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6 January 2023
Enumclaw, Washington, woman sentenced for criminal scheme to steal flood control tax dollarsRead the Press Release
Seattle – The wife of the former long-time Commissioner of an East King County drainage district was sentenced today in U.S. District Court in Seattle to three years in prison and three years of supervised release for multiple federal felonies connected to a scheme to steal tax dollars intended for flood control, announced U.S. Attorney Nick Brown. Joann Thomas, 67, was convicted of 15 federal felonies in May 2022: conspiracy; four counts each of wire fraud and mail fraud, two counts of aggravated identity theft and four counts of money laundering. Because the attorney for Allan Thomas, 70, claimed he was unable to adequately represent his client due to illness, the sentencing for Allan Thomas on ten federal felonies was postponed until February 3, 2023.
At sentencing U.S. District Judge Richard A. Jones noted that the Thomases were involved in a seven-year fraud scheme, “This was not isolated conduct, it involved regular and ongoing requests for funds.” Judge Jones also noted that Joann Thomas had not been truthful saying, “You chose to get on the witness stand and you chose to lie to this court.”
“Allan and Joann Thomas didn’t just defraud their neighbors by stealing tax dollars, they abused a position of public trust, eroding faith in government,” said U.S. Attorney Nick Brown. “The Thomas’ theft caused some 700 neighbors in Enumclaw to pay higher property taxes, which many can ill afford, and for which they got no services. Mr. Thomas also needs to be held accountable at his sentencing next month.”
According to records in the case and testimony at trial, Allan B. Thomas served as Commissioner for Drainage District 5 and 5A in King County for more than 35 years. As a commissioner, Thomas was involved in estimating the costs of drainage maintenance for the district so that the county auditor could set and assess the appropriate taxes. The Commissioners then authorized payment to service providers who were supposed to do maintenance work on the drainage system.
As early as 2012, Joann Thomas set up a joint bank account with Allan Thomas’ son from a previous marriage. The account was a business account for a company called A C Services. Over the next six years, Allan Thomas had $413,323 of local tax dollars paid to A C Services claiming it was for drainage ditch maintenance. However, Thomas’ son testified that other than two small jobs performed in 2012, he did not perform any drainage ditch work. At trial, a current drainage district commissioner testified that he saw no work done on the ditches during that time period, and that when he took on the commissioner job, it was clear the ditch network had had little maintenance for many years.
Financial records admitted at trial show that over those six years (2012-2017), shortly after the tax dollars were deposited into A C Services’ account, the money was quickly transferred to other accounts belonging to the Thomases or was used to pay their expenses for such things as hay, mortgage payments, or property taxes. More than $68,000 was withdrawn as cash.
Allan and Joann Thomas worked together on the scheme. Both were involved in submitting false documents by mail and wire (the mail fraud and wire fraud counts) and the funds that were fraudulently obtained were then moved through various bank accounts (money laundering). Joann Thomas forged the signatures of Allan Thomas’ son and a second drainage commissioner on various records and checks. Allan Thomas was convicted of participating in the forgeries. The forgeries constitute Aggravated Identity Theft. Those counts carry a mandatory two-year sentence that must run consecutive to any sentence imposed on the other counts of conviction.
In 2018, after the couple became aware of an investigation into their conduct, they began funneling the tax dollars through another company: City Biz. The couple submitted warrants for City Biz to be paid for drainage maintenance work and within days of the funds arriving in City Biz bank accounts, nearly all the money was transferred directly to Allan Thomas or the Thomases’ dairy farm. The Thomases’ friend who agreed to help with the City Biz fraud, now also has a federal felony conviction for repeatedly lying to the FBI.
In all, the couple defrauded taxpayers of $468,165. Judge Jones has asked for briefing on the amount of restitution and has scheduled a hearing to set the amount in early March 2023.
The IRS Criminal Investigation (IRS:CI) and the FBI led the investigation with assistance from the Enumclaw Police Department. The Enumclaw City Attorney initiated the review of the district finances. The Washington State Auditor’s Office also conducted an audit of the district in 2019. The King County Prosecuting Attorney’s Office, in consultation with the U.S. Attorney’s Office, determined the case was appropriate for federal prosecution.
The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Andrew Friedman.
Eleven Indicted in Multi-Million Dollar Excise Tax Evasion and Money Laundering Scheme Involving Illegal Sports-Betting OrganizationRead the Press Release
BIRMINGHAM, Ala. – Today, a federal grand jury indictment was unsealed charging eleven defendants from across the United States in a multi-million dollar wagering excise tax evasion scheme, announced U.S. Attorney Prim F. Escalona, Internal Revenue Service, Criminal Investigation Assistant Special Agent in Charge Lisa Fontanette, and U.S. Immigration and Customs Enforcement Homeland Security Investigations Special Agent in Charge Katrina W. Berger.
A 114 count indictment filed in U.S. District Court charges these defendants stemming from their management of a multi-million dollar wagering excise tax evasion scheme involving an illegal sports-betting organization.
- Timothy J. Pughsley, 51, of Birmingham, Alabama, is charged with 38 counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and four counts of money laundering.
- Christopher Burdette, 30, of Chelsea, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and one count of money laundering.
- Nathanael Burdette, 36, of Birmingham, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
- Jonathan Lind, 44, of Birmingham, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
- Thomas V. Zito, 57, of Vestavia, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and one count of money laundering.
- Christopher Donaldson, 46, of Trussville, Alabama, is charged with one count of conspiring to operate an illegal sport-betting organization and one count of conspiring to commit money laundering.
- Gary L. Rapp, Jr., 44, of Lakeland, Tennessee, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
- Mark Giaquinto, 50, of Upton, Massachusetts, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
- Matthew D. Voorhees, 47, of Englewood, Colorado, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
- David Richards, 38, of Las Vegas, Nevada, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
- Joshua Gentrup, 36, of Athens, Georgia, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
According to the indictment, Pughsley began operating a bookmaking business at least 17 years ago. The organization eventually became known as “Red44,” and bookmaking and betting activities occurred online via an offshore server located in Costa Rica. Defendants named within the indictment are alleged to be senior agents in the Red44 organization or original founding members.
Regarding the tax counts against the defendants, the indictment alleges that the organization was estimated to have accepted hundreds of millions of dollars in wagers from bettors from 2019 through 2021. In 2019, the Red44 Organization was alleged to have earned a gross profit of $14,930,787.00. The excise tax owed to the Internal Revenue Service (“IRS”), or two percent of total wagers placed by bettors, would be $6,882,460.46 for 2019 alone. In 2020, the organization had income of approximately $24 million. The excise tax owed to the IRS for this year would total approximately $6 million. Further, in 2021, the organization had income of approximately $36 million. The excise tax owed to the IRS for 2020 would total over $7 million.
IRS Criminal Investigations and Homeland Security Investigations investigated the case. Assistant United States Attorneys Catherine Crosby, Kristen Osborne, and Ryan Rummage are prosecuting the case.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Dominican Man Sentenced for Illegally Reentering United States Following DeportationRead the Press Release
BOSTON – A repeat convicted felon from the Dominican Republic with a criminal record that goes back nearly 19 years was sentenced on Jan. 4, 2023 in federal court in Boston for reentering the United States illegally after deportation.
Yonathan Leandro Villar, 37, was sentenced by U.S. Senior District Court Judge William G. Young to 30 months in prison. Today’s sentence will run concurrent with a 78-month sentence Villar is currently serving in an unrelated state case. Villar will be subject to deportation proceedings upon completion of his sentence. In December 2020, Villar pleaded guilty to illegal reentry.
Villar illegally entered in United States in 1992 using a fraudulent passport. In October 2015, Villar was encountered by immigration officers who confirmed Villar was illegally present in the United States., In July 2016, he was removed from the United States after being released from federal custody for a false passport application conviction. Sometime thereafter, Villar reentered the United States without having received approval to reapply for admission.
In August 2019 Villar was arrested in Foxboro and charged with narcotics and motor vehicle offenses. Fingerprints obtained from Villar at the time of his arrest positively matched those obtained prior to his removal from the United States in 2016.
Villar has a criminal history that dates back almost 19 years with multiple convictions including for firearms, heroin offenses, assault and battery with a dangerous weapon, and attempt to fraudulently obtain a passport. He has more than 20 aliases, 15 false dates of births and nine false social security numbers.
United States Attorney Rachael S. Rollins; Matthew B. Millhollin, Special Agent in Charge of Department of Homeland Security Investigations in New England; and Foxborough Police Chief Michael A. Grace made the announcement. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Rollins’ Major Crimes Unit prosecuted the case.
Dominican Man Pleads Guilty to Trafficking Heroin and Fentanyl from Dominican RepublicRead the Press Release
BOSTON – A Dominican man pleaded guilty today in federal court in Boston to conspiring to traffic multiple kilograms of heroin and fentanyl from the Dominican Republic to states on the East Coast.
Kelvin Regalado, 42, pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and 100 grams or more of carfentanil; one count of distribution and possession with intent to distribute ketamine; and one count of distribution of and possession with intent to distribute 400 grams or more of fentanyl. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for May 10, 2023. Regalado was indicted in December 2020, along with co-defendant Marcos Cabrera, while he was residing in the Dominican Republic. Regalado was extradited to the United States in May 2022 after being taken into custody by Dominican authorities.
From August 2019 through March 2020, in the Dominican Republic, Regalado conspired with Cabrera to deliver nearly three kilograms of heroin and carfentanil to cooperating witnesses in New York, Rhode Island and Massachusetts. Additionally, Regalado arranged to have one kilogram of fentanyl and one kilogram of ketamine sent to the cooperating witnesses through the mail in Massachusetts.
In January 2022, Cabrera was sentenced to 87 months in prison after previously pleading guilty to his role in the conspiracy.
The charges of conspiracy and distribution of and possession with intent to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and 100 grams or more of carfentanil provide for a mandatory minimum sentence of 10 years and up to life in prison, at least five years of supervised release and a fine of up to $10 million. The charge of distribution of and possession with intent to distribute ketamine provide for a maximum of 20 years in prison, at least three years of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Rachael S. Rollins and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistant U.S. Attorney Stephen W. Hassink of Rollins’s Narcotics & Money Laundering Unit is prosecuting the case. The Justice Department’s Office of International Affairs provided substantial assistance.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
District Man Sentenced to 16 Months for Attempted Assault with a Dangerous Weapon and Assaulting a MinorRead the Press Release
Defendant Assaulted Neighbors in an Apartment Building
WASHINGTON – Corey Keelin Bridges, 28, of Washington, D.C., was sentenced today to 16 months in prison for assaulting his neighbors, announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department.
Bridges pleaded guilty on October 19, 2022, in the Superior Court of the District of Columbia. The Honorable Lynn Leibovitz sentenced Bridges today to 16 months in prison for one count of attempted assault with a dangerous weapon, 180 days in prison for one count of simple assault, and 90 days in prison for one count of lewd, indecent, or obscene acts, all sentences to run concurrently. Bridges will be required to register as a sex offender for 10 years.
Bridges assaulted his neighbors in an apartment building in Washington, D.C., on two separate occasions. On May 4, 2022, Bridges assaulted a minor in the hallway of the building. He tried to pull down the minor victim’s sweatpants and pulled down his own shorts, exposing himself. The minor escaped from Bridges and managed to get into their apartment. On June 4, 2022, Bridges knocked on a neighbor’s door and, when the resident opened the door, Bridges held a knife and a screwdriver to the victim’s stomach. The victim managed to avoid injury.
Bridges was arrested on June 4, 2022 and remains in custody.
In announcing the sentences, 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 work of those who handled the cases at the U.S. Attorney’s Office, including Victim/Witness Advocate Christina Bloodworth, and Assistant U.S. Attorneys Carlos A. Valdivia, Jared English, and Crystal Gaines, who investigated and prosecuted the matters.
Detroit Man Sentenced to Serve 30 Years in Federal Prison for a Large Drug Distribution Enterprise Targeting the Spirit Lake, Turtle Mountain and Fort Berthold Indian ReservationsRead the Press Release
FARGO – United States Attorney Mac Schneider announced that on January 6, 2023, United States District Judge Daniel L. Hovland sentenced 32-year-old Darius Sledge, a/k/a Ace, a/k/a Man Man, a/k/a Frank Love, a/k/a Gary, a/k/a Bill, to serve 30 years in prison followed by three years supervised release.
