction for assault with a firearm on a person for which he had been sentenced to seven years in prison.
This case is the product of an investigation by the Tulare County Sheriff’s Office, the ATF, the FBI, the DEA, and other agencies. Assistant U.S. Attorneys Antonio J. Pataca and Stephanie M. Stokman are prosecuting the case.
If convicted of assault on a federal officer, Uriarte faces a maximum penalty of 20 years in prison and a fine of up to $250,000. If convicted of discharging a firearm during a crime of violence, he faces a mandatory minimum of 10 years in prison consecutive to any other sentence and a fine of up to $250,000, and if convicted of being a felon in possession of a firearm, he faces 15 years in prison and a fine of up to $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
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 U.S. Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
United States Enters into Consent Decrees with Principals of CISNE NY Construction, Inc. for Violating Lead Paint Safety RulesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Lisa F. Garcia, the Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States entered into Consent Decrees settling a civil lawsuit against the principals of CISNE NY CONSTRUCTION, INC. (“CISNE”) — EDISON RUILOVA and JOSE PACCHA — for violations of the Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”). Defendants violated provisions of TSCA and the RRP Rule that protect public health by reducing the risk of lead poisoning during renovations in residential buildings that may contain lead paint.
U.S. Attorney Damian Williams said: “CISNE NY Construction, Inc. put the public health at risk by failing to abide by lead-safe work practices during renovations of residential buildings. These consent decrees will help ensure that CISNE NY’s principals abide by safety standards moving forward and send a message that companies and the individuals that run them cannot prioritize profits over complying with health and safety regulations.”EPA Regional Administrator Lisa F. Garcia said: “Protecting children from the harmful effects of lead exposure is a top priority for EPA. In New York, where most housing predates the 1978 federal ban on lead in residential paint, lead exposure is a critical public health concern, particularly for children. Exposure to chips and dust from lead-based paint can cause irreversible brain damage and other debilitating effects, making it essential for renovators to be certified and trained in lead-safe work practices and to implement these practices when disturbing lead-based paint in homes. EPA remains committed to enforcing these vital federal requirements and increasing accountability and awareness to safeguard families and workers from lead exposure.”
The Consent Decrees, which are subject to public comment and approval by the District Court, would resolve a lawsuit filed in Manhattan federal court in 2022, which alleged that CISNE, its principals EDISON RUILOVA and JOSE PACCHA, and several related entities, violated TSCA and the RRP Rule in the course of renovating several Manhattan apartment buildings. The lawsuit also alleged that the same defendants violated TSCA and the RRP Rule by failing to provide EPA with records necessary to enable EPA to monitor the defendants’ compliance.
In the Consent Decrees entered today, JOSE PACCHA and EDISON RUILOVA admitted, acknowledged, and accepted responsibility for the fact that they were the principals of CISNE who were responsible for ensuring the firm’s compliance with the RRP Rule in 2017 and 2018 and that CISNE “violated the RRP Rule and TSCA” as a result of the following conduct during two Manhattan renovation projects:
- Failing to obtain an RRP firm certification prior to conducting renovation work;
- Failing to have a certified renovator direct the renovations and to ensure that all other persons performing the renovations received training on lead-safe work practices;
- Failing to post warning signs defining the work areas and cautioning occupants and other persons not involved in the renovation activities to keep out;
- Failing to provide an EPA pamphlet on lead hazards, The Lead-Safe Certified Guide to Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools, to the owner of the units being renovated;
- Failing to contain the renovation work areas to minimize the risk of lead exposure;
- Failing to clean the work areas after the renovations were completed to ensure that no dust, debris, or residue remained in those areas; and
- Failing to make available to EPA the records necessary to demonstrate compliance with the RRP Rule.
* * *
Pursuant to the Consent Decrees, EDISON RUILOVA and JOSE PACCHA will each pay $25,000 in civil penalties, an amount based on each individual’s documented inability to pay the full civil penalty for which he otherwise would be liable. Further, the Consent Decrees require each individual to receive training before conducting future RRP Rule-covered work and require them to operate any future renovation firm that they own, operate, or control in compliance with safe work practices and other RRP Rule requirements. Failure to comply with the Consent Decrees will result in significant additional penalties.
To provide public notice and afford members of the public the opportunity to comment on the Consent Decrees, the Consent Decrees will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.
