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1 September 2022
Fort Wayne Man Sentenced to 121 Months in PrisonRead the Press Release
FORT WAYNE – Starsky Guin, 45 years old, of Fort Wayne, Indiana, was sentenced by United States District Court Judge Holly A. Brady on his plea of guilty to distribution of methamphetamine and possession with intent to distribute 50 grams or more of methamphetamine, announced United States Attorney Clifford D. Johnson.
Guin was sentenced to 121 months in prison followed by 5 years of supervised release.
According to documents in the case, Guin distributed more than 5 grams but less than 50 grams of methamphetamine on December 1, 2020, and he possessed more than 50 grams of methamphetamine with the intent to distribute on January 13, 2021.
This case was investigated by the Drug Enforcement Administration, with the assistance of the Fort Wayne Police Department. The case was prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
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Former CFO of Claddagh Irish Pubs Parent Company Charged with Defrauding States Out of More Than $1 Million in Sales Tax RevenueRead the Press Release
CLEVELAND - First Assistant U.S. Attorney Michelle M. Baeppler announced that the former Chief Financial Officer (CFO) of CDG Acquisition, LLC (CDG), a company registered in the State of Ohio, which owned “The Claddagh Irish Pubs” chain of restaurants, was charged with defrauding multiple states of sales tax revenue where the restaurant chain operated.
Ciaran Dillon, 56, of Solon, Ohio, was named in the indictment and officially charged with two counts of wire fraud.
According to the indictment, from January 2010 through May 2018, the defendant, acting in his official capacity as CFO of CDG, directed a company accountant to pay certain states less sales tax than the true amount owed. The indictment states that based on the defendant’s instruction, the accountant would edit the company's sales and sales tax figures, file false tax returns and pay states the amount instructed by the defendant.
It is alleged that one common way to underpay sales tax was for the company to report and pay sales tax for four weeks during a five-week period, leading CDG to collect a week’s worth of sales taxes that were omitted from state sales tax filings.
In total, it is alleged that during this time, the defendant defrauded the States of Indiana, Kentucky, Illinois, Michigan, Minnesota, Ohio, Pennsylvania and Wisconsin out of more than $1 million in sales tax revenue collected from CDG customers across fifteen restaurants.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, a sentence will be determined by the court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offenses and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum; in most cases, it will be less than the maximum.
This case was investigated by the Cleveland FBI and is being prosecuted by Assistant U.S. Attorney Alejandro A. Abreu.
Former CEO of Souktel, Inc., Agrees to Pay $100,000 to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – The former Chief Executive Officer of Souktel, Inc., Jacob Korenblum, has agreed to pay the United States $100,000 to resolve allegations that he knowingly caused employees of the company to submit false claims to the United States Agency for International Development (USAID), in Souktel’s performance of grants and contracts to provide customized technology platforms on aid projects in developing countries.
The announcement was made today by U.S. Attorney Matthew M. Graves and Special Agent in Charge Vanessa Freeman for the USAID Office of Inspector General.
“Companies and individuals that do business with the federal government have a responsibility to have controls in place to prevent overbilling and charge only for the work that is actually performed,” said U.S. Attorney Graves. “This case underscores our resolve to work with USAID and other partners to promote accountability and protect taxpayers’ money. It also underscores that companies that discover and disclose their wrongdoing and cooperate in the government’s investigation will be in a far better position than those that fail to disclose their wrongdoing.”
“USAID-funded organizations must ensure that invoices submitted to the government for payment reflect actual work performed on a project,” said USAID OIG Special Agent in Charge Freeman. “USAID OIG, using its global investigative resources, will continue to work with the Department of Justice to hold accountable those who compromise the integrity of important U.S. foreign assistance programs.”
Souktel was a digital consulting firm based in Delaware, with offices in Washington, D.C., Toronto, Canada, and Ramallah, West Bank. Beginning in 2013, the firm was awarded USAID-funded sub-grants and sub-contracts to design and build software programs for mobile phones, used to reach aid workers and beneficiaries in developing countries. In 2019, Souktel self-disclosed to USAID OIG that it had made significant overbillings to USAID prime implementers on several of its projects. The company dissolved in 2021.
The U.S. Attorney’s Office and USAID OIG determined that between February 2014 and January 2017, Souktel submitted at least 55 invoices that contained false or speculative labor hours for its staff. Specifically, despite being under cost-reimbursement awards and required to bill USAID only for labor hours incurred, Souktel, at the direction of its CEO, Jacob Korenblum, submitted fabricated timesheets to five prime awardees to support false or speculative labor hours of its staff while working on USAID-funded projects.
Korenblum cooperated with the investigation and agreed to settle the matter prior to a determination of liability in a civil case. Under the settlement agreement, he agreed to pay $100,000 on top of slightly more than $90,000 that Souktel paid as reimbursement to USAID after its self-disclosure.
The investigation in this matter was conducted by USAID OIG and Assistant U.S. Attorney John C. Truong of the Civil Division of the U.S. Attorney’s Office for the District of Columbia.
Fentanyl, Methamphetamine, and Heroin Importer Sentenced to 46 Months in PrisonRead the Press Release
TUCSON, Ariz. – Yesterday, Jesus Alfonso Duarte, 22, of Pima, Arizona, was sentenced by United States District Judge Rosemary Márquez to 46 months in prison, followed by five years of supervised release. Duarte previously pleaded guilty to Conspiracy to Import Fentanyl, Methamphetamine, and Heroin.
On March 29, 2020, Duarte entered the United States at the DeConcini Port of Entry in Nogales, Arizona with over 25 pounds of methamphetamine, five pounds of heroin, and two pounds of fentanyl hidden in his vehicle. During his interview with federal agents, Duarte admitted to working for a known drug trafficker in Mexico and lending his vehicle to the trafficker prior to reentering the United States.
Homeland Security Investigations conducted the investigation in this case with assistance from the Customs and Border Protection’s Office of Field Operations. Assistant U.S. Attorney Ashley B. Culver, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR-20-2318-TUC-RM
RELEASE NUMBER: 2022-152_Duarte# # #
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.
Federal Jury Finds Palmetto Man Guilty of Armed Robbery, Possessing A Firearm as A Convicted Felon, Contempt, and ExtortionRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces that a federal jury today found Delon Adams (50, Palmetto) guilty of four counts of robbery, four counts of brandishing a firearm during and in relation to a crime of violence, possessing a firearm and ammunition as a convicted felon, extortion, and criminal contempt of court. Each robbery charge carries a maximum penalty of 20 years’ imprisonment. Because Adams has a prior federal conviction for carrying a firearm during and in relation to a drug trafficking crime, each brandishing charge carries a minimum mandatory term of 25 years, and up to life, in federal prison, consecutive to any other term of imprisonment. The felon-in-possession charge carries a maximum penalty of 10 years in prison. The extortion charge carries up to 2 years’ imprisonment. On the criminal contempt charge, Adams may be imprisoned for as long as the Honorable Virginia M. Hernandez Covington, United States District Judge, determines. His sentencing hearing is scheduled for November 17, 2022. Adams had been indicted on October 27, 2020.