In June of 2022, following a 12-day trial, a jury returned guilty verdicts on multiple counts against Sledge and another man from Detroit, Michigan, for their leadership in a drug trafficking organization targeting three of North Dakota’s Native American Reservations.
Darius Sledge was convicted of Continuing Criminal Enterprise, Conspiracy to Distribute and Possess with Intent to Distribute a Controlled Substance, Money Laundering Conspiracy, and Maintaining a Drug-Involved Premise. Sledge also forfeited his rights to more than $20,000 in seized United States currency.
His trial co-defendant, Baquan Sledge, a/k/a Rell, a/k/a TJ, a/k/a Matthew Pierce, was also convicted of Continuing Criminal Enterprise, Conspiracy to Distribute and Possess with Intent to Distribute a Controlled Substance, Money Laundering Conspiracy,and Maintaining a Drug-Involved Premise as well as Possession with Intent to Distribute Oxycodone. Baquan Sledge will be sentenced on January 13, 2023.
This case is part of “Operation Blue Prairie,” an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation into the multi-state trafficking of oxycodone.
“This sentence is a warning to anyone targeting our tribal communities for the distribution of dangerous drugs: You will be caught, you will be prosecuted, and you will serve a long sentence in federal prison”, said US Attorney Mac Schneider. “The United States Attorney’s Office is committed to continuing our partnership with federal, tribal, state, and local law enforcement to promote public safety in Indian country and across North Dakota.”
The multi-agency investigation led by the Bureau of Indian Affairs Division of Drug Enforcement revealed that the Sledge defendants and their co-conspirators targeted areas with fewer law enforcement resources where they could distribute controlled substances at a premium price. The Sledge defendants and others used local residences and people for distribution and stash houses to further their criminal activities for monetary gain. In total, twenty-six defendants were charged in the case.
This case was investigated by the Bureau of Indian Affairs Division of Drug Enforcement, the Federal Bureau of Investigation, the Drug Enforcement Administration, Rolette County Sheriff’s Department, Bottineau County Sheriff’s Department, Ward County Narcotics Task Force, Lake Region Narcotics Task Force, Mandan Hidatsa Arikara Division of Drug Enforcement, North Dakota Bureau of Criminal Investigation, North Dakota Crime Laboratory, Michigan State Police, Minot Police Department, United States Department of Homeland Security Investigations.
The case was prosecuted by the United States Attorney’s Office, with Assistant United States Attorneys Dawn Deitz and Lori Conroy assigned with the assistance of lead investigator Bureau of Indian Affairs Division of Drug Enforcement Special Agent Isaiah Soldier.
######Convicted Felon Sentenced to Six Years in Prison for Drug Offenses, and Possessing Three Firearms with Extended MagazinesRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced to 72 months in prison for possessing quantities of heroin and cocaine he intended to distribute, and possessing several firearms, including an AM-15 rifle, U.S. Attorney Philip R. Sellinger announced today.
Cedric Lewis, 32, of Bloomfield, previously pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with two counts of possession of a firearm and ammunition by a convicted felon and two counts of possession with intent to distribute controlled substances.
According to documents filed in this case and statements made in court:
On Sept. 20, 2020 investigators learned that Lewis was in a car in the Newark/Elizabeth area while he possessed a quantity of heroin and cocaine he intended to sell, as well as an AM-15 rifle with a high-capacity magazine that contained 30 rounds of .300 caliber ammunition. Law enforcement officers subsequently lawfully searched Lewis’s apartment recovered a 9 millimeter pistol with an extended magazine; a .40 caliber pistol with an extended magazine; drug paraphernalia and a scale; $800 in cash, and heroin and cocaine that Lewis intended to sell.
In addition to the prison term, Judge Martinotti sentenced Lewis to three years of supervised release.
U.S. Attorney Sellinger credited members of the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Acting Special Agent in Charge Bryan Miller; deputy marshals with the U.S. Marshals Service in the District of New Jersey, under the supervision of U.S. Marshal Juan Mattos Jr.; and deputy marshals with the U.S. Marshals Service in the Northern District of Georgia, under the supervision of U.S. Marshal Michael S. Yeager, with the investigation leading to today’s sentencing. He also thanked the Bloomfield Police Department for its assistance.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office National Security Unit in Newark.
Columbia Man Sentenced to Federal Prison for Illegally Possessing a FirearmRead the Press Release
COLUMBIA, SOUTH CAROLINA — Nicholas Vanover, 25, of Columbia, was sentenced to 63 months (5 years and three months) in federal prison after pleading guilty to being a felon in possession of a firearm.
Evidence presented to the Court showed the police were called to an apartment complex on Colleton Street in Columbia concerning a large crowd of gang members causing a disturbance. When the officers arrived, several people ran. One gang investigator recognized Vanover from prior incidents and knew he carried guns. The officer gave chase and saw Vanover run into the backyard of a vacant nearby home. When Vanover saw the police officer coming towards him, he quickly went behind the home and very shortly thereafter reappeared. While the officer was approaching Vanover, Vanover stated he “had weed and a little blunt and a little bit of weed in my pocket.”
The officer took Vanover into custody, searched him, and found a small clear plastic bag containing marijuana in his pocket along with a hand-rolled cigar that also contained marijuana. The officer then went to the back of the vacant home and saw the crawl space door was open under the home. The officer looked inside the space and saw a firearm lying in the crawl space. The gun did not have dirt or dust on it and appeared to be freshly placed there. The area around the crawl space seemed to be freshly walked on. The firearm was a fully loaded .40 caliber Smith and Wesson pistol that had been reported stolen. Vanover denied possessing the firearm but admitted to possessing the marijuana. Vanover also told the officers he was in possession of 5 counterfeit $20 bills that he had purchased online that he was going to put in the casket of another Blood member.
After being taken to the detention center, Vanover made a call to a female friend. During the phone call, the woman asked him why he had the firearm. Vanover stated he had it for his protection. This telephone call confirmed his possession of the firearm. Vanover had previously been convicted of multiple drug charges, so federal law prohibits him from possessing firearms or ammunition.
Senior United States District Judge Cameron McGowan Currie sentenced Vanover to 63 months in prison, to be followed by a 3-year term of court-ordered supervision. There is no parole in the federal system.
This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the City of Columbia Police Department. Assistant U.S. Attorney William K. Witherspoon prosecuted the case.
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Clinton Man Pleads Guilty to Being a Convicted Felon in Possession of a FirearmRead the Press Release
Jackson, Miss. – A Clinton man pleaded guilty to being a convicted felon in possession of a firearm, announced U.S. Attorney Darren LaMarca and Special Agent in Charge Kurt Thielhorn of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
According to court documents, Stanley Cavett, Jr., 35, was found in possession of a firearm by a Clinton Police officer on November 5, 2019. Cavett has multiple prior felony convictions. As a convicted felon it is contrary to federal law for Cavett to possess any firearm.
On February 8, 2022, a federal grand jury indicted Cavett for possession of a firearm as a convicted felon.
Cavett will be sentenced on April 5, 2023 in U.S. District Court in Jackson. He faces a maximum penalty of ten years in prison and a $250,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the ATF and the Clinton Police Department. It is being prosecuted by Assistant United States Attorney Jessica S. Terrill.
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.
Cedar Rapids Nurse Sentenced to Five Years in Federal Prison for Stealing Narcotics from Three Corridor HospitalsRead the Press Release
A Cedar Rapids nurse who diverted narcotics to her own use at four major Eastern Iowa health care providers, including three hospitals, in less than two years, was sentenced today to five years in federal prison. Sarah Jean Moses, age 43, received the prison term after pleading guilty in 2021 and 2022 in three separate federal criminal cases to five felonies, namely, one count of tampering with a consumer product, one count of false statements relating to health care matters, one count of violating the Health Insurance Portability and Accountability Act (HIPAA), one count of obtaining a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge, and one count of theft of government funds.
In a plea agreement, and at other hearings in the three cases, the evidence showed that, in 2006, the State of Iowa issued a registered nursing license to Moses. Between 2017 and 2019, Moses acquired various controlled substances from her employers, including opioids such as hydromorphone (also known by the trade name “Dilaudid”), morphine, and oxycodone. To do so, Moses secretly tampered with the vials of the controlled substances, replacing the pain medication with saline and restocking the tampered-with vials into a secure drug dispensing machine that the hospital’s doctors and nurses used. To find out which of her employers’ patients were supposed to receive the pain medication, Moses engaged in an illegal practice known as “patient combing,” in which Moses used her access to her employers’ computers to examine private patient records. Moses also made false and fictitious statements to her employers and in patient records to cover up her scheme.
Specifically, in September 2017, during her first month working in the emergency room of a Cedar Rapids hospital, Moses accessed a secure drug dispensing machine that contained hydromorphone vials. The hydromorphone was intended for emergency room patients who were suffering pain. Moses also viewed 7 patient records without lawful authority at the Cedar Rapids hospital. After the hospital discovered six tampered-with vials in the machine, the hospital terminated Moses’s employment and reported her conduct to the Iowa Board of Nursing (IBON).
In March 2018, during her first month working for a major local home health care company, Moses was assigned to care for an elderly resident of a Marion assisted living facility. A doctor had prescribed the resident oxycodone for leg pain. Without the knowledge of her employer, and against the employer’s policies, Moses offered to pick up the resident’s oxycodone from a nearby major grocery store pharmacy chain. Moses picked up the pain medication from the pharmacy but, instead of delivering the oxycodone to the patient, Moses diverted 56 oxycodone pills to herself and made a false entry in the patient’s medical record. The home health care company immediately suspended Moses’s employment and reported her conduct to IBON. Moses never returned to work at the home health care company. As a result of Moses’s conduct, the pharmacy changed its policy regarding verifying the identity of persons who pick up prescription medications for others.
Between September 2018 and November 2018, Moses worked at an Iowa City hospital. Moses continued her scheme to tamper and divert controlled substances at the Iowa City hospital and, in doing so, illegally accessed 64 patient files. Just as she had done at the Cedar Rapids hospital in September 2017, Moses removed the caps from vials of hydromorphone and then carefully punctured the vials with the needles and drew out the hydromorphone. Moses then refilled the vials with saline to make the vials appear as if they still contained hydromorphone. Moses also carefully replaced the caps of the vials to make it appear as if the vials were undisturbed, when, in truth, these consumer products no longer contained their declared values of hydromorphone. In this way, Moses made it appear as if the vials remained new, unopened, and filled with the controlled substance on their respective labels, that is, hydromorphone, when, in, truth, Moses had diverted some or all of the hydromorphone in the vials to herself. Moses then placed the tampered vials back in the dispensing machine. Moses admitted that she acted with reckless disregard for the risk that another person would be placed in danger of bodily injury and under circumstances manifesting extreme indifference to such risk. In November 2018, the Iowa City hospital terminated Moses’s employment and reported her to IBON.
Between January and March 2019, Moses worked as a nurse for another hospital in Iowa City. Moses continued her scheme to tamper and divert at this hospital and, during the entire term of her employment there, stole hydromorphone, morphine, and oxycodone. Moses illegally accessed 17 patient files at this hospital, which determined Moses was “patient combing.” In March 2019, this third hospital terminated Moses’s employment.
Moses later found a job working as a paraprofessional for a child. Between April and August 2020, Moses stole over $6,000 in fraudulent unemployment benefits from the State of Iowa by underreporting her wages from the employment. The federal government had appropriated the unemployment funds under the CARES Act of 2020 on account of the COVID-19 pandemic.
Moses was detained before her sentencing after a U.S. Magistrate Judge found that she repeatedly violated the terms of her pretrial release conditions. While on pretrial release, Moses used methamphetamine, failed to participate in drug testing and treatment, and possessed an assault rifle. Between August and October 2021, while on pretrial release, Moses was caught shoplifting at the same Cedar Rapids big-box department store chain on six separate occasions. Moses fled from the courthouse in a car after her probation officer informed her there was a warrant outstanding for her arrest for her pretrial release violations. A deputy U.S. Marshal ultimately gave chase and apprehended Moses not far from the federal courthouse in Cedar Rapids. Moses has prior convictions in state court for shoplifting and drunk driving.