Mr. Williams thanked the attorneys and enforcement staff at EPA Region 2 for their critical work in this matter.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorney Zack Bannon is in charge of the case.
Paccha_Consent_Decree.pdf Ruilova_Consent_Decree.pdfUnited States Attorney Alison J. Ramsdell Announces Implementation of New Voluntary Self-Disclosure PolicyRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell has announced the implementation of the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy. The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO), and provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate and timely and appropriately remediate.
The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations. The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.
Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation. A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by—in the absence of any aggravating factor—fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.
The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.
In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.
United States & Tennessee Settle False Claims Act Allegations Against Three Medical ProvidersRead the Press Release
NASHVILLE – Three Tennessee medical providers have agreed to settle allegations of False Claims Acts violations relating to the submission of claims seeking reimbursement for autonomic nervous system testing, announced U.S. Attorney Henry C. Leventis and Tennessee Attorney General Jonathan Skrmetti.
The United States and Tennessee contend that: Premier Internal Medicine of Giles County, PLLC (Premier) violated the False Claims Act and the Tennessee Medicaid False Claims Act (FCA) by submitting claims for non-reimbursable and/or medically unnecessary autonomic nervous system testing during the period of January 2, 2015, through April 28, 2021. As a result of the settlement, Premier will pay $440,518.84, of which $264,050.17 is restitution.
Christine King-Patterson (King), a medical practitioner at a former medical practice in Waverly, Tennessee, violated the FCA by submitting claims for non-reimbursable and/or medically unnecessary autonomic nervous system testing during the period of January 2, 2015, through December 31, 2020. King will pay $126,988.65, of which $82,118.36 is restitution.
Monica Masingale, formerly a nurse practitioner in Englewood, Tennessee, violated the FCA by submitting claims for non-reimbursable and/or medically unnecessary autonomic nervous system testing during the period of February 1, 2015, through October 30, 2019. Masingale will pay $315,000 in restitution under the terms of the settlement.
Of the $882,50749 in settlements, the United States will receive $639,551.41 and Tennessee will receive $242,956.08.
The civil claims resolved by these settlements are allegations. There has been no determination or admission of liability.
These matters were handled by Assistant U.S. Attorney Kara F. Sweet of the Middle District of Tennessee and Senior Assistant Attorney General Tony Hullender of the Tennessee Attorney General’s Office.
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U.S. Attorney Jason M. Frierson Statement in Recognition of Black History MonthRead the Press Release
LAS VEGAS – The United States Attorney’s Office for the District of Nevada issued the following statement from United States Attorney Jason M. Frierson in recognition of Black History Month:
“As our celebration of Black History Month comes to a close this year, I would like to acknowledge the generations that have come before us as well as those who continue their work advancing justice and equality in our country. The United States Attorney’s Office for the District of Nevada has joined communities throughout Nevada to celebrate African American history and culture, and have paid tribute to individuals whose achievements impacted our community and society as a whole. We acknowledge individuals at all levels who work today to advance the Department of Justice’s mission to uphold the rule of law, keep our country safe, and protect civil rights.
I am humbled to serve as the first African American to hold the position of United States Attorney in the District of Nevada. As we strive to reflect the community that we serve, I am also proud that we have more African American Assistant United States Attorneys in the District of Nevada than ever before. It is an honor to work alongside dedicated Assistant United States Attorneys, professional staff, law enforcement partners, and community organizations to make Nevada a safer place to live and work.”
Tulsan Sentenced to Life in Prison for Sexually Abusing a 7-Year-Old ChildRead the Press Release
A Tulsan who sexually abused a young child for approximately one year was sentenced Monday in federal court, announced U.S. Attorney Clint Johnson.
U.S. District Judge Jack Zouhary sentenced Robert William Perry II, 32, to life in federal prison. In May, Perry was found guilty at trial for aggravated sexual abuse of a minor in Indian Country and for abusive sexual contact of a minor in Indian Country.
“Robert Perry’s crimes are despicable. The defendant repeatedly abused a 7-year-old girl for whom the defendant was responsible,” said U.S. Attorney Clint Johnson. “This week, the Court made it clear that Perry’s predatory crimes and blame shifting warranted a lifetime in federal prison.”