According to testimony and evidence presented at trial, between August 26 and September 15, 2020, Adams robbed four wireless phone stores – three in Manatee County and one in Hillsborough County. During each robbery, he pointed a gun at store employees and stole iPhones and cash. Adams subsequently sold the stolen iPhones. Law enforcement officers arrested Adams on October 1, 2020, and found him in possession of a loaded handgun. Adams subsequently mailed a threatening communication to a witness in an attempt to obtain money and violated two court orders by refusing to be fingerprinted.
This case was investigated by the Strategic Pattern Armed Robbery Technical Apprehension (SPARTA) unit of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Florida Department of Law Enforcement, the Hillsborough County Sheriff’s Office, the Manatee County Sheriff’s Office, and the Palmetto Police Department. It is being prosecuted by Assistant United States Attorneys Diego F. Novaes and Christopher F. Murray.
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.
Fayette County Woman Sentenced to Prison for Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – Brittany Ellen Flint, 33, of Fayetteville, was sentenced today to one year and three months in prison, to be followed by three years of supervised release, for distributing methamphetamine.
According to court documents and statements made in court, Flint admitted that she sold approximately 6.8 grams of methamphetamine to a confidential informant in Oak Hill on January 10, 2022.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Drug Enforcement Administration (DEA), the Central West Virginia Drug Task Force, and the Oak Hill Police Department for conducting the investigation.
Senior United States District Judge John T. Copenhaver Jr. imposed the sentence. Former Assistant United States Attorney Nick Miller and Assistant United States Attorney Ryan A. Keefe prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:22-cr-35.
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Duluth Man Sentenced to 10 Years for Attempted Bank Robbery & Illegal Gun PossessionRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Cody Walker-Nelson, 31, Duluth, Minnesota was sentenced today by U.S. District Judge William Conley to 10 years in prison for attempted bank robbery and possessing firearms as a felon. Walker-Nelson pleaded guilty to these charges on May 24, 2022.
On October 1, 2021, Walker-Nelson engaged in a dangerous crime spree in Superior, Wisconsin and Duluth. In Duluth, he stole two cars and led police on several high-speed chases. In Superior, he burglarized a residence, stealing three handguns and four long guns.
Walker-Nelson then attempted to rob the Superior branch of Associated Bank. He pulled up to the drive-through window, knocked on the window to get the teller’s attention, took up a firing stance, and pointed one of the stolen handguns at her. The teller quickly moved out of sight and Walker-Nelson fled the area driving against traffic across the Bong Bridge to Duluth.
Once back in Duluth, Walker-Nelson tried to steal the car of an off-duty police officer but left when confronted by the officer. He then stole a wallet from two people and fired a gun in their presence. Next, he went to an apartment building where he was surrounded by law enforcement and SWAT teams. Walker-Nelson discharged one of the stolen handguns several times during the standoff, including shooting at and disabling a law enforcement drone.
Ultimately tear gas was used and a SWAT team forcibly breeched the front door, at which time Walker-Nelson fired a round through the bedroom door. Walker-Nelson retreated to a large safe in the bedroom where he attempted to start a fire using a canister of propane. After he was taken into custody, officers found numerous bullet holes in the apartment including one that traveled through the front door and into a neighboring apartment.
Walker-Nelson is a felon, has been to prison before, and has prior convictions for theft of firearms, burglary, felon in possession of a firearm, assault, and violating a domestic abuse injunction.
At sentencing, Walker-Nelson said that he was a drug addict who was not able to maintain sobriety through the pandemic which led him committing these crimes. Judge Conley was not satisfied with this and said it only partially mitigated the offense as Walker-Nelson had previous opportunities for treatment. Judge Conley said that he had to sentence Walker-Nelson based on the severity of his conduct and risk to reoffend in the future, and that the sentence was meant to hold him accountable and protect the community. Judge Conley described the federal case as a drug-induced criminal rampage through Superior and Duluth consisting of multiple violent and invasive offenses which endangered specific individuals and the community as a whole.
Judge Conley sentenced Walker-Nelson to 10 years in prison to be followed by 3 years of supervised release. This term of imprisonment was ordered to run concurrently with pending and related cases in Superior and Duluth.
The charges against Walker-Nelson were the result of an investigation conducted by the Superior and Duluth Police Departments, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case has been handled by Assistant U.S. Attorney Corey Stephan.
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.
Drug Trafficker Sentenced for Illegal Possession of Methamphetamine and a FirearmRead the Press Release
LAKE CHARLES, La. – Ryan Spencer George, 37, of Lake Charles, Louisiana, was sentenced today in U.S. District Court, announced United States Attorney Brandon B. Brown. George was sentenced by United States District Judge James D. Cain, Jr. to 108 months (9 years) in prison, followed by 3 years of supervised release. George pleaded guilty on May 26, 2022 to possession with intent to distribute methamphetamine and possession of a firearm by a convicted felon.
On March 31, 2020, detectives with the Combined Anti-Drug Task Force were assisting the Lake Charles Police Department and conducted a traffic stop on the vehicle being driven by George. Subsequent to his arrest, law enforcement officers found multiple plastic bags containing at least 25 grams of methamphetamine, a small digital scale and a wallet containing various denominations of U.S. Currency inside the front pocket of his pants. George admitted to officers that the bags contained methamphetamine and that some of the money was gained from selling narcotics. While searching George’s vehicle, officers found a loaded SCCY 9mm pistol on the floorboard between the driver’s seat and the console.
Further investigation by law enforcement revealed that George had multiple prior felony convictions, including distribution of methamphetamine (2015) and possession of a weapon by a convicted felon (2018), prohibiting him from possessing a firearm or ammunition.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Lake Charles Police Department and was prosecuted by Assistant U.S. Attorney Daniel J. Vermaelen.
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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Drug Trafficker Receives 15+ Year Sentence for Possession of MethamphetamineRead the Press Release
SHREVEPORT, La. - United States Attorney Brandon B. Brown announced that Michael C. Francis, 37, of Bossier City, Louisiana, has been sentenced in United States District Court. Chief United States District Judge S. Maurice Hicks, Jr. sentenced Francis to 188 months (15 years, 8 months) in prison, followed by 5 years of supervised release, on drug trafficking charges.
Beginning in March 2019, and continuing until on or about December 31, 2019, Francis and eight other defendants were involved in a drug trafficking conspiracy and pleaded guilty to possessing and distributing methamphetamine in the Caddo and Bossier Parish areas. Law enforcement officers began an investigation into their illegal drug trafficking activities and were able to obtain a court ordered wiretap on one of his co-defendants, Demetrius Deangelo Hall’s, cell phone. Through numerous intercepted communications, agents learned that Hall was communicating with Francis and others. Hall and Francis discussed providing each other with various amounts of methamphetamine on numerous occasions.