Moses was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Moses was sentenced to 60 months’ imprisonment. She was ordered to make over $6,000 in restitution to the State of Iowa. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. At the sentencing hearing, Judge Williams observed that Moses’s case was one of the worst cases of narcotics theft by a health care professional he had seen and characterized Moses’s conduct on pretrial release as “abysmal.”
United States Attorney Timothy T. Duax stated, “Sarah Moses’s conduct was egregious. She placed the patients of three of Eastern Iowa’s major hospitals and a home health care provider at serious risk of harm when she replaced needed pain medications with saline. Her sentence is well-deserved and hopefully will deter others who would be tempted to steal narcotics from their employers and patients.”
“Patients rely on the knowledge that they will receive FDA-approved medications to manage their conditions,” said Special Agent in Charge Charles L. Grinstead, FDA Office of Criminal Investigations Kansas City Field Office. “When health care professionals tamper with those needed medications, we will pursue and bring them to justice.”
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department's response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Moses is being held in the United States Marshal’s custody until she can be transported to a federal prison. The case was prosecuted by Assistant United States Attorneys Timothy L. Vavricek and Jason Norwood, Assistant United States Attorney Clifford Cronk of the U.S. Attorney’s Office for the Southern District of Iowa, and investigated by the Food and Drug Administration, Office of Criminal Investigations, the Iowa Medicaid Fraud Control Unit, and the Department of Health and Human Services, Office of Inspector General
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 21-CR-19, 21-CR-47, and 22-CR-56.
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Canadian Man Pleads Guilty to Illegally Bringing an Alien to the United StatesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney Trini E. Ross announced today that Edwin Ramirez-Cordones a/k/a El Fuerte, 46, of Ontario Canada, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to bringing an alien to the United States at a place other than a designated port of entry, which carries a maximum penalty of 10 years in prison and a fine of $250,000.
Assistant U.S. Attorney Franz M. Wright, who is handling the case, stated that in May 2019, while in Ontario, Canada, Ramirez-Cordones launched a boat into the Niagara River with two individuals on board that he knew were not citizens or nationals of the United States: Leonardo Jiminez-De La Rosa and Rita Leida Montes Farfan. Ramirez-Cordones navigated the boat across the Niagara River to the United States, and landed at a dock in Lewiston, NY, although he knew the dock was not a designated port of entry. After the aliens disembarked from the boat at the dock, Ramirez-Cordones returned to Ontario, Canada. Ramirez-Cordones was to be paid $8,500 for bringing the aliens to the United States.
The plea is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy and Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino.
Sentencing is scheduled for May 19, 2023, before Judge Vilardo.
Bylas Man Sentenced to 293 Months for Second Degree MurderRead the Press Release
PHOENIX, Ariz. – Marvin Tona, 48, of Bylas, Arizona, was sentenced on December 19, 2022, by United States District Judge Steven P. Logan to 293 months in prison. Tona pleaded guilty to Second Degree Murder.
On September 5, 2021, while on the San Carlos Apache Indian Reservation, Tona argued with the adult victim, a one-time friend, at a residence in Bylas, Arizona. Armed with a handgun, Tona shot into a bedroom of the residence where the victim was located. The bullet struck and killed the victim. Both the victim and Tona are enrolled members of the San Carlos Apache Indian community.
Agents from the Bureau of Indian Affairs, the Federal Bureau of Investigation, and Officers of the San Carlos Police Department conducted the investigation in this case. Assistant United States Attorney Thomas C. Simon, District of Arizona, Phoenix, handled the prosecution.
CASE NUMBER: CR-21-00830-PHX-SPL
RELEASE NUMBER: 2023-002_Tona# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Buffalo Man Going to Prison for Bank RobberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney Trini E. Ross announced today that Anthony Wilson, 35, of Buffalo, NY, who was convicted of aggravated bank robbery and possession of a firearm in furtherance of a crime of violence, was sentenced to serve 66 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Joshua A. Violanti, who handled the case, stated that on the morning of October 26, 2017, Wilson and co-defendants Adrian D. Applewhite and Khalil Holland, traveled to Angola, NY to rob the Lakeshore Federal Credit Union on Erie Road. Defendant Holland entered the Lakeshore Federal Credit Union wearing a mask and brandishing a semi-automatic pistol given to him by Wilson, while Wilson waited in a car nearby. Holland approached the teller and demanded money; however, the alarm was activated, and Holland left without taking any money. Holland fled on foot and was arrested shortly thereafter. During the pursuit, Holland discarded the pistol.
Defendant Applewhite was previously convicted in federal court and is awaiting sentencing. Defendant Holland was previously convicted and sentenced in New York State Court.
The sentencing is the result of an investigation by the New York State Police, under the direction of Major Eugene Staniszewski; the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Michael Stansbury; the Lackawanna Police Department, under the direction of Chief Mark Packard; the Evans Police Department, under the direction of Chief Douglas J. Czora; and the Tonawanda Police Department, under the direction of Chief James P. Stauffiger. Additional assistance was provided by the Erie County District Attorney’s Office.
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Brooklyn, New York man convicted in cross country marijuana distribution conspiracyRead the Press Release
Seattle – A 54-year-old Brooklyn, New York resident was convicted today in U.S. District Court in Seattle of conspiracy to distribute more than 1,000 kilos of processed marijuana, announced U.S. Attorney Nick Brown. Chee Choong Ng was arrested in October 2020, when eleven people were indicted for a coast-to-coast illegal marijuana trafficking scheme. The jury deliberated about four hours following the two-day trial. U.S. District Judge John C. Coughenour scheduled sentencing for April 4, 2023.
According to records filed in the case and testimony at trial, the investigation culminated in October 2020 with the search of more than 35 locations in Washington, Oregon, and New York. Many of the sites searched were illegal marijuana grow houses. Over the course of the investigation, law enforcement determined marijuana was being grown on the west coast and was shipped to New York, New Jersey, Pennsylvania, Massachusetts, Connecticut, Illinois, Kentucky, Georgia, and Missouri.
Chee Choong Ng served as a distributor on the east coast, picking up large loads of marijuana that had been shipped from west coast members of the conspiracy. Once received, Ng coordinated with other co-conspirators to further distribute the marijuana—including to Public Storage units in Pennsylvania, a stash house in Staten Island, and various locations in Brooklyn. Prosecutors introduced hundreds of messages—sent using the social media application “WeChat”—between Ng and another co-conspirator that showed Ng’s sustained and knowing involvement in the conspiracy. When arrested, Ng had five different cell phones and a false identification that he began using after he was stopped with a load of marijuana in the summer of 2020. Prosecutors also introduced financial records showing Ng had taken in more than $140,000 in cash over the course of the conspiracy.
The other defendants in the case have pleaded guilty and have been sentenced to prison terms of up to 60 months.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. The case was investigated by the U.S. Postal Inspection Service (USPIS) Seattle and Newark offices and the King County Sheriff’s Office, with assistance from the Internal Revenue Service Criminal Investigation.
The case is being prosecuted by Assistant United States Attorneys Joseph Silvio and Michelle Jensen.
Bosque Farms man sentenced to four years and nine months in prison for assault and firearms convictionsRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced today that Everett Paquin was sentenced to four years and nine months in prison. Paquin, 59, of Bosque Farms, New Mexico, and an enrolled member of the Pueblo of Isleta, pleaded guilty on Sept. 6 in federal court to assault with a dangerous weapon and being felon in possession of a firearm and ammunition.
On Dec. 21, 2020, Paquin assaulted his then-girlfriend, identified in court records as Jane Doe, at his home on the Pueblo of Isleta. Paquin admitted to pushing, slapping, punching and kicking the victim, as well threatening and injuring her with a utility knife. During the assault, Paquin would not allow the victim to leave and repeatedly threatened her and her family with harm and death. Jane Doe is also an enrolled member of the Pueblo of Isleta.
At the time of the assault, Paquin possessed a loaded shotgun in his home. As a convicted felon, Paquin could not legally possess a firearm or ammunition.
Upon his release from prison, Paquin will be subject to three years of supervised release. The terms of the agreement also require Paquin to complete inpatient and outpatient substance abuse programs, an anger management program and a domestic violence prevention program.
The Isleta Police Department investigated this case. Assistant United States Attorney Alexander F. Flores prosecuted the case.
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Armed meth dealer from Livingston sentenced to 10 years in prisonRead the Press Release
BILLINGS — A Livingston man who admitted to distributing methamphetamine in Park and Gallatin counties while possessing a firearm was sentenced today to 10 years in prison, to be followed by five years of supervised release, U.S. Attorney Jesse Laslovich said.
Ryan King Steady, 41, pleaded guilty in June 2022 to distribution of meth and to possession of a firearm in furtherance of a drug trafficking crime.
U.S. District Judge Susan P. Watters presided.
The government alleged in court documents that in January 2021, Livingston Police Department officers were dispatched to Steady’s residence after receiving a call that a woman was being held against her will and engaging in sex trafficking. When officers arrived, they found a 9mm semi-automatic pistol with two magazines, ammunition and a holster in Steady’s bedroom. Law enforcement further learned that Steady had several people moving meth for him. Law enforcement also learned that Steady would leave his residence to sell meth and that he sold meth from his home. In April 2021, an officer with the Gallatin County Sheriff’s Office conducted a traffic stop of Steady. Steady was on felony probation, and his supervising officer requested a search of his vehicle. Officers located gram quantities of meth, a digital scale, 55 unused clear plastic baggies, and a 12-gauge sawed-off shotgun.
Assistant U.S. Attorney Karla E. Painter prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Park County Sheriff’s Office, Gallatin County Sheriff’s Office and Montana Probation and Parole.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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5 January 2023
Woman Sentenced for Possessing Quarter Pound of Methamphetamine While ShopliftingRead the Press Release
United States Attorney Steven Russell announced that Milea Ixta, 32, of Ithaca, Nebraska, was sentenced on January 4, 2023, in federal court in Omaha for Possession with Intent to Distribute Methamphetamine. United States District Judge Brian C. Buescher sentenced Ixta to 162 months’ imprisonment. There is no parole in the federal system. After Ixta’s release from prison, she will begin a 5-year term of supervised release.
On January 18, 2021, officers responded to a Walmart in Omaha regarding a report of shoplifting where the customer failed to ring up items and was attempting to leave the store. When the officer arrived, Ixta was taken into custody. A backpack she was carrying was searched. In addition to locating the stolen merchandise, officers also seized 148 grams of actual methamphetamine as well as 580 grams of a cutting agent.
This case was investigated by the Omaha Police Department.
Woman Charged with Threatening to Bomb Democratic Campaign Office Detained During Initial AppearanceRead the Press Release
MACON, Ga. – A northeast Georgia resident charged with threatening to bomb the Athens-Clarke County Democratic Committee Campaign headquarters in Athens, Georgia, last month and lying to federal investigators was remanded from state to federal custody at her initial appearance today.
Jessica Diane Higginbotham aka Jessica Harriod, 35, of Elberton, had her initial appearance before U.S. Magistrate Court Judge Charles Weigle at the U.S. Courthouse in Macon this afternoon; the government’s motion to detain Higginbotham was granted by the Court. Higginbotham is charged with one count of communicating a bomb threat and one count of making false statements. If convicted of communicating a bomb threat, Higginbotham faces a maximum sentence of ten years imprisonment and a $250,000 fine. If convicted of making false statements, she faces a maximum sentence of five years imprisonment and a $250,000 fine.
The indictment alleges that Higginbotham made a threat to bomb the Athens-Clarke County Democratic Committee Campaign building in Athens, Georgia, on Dec. 3, 2022, and lied to federal agents on Dec. 4, 2022, about her knowledge of a specific email address and the use of the TextNow communication application on her Samsung cellphone, both of which belong to her.
The case was investigated by the FBI, the U.S. Capitol Police, the Athens-Clarke County Police Department and the Elbert County Sheriff’s Office.
Assistant U.S. Attorney Will R. Keyes is prosecuting the case.
An indictment is only an allegation of criminal conduct, and all defendants are presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt.