During the hearing, the judge called Perry’s actions intentional and manipulative. He reflected on the long-term trauma the child would have to live with then noted that protecting children was one of society’s highest duties.
Perry sexually abused the minor from May 6, 2017, to May 15, 2018,. Prosecutors contended that Perry would coerce the young child into sex acts then “reward” her with candy, other items, and the opportunity to play video games in what the defendant termed as a “man cave,” a closet where Perry regularly played video games and watched pornography. Most of the abuse occurred in the closet while the child was in the defendant's care. The child eventually told a friend at school about the abuse. Another student overheard the discussion and reported it to her teacher. The teacher had a conversation with the victim, who then disclosed the abuse and wrote about it. The teacher reported the crimes to the Oklahoma Department of Human Services.
In a forensic interview, the young child was initially hesitant to speak about the abuse but indicated that Perry made her keep secrets. She eventually drew a picture of the abuse when she was examined by a Sexual Assault Nurse Examiner. She also testified about the abuse at an earlier state trial and at the federal trial in May 2022.
Perry was previously convicted in Tulsa County District Court in 2020, but the conviction was later dismissed because the state lacked jurisdiction to prosecute the case following the Supreme Court’s decision in McGirt v Oklahoma. Perry is a citizen of the Muscogee Nation, and the crimes occurred within the tribe’s reservation. Only the federal government or tribes have jurisdiction to prosecute cases that occur in Indian Country that involve Native American defendants.
The FBI and Tulsa Police Department conducted the investigation. Assistant U.S. Attorneys Alex M. Scott and Valeria G. Luster prosecuted the case.
*Note: The defendant, Robert Perry II, now identifies as she/her.
Staten Island Gang Member Indicted for Sex Trafficking and Sexual Exploitation of MinorsRead the Press Release
Earlier today, in federal court in Brooklyn, a five-count indictment was unsealed charging Justin Dixon, a member of the Crips street gang, with sex trafficking, coercion and enticement of a minor, sexual exploitation of a minor and felon in possession. On February 6, 2023, Dixon was arraigned on a complaint before United States Magistrate Judge Taryn A. Merkl and a permanent order of detention was issued.
Breon Peace, United States Attorney for the Eastern District of New York; Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Keechant L. Sewell, Commissioner, New York City Police Department (NYPD), announced the indictment.
As set forth in court filings, in January 2023, Dixon allegedly used violence and threats of violence to compel the commission of commercial sex acts by a 14-year-old minor for his financial benefit. Dixon transported the minor victim – as well as other women – to a small geographical area off of Pennsylvania Avenue in East New York, Brooklyn, which is known as the “Penn Track” or the “Blade.” Dixon would then force the women to engage in prostitution and demanded that the proceeds of prostitution be turned over to him. Any resistance from the victims was met with violence.
Dixon used social media and other internet applications to establish relationships with potential victims, groom them and manipulate them into working for him as prostitutes. The 14-year-old minor was forced to live in a Staten Island house, along with Dixon and various other women. In that house, Dixon continued to enslave the women by forcing them to clean the house, cook for him and bathe him. The defendant would not allow the women to be clothed inside the house and would physically punish the women if they disobeyed any of these rules.
The investigation revealed that the defendant would call Jane Doe “tiny,” presumably due to her petite figure as a small fourteen-year-old. Dixon constantly overfed Jane Doe and consistently told her that she needed to eat more, in order to look older than her current age. The defendant also told Jane Doe he was arranging a trip to Florida for Jane Doe to have plastic surgery, including breast implants, in order to make her appear older than her current age.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of sex trafficking of a minor through force, fraud and coercion, the defendant faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum of life in prison.
If you are a victim or have information, there are several ways to contact the FBI: send a tip online at https://tips.fbi.gov or call 1-800-CALL-FBI. They are ready to work with you in your native language, regardless of your immigration status.
This prosecution is part of Project Safe Childhood, a nationwide initiative led by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being prosecuted by Assistant United States Attorney Lauren Elbert and Lorena Michelen.