During the investigation, on October 21, 2019, law enforcement agents intercepted phone calls and text messages between Hall and his co-conspirators indicating that Hall was traveling to Texas to obtain more methamphetamine from co-defendant Steve Mireles. During these intercepted calls, Francis was heard discussing the price of methamphetamine for Francis’ part and that he would have to pay for the courier fee. On February 22, 2021, Francis pled guilty to possessing with intent to distribute at least 50 grams or more of methamphetamine.
This case was investigated by the DEA, ATF, Shreveport Police Department, Caddo Parish Sheriff’s Office, Greenwood Police Department, and Louisiana State Police. The case was prosecuted by Assistant U.S. Attorneys Tennille Gilreath and Allison Duncan. This effort is part of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
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Decade-Long Social Security Fraud Scheme Leads to Federal Prison TimeRead the Press Release
WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware, announced that a Seaford man was sentenced yesterday to 30 days imprisonment followed by 3 years of supervised release for defrauding the Social Security Administration (“SSA”) of nearly $150,000 through a scheme that lasted more than a decade. The sentence was pronounced by Chief U.S. District Judge Colm F. Connolly.
According to court documents, Marques Fountain, 42, collected another man’s SSA retirement benefits after the beneficiary died. The man, for whom Fountain served as a caretaker, passed away in 2009. The SSA, however, continued to deposit the deceased man’s SSA retirement benefits into a bank account controlled by Fountain. For more than a decade, Fountain accessed and used these SSA retirement benefits for his personal expenses. After admitting that he knew stealing the money was wrong, Fountain pleaded guilty in October 2021.
U.S. Attorney Weiss stated, “Social Security Administration benefits provide much needed assistance to the most vulnerable members of our society. Mr. Fountain spent a decade stealing from the federal government. Thanks to the work of the SSA Office of the Inspector General, Fountain will now spend time in federal prison and be required to pay full restitution to the government.”
“Mr. Fountain chose to defraud the Social Security Administration rather than report the beneficiary’s death to use for his personal gain for more than ten years. Today’s sentencing shows that concealing death reports from SSA to obtain deceased benefits is a serious criminal offense,” said Gail S. Ennis, Inspector General for the SSA. “We will continue to pursue those who defraud SSA programs, and I appreciate the U.S. Attorney’s Office for prosecuting this case.”
Assistant U.S. Attorney Christopher R. Howland prosecuted the case, which was investigated by SSA’s Office of the Inspector General.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 20-cr-82-CFC.
Company owner sentenced for failing to turn over employee taxesRead the Press Release
ST. LOUIS – U.S. District Judge Rodney W. Sippel on Thursday sentenced the owner of a company who withheld taxes from employee paychecks but didn’t turn them over to the IRS to five years of probation and ordered him to pay more than $700,000 in restitution.
Blue 2.0 LLC owner Jonathan Michaelson, 46, of University City, will have to pay $1,000 per month, or 10% of his monthly income, until the money is paid off.
Michaelson withheld a total of $767,367 in income, Social Security and Medicare taxes from employee paychecks from tax years 2014-2017, but didn’t turn that money over to the IRS.
Michaelson was indicted in September 2021. He pleaded guilty in May to one count of willful failure to pay over tax.
Charles Miller, acting Special Agent in Charge of the IRS Criminal Investigation’s St. Louis Field Office, said, “IRS: CI takes employment tax crimes very seriously because of the impact these offenses have on employee benefits. Mr. Michaelson withheld taxes from his employees’ income and instead of paying the taxes to the IRS as he was required to do, he used the money to enrich his personal lifestyle. Today’s sentence serves as a warning for any employers considering defrauding their employees and honest taxpayers in this way.”
The case was investigated by the Internal Revenue Service. Assistant U.S. Attorney Gwendolyn Carroll prosecuted the case.
Co-Founder and Chief Investment Officer of London-Based Hedge Fund Charged with FX Market Manipulation and FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging NEIL PHILLIPS, the co-founder and chief investment officer of a hedge fund based in the United Kingdom, with conspiracy to commit commodities fraud, conspiracy to commit wire fraud, commodities fraud, and wire fraud in connection with a scheme to artificially manipulate the United States dollar (“USD”) / South African rand (“ZAR”) exchange rate to fraudulently trigger a $20 million payment under a barrier options contract. PHILLIPS was arrested in Spain earlier this week at the request of the United States.
U.S. Attorney Damian Williams said: “As alleged, Neil Phillips – the co-founder and chief investment officer of a prominent U.K. hedge fund – manipulated the FX market in order to unlawfully obtain millions of dollars in payments for his hedge fund under an options contract. Market manipulation is pernicious in all of its forms and today’s charges are a reminder that the Southern District of New York will steadfastly investigate and prosecute such activity whether it occurs in the equity market, the FX market, or elsewhere in the financial system.”
FBI Assistant Director Michael J. Driscoll said: “As alleged, Mr. Phillips maliciously manipulated global markets in order to defraud financial institutions for illicit profit. The FBI is determined to root out these types of frauds so financial markets remain a level playing field. As shown today, the FBI will find fraudulent actors no matter where in the world they are located and seek to bring them back to the United States to face the consequences of their actions in our federal criminal justice system.”
As alleged in the Indictment unsealed in Manhattan federal court:[1]
Background on Hedge Fund-1 and the FX Markets
At all relevant times, PHILLIPS was the co-founder and co-Chief Investment Officer of a hedge fund based in the United Kingdom (“Hedge Fund-1”), which was a global “macro” fund that focused on macroeconomic trends and emerging markets, foreign currency exchange (“FX”) markets, and currency and commodity products. Hedge Fund-1 was at all relevant times a registered commodity pool operator with the Commodity Futures Trading Commission (the “CFTC”) and PHILLIPS was himself registered with the CFTC as well.
The FX market is a global market in which participants trade currencies in pairs. In a currency pair, each currency is valued relative to the other, and the ratio that expresses the value of one currency against the other is referred to as the “exchange rate” or the “rate.” FX “spot” trades involve one party agreeing to receive a particular currency in exchange for delivering a different currency, at an agreed-upon price and quantity.
The $20 Million One Touch Option
In late October 2017, Hedge Fund-1 purchased a “one touch” digital option for the USD/ZAR currency pair that was set to expire on January 2, 2018. The option had a notional value of $20 million and a barrier rate of 12.50 ZAR to USD (the “$20 Million One Touch Option”). Under the terms of the $20 Million One Touch Option, if the USD/ZAR exchange rate went below the rate of 12.50 at any point prior to January 2, 2018, Hedge Fund-1 would be entitled to a $20 million payment. Hedge Fund-1 subsequently allocated a portion of the $20 million notional value to a client (“Client Fund-1”), thereby entitling Client Fund-1 to receive $4,340,000 in the event that the $20 Million One Touch Option was triggered.