Woman Arrested for Interfering with Security Screening Personnel at the Luis Muñoz Marín International AirportRead the Press Release
SAN JUAN, Puerto Rico – A federal grand jury in the District of Puerto Rico returned an indictment charging Nathalia Carolina Rosado with Interfering with Security Screening Personnel at the Luis Muñoz Marín International Airport in Carolina, Puerto Rico. The indictment was unsealed upon her arrest on January 4, 2023.
According to court documents, on November 24, 2022, Rosado assaulted two federal airport and air carrier employees who had security duties within the airport, and such assault interfered with the performance of duties of the employees and lessened the ability of the employees to control the access to the aircraft jet bridge and preventing entry of an unauthorized person into the secured area. The indictment alleges that Rosado, a Spirit Airlines passenger, assaulted two Spirit Airlines employees while attempting to force her way into the jet bridge after she had been removed from the plane.
“Incidents like this are unacceptable and dangerous because they not only put the federal employees at risk, but all of the people at the airport, employees and travelers,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “Airport employees work each and every day to keep the flying public safe, and law enforcement authorities will also remain vigilant so that those who break the law will be brought to justice.”
“Airports are crucial to our economy and society in general. They facilitate tourism, trade, connectivity, economic growth, provide employment and enable a rapid response when disasters occur,” stated Joseph González, Special Agent in Charge of the FBI, San Juan Field Office. “Airport security is almost synonymous with national security, and behavior such as this is dangerous. The FBI is vigilant and will respond aggressively to events such as these. We urge travelers to be safe and respect the safety of other travelers, to avoid facing federal charges.”
If convicted, Rosado faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case.
Assistant U.S. Attorney Daniel J. Olinghouse is prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Wolf Point man sentenced to 27 months in prison for attempted fentanyl traffickingRead the Press Release
GREAT FALLS — A Wolf Point man today was sentenced to 27 months in prison, to be followed by four years of supervised release, after he admitted to attempting to possess fentanyl for distribution on the Fort Peck Indian Reservation, U.S. Attorney Jesse Laslovich said.
Andre Jean Reum, 44, pleaded guilty in September 2022 to attempted possession with intent to distribute fentanyl.
Chief U.S. District Judge Brian M. Morris presided.
In court documents, the government alleged that Reum was responsible for bringing large quantities of fentanyl pills from Washington the Fort Peck Indian Reservation for distribution. Reum was ordering fentanyl pills through the mail from a Washington supplier and distributing them for profit. Reum was arrested when the last package he ordered was intercepted in May 2022 and found to contain 586 fentanyl pills. After his arrest, Reum described to a fellow inmate that he had received multiple prior shipments from the same supplier.
Assistant U.S. Attorney Ethan R. Plaut prosecuted the case, which was investigated by the FBI and Bureau of Indian Affairs.
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Westport Investment Advisor Pleads Guilty to Federal Tax ChargeRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Joleen D. Simpson, Special Agent in Charge of IRS Criminal Investigation in New England, announced that THOMAS PACILIO, 64, of Westport, waived his right to be indicted and pleaded guilty today before U.S. District Judge Sarala V. Nagala in Hartford to a federal tax offense.
According to court documents and statements made in court, in 2011, Pacilio and his partner started Clapboard Hill Advisors LLC, a financial services business headquartered in Westport. In 2013, Pacilio created Alcamo Holding Corporation Inc. (“Alcamo”), an 1120S corporation, and transferred his Clapboard Hill Advisors partnership interest to Alcamo. In 2014, Pacilio, through Alcamo, and his partner, through a separate 1120S corporation, sold Clapboard Hill Advisors to McGladrey Wealth Management LLC (“McGladrey”). Under the sale agreement, McGladrey agreed to make a lump sum payment at closing. Thereafter, Pacilio was to become an employee of McGladrey for three years subject to a non-competition provision. In addition to being paid a salary by McGladrey, if Pacilio remained an employee, Pacilio would receive a $350,000 payment on each anniversary of the sale for three years. He would also receive a portion of McGladrey’s annual gross revenue of up to $150,000 for the first year, $350,000 for the second year, and $450,000 for the third year.
In pleading guilty, Pacilio admitted that, for the 2015 through 2018 tax years, he filed individual income tax returns that omitted installment payments related to the sale of Clapboard Hill Advisors to McGladrey. In total, he omitted approximately $1,476,425 that should have been reported either as ordinary income or as capital gains, which resulted in a tax loss of $286,328 to the IRS.
Pacilio pleaded guilty to one count of filing a false tax return, an offense that carries a maximum term of imprisonment of three years. Judge Nagala scheduled sentencing for April 6.
Pacilio is released on a $350,000 pending sentencing.
This investigation is being conducted by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Heather L. Cherry.
U.S. Attorney’s Office for Southern District of Indiana Collects over 12 Million Dollars in Civil and Criminal Actions in Fiscal Year 2022Read the Press Release
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, announced today that the U.S. Attorney’s Office for the Southern District of Indiana collected $12,233,320 in criminal and civil actions in Fiscal Year 2022. Of this amount, $3,519,196 was collected in criminal actions and $8,714,124 was collected in civil actions.
Additionally, the Southern District of Indiana worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $216,807 in cases pursued jointly by these offices. Of this amount, $60,816 was collected in criminal actions and $155,991 was collected in civil actions.
“The efforts and leadership of our Civil Division and Asset Recovery Unit have resulted in the recovery of millions of dollars that will assist victims of fraud and other crimes,” said U.S. Attorney Myers. “We are proud to have coordinated with so many local, state, and federal law enforcement partners to protect victims and hold criminals accountable.”
U.S. Attorney Myers thanked Civil Division Chief Shelese Woods and Asset Recovery Unit Chief Kelly Rota, as well as the Office’s outstanding support professionals for their diligent efforts.
The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s Office for the Southern District of Indiana, working with partner agencies and components, collected $1,964,136 in asset forfeiture actions in Fiscal Year 2021. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
For example, in August, the Southern District of Indiana recovered $5,591.044 as part of the government’s settlement with American Senior Communities, L.L.C. (ASC). In 2017, a former employee of a hospice services company doing business with ASC filed a “whistleblower” lawsuit under the civil False Claims Act. The complaint alleged that ASC had engaged in conduct to defraud the Medicare program. Specifically, the complaint alleged that ASC was charging Medicare directly for various therapy services, which were being provided to beneficiaries who had been placed on hospice, when those services should have been covered by the beneficiaries’ Medicare hospice coverage. Based on the investigation, the estimated loss to the Medicare program was $2,795,522.33 and ASC agreed to pay $5,591,044.66 to the United States. Assistant U.S. Attorneys Shelese Woods and Justin Olson handled the case for the United States
See full release here: U.S. Attorney's Office Recovers Over $5.5 Million in Civil False Claims Settlement with ASC
U.S. Attorney’s Office Collects More Than $33 Million in Fiscal Year 2022Read the Press Release
SYRACUSE, NEW YORK – U.S. Attorney Carla B. Freedman announced today that the U.S. Attorney’s Office for the Northern District of New York (NDNY) collected $33,885,629.97 in criminal and civil actions in Fiscal Year 2022. Of this amount, $3,205,538.53 was collected in criminal actions and $30,680,091.44 was collected in civil actions.
Additionally, NDNY worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $199,895.85 in cases pursued jointly by these offices. Of this amount, $42,147.15 was collected in criminal actions and $157,748.70 was collected in civil actions.
“The Northern District of New York is fully committed to the critical work of collecting money to make crime victims whole, forfeiting property used to commit crimes, and recovering money for the Federal Treasury. My office will continue to use all of its resources to make sure people and companies are held financially accountable when they commit crimes and violate the False Claims Act,” said United States Attorney Carla B. Freedman.
Notable collections and recoveries in Fiscal Year 2022 include:
In April, NDNY collected $199,942.57 in restitution from Martin Kimber. Kimber was sentenced to 168 months in prison for using mercury, a toxic chemical, and tampering with consumer products at the Albany Medical Center in Albany, New York. Kimber admitted that on four separate occasions in 2011 and 2012, he spread mercury, a potentially fatal neurotoxin, throughout various areas of the Albany Medical Center in ways that could lead to inhalation or absorption of the mercury. Kimber also admitted that he spread mercury to retaliate for what he thought were unfair hospital bills. The victim, Albany Medical Center, has received this money.
In May, NDNY recovered more than $24 million as part of a $48.5 million settlement NDNY and the U.S. Attorney’s Office for the Eastern District of Washington reached with Trimark USA, LLC to resolve allegations that two of Trimark USA’s subsidiaries manipulated federal small business set-aside contracts. In addition to this recovery, during fiscal year 2022, NDNY recovered more than $6 million in civil cases involving fraud, false claims, and prescription drug diversion.
The U.S. Attorneys’ Offices, along with the Department of Justice’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Additionally, NDNY, working with partner agencies and divisions, collected $6,910,180 in asset forfeiture actions in Fiscal Year 2022. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney Josh Hurwit to Co-Sponsor United Against Hate Event in Treasure ValleyRead the Press Release
BOISE – U.S. Attorney Josh Hurwit along with the College of Idaho, the Wassmuth Center for Human Rights, DOJ Community Relations Service, and the FBI are convening a United Against Hate meeting on January 16 at College of Idaho in Caldwell, Idaho. The event is free and is open to the public. The registration link can be found here: www.eventbrite.com/e/united-against-hate-tickets-492001348277.
United Against Hate is an initiative launched by the Department of Justice focused on improving efforts to combat hate crimes and hate incidents through relationship building at the local level. Through this endeavor, the Office seeks to create and strengthen trust and partnerships among law enforcement, community leaders, and residents.
“In my view, this initiative is particularly timely for Idaho, as we have experienced a series of troubling hate incidents throughout the state in the past several years,” said U.S. Attorney Hurwit. “As Attorney General Garland has said, this is a moment for an all-hands-on-deck approach to combatting unlawful hate.”
The January 16 event will include presentations from prosecutors about hate crimes laws and reporting mechanisms and speakers who will share their courageous experiences responding to hate.
“I look forward to meeting community members and hearing different perspectives on how we can work together to unite our community in standing up to unlawful hate,” said U.S. Attorney Hurwit. “And I am deeply honored to partner with our co-sponsors to prioritize this critical mission.”
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Two North Carolina Tax Preparers Sentenced to Prison for $5 Million Tax ConspiracyRead the Press Release
Two North Carolina women were sentenced to prison this week for preparing false tax returns for clients and causing them to be filed with the IRS.
According to court documents and statements made in court, from approximately 2009 through 2018 Betty Hawkins, 51, and Phyllis Ricks, 63, both of Rocky Mount, conspired with others to file false tax returns for clients of the tax preparation businesses where they worked. These returns included fictitious federal income tax withholding figures as well as other fraudulent items that generated fraudulent refunds for the clients. In total, Hawkins, Ricks and their co-conspirators caused more than 1,000 false tax returns to be filed with the IRS that claimed a total of approximately $5 million in fraudulent refunds.
Ricks was sentenced today to three years in prison and Hawkins was sentenced yesterday to two years in prison. In addition to the term of imprisonment, U.S. District Judge Terrence W. Boyle ordered both women to serve three years of supervised release and to pay approximately $5.2 million in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Michael F. Easley for the Eastern District of North Carolina made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorney Mary Frances Richardson of the Tax Division and Assistant U.S. Attorney Susan Menzer prosecuted the case.
Two Men Guilty of Federal Charges Related to January 2022 Shooting in DavenportRead the Press Release
DAVENPORT, IA – On January 4, 2023, a federal jury convicted a Davenport man of being a felon in possession of a firearm related to his involvement in a January 29, 2022, shooting in the area of 13th Street and Washington Street in Davenport.
According to court documents and evidence presented at trial, Leonard Fisher, age 32, was involved in a shooting around 13th Street and Washington Street during the early morning hours of Saturday, January 29, 2022. Evidence at trial showed that an altercation started inside the Thunderguard Club, then located at 1314 Washington Street, spilled out onto Washington Street, and resulted in numerous shots being fired. When officers arrived on scene, they located two separate sets of shell casings, and a firearm next to a pool of blood. Fisher’s DNA matched the pool of blood next to the gun, and he was identified as being one of the shooters via surveillance video.
The other shooter, Timothy Eugene Angel, age 39, of Clinton, was federally charged with being a felon in possession of ammunition, as the gun he used was never recovered. Angel pled guilty and is set for sentencing in federal court on January 24, 2023. Fisher’s sentencing date has not yet been set. Both men face up to 10 years in federal prison. There is no parole in the federal court system.