The Defendant:
JUSTIN DIXON
Age: 32
Staten Island, New YorkE.D.N.Y. Docket No. 23-CR-90
Springfield, Illinois Man Sentenced to 60 Months and One Day in Prison for Possession with Intent to Distribute and Firearm OffensesRead the Press Release
SPRINGFIELD, Ill. – A Springfield, Illinois man, Jason Craig, 46, of the 2000 block of Normandy Road, has been sentenced to 60 months and one day for possession with intent to distribute a substance containing cocaine base (crack), possession with intent to distribute cocaine, and possession of a firearm in furtherance of a drug trafficking crime.
Craig was indicted in November of 2019 and pleaded guilty in June of 2022.
The statutory penalties for possession with intent to distribute are not more than 20 years in prison, not more than a $1,000,000 fine, and not less than 3 years of supervised release. The statutory penalties for possession of a firearm in furtherance of a drug trafficking crime are not less than five years and up to life in prison, not more than a $250,000 fine, and not more than 5 years of supervised release.
The Springfield Police Department, Illinois State Police, Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Assistant United States Attorney Matthew Z. Weir represented the government in the prosecution.
The case against Craig 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.
South Carolina Man Who Trafficked Guns into Connecticut Sentenced to 8 Years in Federal PrisonRead the Press Release
COLUMBIA, SOUTH CAROLINA — Marquis Jerome Pollard, 42, of Yemassee, South Carolina, was sentenced by the United States District Court in Connecticut to 96 months in prison, followed by three years of supervised release, for firearm offenses related to an illegal gun trafficking operation.
According to court documents and statements made in court, in the Spring of 2021, ATF Task Force officers learned that Pollard used straw purchasers to obtain firearms in South Carolina, and sold the firearms in Connecticut. On April 19, 2021, investigators made a controlled purchase of a 9mm Glock handgun and a drum magazine from Pollard and Quinn Mooring in New Haven, Connecticut, in exchange for $1,500. The firearm was one of five 9mm handguns that had been purchased by an individual at a pawn shop in Port Royal, South Carolina, in the month prior to the transaction in Connecticut.
On May 3, 2021, investigators surveilled the firearm purchaser as he picked up two additional handguns from the Port Royal firearm dealer and traveled to a restaurant parking lot in Beaufort, South Carolina, where he transferred them to Pollard. When law enforcement attempted to arrest Pollard, he fled in his vehicle at a high rate of speed. Pollard drove on sidewalks and over curbs during the pursuit, and was eventually apprehended in a residential neighborhood after abandoning his car and attempting to flee on foot. Investigators recovered three firearms from his vehicle, including the two handguns that he received in the restaurant parking lot, and a loaded .40 caliber pistol with a 30-round magazine.
The investigation revealed that Pollard paid two separate straw purchasers to acquire at least 17 firearms for him. In addition to the two handguns that were seized from Pollard’s vehicle and the 9mm handgun that investigators purchased from Pollard in New Haven in April 2021, five additional firearms have been recovered by law enforcement. One was recovered from a felon in New Haven in June 2021; one was recovered from the scene of a shooting in Hamden, Connecticut; one was recovered after it was used in a shooting in New Haven; one was recovered from a juvenile in South Carolina after it had been used in multiple crimes; and one was recovered earlier this month in Hamden from an individual who was fleeing from law enforcement in possession of the firearm and a distribution quantity of crack cocaine. Nine firearms have not been recovered.
Pollard’s criminal history includes multiple felony convictions. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Pollard was charged by indictments in both the District of Connecticut and in the District of South Carolina. The South Carolina case was transferred to Connecticut for further prosecution.
Pollard has been detained since his arrest. On October 28, 2022, he pleaded guilty to two counts of unlawful possession of a firearm by a felon.
On January 13, 2022, Mooring, of New Haven, pleaded guilty of possession of a firearm by a felon. He awaits sentencing.
The individuals who purchased firearms for Pollard in South Carolina were charged and convicted in the District of South Carolina.