Other financial institutions were party to the transaction: Hedge Fund-1 purchased the $20 Million One Touch Option through a financial services firm (“Intermediary Firm-1”) that facilitates trades on behalf of underlying clients; a subsidiary of a bank headquartered in Manhattan, New York (“Bank-1”) was obligated to pay the $20 million in the event the $20 Million One Touch Option was triggered; and a bank headquartered in Manhattan, New York (“Bank-2”) acted as Hedge Fund-1’s prime broker in connection with the $20 Million One Touch Option.
Hedge Fund-1 and Bank-2 entered into a letter agreement that set forth the terms and conditions of the transaction. This letter agreement provided that Hedge Fund-1 would be “acting in good faith and in a commercially reasonable manner” as the “Calculation Agent” in connection with the $20 Million One Touch Option and that Hedge Fund-1 would determine whether a barrier event occurred in good faith and in a commercially reasonable manner.
PHILLIPS Intentionally Manipulates the USD/ZAR Rate on Boxing Day 2017
With the $20 Million One Touch Option set to expire in a matter of days without having been triggered, on December 26, 2017 (Boxing Day), PHILLIPS engaged in a scheme to intentionally and artificially manipulate the USD/ZAR rate to drive the rate below 12.50 and trigger payment under the $20 Million One Touch Option. PHILLIPS caused and sought to cause the USD/ZAR exchange rate to fall below 12.50 by engaging in FX spot trades in which he caused hundreds of millions of USD to be exchanged for ZAR. PHILLIPS engaged in this USD/ZAR FX spot trading for the express purpose of artificially driving the USD/ZAR rate below 12.50. On December 26, 2017, in the hours that followed the completion of the USD/ZAR FX spot trading directed by PHILLIPS, the USD/ZAR rate once again increased and returned to levels above the 12.50 barrier and did not go below that rate for the remainder of the day.
In particular, during the span of less than an hour between shortly before midnight London time on December 25, 2017 (Christmas day), and approximately 12:45 a.m. London time on December 26, 2017 (Boxing Day), PHILLIPS personally directed a Singapore-based employee (“CC-1”) of a bank (“Bank-3”) to sell, on behalf of Hedge Fund-1, a total of approximately $725 million USD in exchange for approximately 9,070,902,750 ZAR. During the course of that approximately one-hour period, PHILLIPS, through his trading, caused the USD/ZAR rate to fall substantially until the rate went just below 12.50. As soon as PHILLIPS had achieved his objective and the USD/ZAR rate fell below 12.50 due to PHILLIPS’ manipulative spot trading activity, PHILLIPS immediately directed that CC-1 cease trading. PHILLIPS provided trading instructions to CC-1 through Bloomberg chat messages while PHILLIPS was located in South Africa and while CC-1 was located in Singapore. In these Bloomberg chat messages, PHILLIPS explicitly directed CC-1 to continue selling until the USD/ZAR rate fell below 12.50 and PHILLIPS expressly stated that PHILLIPS’ purpose in directing these trades was to drive the USD/ZAR rate below 12.50 stating, among other things, “my aim is to trade thru 50,” “[n]eed it to trade thru 50. 4990 is fine,” and “[g]et it thru.” Once PHILLIPS was informed by CC-1 that the USD/ZAR had traded at below 12.50, PHILLIPS immediately instructed CC-1 to “stop” trading and asked for proof “of the print.”
PHILLIPS Causes the Fraudulent Triggering of the $20 Million One Touch Option
Minutes after PHILLIPS artificially caused the USD/ZAR exchange rate to fall below 12.50 through his manipulative trading, PHILLIPS instructed another employee of Hedge Fund-1 (“CC-2”) to notify Intermediary Firm-1 that the $20 Million One Touch Option had been triggered. Consistent with PHILLIPS’ directive, CC-2 contacted an employee of Intermediary Firm-1 to confirm that the $20 Million One Touch Option had been triggered and, in so doing, omitted the fact that the triggering event – the USD/ZAR rate falling below 12.50 – had occurred as a result of the manipulation of the USD/ZAR exchange rate by PHILLIPS. Furthermore, Bank-2, which was serving as Hedge Fund-1’s prime broker in connection with the $20 Million One Touch Option and with whom Hedge Fund-1 had executed the relevant letter agreement governing the transaction, required confirmation from both the executing broker and from Hedge Fund-1 that the $20 Million One Touch Option had, in fact, been triggered. In this regard, on or about December 27, 2017, an employee of Hedge Fund-1 notified Bank-2, that “[t]he below option level of 12.50 was hit yesterday” and sought to process payment in connection with the triggering of the $20 Million One Touch Option. This representation by Hedge Fund-1 to Bank-2 that the $20 Million One Touch Option had been triggered likewise omitted the fact that the triggering event – the USD/ZAR exchange rate falling below 12.50 – had occurred as a result of the manipulation of the USD/ZAR exchange rate by PHILLIPS.
As a result of the fraudulent triggering of the $20 Million One Touch Option by PHILLIPS, Hedge Fund-1 ultimately received a wire transfer of $15,660,000 and Client Fund-1 received a wire transfer of $4,340,000.
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PHILLIPS, 52, of the United Kingdom, is charged with one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; one count of commodities fraud, in violation of Title 7, United States Code, Sections 9(1) and 13(a)(5), which carries a maximum sentence of 10 years in prison; and one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carry a maximum sentence of 20 years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the investigative work of the FBI. He also thanked the Justice Department’s Office of International Affairs, as well as authorities in Spain. Mr. Williams further thanked the Commodity Futures Trading Commission for their cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Noah Solowiejczyk is in charge of the prosecution.
The allegations in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Central Valley Corporate Insider and Small Business Owner Indicted for Stealing Nearly $5 Million in Livestock Feed IngredientsRead the Press Release
FRESNO, Calif. — A federal grand jury returned a multiple-count indictment today against Richard Best, 68, of Fresno, and Shawn Sawa, 46, formerly of Clovis, charging them with conspiracy and wire fraud.
According to court documents, from 2015 through 2017, Best and Sawa stole $4.8 million worth of canola used in cow feed from international food processors. They then sold the canola for a windfall.
Best and Sawa carried out the scheme through Best’s now defunct train-to-truck transloading company, Richard Best Transfer Inc. (RBT). A transloading company transfers commodities from one mode of transportation to another mode. The victims sent hundreds of thousands of tons of their canola and other commodities to RBT for delivery to their customers. Sawa was the manager of one of the victim’s branch offices in Fresno and had a close relationship with Best.