U.S. Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was investigated by the Davenport Police Department, with assistance from the Bureau of Alcohol, Tobacco, and Firearms.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. In May 2021, the 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.
Two Memphis Men Sentenced for Federal Firearms CrimesRead the Press Release
Memphis, TN – Daniel Kirtman, 25, and Michael Thomas, 24, have been sentenced to a total of 15 years in federal prison for federal firearms crimes. Kirtman was sentenced to eight years for being a felon in possession of a firearm and possession and transfer of a short-barrel rifle. Thomas was sentenced to seven years for possession of a machine gun and possession of a firearm in furtherance of drug trafficking crime.
According to information presented in court, in June 2021, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Multi-Agency Gang Unit investigated individuals who were illegally possessing firearms and machine gun conversion devices.
On two separate occasions, Thomas sold machine gun conversion devices, known as “Glock switches.” On another occasion, Kirtman, a convicted felon, sold a short-barrel rifle. Agents arrested Thomas and seized an AR-style pistol. Agents also arrested Kirtman and seized a Glock pistol equipped with an extended magazine and a machinegun conversion device. During the investigation, agents purchased and seized 10 firearms from Kirtman and Thomas.
On June 29, 2022, Thomas pled guilty to possessing a machinegun and possessing a firearm in furtherance of a drug trafficking crime. On August 26, 2022, Kirtman pled guilty to being a felon in possession of a firearm, possessing and transferring a firearm in violation of the National Firearms Act.
On December 1, 2022, United States District Judge Jon P. McCalla sentenced Thomas to 84 months in prison, to be followed by four years of supervised release. On December 7, 2022, Judge McCalla sentenced Kirtman to 102 months in prison, to be followed by three years of supervised release. There is no parole in the federal system.
United States Attorney Kevin Ritz thanked Assistant United States Attorney Gregory Allen, who prosecuted this case, as well as the law enforcement partners who investigated the case.
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For more information, please contact Public Information Officer Cherri Green at (901) 544-4231 or [email protected]. Follow @WDTNNews on Twitter for office news and updates.
Superior man sentenced for setting fires on Forest Service landsRead the Press Release
MISSOULA — A Superior man who admitted to setting fires on Forest Service lands was sentenced today to a term of imprisonment of eight months, to be followed by three years of supervised release, and was ordered to pay $3,323 restitution, U.S. Attorney Jesse Laslovich said.
Jeremy Johannes Hennick, 52, pleaded guilty in September 2022 to timber set afire.
U.S. District Judge Dana L. Christensen presided.
In court documents, the government alleged that between 2013 and 2021, more than 40 suspected arson fires were set on state and federal land in Mineral County. In 2021 alone, 22 fires were documented and investigated. Law enforcement identified Hennick as a suspect after a vehicle he drove was spotted in the area of some of the fires. The government further alleged that a fire was reported on National Forest System lands on Aug. 1, 2021, at about 5 a.m., near the junction of Mullan Road East and Riverbend Road in Mineral County. Wildland fire investigators responded and documented the main fire and three additional burned items located more than 30 feet away. Investigators concluded each burned area represented a separate fire, that the fires were human-caused and had been set using homemade devices, such as cigarette packages stuffed with paper and, occasionally, covered with an accelerant.
Based on evidence, the Forest Service intensified its investigation of Hennick. Agents interviewed Hennick, who admitted he had been setting fires for four to five years, primarily by lighting trash on fire and throwing it out the window of whatever vehicle he was driving. Damage was minimal, based in large part on the diligence and resourcefulness of the Forest Service law enforcement officers who investigated the case and the firefighters who responded to the flames.
Assistant U.S. Attorney Timothy J. Racicot prosecuted the case, which was investigated by the U.S. Forest Service.
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St. Louis Man Admits to Pulling Trigger in Fatal East St. Louis Bank RobberyRead the Press Release
EAST ST. LOUIS, Ill. – Jaylan D. Quinn, 23 of St. Louis, Missouri, pled guilty in a U.S. District Court on Wednesday to fatally shooting a security guard while robbing First Bank in East St. Louis in August 2021.
“Vicious acts of armed violence in our communities are intolerable,” said U.S. Attorney Rachelle Aud Crowe. “The U.S. Attorney’s office is prepared to pursue justice in honor of the life lost, and I commend the FBI and our law enforcement partners for their efforts to improve public safety and remove dangerous individuals from society.”
“The FBI and our law enforcement partners acted swiftly, working around the clock, to quickly arrest the individuals responsible for the robbery and tragic death of Mr. Horn,” said FBI Springfield Field Office Special Agent in Charge David Nanz. “While the violent act will have a lifelong impact, we hope the justice that is to come will bring some level of comfort for the employees, friends, and family of the victim.”
According to court documents, Quinn and Andrew R. Brinkley, 21 of St. Louis, Missouri, entered First Bank in East St. Louis located at 350 River Park Dr. around 4 p.m. on Aug. 27, 2021. Wearing masks, the pair approached the teller and displayed a demand note. The note read, “I GOT A BOMB STRAPPED TO MY CHEST PUT ALL THE MONEY IN OR EVERYONE DIE.” After receiving funds, the two men ran toward the door.
Ted Horn, 56 of St. Libory, Illinois, was working at the bank as a uniformed security guard and followed the men to observe, but Quinn drew a semi-automatic handgun and shot Horn in the head. The robbers then fled in a white Lexus sedan. Horn was pronounced dead at the scene.
Bank surveillance video quickly led to the identification of Brinkley as a suspect. By 2 p.m. the following day, the FBI arrested Brinkley and Quinn at Brinkley’s residence in St. Louis.
Agents executed a search warrant at the residence and recovered a loaded 9mm handgun, two marked bills that were taken during the First Bank robbery, and clothing that matched what the robbers wore. A white Lexus sedan was found parked outside the residence.
Brinkley pled guilty to a bank robbery charge and is currently scheduled to appear in court next at 1:30 p.m. on Jan. 11, 2023.
The FBI-Springfield is leading the investigation with assistance from the Illinois State Police and the East St. Louis Police Department. Assistant U.S. Attorneys Laura Reppert and Ali Burns are prosecuting the case.
[A previous version of this press release incorrectly stated Horn moved to intercept the men.]
St. Louis Man Accused of Murder During Fentanyl ConspiracyRead the Press Release
ST. LOUIS – A man from St. Louis, Missouri was indicted by a federal grand jury Wednesday and accused of a fatal shooting in November linked to the distribution of fentanyl.
Terrell Donta McDaniel, 41, was indicted on one count of conspiracy to distribute and possession with the intent to distribute fentanyl and one count of murder through the use of a firearm during a drug trafficking crime.
The indictment accuses McDaniel of discharging a firearm on November 2 resulting in the premeditated murder of Andre Nash.
An affidavit filed with a criminal complaint on December 7 says McDaniel shot Nash over a drug debt in the 4100 block of Clara Place in St. Louis and then dumped the body in the Wells-Goodfellow neighborhood in St. Louis.
The fentanyl conspiracy charge carries a penalty of up to 20 years in prison, a $1 million fine, or both. The firearm charge is punishable by a sentence of up to life in prison, a $250,000 fine or both.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The case was investigated by the St. Louis Metropolitan Police Department and the FBI.
Springfield Man Sentenced to Nearly Seven Years in Prison for Distributing FentanylRead the Press Release
BOSTON – A Springfield man was sentenced yesterday in federal court in Worcester for drug trafficking charges involving fentanyl.
Juan Jimenez, 48, was sentenced by U.S. Senior District Court Judge Timothy S. Hillman to 83 months in prison and four years of supervised release. In April 2022, Jimenez pleaded guilty to one count of conspiracy to distribute 40 grams or more of fentanyl and two counts of possession with intent to distribute and distribution of 40 grams or more of fentanyl.
On multiple occasions in May 2021, Jimenez sold fentanyl to an undercover agent. Specifically, on May 12, 2021, Jimenez met the undercover officer at a parking lot in Sturbridge where he provided the undercover agent with a package containing almost 50 grams of fentanyl. During the meeting, Jimenez expressed that he did not want to have “that much” on him and therefore intended to bring another individual to future meetings to handle transactions. On May 19, 2021, Jimenez drove himself and another individual to the same parking lot to meet with the undercover agent. There, Jimenez sent his accomplice to provide the undercover agent with a package containing 50 grams of fentanyl.
United States Attorney Rachael S. Rollins; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Southbridge Police Chief Shane Woodson; and Sturbridge Police Chief Earl Dessert made the announcement today. Assistant U.S. Attorney Kristen M. Noto of Rollins’ Worcester Branch Office prosecuted the case.
Sioux City Man to Federal Prison for Meth ConspiracyRead the Press Release
Jesse Chavez, 43, from Sioux City, Iowa, was sentenced on January 4, 2023, in federal court in Sioux City, to 180 months’ imprisonment.
Chavez pled guilty June 28, 2022, to conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine. In 2015, Chavez was convicted of possession with intent to deliver drugs in Iowa District Court for Woodbury County.
At the hearings, evidence showed that between September 2021 and December 2021, Chavez was involved in a conspiracy that distributed at least 500 grams of mixed methamphetamine and 150 grams of pure methamphetamine in the Sioux City area. On December 14, 2021, Sioux City Police officers observed suspicious conduct by Chavez in the Walgreens parking lot and inside the store. Officers confronted Chavez, obtained consent to search his vehicle, and seized three ounces of methamphetamine. Chavez would obtain multiple ounce quantities of methamphetamine from his sources of supply and then sell lesser quantities of the methamphetamine to others.
Sentencing was held before United States District Court Chief Judge Leonard T. Strand. Chavez was sentenced to 180 months’ imprisonment and must serve a 10-year term of supervised release following imprisonment. There is no parole in the federal system. Chavez remains in custody of the United States Marshal until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22-4009. Follow us on Twitter @USAO_NDIA.
Rocheport Woman Indicted for $1.5 Million Fraud SchemeRead the Press Release
JEFFERSON CITY, Mo. – A Rocheport, Mo., woman has been indicted by a federal grand jury for using her payroll services business in a $1.5 million fraud and embezzlement scheme.
Kathryn L. Cunningham, also known as “Kat,” 62, was charged in a 38-count indictment returned under seal by a federal grand jury in Jefferson City, Mo., on Dec. 13, 2022. That indictment was unsealed and made public today following Cunningham’s arrest. Her initial court appearance and arraignment will be held this afternoon.
Cunningham is the former owner and CEO of Moresource, Inc., in Columbia, Mo., which provided payroll services for approximately 141 clients when it closed in June 2020. Moresource contracted with each of these clients to accurately calculate the client’s payroll and the state and federal payroll and income taxes for the client’s employees, to obtain funds from the client to cover that payroll, to disburse payroll funds to the client’s employees, to remit payroll and income tax payments to state departments of revenue and the IRS, and to generate and submit all required state and federal payroll tax forms.
Cunningham allegedly embezzled money from the payroll account held in trust for Moresource’s clients. She took her clients’ money for her personal benefit, the indictment says, as well as to fund her company’s operations. Cunningham allegedly embezzled approximately $1,545,427 of payroll deposits from 24 Moresource clients.
As part of her fraud scheme, the indictment says, Cunningham also used money from Moresource’s operating account for her personal use. Cunningham borrowed money on multiple occasions from at least two non-bank lenders to cover shortfalls in the client funds in the Moresource payroll account. She also paid the principal and interest on several of those loans from the client funds in Moresource payroll account.
According to the indictment, Cunningham fraudulently obtained a guaranteed loan and a line of credit from the Small Business Administration by concealing a financial liability. On multiple occasions, Cunningham caused SBA guaranteed funds to be disbursed into Moresource’s operating account and then transferred into Moresource’s payroll account to replace client funds she had embezzled rather than use the SBA funds for working capital.
According to the indictment, Cunningham embezzled federal funds from Abilities for Business, Inc. (subsequently known as Mid-Missouri Business Leadership Network, Inc.), an organization of which she was president. Cunningham deposited funds embezzled from this organization into Moresource’s payroll account to replace client funds she had also embezzled. Cunningham also deposited funds embezzled from Abilities for Business into her personal bank accounts.