This matter has been investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); West Haven, Connecticut, Police Department; New Haven, Connecticut, Police Department; Beaufort, South Carolina, Police Department; and Beaufort County, South Carolina, Sheriff’s Office. These cases are being prosecuted by Special Assistant U.S. Attorney Carra J. Henderson in the District of South Carolina and Assistant U.S. Attorney Konstantin Lantsman in the District of Connecticut.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Seven Defendants Sentenced for Defrauding Federal Program That Provided Technology Funding for Rockland County SchoolsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the sentencing of all seven defendants who previously pled guilty to defrauding the federal “E-Rate” program, designed to provide information technology to underprivileged schools, in connection with E-Rate funds provided to private religious schools in Rockland County, New York. PERETZ KLEIN, BEN KLEIN, MOSHE SCHWARTZ, SIMON GOLDBRENER, SHOLEM STEINBERG, ARON MELBER, and SUSAN KLEIN had each pled guilty in White Plains federal court to one count of conspiring against the United States and were sentenced in proceedings held between June 2022 and today. PERETZ KLEIN was sentenced to 48 months in prison; BEN KLEIN was sentenced to 27 months in prison; MOSHE SCHWARTZ was sentenced to 27 months in prison; SIMON GOLBRENER was sentenced to 24 months in prison; SHOLEM STEINBERG was sentenced to 12 months and one day in prison; AARON MELBER was sentenced to nine months in prison; and SUSAN KLEIN was sentenced to time served. U.S. District Judge Kenneth M. Karas imposed all sentences.
U.S. Attorney Damian Williams said: “The seven defendants who have now pled guilty in this case sought to steal from our most vulnerable population: economically disadvantaged children. The defendants created elaborate schemes with complete disregard for the fact that the money they selfishly stole should have gone towards providing children with much-needed technology to further their education and brighten their future. Each defendant now faces serious penalties for their callous crime.”
According to the allegations made in the Indictment and the Informations to which the defendants pled guilty, as well as the defendants’ admissions in court:
The E-Rate program distributes funds to schools and libraries mostly serving economically disadvantaged children so that those institutions can afford needed telecommunication services, internet access, and related equipment. Over 30,000 applications from schools and libraries seeking funds to serve economically disadvantaged children were received each year during the relevant time period, and every year, requests for E-Rate funds have exceeded funds available. In order to obtain those funds, educational institutions certify that they are purchasing equipment and services from a private vendor. If approved, the program defrays the cost by up to 90%. The educational institution is supposed to enter into an open bidding process in order to select a vendor, and the educational institution and vendor then submit a series of certifications that they comply with a number of requirements of the E-Rate program. A school applying for E-Rate funds may employ a consultant, but that consultant must be independent of the vendors competing to sell E-Rate funded equipment and services.
The schools at issue in this case never received millions of dollars’ worth of these items and services for which the defendants billed the E-Rate program. In other cases, the schools and the defendants requested hundreds of thousands of dollars of sophisticated technology that served no real purpose for the student population. For example, from 2009 through 2015, one day care center that served toddlers from the ages of two through four requested over $700,000 – nearly $500,000 of which was ultimately funded – for equipment and services – including video conferencing and distance learning, a “media master system,” sophisticated telecommunications systems supporting at least 23 lines, and high-speed internet – from companies controlled by certain defendants. In still other instances, the schools received equipment and services that fulfilled the functions for which the schools had requested E-Rate funds (such as providing the school with internet access), but the schools and the defendants materially overbilled the E-Rate program for the items provided in order to enrich themselves at the expense of the underprivileged children the program was designed to serve.
The defendants also perverted the fair and open bidding process required by the E‑Rate program. Defendants who held themselves out as independent consultants working for the schools in truth worked for and were paid by other defendants who controlled vendor companies. These defendants presented the schools with forms to sign or certify, awarding E-Rate funded contracts to companies owned by several defendants. As a result of false and misleading filings, the defendants received millions of dollars in E-Rate funds for equipment and services that they did not, in fact, provide and which the schools did not use, and the defendants purporting to act as consultants accepted payments totaling hundreds of thousands of dollars from the vendors, despite falsely presenting themselves as independent of the vendors.
In return for their participation in the scheme to defraud the E‑Rate program, certain schools and school officials received a variety of improper benefits from certain defendants, including a percentage of the funds fraudulently obtained from E-Rate for equipment and services that were not, in fact, provided to the schools; free items paid for with E-Rate funds but not authorized by the program, such as cellphones for school employees’ personal use and alarm systems and security equipment (which the E-Rate program does not authorize) installed at the schools; and free services for which the E-Rate program authorizes partial reimbursement (such as internet access) but for which the schools did not – contrary to their statements in filings – make any payment at all.