Best and Sawa sold the stolen canola through an acquaintance in Texas who used to work in the livestock feed industry. The acquaintance sold the stolen canola to farms and dairies, and distributed the proceeds according to Best’s instructions. This included wire transfers to RBT, Best, and Sawa’s bank accounts. The account that Sawa used was opened in his spouse’s name to try to conceal the scheme.
Throughout the scheme, Best and Sawa caused RBT to send fraudulent inventory reports to the victims representing that RBT had certain amounts of their canola in-stock when, in fact, RBT had significantly lesser amounts. Whenever the victims began to make inquiries about missing canola, Best and Sawa told them it had been destroyed by bad weather when it had actually been stolen.
Best and Sawa used the proceeds from the scheme to cover RBT’s operating expenses, purchase luxury homes and multiple vehicles, take trips, and hire private karate teachers, among other expenses.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Joseph Barton is prosecuting the case.
If convicted, Best and Sawa face maximum statutory penalties of 20 years in prison and a $250,000 fine for each of the conspiracy and wire fraud counts. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Calcasieu Parish Man Sentenced on Child Pornography ChargesRead the Press Release
LAKE CHARLES, La. - United States Attorney Brandon B. Brown announced that Shane Robinson, 28, of Lake Charles, Louisiana, has been sentenced by United States District Judge James D. Cain, Jr. to 180 months (15 years) in prison, followed by a lifetime of supervised release, on child pornography charges. Robinson was indicted by a federal grand jury in Lafayette and charged with production of child pornography and pleaded guilty to the charge on May 26, 2022.
Robinson was identified by the National Center for Missing and Exploited Children (NCMEC) as a person who may be possessing or distributing child pornography. Law enforcement agents obtained a search warrant and seized Robinson’s cell phone. On the cell phone, agents found sexually explicit images of a 4-year old child which Robinson had produced using the cell phone. In fact, Robinson can be seen in one of the sexually explicit images. Law enforcement agents questioned Robinson and he admitted to producing the images using his cell phone.
The case was investigated by the Department of Homeland Security – Bureau of Immigration and Customs Enforcement and was prosecuted by Assistant U.S. Attorney J. Luke Walker.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Box Elder Man Sentenced for Possession of Child PornographyRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Box Elder, South Dakota, man convicted of Possession of Child Pornography was sentenced on August 19, 2022, by U.S. District Karen E. Schreier.
John Cody Klingman, age 31, was sentenced to three years in federal prison, followed by five years of supervised release. Klingman was ordered to pay a $100 special assessment to the Federal Crime Victims Fund and $5,000 in restitution. Klingman will also be required to register as a sex offender under the Sex Offender Registration and Notification Act.
Klingman was arrested and federally indicted following several Cybertips from the National Center of Missing and Exploited Children. The Internet Crimes Against Children taskforce executed a search warrant on Klingman’s home and seized multiple devices. Forensic examination of those devices rendered searches for child and teen pornography, as well as computer-generated child pornography and age difficult images.
This case was investigated by the Internet Crimes Against Children taskforce, South Dakota Division of Criminal Investigation, Homeland Security Investigations, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Klingman was immediately remanded to the custody of the U.S. Marshals Service.
Boone County Man Sentenced to Prison in Connection with Damage to Energy FacilityRead the Press Release
CHARLESTON, W.Va. – Brandon Beverly, 46, of Whitesville, Boone County, was sentenced today to two years in prison, to be followed by three years of supervised release, for attempting to damage the property of an energy facility, identified as a known mine located across Boone and Lincoln counties.
Beverly was found guilty by a federal jury following a two-day trial According to court documents and evidence presented at trial, Beverly helped to steal specialized mine equipment from the known mine in May and June 2019, resulting in more than $5,000 in damage.
United States Attorney Will Thompson made the announcement and commended the investigative work of West Virginia State Police and the Federal Bureau of Investigation (FBI).
Senior United States District Judge John T. Copenhaver, Jr. imposed the sentence. Assistant United States Attorneys Kathleen Robeson and Nowles Heinrich prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-260.
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Billings felon sentenced to prison for illegal possession of firearmsRead the Press Release
MISSOULA – A Billings man who admitted to illegally possessing firearms after having been convicted of a felony was sentenced today to two years in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.
Michael Russell Torres, 30, pleaded guilty in April to two counts of prohibited person in possession of a firearm and ammunition.
U.S. District Judge Donald W. Molloy presided.
The government alleged in court documents that Torres was convicted of a felony drug crime in New York in 2013 and did not regain his right to possess firearms. In March 2021, Missoula Police officers responded to a citizen’s complaint and found Torres outside of a vehicle. Torres told officers he had a firearm on him. When officers placed Torres in handcuffs, a loaded, 9mm caliber pistol that had been under his shoulder fell to the ground. About a year later, law enforcement officers served an arrest warrant on Torres in Billings and found a .40 caliber pistol in his front waistband during a search.
The U.S. Attorney’s Office prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Missoula Police Department and Billings Police Department.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Beloit Man Sentenced to 9 Years for Cocaine Trafficking & Illegal Gun PossessionRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Eshawn M. Reed, 40, Beloit, Wisconsin pleaded guilty and was sentenced today by Chief U.S. District Judge James D. Peterson to 9 years in federal prison for distributing crack cocaine and possessing a firearm in furtherance of a drug trafficking crime. This 9-year prison term will be followed by 5 years of supervised release.
On April 6, July 19, and August 5, 2021, Janesville Police Department officers purchased crack cocaine from Reed in Janesville using a confidential informant.
On August 10, 2021, law enforcement officers planned to arrest Reed and search his residence in Janesville. On that day, Beloit Police Department officers attempted to conduct a traffic stop on the vehicle Reed was driving. Reed did not pull over and instead fled in his vehicle at a high rate of speed. Officers located Reed’s abandoned car sometime later. Reed was found walking away from the vehicle and taken into custody. His vehicle was searched, and officers found a loaded Ruger 57 handgun, an additional loaded magazine, a bag containing 25 grams of crack cocaine sitting on top of a stack of $4,380 in cash, an additional $15,790 in cash, and 1,063 grams of marijuana. Reed’s DNA was found on the firearm.
Officers also searched Reed’s residence in Janesville pursuant to a search warrant. At the residence, officers found drug trafficking paraphernalia, including a vacuum-sealing machine, unused vacuum bags, a 100-gram weight, measuring cups, strainers, and packaging materials. The next day, officers were alerted to a bag found in a ditch along Reed’s suspected flight path from law enforcement the day prior. Inside the bag, officers found 671 grams of powder cocaine and 62 grams of crack cocaine. Reed’s DNA was found on the bag of powder cocaine. When interviewed by officers, Reed admitted to possessing the guns, drugs, and cash in the vehicle and admitted that the crack cocaine found in the car was prepackaged for sale so he would be ready when someone called.