Cunningham attempted to conceal her embezzlement of client funds by causing Moresource to stop making timely and accurate IRS filings, the indictment says, and to stop making regular payments to the IRS for the employment taxes owed by her clients. Cunningham caused documents to be transmitted to her clients that falsely stated all payroll tax obligations had been satisfied. Cunningham falsely told her clients that the IRS sent them tax deficiency notices because the IRS was behind in processing tax payments, because the IRS misapplied the tax payments, and because of issues with Moresource’s payroll software.
The federal indictment charges Cunningham with 24 counts of bank fraud, four counts of stealing from an organization that receives federal funds, and 10 counts of wire fraud.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the FBI and IRS-Criminal Investigation.
Restaurant manager sentenced to prison for embezzling $300,000 from employerRead the Press Release
ATLANTA - Scott Spilberg has been sentenced to prison for embezzling over $300,000 from his employer by using his company charge card for personal visits to adult entertainment clubs.
“Spilberg was trusted by his employer and betrayed that trust by shelling out more than $300,000 of company funds at adult entertainment clubs,” said U.S. Attorney Ryan K. Buchanan.
“This greedy defendant abused his position to fund his own lifestyle. Because of his actions, the restaurant, and people he was chosen to lead suffered the impacts,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “People who brazenly steal from their employers should expect to be held accountable.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: Spilberg was hired as the manager at Houck's Grille in August 2020. Beginning in October 2020, at the height of the COVID-19 pandemic, Spilberg began using his company issued debit card to pay for his visits to two adult entertainment clubs. Ultimately, he visited the clubs more than 50 times during an 11-month period, charging over $300,000 to the company debit card. The loss of this money caused a significant hardship to the restaurant and threatened the livelihood of its 40 employees and forced it to borrow COVID-relief funds to stay in business.
Scott Spilberg, 56, of Canton, Georgia, was sentenced to two years, six months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $300,533.78. Spilberg was convicted on September 19, 2022, after he pleaded guilty to the offense of wire fraud.
This case was investigated by the Federal Bureau of Investigation with the assistant of the Roswell Police Department.
Assistant U.S. Attorney Christopher J. Huber prosecuted 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.
Repeat Gastonia Drug Trafficker Is Found Guilty of Drug DistributionRead the Press Release
CHARLOTTE, N.C. – A federal jury in Charlotte delivered a guilty verdict against Kenter O’Neal Ruff, 43, of Gastonia, N.C., for drug distribution, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn Jr. presided over the three-day trial which ended today.
Michael C. Scherck, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Interim Chief Trent Conrad of the Gastonia Police Department join U.S. Attorney King in making today’s announcement.
According to filed court documents, evidence introduced at trial and witness testimony, over the course of an investigation into drug trafficking in Gaston County, law enforcement identified Ruff as a local drug distributor. According to trial evidence, on multiple occasions between October 2020 and April 2021, Ruff sold cocaine base to an individual cooperating with law enforcement. At the time, Ruff was on supervised release stemming from a prior federal drug conviction and had additional state convictions related to drug trafficking and drug possession.
The federal jury convicted Ruff of four counts of distribution of cocaine base. Ruff remains in federal custody. A sentencing date has not been set.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
U.S. Attorney King thanked the FBI and the Gastonia Police Department for their investigation of the case.
Assistant United States Attorneys Thomas Kent and Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte and Special Assistant United States Attorney (SAUSA) William Wiseman are prosecuting the case. Mr. Wiseman is a state prosecutor with the office of the 26th Prosecutorial District and was assigned by District Attorney Spencer Merriweather to serve as a SAUSA with the U.S. Attorney’s Office in Charlotte. Mr. Wiseman is sworn in both state and federal courts. The SAUSA position is a reflection of the partnership between the office of the 26th Prosecutorial District and the United States Attorney’s Office.
Readout of Congressional Visit to the FBI’s Criminal Justice Information Services DivisionRead the Press Release
Today, Deputy Attorney General Lisa O. Monaco, Director Christopher A. Wray, and Senators John Cornyn (TX), Joe Manchin (WV), Christopher Murphy (CT), Shelley Capito (WV) and Thom Tillis (NC) visited the Criminal Justice Information Services Division (CJIS) of the Federal Bureau of Investigation (FBI) in Clarksburg, West Virginia.
While in Clarksburg, they received a series of briefings and demonstrations on how the recent changes made to the National Instant Criminal Background Check System (NICS), following the passage of the NICS Denial Notification Act and the Bipartisan Safer Communities Act (BSCA), are protecting Americans across the country. NICS is the FBI's national system that, as required by law, conducts a background check on people in over 40 states and territories who want to purchase or possess a firearm or explosive. NICS assists 13 additional states that conduct their own checks, which often rely on data held by CJIS.
Implemented this past September, the NICS Denial Notification Act now requires NICS to alert state and local law enforcement to background check denials, so that these authorities can decide whether to investigate or prosecute these denied individuals.
Building on that, BSCA further expanded and strengthened NICS background checks, including by enhancing checks for young adults, aged 18 to 21, to now require contacting state agencies and local law enforcement for disqualifying juvenal criminal history and mental health records. The legislation also closed the so-called “boyfriend loophole” by expanding the “misdemeanor crimes of domestic violence” prohibitor. Now, persons convicted on or after June 25, 2022, of a qualifying offense against a person with whom they are or were in a “dating relationship” will be denied their purchase of a firearm as a result of their background check.
Separately, CJIS Assistant Director Michael A. Christman and his executive staff provided the group with an overview of the National Threat Operations Center, which serves as the primary communication channel for the public to provide information pertaining to federal violations and threats to national security and operates out of CJIS.
Raleigh Man Sentenced to 14 Years in Prison After a Domestic Dispute Ended in Shots Fired at his GirlfriendRead the Press Release
RALEIGH, N.C. – Steven Antonio Peterson, 32, of Raleigh, was sentenced yesterday to 168 months in prison for two counts of being a felon in possession of a firearm. Peterson pled guilty to the charges.
According to court documents and other information presented in court, Peterson possessed a firearm on August 29, 2021 when he got into an argument with his girlfriend after he broke into her house through the window, hit her in the face with a pistol, and then fired a round at her as she tried to walk away. The round nearly hit her. Peterson then threatened the victim. On September 1, 2021, Raleigh Police arrested Peterson who was carrying a 9-millimeter handgun at the time of arrest. Ballistics determined that the same firearm was used in the shooting on August 29th. Peterson had previously been convicted of a felony and is not legally permitted to possess a firearm or ammunition.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Raleigh Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated the case and Assistant U.S. Attorney Philip Aubart prosecuted the case.
The conviction is a result of the ongoing Violent Crime Action Plan (VCAP) initiative which is collaborative effort with local, state, and federal law enforcement agencies, working with the community, to identify and address the most significant drivers of violent crime. VCAP involves focused and strategic enforcement, and interagency coordination and intelligence-led policing.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:22-CR-00145-BO-001.
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Providence Man Sentenced to Federal Prison for Participating in Fraud Schemes Before and After His Initial Arrest for Bank FraudRead the Press Release
PROVIDENCE – A Providence man who admitted to participating in check cashing fraud schemes, and who continued to do so while on federal pre-trial release after his arrest on related charges, was sentenced today to three years in federal prison, announced United States Attorney Zachary A. Cunha.
Rachon Waite, 32, previously admitted to a federal judge that, from December 2020 to June 2021, and then again, after his August 2, 2021, arrest, from October 2021 through April 2022, he recruited individuals on social media to use their personal identifying information and bank accounts to cash fraudulently-created checks. Members of the conspiracy working with Waite stole checks of multiple Rhode Island and Massachusetts business from the U.S. Mail stream and then used the information from those checks to create fraudulent checks using the names and personal identifying information of individuals recruited by Waite. Waite, his co-conspirators, and, in some instances, the individuals Waite recruited deposited these fraudulent checks in their bank accounts and quickly withdrew the funds, or attempted to, before banks determined that the deposited checks were fraudulent. In other instances, individuals recruited by Waite cashed the fraudulent checks.
Waite was first arrested on a federal complaint in August 2021 for participating in the fraudulent check cashing scheme. He was released on bail and placed on pretrial supervision by the Court. Despite this, in October 2021, Waite recommenced his role in the check cashing fraud scheme. On May 24, 2022, Waite was charged for his role in the fraudulent check cashing activity that followed his release on bail on the first complaint.
According to information presented to the court, criminal conduct attributed to the defendant caused a loss to banks and businesses totaling more than $169,000.
Waite pleaded guilty on August 22, 2022, to conspiracy to commit bank fraud, aggravated identity theft, and commission of an offense while on release. He was sentenced today by U.S. District Court Judge William E. Smith to thirty-six months in federal prison to be followed by three years of federal supervised release. Restitution will be determined at a later date.
The case was prosecuted by Assistant United States Attorney Denise M. Barton.
The matter was investigated by the FBI and the Bristol and Narragansett, RI, and Wrentham, MA, police departments.
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Port Arthur Man Guilty of Glock Auto-Switch ViolationRead the Press Release
BEAUMONT, Texas - A Port Arthur man has pleaded guilty to federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.
Javier Jesus Morales, 26, pleaded guilty to possession of an unregistered firearm today before U.S. District Judge Marcia A. Crone.
According to information presented in court, on Oct. 27, 2020, Morales sold a Glock .9mm pistol to a federal agent acting in an undercover capacity after the agent responded to a posting on the social media forum “Snapchat” advertising for the sale. The Glock pistol was outfitted with an attached aftermarket “auto-switch.” The auto-switch is a device used to convert a standard, legal handgun into a fully automatic machine gun, which if not registered in the National Firearms Registration and Transfer Record is illegal to possess. The firearm was not registered to Morales.
Morales was indicted by a federal grand jury on Feb. 2, 2022. He faces up to 10 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is being investigated by the Beaumont Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. This case is being prosecuted by Assistant U.S. Attorney Joseph R. Batte.
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Pennsylvania Man Sentenced to 5 Years in Federal Prison for Role in Connecticut Drug RingRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that MYRON BROWN, also known as “Farid,” 49, of Chester, Pennsylvania, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 60 months of imprisonment, followed by four years of supervised release, for trafficking cocaine.
This matter stems from an investigation led by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area (HIDTA) Task Force into a drug trafficking organization headed by Tajh Wiley of Norwalk. The investigation, which included a court-authorized wiretap of Wiley’s phone, revealed that Wiley conspired to distribute large quantities of fentanyl, cocaine and marijuana and distributed drugs throughout Connecticut and elsewhere with the assistance of several associates. In April 2021, Brown transported approximately 900 grams of cocaine to an associate of Wiley’s in Manhattan.
Wiley and seven co-conspirators were arrested on June 9, 2021. In association with their arrests, investigators executed multiple search warrants and seized approximately a kilogram of fentanyl, a kilogram of cocaine, approximately 83 grams of crack cocaine, more than 12 pounds of marijuana, two press machines and other items and materials used by Wiley and his co-conspirators to process and package illegal drugs. Investigators also seized from Wiley jewelry valued at more than $100,000, and a 2021 Mercedes-Benz valued at approximately $146,000.
On May 2, 2022, Brown pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine.
Brown was incarcerated in Pennsylvania on state drug and firearm charges when he was indicted in this case. Brown’s state case was later adopted by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and is pending.
On July 25, 2022, a jury found Wiley guilty of drug trafficking offenses. On December 28, 2022, Judge Arterton sentenced him to 12 years of imprisonment.
This investigation was conducted by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area (HIDTA) Task Force, Federal Bureau of Investigation, Bridgeport Police Department, Fairfield Police Department, Norwalk Police Department, Stamford Police Department, Stratford Police Department, Yonkers (New York) Police Department and the U.S. Marshals Service. The HIDTA Task Force includes personnel from the DEA Bridgeport Resident Office, the Connecticut State Police, and the Bridgeport, Norwalk, Stamford, Stratford, Milford and Danbury Police Departments.
This case is being prosecuted by Assistant U.S. Attorneys Patrick J. Doherty, Robert S. Dearington, Margaret M. Donovan and Elena L. Coronado through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Orange County Convicted Felon Guilty of Federal Firearms ViolationRead the Press Release
BEAUMONT, Texas – A Vidor man has pleaded guilty to a federal firearms violation in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.