PERETZ KLEIN, SUSAN KLEIN, BEN KLEIN, and SHOLEM STEINBERG held themselves out as vendors to schools participating in the E‑Rate program. Corporations controlled by these defendants requested over $35 million in E‑Rate funds and received over $14 million in E‑Rate funds from in or about 2010 to in or about 2016. Each of these defendants has now admitted that the companies they controlled did not, in fact, provide much of the equipment for which they billed the federal government.
SIMON GOLDBRENER and MOSHE SCHWARTZ held themselves out as consultants who worked for educational institutions supposedly helping schools to participate in the E-Rate program by, among other things, holding a fair and open bidding process to select cost-effective vendors. GOLDBRENER and SCHWARTZ have now admitted that they were, in fact, paid hundreds of thousands of dollars by the vendors to complete and file false E-Rate documents that circumvented the bidding process and resulted in the payment of millions of dollars to the vendors.
ARON MELBER was an official at a private religious school in Rockland County, New York, that participated in the E-Rate program with some of the defendants. MELBER has now admitted that he filed false certifications with the E-Rate program, falsely claiming to have obtained authorized E‑Rate funded equipment and services from vendors selected through a fair and open bidding process.
Each defendant pled guilty to one count of a conspiracy to commit wire fraud.
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PERETZ KLEIN, 68, of Spring Valley, New York, was sentenced on June 8, 2022, to 48 months in prison followed by 24 months of supervised release and was ordered to forfeit $1,144,288.37 and to pay restitution of the same amount.
BEN KLEIN, 43, of Monsey, New York, was sentenced on October 19, 2022, to 27 months in prison followed by 24 months of supervised release and was ordered to forfeit $412,586.37 and to pay restitution of the same amount.
MOSHE SCHWARTZ, 50, of Monsey, New York, was sentenced on June 9, 2022, to 27 months in prison followed by 24 months of supervised release and was ordered to forfeit $275,160.00 and to pay restitution of the same amount.
SIMON GOLDBRENER, 59, of Monsey, New York, was sentenced on November 7, 2022, to 24 months in prison followed by 24 months of supervised release and was ordered to forfeit $479,357.18 and to pay restitution of the same amount.
SHOLEM STEINBERG, 43, of Monsey, New York, was sentenced on November 7, 2022, to 12 months and one day in prison followed by 24 months of supervised release and was ordered to forfeit $191,423.50 and to pay restitution of the same amount.
ARON MELBER, 47, of Monsey, New York, was sentenced on February 28, 2023, to nine months in prison followed by 24 months of supervised release and was ordered to forfeit $127,654.55 and to pay restitution of the same amount.
SUSAN KLEIN, 62, of Spring Valley, New York, was sentenced on June 8, 2022, to time served followed by 12 months of supervised release and was ordered to forfeit $1,144,288.37 and to pay restitution of the same amount.
Mr. Williams thanked the Federal Bureau of Investigation, the Federal Communications Commission - Office of the Inspector General, and the Rockland County District Attorney’s Office for their outstanding work on the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Michael D. Maimin, Hagan Scotten, and Vladislav Vainberg are in charge of the prosecution.
Serial Con Artist Sentenced to 51 Months in Connection with Embezzlement SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that TRACII SHOW HUTSONA was sentenced today to 51 months in prison for her embezzlement of more than one million dollars as part of a confidence scheme. The sentence was imposed by U.S. District Judge Jesse M. Furman.
U.S. Attorney Damian Williams said: “Not long after serving a lengthy sentence for a previous federal conviction, Tracii Show Hutsona betrayed her employer’s trust by misusing her employer’s financial information to fund her own luxury lifestyle for years. Her desire to live the high life at the expense of her victim has placed her back where she began — facing another substantial federal sentence.”
According to public court filings and statements made in Court:
Between October 2015 and November 2019, SHOW HUTSONA engaged in a confidence scheme to embezzle over a million dollars from a victim (the “Victim”). The Victim hired SHOW HUTSONA to serve as a personal assistant at the Victim’s home and trusted SHOW HUTSONA with access to the Victim’s financial information. Just a few months after she was hired, and while SHOW HUTSONA was on supervised release in connection with a previous federal fraud conviction in California, SHOW HUTSONA began using that access to finance her own luxury lifestyle.