Reed was prohibited from legally possessing a firearm based on multiple prior felony convictions. During the time of the controlled buys and arrest, he was on state supervision for three felony cases – one involving second degree recklessly endangering safety, use of a dangerous weapon, a second case involving maintaining a drug trafficking place, and a third case involving possessing cocaine with the intent to distribute. His state supervision has since been revoked and he is currently serving a total sentence of 5 years in state prison with an anticipated release date of November 7, 2026. Judge Peterson ordered Reed’s 4-year federal sentence on the cocaine distribution charge to run concurrently with the remainder of Reed’s state prison sentence and ordered Reed’s 5-year federal sentence on the firearm charge to run consecutively to the cocaine distribution charge as well as Reed’s state prison sentences.
At sentencing, Judge Peterson said that Reed’s crimes were very serious, that his extensive drug dealing was degrading to the community, and that his firearm possession was highly aggravating. Judge Peterson noted Reed’s long, unrelenting history of crime which included a prior federal conviction for possessing a firearm as a felon.
The charges against Reed were the result of an investigation conducted by the Janesville, City of Beloit, and Town of Beloit Police Departments, the Wisconsin Department of Justice Division of Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Steven P. Anderson prosecuted this case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Beckley Man Pleads Guilty to Federal Drug CrimeRead the Press Release
BECKLEY, W.Va. – Liteef Hughes, 41, of Beckley, pleaded guilty today to the distribution of cocaine base, also known as “crack.”
According to court documents and statements made in court, Hughes admitted to selling a quantity of crack to a confidential informant at his Beckley residence on April 28, 2022. On May 5, 2022, law enforcement officers executed a search warrant at Hughes’ residence, and found quantities of cocaine and crack and $1,667. Hughes admitted to possessing the cocaine and crack, and further admitted that the $1,667 was proceeds obtained from drug trafficking. The investigation revealed that Hughes had distributed cocaine for approximately two and a half years.
Hughes is scheduled to be sentenced on December 22, 2022, and faces a maximum penalty of 20 years in prison, three years of supervised release, and a $1 million fine.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Beckley/Raleigh County Drug and Violent Crime Unit.
United States District Judge Frank. W. Volk presided over the hearing. Assistant United States Attorney Timothy D. Boggess is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:22-cr-105.
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Baton Rouge Man Indicted for Assaulting and Threatening Federal OfficersRead the Press Release
NEW ORLEANS, LOUISIANA – KESHAWN KELLY, age 19, a resident of Baton Rouge, Louisiana, was charged August 26, 2022, in a two-count indictment by a federal grand jury with influencing federal officials by threat in violation of Title 18, United States Code, Section 115(a)(1)(B), and assaulting federal officers in violation of Title 18, United States Code, Section 111, announced U.S. Attorney Duane A. Evans.
According to the indictment, KELLY assaulted and threatened several members of the United States Department of Veteran’s Affairs Police. The maximum punishment KELLY faces for influencing federal officials by threat is six years imprisonment, up to a $250,000 fine, up to three years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee. The maximum punishment for assaulting federal officers is one year imprisonment, up to a $100,000 fine, up to one year of supervised release following any term of imprisonment, and a $25 mandatory special assessment fee.
U.S. Attorney Evans reiterated that the indictment is merely a charging document and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was investigated by the United States Department of Veteran’s Affairs Police. The prosecution is being handled by Assistant United States Attorney J. Benjamin Myers.
Bakersfield Man Indicted for Illegally Possessing a FirearmRead the Press Release
FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Billy Reo Howard, 51, of Bakersfield, charging him with being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on June 3, 2022, law enforcement officers on routine patrol observed Howard driving a vehicle with expired tags on Garces Highway. When the officers attempted to conduct an enforcement stop, Howard ran a stop sign, drove at a high rate of speed, and failed to yield. As the officers continued behind the vehicle, they saw a firearm being thrown from the driver’s side window. The officers located the firearm, a loaded Bersa .380‑caliber pistol. Howard ran from the vehicle and was eventually located hiding on a nearby property. Howard has several felony convictions for evading a peace officer, possessing a controlled substance for sale, carjacking, and being a felon in possession of ammunition.
This case is the product of an investigation by the Federal Bureau of Investigation and the Delano Police Department. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.
If convicted, Howard faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the U.S. Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Auburn Man Sentenced to 10 Years for Fentanyl and Cocaine Trafficking in Androscoggin CountyRead the Press Release
PORTLAND, Maine: An Auburn man was sentenced in U.S. District Court in Portland today for distributing and possessing with the intent to distribute fentanyl and cocaine, U.S. Attorney Darcie N. McElwee announced.
U.S. District Judge Nancy Torresen sentenced Vincent Steed, 42, to ten years in prison and three years of supervised release. Steed pleaded guilty in December 2021.
According to court records, on two separate occasions in June 2021, Steed sold fentanyl and cocaine from his apartment in Auburn to a confidential informant working with the Maine Drug Enforcement Agency. At the time, Steed was on supervised release in connection with a 2016 federal drug trafficking conviction. Judge Torresen imposed an additional two years of imprisonment on Steed for violating his conditions of supervised release, to run concurrently.
The Maine Drug Enforcement Agency investigated the case.
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Armed Drug Dealer Sentenced to 5 Years in Federal PrisonRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that TREA FRASER, 27, of New Haven, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 60 months of imprisonment, followed by five years of supervised release, for possessing a firearm in furtherance of his drug trafficking activities.
According to court documents and statements made in court, in 2020, the FBI New Haven Safe Streets Gang Task Force and the West Haven Police Department began investigating the narcotics trafficking activity of Fraser and another individual. Between October and December 2020, investigators made controlled purchases of crack cocaine from Fraser. On February 9, 2021, a search of Fraser’s residence revealed quantities of crack cocaine and heroin items used to process and package narcotics for street sale, ammunition, and $3,900 in cash. A search of his vehicle revealed approximately 100 grams of cocaine and a loaded .45 caliber Glock 41 handgun that was reported stolen in Alabama.
Fraser has been detained since his federal arrest on March 1, 2021. On November 17, 2021, he pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime.
Fraser’s criminal history includes state convictions for firearm and drug offenses, and for witness tampering related to his attempt to have a witness to a shooting incident change his statement.
This matter was investigated by the FBI New Haven Safe Streets Gang Task Force and the West Haven Police Department. The case was prosecuted by Assistant U.S. Attorney Konstantin Lantsman.
This prosecution 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 Justice 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.
Albuquerque supplement retailer sentenced to three years’ probation for performance enhancing drugsRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced that Tanya Puccini was sentenced on Aug. 30 to three years of probation for introduction and delivery of misbranded drugs. Puccini, 47, of Albuquerque, pleaded guilty on Jan. 7.