Job Allen Smith, 49, pleaded guilty to possession of a firearm by a prohibited person today before U.S. District Judge Marcia A. Crone.
According to court documents, on Nov. 18, 2021, law enforcement officers conducted a search warrant at a residence in Vidor where they believed Smith would be in possession of narcotics. During the search, officers discovered two firearms in the master bedroom closet. Smith, a convicted felon, is prohibited by federal law from owning or possessing firearms or ammunition.
Smith was indicted by a federal grand jury on Sep 7, 2022. He faces up to 10 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is being investigated by the Orange County Sheriff’s Office, Orange County SWAT, FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Russell James.
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Omaha Man Sentenced to 10 Years for Child Pornography Receipt and DistributionRead the Press Release
United States Attorney Steven Russell announced that Jame Rodriguez-Ramirez, 21, of Omaha, Nebraska, was sentenced today in federal court in Omaha for receipt and distribution of child pornography. United States District Judge Brian C. Buescher sentenced Rodriguez-Ramirez to 120 months’ imprisonment. There is no parole in the federal system. After his release from prison, Rodriguez-Ramirez will begin a five-year term of supervised and will be required to register as a sex offender.
Rodriguez-Ramirez has been the subject of multiple investigations resulting from NCMEC cybertips for child pornography materials. The cybertips were generated by DropBox, a file sharing service, in 2017; Instagram in 2019; and Omegle in 2021. Each cybertip resulted in a separate search of his Omaha residence and seizure of his electronic devices by investigators.
In 2017, during an investigation by Homeland Security Investigations (HSI), Rodriguez-Ramirez admitted to viewing images and videos of child pornography on his cell phone and to using Omegle to obtain links to the child pornography, stating he had shared links with others to obtain additional links. During the September of 2019 search by the Federal Bureau of Investigation, Rodriguez-Ramirez’s devices were seized and forensically examined. The examination yielded 8 images containing nude or semi-nude prepubescent and pubescent minor females ranging in the approximate ages of 10-15 years old and 12 videos depicting prepubescent females, ranging from infant/toddler age to 8 years old, as well as pubescent teenage girls, approximately 12-14 years old, engaged in sexually explicit conduct and lascivious viewing of their vagina and anus.
The Nebraska State Patrol began its investigation based on a July 2021 cybertip received from Omegle, after which it learned of the earlier HSI and FBI investigations. On October 26, 2021, while forensics were still pending in the FBI case, NSP investigators searched Rodriguez-Ramirez’s residence again. Rodriguez-Ramirez admitted to viewing images and videos using Omegle on his cell phone. Investigators also seized more devices (and iPhone and an Apple MacBook) for examination. Forensic review revealed additional evidence of possession and distribution of child pornography on Rodriguez-Ramirez’s cell phone which occurred after the home was searched in 2019. Investigators confirmed that videos and two images from his cell phone depicted sexual conduct involving children younger than 16 years old.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Omaha FBI's Child Exploitation and Human Trafficking Task Force, Nebraska State Patrol and Homeland Security Investigations.
Omaha Man Sentenced for Distributing Child PornographyRead the Press Release
United States Attorney Steven Russell announced that Gregory Lukassen, 50, of Omaha, Nebraska, was sentenced today in federal court in Omaha for distribution and receipt of child pornography. The Honorable Brian C. Buescher sentenced Lukassen to 240 months’ imprisonment. There is no parole in the federal prison system. After his release from prison, Lukassen will serve 5 years of supervised release. Lukassen was also ordered to pay $12,000 in restitution.
In October, Lukassen was found guilty after a two-day jury trial. The evidence at trial showed that officers contacted Lukassen at a residence in Bellevue, Nebraska, after receiving Cybertip Reports from the National Center for Missing and Exploited Children (NCMEC) indicating that online service providers had reported uploads of child pornography. Lukassen admitted to chatting online regarding sexual fantasies and claimed to have received child pornography unintentionally during those chats. Forensic examinations of devices seized from Lukassen showed cache and/or thumbnail files of at least 38 unique images of child pornography on the devices, including some of the images reported in the Cybertips.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Bellevue Police Department and Homeland Security Investigations..
Omaha Business Owner Sentenced for Failing to Pay over Payroll TaxesRead the Press Release
United States Attorney Steven Russell announced that Bryan A. Erdman, 52, of Omaha, Nebraska, was sentenced today in federal court in Omaha for failing to pay over payroll taxes. United States District Judge Brian C. Buescher sentenced Erdman to 12 months and 1 day of imprisonment. There is no parole in the federal system. After his release from prison, Erdman will begin a 3-year term of supervised release. Judge Buescher ordered Erdman to pay $462,644.93 in restitution.
An investigation conducted by the Internal Revenue Service Criminal Investigation Division determined that BSJ CO, Inc. (“BSJ CO”) was a Nebraska corporation doing business as It’s a Wonderful World Childcare within the District of Nebraska. Erdman was the president and owner of BSJ CO, and exercised control over the business affairs, including authorizing business expenses, authorizing payment of employee paychecks, signing of employee paychecks, approval of payments made by the corporation, and approval of payment of payroll taxes to the Internal Revenue Service. BSJ CO was required to withhold taxes from its employees’ paychecks, including federal income taxes, and Medicare and Social Security taxes. BSJ CO was also obligated to pay an employer’s share of these “payroll taxes.” Erdman had the responsibility to collect, truthfully account for, and pay over BSJ CO “payroll taxes” to the Internal Revenue Service.
Throughout calendar years 2015 to 2017, BSJ CO withheld tax payments from its employees’ paychecks; however, failed to account for and pay over approximately $295,463.91 of the employee share of “payroll taxes.” For tax years 2015 to 2017 Erdman also failed to pay over approximately $167,181.02 of the employer share of “payroll taxes.” During the time period that Erdman failed to account for and failed to pay over “payroll taxes,” Erdman used at least some of the funds within the BSJ CO’s bank account to pay for personal expenses not associated with BSJ CO.
“Employers have a responsibility to withhold the proper amount of taxes from their employees’ wages and pay those taxes over to the IRS,” said IRS Criminal Investigation Acting Special Agent in Charge, Thomas Murdock, St. Louis Field Office. “Not only is it their legal duty to the United States, they also owe it to their workers to protect their Medicare and Social Security benefits.”
This case was investigated by the Internal Revenue Service Criminal Investigation Division.
North Dakota man admits fentanyl trafficking in Great FallsRead the Press Release
GREAT FALLS — A North Dakota man admitted to trafficking charges today after law enforcement found hundreds of fentanyl pills and a loaded firearm in a vehicle he was driving in Great Falls, U.S. Attorney Jesse Laslovich said.
Kelly Sterling Wait, 45, of Williston, North Dakota, pleaded guilty to possession with intent to distribute controlled substances. Wait faces a maximum of 20 years in prison, a $1 million fine and at least three years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing was set for May 18. Wait was detained pending further proceedings.
The government alleged in court documents that in October 2022, Russell Country Drug Task Force agents were surveilling a motel room in Great Falls as part of an ongoing drug investigation. Two men, including Wait, left the room, entered a vehicle, drove a short distance and park. Wait was the driver. His male passenger got out of the vehicle and appeared to steal several items from trucks in the lot. The investigation led to the Montana Highway Patrol stopping the vehicle. Wait was removed from the driver’s seat and a loaded pistol was removed from his waistband, along with a fanny pack he had. The vehicle was searched on a state warrant. Approximately 186 fentanyl pills were found in the fanny pack, and six bags, each containing 100 fentanyl pills, were found in the trunk. Another 60 fentanyl pills were found in the passenger seat area.
Assistant U.S. Attorney Ethan R. Plaut is prosecuting the case, which was investigated by the Russell Country Drug Task Force, Homeland Security Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives, Montana Highway Patrol and Great Falls Police Department.
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Non-Fungible Token (NFT) Developer Charged in Multi-Million Dollar International Fraud SchemeRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Aurelien Michel, a French national residing in the United Arab Emirates (UAE), with defrauding purchasers of “Mutant Ape Planet” NFTs, a type of digital asset, of more than $2.9 million in cryptocurrency. The defendant was arrested last night at John F. Kennedy International Airport. His initial appearance is scheduled for this afternoon before United States Magistrate Judge James R. Cho.
As part of the scheme, NFTs were marketed to purchasers, who were falsely promised numerous rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs. After selling out of the NFTs, the purchasers were “rug pulled” – a cryptocurrency scam in which a developer attracts investors, but pulls out before the project is complete, leaving buyers with a worthless asset – as none of the promised benefits were provided. Instead, millions worth of the NFT purchasers’ cryptocurrency was diverted for Michel’s personal benefit.
Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the charges.
“As alleged, the defendant used a traditional criminal scheme to defraud consumers eager to participate in a new digital asset market,” stated United States Attorney Peace. “Protection from fraud and manipulation extends to all consumers and investors, including those participating in the fast-evolving market for NFTs and other crypto assets. Our Office is committed to bringing to justice any criminal actor abusing any markets for their own gain.”
“As alleged, Aurelien Michel perpetrated a ‘rug pull’ scheme - stealing nearly $3 million from investors for his own personal use. Purchasers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were deceived and received none of the promised benefits,” said Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations (HSI) in New York. “HSI uses our extensive experience investigating financial crime in conjunction with our cutting edge cyber capabilities to uncover fraud and bring the perpetrators to justice.”
“It’s alleged that Michel defrauded investors by making false representations of, amongst other things, giveaways, tokens with staking features, and merchandise collections. Once the NFTs were sold-out, Michel allegedly ceased communications and withdrew purchasers’ funds from the company’s cryptocurrency wallets, lining his pockets with nearly $3 Million of investors’ money,” stated IRS-CI Fattorusso. “Michel can no longer blame the NFT community for his criminal behavior. His arrest means he will now face the consequences of his own actions.”
As alleged in the criminal complaint, Mutant Ape Planet NFTs were a digital asset stored on the Ethereum blockchain. As an NFT, each Mutant Ape Planet NFT was unique, freely transferrable, and gave purchasers exclusive ownership over each NFT. The NFTs were marketed with promises of exclusive benefits potential purchasers would receive. Those benefits included exclusive opportunities for additional investments, giveaways, merchandise, and other rewards. However, after sending their cryptocurrency and obtaining the NFT, purchasers received nothing while their cryptocurrency was diverted from the Mutant Ape Planet NFT project to cryptocurrency wallets controlled by the defendant Aurelien Michel. In total, more than $2.9 million in purchasers’ cryptocurrency was diverted as part of the Michel’s scheme.
As alleged, in a social media chat with current and prospective purchasers, Michel admitted to the fraudulent “rug pull,” but blamed the community of NFT purchasers for his actions, stating, “We never intended to rug but the community went way too toxic.”
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Drew Rolle and Dylan Stern of the Office’s Business and Securities Fraud Section with assistance from Paralegal Specialist William Daniels.
If you believe that you have been a victim of this crime, please call the HSI Tip Line at 1-866-347-2423.
The Defendant:
AURELIEN MICHEL
Age: 24
Dubai, United Arab EmiratesE.D.N.Y. Docket No. 23-MJ-7
Nine Men Charged with Roles in Gang-Led Drug and Gun Trafficking NetworkRead the Press Release
NEWARK, N.J. – Nine members of a drug and gun trafficking network led by Latin King gang members in Union and Middlesex counties have been charged with drug and weapons offenses, U.S. Attorney Philip R. Sellinger announced today.
The defendants are charged by complaint with conspiracy to distribute and possess with intent to distribute narcotics, including fentanyl and cocaine, possession with intent to distribute narcotics, conspiracy to traffic firearms, including several privately made firearms (PMFs or “ghost guns”), and the unlawful possession of firearms.
“The charges we’re announcing today describe an illegal network that was actively distributing guns and drugs, including fentanyl and cocaine, around New Jersey,” U.S. Attorney Sellinger said. “In addition to bringing illegal weapons into New Jersey from other states, these defendants are charged with manufacturing untraceable gun parts that could be used to convert weapons for automatic firing. Thanks to the excellent work of our federal, state and local law enforcement partners, we’ve dealt a substantial blow to this criminal operation.”