In February 2016, SHOW HUTSONA opened a credit card account in the Victim’s name without the Victim’s knowledge or authorization. In September 2018, after the Victim learned about significant expenditures from the Victim’s financial accounts, the Victim confronted SHOW HUTSONA, who confessed that she had used the Victim’s financial accounts for her own personal use and repeatedly apologized to the Victim. Shortly thereafter, SHOW HUTSONA and the Victim signed an agreement, which stated, among other things, that SHOW HUTSONA had obtained an “additional user card” (the “User Card”) and that SHOW HUTSONA “had been using [the Victim’s] account since July 2016.” The agreement further stated that SHOW HUTSONA needed to repay $307,498.02 to the Victim. Having regained the Victim’s trust, in the days and months after executing the agreement with the Victim, SHOW HUTSONA continued to use the Victim’s financial accounts without permission, including through use of the User Card, which SHOW HUTSONA had represented to the Victim had been destroyed.
In September 2019, the Victim terminated her relationship with SHOW HUTSONA after discovering additional unauthorized charges made by SHOW HUTSONA. The Victim reported fraudulent expenditures on the Victim’s financial accounts to her bank. During the bank’s subsequent investigation, SHOW HUTSONA faxed the bank a fraudulent “Power of Attorney” document (the “Power of Attorney”), which appeared to be signed by the Victim and notarized. The Power of Attorney stated that SHOW HUTSONA would serve as the Victim’s “attorney-in-fact” and have control over the Victim’s “Banking and other financial institution transactions.” In fact, the Victim did not provide SHOW HUTSONA with any such power of attorney, the Victim did not sign the document, and the notary did not notarize it.
During the scheme, SHOW HUTSONA, without authorization, added herself as an additional account holder to at least two checking accounts and a savings account maintained by the Victim and obtained multiple credit cards in her own name but drawn on accounts of the Victim (collectively, the “Fraud Accounts”). Over the course of approximately four years, SHOW HUTSONA used the Fraud Accounts to steal over $1 million from the Victim. SHOW HUTSONA used the proceeds of her fraud scheme to make payments to SHOW HUTSONA’s concierge business and for personal expenses, such as mobile phones, restaurants and nightclubs, luxury hotels, and jewelry. To cover the purchases, SHOW HUTSONA transferred hundreds of thousands of dollars into the Fraud Accounts from a checking account of the Victim and two 529 college savings accounts maintained by the Victim on behalf of the Victim’s children.
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In addition to her prison term, SHOW HUTSONA, 54, of Scottsdale, Arizona, was sentenced to three years of supervised release. She was further ordered to forfeit $1,148,759.28 and to pay restitution in the amount of $1,148,759.28.
Mr. Williams praised the outstanding investigative work of the United States Secret Service and the New York City Police Department.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.
San Diego Resident Charged for Maintaining a Steroid Distribution Center in Spring ValleyRead the Press Release
SAN DIEGO – The U.S. Attorney’s Office unsealed a complaint today charging San Diego resident Edgar Lopez Feliciano with maintaining a steroid distribution center in Spring Valley. As detailed in the complaint, Feliciano’s network is allegedly involved in the creation and distribution of significant quantities of anabolic steroids throughout the United States.
In a coordinated takedown that took place today, federal, state, and local law enforcement agents and officers arrested Feliciano and executed search warrants at the steroid distribution center in Spring Valley and Feliciano’s personal residence in Poway. During the searches, agents seized a large amount of anabolic steroids - estimated to be hundreds of thousands of individual dosage-units. They also seized more than $25,000 in U.S. currency, six Rolex watches and other luxury jewelry, and multiple high-end luxury vehicles including a 2023 Mercedes Maybach S580 and a 2023 Mercedes AMG G63.
During the investigation, agents learned that Feliciano allegedly purchases his anabolic steroid powders from sources of supply located in China and Turkey and then uses the steroid powders to create and manufacture anabolic steroids for distribution throughout the United States through the U.S. Mail system. According to postal meter readings, law enforcement officials estimate that Feliciano distributed more than 10,000 parcels containing anabolic steroids between June 2022 and August 2022 and until his arrest continued to distribute anabolic steroids from the distribution center in Spring Valley on a daily basis.