Puccini was the owner and operator of Allstar Nutrition, a health supplement store in Albuquerque. In December 2017, Puccini began selling Selective Androgen Receptor Modulators (SARMs), a type of performance enhancing drugs (PEDs) that stimulate the growth of certain muscle and bone. These products are prohibited by the U.S. Anti-Doping Agency and the World Anti-Doping Agency and are not approved by the U.S. Food and Drug Administration (FDA).
These drugs were sold in bottles labeled “not for human consumption” and “for research purposes only.” Puccini nonetheless provided verbal, printed and occasionally written instructions to purchasers for personal use of the drugs for fitness gains, such as muscle growth. For example, Puccini provided a written note to a customer in which she represented that the drugs were not “technically” SARMs, but included instructions for using the drugs to promote muscle growth.
Altogether, from December 2017 through June 2021, Puccini made retail sales of at least $107,486 of unapproved PEDs.
“Misbranded drugs that are disguised as dietary supplements and contain potentially harmful hidden ingredients place American consumers at risk,” said Special Agent in Charge Charles L. Grinstead, FDA Office of Criminal Investigations Kansas City Field Office. “We will continue to investigate and bring to justice those who endanger the U.S. public health by distributing fraudulent and potentially dangerous products.”
Consistent with a stipulation in the plea agreement, Puccini forfeits her interest in any drug she received or transferred that is or was adulterated or misbranded. The Court will issue a money judgement within 30 days.
The FDA investigated this case. Assistant United States Attorney Jeremy Peña is prosecuting the case.
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Accounting Specialist Charged with Embezzling more than $270,000 from WFYI Public MediaRead the Press Release
INDIANAPOLIS – Mindi B. Madison, 52, of Indianapolis, has been charged by information with conspiracy to commit wire fraud. Madison will make her initial appearance on September 15, 2022, at 10:00 a.m., in Room 349, at the federal court in Indianapolis.
According to court documents, Madison began working as an Accounting Specialist for WFYI Public Media (“WFYI”) in January 2018. WFYI was owned and operated by Metropolitan Indianapolis Public Media, Inc., and provided television and radio programming throughout Central Indiana. Madison’s co-conspirator, Individual 1, was neither an employee nor a vendor of WFYI.
As an Accounting Specialist, Madison had access to WFYI’s accounting software, and was trusted to present legitimate expenses, claims, invoices, and supporting documentation along with the unsigned WFYI checks to employees at WFYI who had signature authority for their approval and signature. Instead of presenting legitimate claims that arose out of WFYI’s legitimate business expenses for signature and payment, Madison abused her position of trust, and presented at least 156 fake claims and invoices for payment. In effort to conceal the theft from WFYI and their banking institutions, Madison and Individual 1 agreed that Madison would falsify invoices using versions of Individual 1’s name and businesses connected to her.
Madison tendered WFYI checks to Individual 1, and they agreed that Individual 1 would then deposit the checks into Individual 1’s bank accounts. Individual 1 then withdrew Madison’s portion in cash, and they split the illegal proceeds. Both Madison and Individual 1 used WFYI’s stolen funds for their own personal expenditures including but not limited to, rent, restaurants, groceries, fuel, and utilities. In total, Madison embezzled approximately $270,876 from WFYI before her theft was discovered.
If convicted, Madison faces a maximum penalty of 20 years in federal prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, and Herbert J. Stapleton, Special Agent in Charge of the Federal Bureau of Investigation’s Indianapolis Field Office, made the announcement.
U.S. Attorney Myers thanked Assistant United States Attorney Tiffany J. Preston, who is prosecuting this case.
An information 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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Woman Sentenced for Stealing over $100,000 from Social SecurityRead the Press Release
SALT LAKE CITY – Melody Jean Styszko, 54, now of Eldridge, Missouri, was sentenced in U.S. District Court in Utah to 60 months of probation for continuing to accept and spend $104,314 dollars in Social Security Retirement Insurance payments from the United States Social Security Administration that were meant for her late father. Styszko was also ordered to pay $104,314 in restitution back to the Social Security Administration as a condition of her sentence.
According to sentencing documents filed by federal prosecutors, Styszko maintained a joint checking account with her late father before his death. After her father died, Styszko continued to accept her father’s Social Security Retirement Insurance benefits as they were deposited into the same joint account for more than ten years. Over the course of those years, Styszko ultimately spent over $104,314 of those benefits on herself. Styszko spent the benefits even though she admitted that “based on the facts known to [her], [she] was conscious and aware of the high probability that [she] was not entitled to this money.”
This case was prosecuted by Assistant United States Attorneys from the District of Utah and was investigated by the Social Security Administration Office of Inspector General.
Wilmington Woman Sentenced to 31 Months in Federal Prison in CARES Act Fraud CaseRead the Press Release
WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware, announced today that Ana Soto, 41, of Wilmington and formerly of Newark, was sentenced yesterday to 31 months imprisonment on wire fraud and money laundering convictions. Chief U. S. District Court Judge Colm F. Connolly pronounced the sentence.
Within days of the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Soto began her scheme to defraud the Small Business Administration (SBA) and its authorized lenders. Between March 30, 2020, and January 24, 2021, Soto submitted approximately seventeen (17) fraudulent loan applications in order to obtain loans through the small business loan programs established by the CARES Act including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program. These applications were made on behalf of five entities controlled by Soto or her close relations. Each of the loan applications falsely stated the amount of gross revenues, cost of goods sold, and number of employees. In some instances, the loan applications falsely claimed the businesses were in operation at the start of the Coronavirus Pandemic. As a result of these false applications, Soto obtained approximately $246,000, and applied for, but was denied, an additional approximately $500,000 in CARES Act loans.
U.S. Attorney Weiss stated, “Today the Court justly held Ana Soto accountable for her crimes. Defendant’s conduct, which took advantage of government programs designed to provide economic support for the American people at the outset of a global pandemic, is particularly deplorable. When the government stepped in to quickly provide relief and reassure its citizens with financial help, Defendant chose to exploit the system to her own advantage. We remain committed to prosecuting those who have done the same. Defendant’s sentence should be a stark reminder that we will bring to justice those who defrauded the government during the COVID-19 pandemic.”
"This is an example of someone who was attempting to take advantage of a program to help Americans during the Covid-19 pandemic," said Special Agent in Charge Thomas J Sobocinski of the FBI’s Baltimore Field Office. “We would like to thank our partners at the IRS in helping us to ensure funds provided for Covid-19 programs make it to the people in Delaware who need it the most.”
Ana Soto deliberately and repeatedly carried out a scheme to defraud a program that was implemented to assist people during the pandemic,” said Yury Kruty, Special Agent in Charge of IRS-Criminal Investigation. “Today’s sentencing punishes her and serves as a warning to others that IRS-CI and our law enforcement partners stand ready to investigate those who attempt to fleece the government.”