“ATF has a zero-tolerance policy for those engaged in firearms-related violence, violent drug gangs, and those who facilitate the illegal manufacturing and trafficking of firearms,” Acting Special Agent in Charge of ATF Bryan Miller said. “We are committed to doing the necessary work to protect our neighborhoods from criminals who jeopardize the public’s safety and lessen the quality of life in our communities. This investigation demonstrates ATF’s dedication to working with our local, state, and federal partners in identifying and incarcerating violent offenders who threaten the peace that our neighborhoods so deserve.”
“The arrest of these defendants, and the seizure of drugs and guns has made our community safer,” Acting Special Agent in Charge of the DEA’s New Jersey Division Daniel J. Kafafian said. “This network was pushing deadly fentanyl and cocaine, and there is no doubt the weapons being produced and seized would have led to violence and misery. This is another example of law enforcement partners at all levels working towards the common goal of protecting the citizens of New Jersey.”
According to the allegations in the complaint, the defendants below are members and associates of the Latin Kings street gang:
- Justin Aponte, 28, of Elizabeth, New Jersey;
- Victor Barrios, 28, of Bayonne, New Jersey;
- Jose Fontanez, 28, of Carteret, New Jersey;
- Jonathan Lakomy, 32, of Ringwood, New Jersey;
- Christian Rodriguez, 32, of Chesterfield, Virginia;
- Jeziel Romero, 27, of Old Bridge, New Jersey;
- Christopher Soto, 30, of Matawan, New Jersey;
- Angel Valentin, 34, of Carteret, and
- Ian Wooten, 30, of Carteret.
All New Jersey resident defendants appeared before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court. Rodriguez appeared before U.S. Magistrate Judge Mark R. Colombell, in Richmond, Virginia, federal court. Soto remains at large.
According to documents filed in this case and statements made in court:
Beginning in May 2022, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Drug Enforcement Administration, along with state and local law enforcement agencies, began investigating a drug and firearms trafficking network that included Aponte, Barrios, Fontanez, Lakomy, Rodriguez, Romero, Valentin and Wooten. Many members of the trafficking network were members or associates of the Almighty Latin Kings & Queens Nation, commonly known as the “Latin Kings.” The trafficking network operated largely in neighborhoods in Elizabeth and Carteret, New Jersey.
Law enforcement officers identified members of the trafficking network who were responsible for the distribution of controlled substances, including substantial quantities of fentanyl and cocaine, from residences in Elizabeth and Carteret and elsewhere. Investigators were able to collect evidence that Lakomy supplied fentanyl to Aponte, who in turn provided the drugs to other members of the trafficking network for redistribution. Fontanez, Romero, Valentin, and Wooten were identified as responsible for street-level distribution of the fentanyl and cocaine.
Aponte, Barrios, Rodriguez and Wooten conspired to illegally traffic firearms, including traditional firearms and PMFs. In November 2022, investigators determined that Aponte and Barrios were working to produce PMFs at Barrios’ residence. A search warrant executed at that time resulted in the seizure of:
- One Glock-26-style PMF 9x19mm semi-auto handgun;
- one .40 caliber S&W handgun with a Polymer-80 frame with a slide from a Glock model 22 handgun;
- 21 rounds of 5.56 caliber ammunition;
- 45 rounds of .40 caliber ammunition;
- 13 partially manufactured firearms;
- two 3D printers; and
- 3D printing materials.
When law enforcement agents entered Barrios’ residence, they observed that the two 3D printers were in the process of manufacturing PMFs.
Investigators also determined that Aponte was conspiring with Rodriguez to traffic firearms from Virginia to New Jersey. In one meeting between Aponte, Rodriguez, and an undercover law enforcement agent at a location in Virginia, Rodriguez agreed to sell several firearms to Aponte. Subsequently, Aponte told the undercover agent that the firearms were ready to be transported from Rodriguez to Aponte and then sold to the agent.
From May 2022 to December 2022, law enforcement officers seized more than 15,000 individual doses of fentanyl, approximately 14 grams of cocaine base, 26 firearms including 24 PMFs, and three machine gun conversion devices, which are parts designed to convert a semiautomatic firearm into a fully automatic machinegun.
In addition, during the course of lawful searches conducted by law enforcement on January 4, 2023, law enforcement recovered:
- four firearms, including one FIE Titan .25 caliber semiautomatic handgun and three PMFs consistent with those seized by law enforcement during the investigation from Soto’s residence;
- 3,500 individual doses of suspected fentanyl, a separate 125 grams of suspected powdered fentanyl, and narcotics packaging materials from Lakomy’s residence; and
- 5,000 individual doses of suspected fentanyl, two firearms, including a Springfield model XD 9mm semiautomatic handgun, and a Smith & Wesson model SD40 VE .40 caliber semiautomatic handgun, and six Glock-brand firearm slides consistent with those used by members of the conspiracy to manufacture PMFs, and 100 bricks of suspected fentanyl from Wooten’s residence.
The maximum penalties per count in the filed complaint are:
Count
Charge
Defendant(s)
Maximum Penalty
One
Conspiracy to Distribute Controlled Substances
Aponte, Fontanez, Lakomy, Romero, Valentin, Wooten
Life in prison
Two
Firearms Trafficking Conspiracy
Aponte, Barrios, Rodriguez, Wooten
15 Years
Three
Firearms Trafficking
Aponte, Barrios
15 Years
Four
Possession of Machine Guns
Aponte
10 Years
Five
Possession of a Firearm by a Convicted Felon
Aponte
15 Years
Six
Possession of a Firearm by a Convicted Felon
Soto
15 Years
Seven
Possession with Intent to Distribute Fentanyl
Lakomy
40 Years
Eight
Possession with Intent to Distribute Fentanyl
Wooten
40 Years
Nine
Possession with Intent to Distribute Cocaine Base
Fontanez
20 Years
U.S. Attorney Sellinger credited special agents of the ATF, under the direction of Acting Special Agent in Charge Miller in Newark and Acting Special Agent in Charge Christopher Amon in Richmond, Virginia; special agents of the DEA, under the direction of Acting Special Agent in Charge Kafafian in Newark; the Union County Prosecutor’s Office, under the direction of Prosecutor William A. Daniel; the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone; the Plainfield Police Department, under the direction of Director James Abney; the Elizabeth Police Department, under the direction of Police Director Earl Graves and Chief Giacommo Sacca; the Perth Amboy Police Department, under the direction of Chief Lawrence Cattano; the Woodbridge Police Department, under the direction of Police Director Robert Hubner; the Union County Sheriff’s Department, under the direction of Sheriff Peter Corvelli; and the Scotch Plains Police Department, under the direction of Chief Theodore D. Conley, with the investigation. He also thanked the Hudson County Prosecutor’s Office and the New Jersey Department of Corrections for their assistance.
The government is represented by Assistant U.S. Attorneys John Mezzanotte and Robert Frazer of the Organized Crime and Gangs Unit in Newark, and by Assistant U.S. Attorney Angela Mastandrea-Miller of the U.S. Attorney’s Office, Eastern District of Virginia.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Newport News Attorney Sentenced for Tax FraudRead the Press Release
NEWPORT NEWS, Va. – A Newport News woman was sentenced today to 52 months in prison and ordered to pay a $200,000 fine for evading the assessment of her 2015 and 2016 income tax returns.
According to court documents, Nosuk Kim, 61, was formerly a licensed attorney, substitute judge, and member of the disciplinary committee for the Virginia State Bar. While serving in these capacities, she and her husband laundered more than $2.2 million in fraud proceeds through an entity in China and her attorney-trust account. The defendant used these funds to pay down a home equity line of credit on the family home and to purchase other real estate investments.
The laundered funds were proceeds of her husband’s extensive procurement fraud scheme involving more than $7 million in government contracts. The defendant’s husband, Beyung Kim, was previously prosecuted in the Eastern District of Virginia and sentenced to 58 months in prison in August 2021.
Despite laundering approximately $970,000 of taxable income in 2015 and approximately $1,250,000 of taxable income in 2016, the defendant did not report any of this income on her federal income taxes for those tax years. As a result of her tax fraud, the defendant caused approximately $868,924.54 in lost tax revenue to the United States.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Derek Gordon, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Chris Dillard, Special Agent in Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service; Cynthia L. Hearn, Acting Special Agent in Charge of the Washington D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Peter J. Tolentino, Special Agent in Charge of the NCIS Economic Crimes Field Office made the announcement after sentencing by U.S. District Judge David J. Novak.
Significant assistance was provided by the Defense Contract Audit Agency.
Assistant U.S. Attorneys Brian J. Samuels and D. Mack Coleman prosecuted 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. 4:22-cr-52.
Milwaukee Man sentenced to 60 months’ imprisonment for fraudulent tax refund scheme.Read the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on January 4, 2023, Francis T. Burns (52) was sentenced to 60 months’ imprisonment for orchestrating a fraudulent tax refund scheme. Burns was also ordered to pay restitution to the Internal Revenue Service (IRS) in the amount of $1,127,960.45 and to spend two years on supervised release following his prison term.
In November 2020, a superseding indictment charged Burns with committing wire fraud, mail fraud, money laundering, and submitting a false claim to the IRS, in violation of 18 U.S.C. §§ 1341, 1343, 1957, and 287. Burns went to trial and was convicted of all counts by a jury on October 5, 2022.
At trial, the United States proved that between 2016 and 2019, Burns engaged in a scheme to defraud the IRS into paying millions of dollars in refunds to which Burns was not entitled. To obtain those refunds, Burns claimed to be filing returns on behalf of a non-existent estate or a trust he made up. Burns’ false tax returns attached and were based on fake 1099s that falsely claimed significant sums of income were withheld for federal taxes by third parties such as banks. In reality, Burns was unemployed and there was no estate, no trust, and no income.
Over the period of the scheme charged in the indictment, Burns filed false tax returns asking for refunds totaling more than $80 million. Burns also subsequently filed additional false returns asking for over $2 billion. Although Burns did not receive the majority of the money, he spent the refunds he did receive on an expensive house in Chicago, a Mercedes, and other personal expenses. The IRS later seized and forfeited a significant percentage of the money, the house, and the car. Burns’ fraudulent scheme ultimately caused over $1 million in losses to the IRS.
In announcing the sentence, United States District Court Judge Lynn Adelman focused on the egregious nature of Burns’ continuing conduct despite receiving multiple warnings and communications from the IRS alerting him to the frivolous nature of his filings.
Judge Adelman noted that it was important to impose a significant sentence in order to send a message to other rational actors who might consider defrauding the IRS, particularly given that the United States’ tax system depends on the honesty of its tax-paying citizens.
“Today’s sentence is the direct result of Burns’ relentless efforts to defraud the IRS and line his own pockets at the expense of his fellow citizens,” states U.S. Attorney Haanstad. “I commend the hard work of all involved in seeking to hold Burns responsible for his actions and to seek justice for every individual in this country who pays his or her fair share of taxes.”
"Francis Burns engaged in a deliberate scheme to steal from the U.S. Treasury. In the process, he displayed a complete disregard for his fellow citizens," said Justin Campbell, Special Agent in Charge of IRS - Criminal Investigation, Chicago Field Office. "We are pleased that justice was served on behalf of honest taxpayers."
The Criminal Investigation Division of the Internal Revenue Service investigated this case, which Assistant United States Attorneys Julie F. Stewart and John P. Scully prosecuted.
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Michigan man indicted for setting fire to nine commercial trailers in New MexicoRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Brendan Iber, Special Agent in Charge of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), announced that a federal grand jury on Dec. 20 indicted Viorel Pricop on nine counts of arson.
Pricop, 64, of Allen Park, Michigan, is currently in custody in the Central District of California, where Pricop is charged with arson.
According to a criminal complaint, Pricop allegedly set fire to 25 semi-truck trailers owned by Swift Transportation, a trucking company based in Phoenix, Arizona. In addition to the nine fires in New Mexico, Pricop allegedly is responsible for fires in California, Arizona, Texas, Oklahoma, Louisiana, Arkansas and Alabama. On Dec. 21, Pricop was indicted in the District of Arizona on three counts of arson.
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Pricop faces up to 10 years in prison.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. Assistant United States Attorney Jack E. Burkhead is prosecuting the case for the District of New Mexico.
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