According to the complaint, between 2018 and 2021, agents identified multiple financial accounts held by Feliciano with the total amount of deposits into these accounts being approximately $7 million, and more than $2.5 million in wire transfers sent from these accounts to overseas entities believed to be involved in the production and distribution of Schedule III Controlled Substances.
“The complaint alleges a national steroid distribution network operating in the San Diego community,” said U.S. Attorney Randy Grossman. “We will continue to work closely with our federal and local partners to prosecute those who traffic in controlled substances using our U.S. mail system.”
Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.
“According to the complaint, the defendant was manufacturing and trafficking illicitly produced anabolic steroids,” said DEA Special Agent in Charge Shelly Howe. “DEA and our state and local partners will continue to actively pursue drug traffickers whether they are trafficking illicit drugs or controlled substances.”
“The best way to disrupt and dismantle any criminal organization is to follow the money and take ill-gotten gains,” said Tyler Hatcher Special Agent in Charge of IRS Criminal Investigation's Los Angeles Field Office, “IRS Criminal Investigation is proud to work with our partners in investigating this case.”
“This investigation shows our persistence and dedication in protecting the U.S. Mail from criminal misuse and disrupting the flow of these dangerous drugs being trafficked in our communities,” said Carroll Harris, Inspector in Charge of the Los Angeles Division. “The arrest of Feliciano demonstrates our collaborative efforts to continue to work closely with our partners to identify and prosecute those who are seeking a profit at the expense of the public safety.”
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 using an intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
DEFENDANT Case Number 23MJ0630-BLM
Edgar Lopez Feliciano Age: 54 San Diego, CA
SUMMARY OF CHARGES
Maintaining a Drug-Involved Premises – Title 21, U.S.C., Section 856(a)(1) and (2)
Maximum penalty: Twenty years in prison and $500,000 fineAGENCY
Drug Enforcement Administration
Internal Revenue Service
United States Postal Inspection Service
*The charges and allegations contained in a complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Roundup man admits coercing minor girl to produce sexually explicit imagesRead the Press Release
BILLINGS — A Roundup man today admitted allegations that he coerced a minor girl into producing sexually explicit images of herself after providing the girl with a laptop, U.S. Attorney Jesse Laslovich said.
Marshall Vincent Lucas, 42, pleaded guilty to coercion and enticement. Lucas faces a mandatory minimum 10 years to a lifetime in prison, a $250,000 fine and at least five years of supervised release.
U.S. Magistrate Judge Timothy J. Cavan presided. A sentencing date will be set before U.S. District Judge Dana L. Christensen. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Lucas was released pending further proceedings.
The government alleged in court documents that in September 2021, Lucas provided the victim, Jane Doe 1, who is under the age of 16 years, with a laptop for purposes of communicating with her. Lucas had met Jane Doe 1 through her mother. Lucas began to correspond with Jane Doe 1 using an alias. Through electronic and in-person communications, Lucas asked Jane Doe 1 how she felt about him and requested nude pictures of her. Lucas persisted, and Jane Doe 1 ultimately provided him with nude pictures of herself that she produced as his direction. Lucas also sent Jane Doe 1 nude pictures of himself and instructed her to delete electronic communications between them.
Assistant U.S. Attorney Zeno B. Baucus is prosecuting the case, which was investigated by the FBI’s Child Exploitation and Human Trafficking Task Force.
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Rochester Man Pleads Guilty to Drug Conspiracy and Gun ChargeRead the Press Release
ROCHESTER, N.Y.-U.S. Attorney Trini E. Ross announced today that Janard D. Warnick, 30, of Rochester, NY, pleaded guilty to conspiracy to distribute cocaine and possession of firearms in furtherance of a drug trafficking crime before U.S. District Judge Frank P. Geraci, Jr. The charges carry a maximum penalty of life in prison and a $1,000,000 fine.
Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated Warnick sold cocaine for profit and maintained a Clifford Avenue residence in Rochester to store, process, and sell controlled substances. On February 23, 2022, investigators executed a search warrant at the Clifford Avenue residence, seizing approximately 61 grams of cocaine, a quantity of fentanyl and acetyl fentanyl, approximately two grams of crack cocaine, and drug paraphernalia. Investigators also recovered three firearms and a variety of ammunition.
The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief David Smith, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino.
Sentencing is scheduled for May 9, 2023, at 2:30 p.m. before Judge Geraci.
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