The case was investigated by the FBI and IRS-Criminal Investigation. It was prosecuted by Assistant U.S. Attorney Lesley Wolf. U.S. Attorney Weiss thanked the investigators for their diligence and dedication in pursuing this investigation.
Waynesboro Man Sentenced to 151 Months’ Imprisonment for Methamphetamine Trafficking and Firearms OffensesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Johnathan Fisher, age 40, of Waynesboro, Pennsylvania, was sentenced on August 29, 2022, to 151 months’ imprisonment by United States District Court Judge Christopher C. Conner for methamphetamine trafficking and firearms offenses.
According to United States Attorney Gerard M. Karam, Fisher possessed with the intent to distribute over 50 grams of actual methamphetamine on May 7, 2020, in Waynesboro, Pennsylvania. Fisher also possessed a Remington .380 handgun and a Stevens 12-gauge shotgun when he knew that his previous convictions prohibited him from possessing a firearm.
The case was investigated by the Federal Bureau of Investigations (FBI), the Waynesboro Police Department, and the Franklin County Drug Task Force. Assistant U.S. Attorney Jaime M. Keating prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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United States obtains warrant for seizure of $45M airplane owned by Russian energy company PJSC LUKOILRead the Press Release
HOUSTON - The United States obtained a warrant to seize a Boeing 737-7EM aircraft owned by PJSC LUKOIL, a Russian multinational oil and gas corporation headquartered in Moscow, Russia. The U.S. District Court for the Southern District of Texas authorized the seizure, finding probable cause that the Boeing aircraft was subject to seizure based on violations of federal law.
Earlier this year, the Department of Commerce issued sanctions against Russia in response to Russia’s invasion of Ukraine. The sanctions impose export controls and license requirements to protect U.S. national security and foreign policy interests. The Russia sanctions expanded prohibitions on the export, reexport or in-country transfer of, among other things, U.S.-manufactured aircraft to or within Russia without a valid license or license exception.
According to court documents, LUKOIL owns the Boeing aircraft – bearing tail number VP-CLR and manufacturer serial number 34865 – which flew into and out of Russia in violation of the Department of Commerce’s Russia sanctions.
“The FBI will remain focused and faithful to our responsibility to protect our U.S. national security and foreign policy interests,” said Special Agent in Charge James Smith of the FBI – Houston Field Office. “We’ll continue to go after individuals who insist on helping Russia advance its hostile and illegal activities, and we’ll continue to seize their valuable possessions, wherever they may be. We thank Homeland Security Investigations (HSI) and the Department of Commerce for their partnership in this case.”
“Once again, the United States, through its experts at the FBI and the Department of Commerce, has laid open a series of shell companies and sham corporations designed to conceal the ownership and illegal movements of controlled technology,” said Task Force KleptoCapture Director Andrew C. Adams. “The aircraft at the center of today’s affidavit was ultimately the property of Lukoil, though that ownership was obscured through a now-public series of holding companies. With today’s unsealed affidavit, aviation, insurance, and financial services companies are made aware of that nesting doll-structure, and can proactively avoid the provision of services that might aid the movement of this tainted aircraft as the United States pursues its seizure.”
“Today’s actions to enforce the powerful export restrictions placed on Russia are our latest coordinated measures that let Vladimir Putin and his allies know they are isolated and we are watching,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “The Commerce Department’s Office of Export Enforcement continues to vigorously enforce the export laws of the United States and stand with the people of Ukraine against Putin’s war of aggression.”
“By aggressively pursuing the seizure of these assets, we have sent a resounding message to sanctions violators and third-party facilitators around the globe that we are committed to targeting any individual or entity that seeks to blatantly skirt the sanctions, export controls and license requirements imposed by the United States in response to Russia’s unprovoked military invasion of Ukraine,” said Special Agent in Charge Mark Dawson, HSI Houston. “Using our broad investigative and enforcement authorities and global reach, HSI will continue to work alongside our federal partners to protect U.S. national security interests and inflict maximum disruptive effects against anyone who violates these sanctions in an effort to support the Russian government.”
The Boeing last flew into the United States in March 2019 when the plane flew from overseas to Houston with LUKOIL officials, including a Russian oligarch – then LUKOIL president and CEO Vagit Alekperov – on board the aircraft. The Boeing is believed to be in Russia and worth approximately $45 million. Since September 2014, LUKOIL has been subject to sectoral sanctions imposed by the Department of the Treasury’s Office of Foreign Assets Control.
The seizure action is being coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
The FBI’s Houston Field Office, the Department of Commerce’s Bureau of Industry and Security and HSI in Houston are investigating the seizure matter. The investigation into additional aircraft is ongoing.
Assistant U.S. Attorneys John Pearson and Brandon L. Fyffe of the U.S. Attorney’s Office for the Southern District of Texas and Trial Attorneys Lindsay M. Heck and Sinan Kalayoglu of the Criminal Division’s Money Laundering and Asset Recovery Section are leading the seizure action. The U.S. Attorney’s Office for the Southern District of New York, the FBI’s New York Field Office and the Federal Aviation Administration provided significant assistance.
United States Obtains Warrant for Seizure of $45 Million Airplane Owned by Russian Energy Company PJSC LUKOILRead the Press Release
The United States obtained a warrant to seize a Boeing 737-7EM aircraft owned by PJSC LUKOIL, a Russian multinational oil and gas corporation headquartered in Moscow, Russia. The U.S. District Court for the Southern District of Texas authorized the seizure, finding probable cause that the Boeing aircraft was subject to seizure based on violations of federal law.
Earlier this year, the U.S. Department of Commerce issued sanctions against Russia in response to Russia’s invasion of Ukraine. The sanctions impose export controls and license requirements to protect U.S. national security and foreign policy interests. The Russia sanctions expanded prohibitions on the export, reexport or in-country transfer of, among other things, U.S.-manufactured aircraft to or within Russia without a valid license or license exception.
According to court documents, LUKOIL owns the Boeing aircraft – bearing the tail number VP-CLR and the manufacturer serial number 34865 – which flew into and out of Russia in violation of the Department of Commerce’s sanctions against Russia.
The Boeing last flew into the United States in March 2019 when the plane flew from overseas to Houston, Texas with LUKOIL officials, including a Russian oligarch – then LUKOIL president and CEO Vagit Alekperov – on board the aircraft. The Boeing is believed to be in Russia and worth approximately $45 million. Since September 2014, LUKOIL has been subject to sectoral sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control.
The seizure action is being coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
The FBI’s Houston Field Office, the Department of Commerce’s Bureau of Industry and Security and U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations in Houston are investigating the seizure matter.
Assistant U.S. Attorneys John Pearson and Brandon L. Fyffe of the U.S. Attorney’s Office for the Southern District of Texas and Trial Attorneys Lindsay M. Heck and Sinan Kalayoglu of the Criminal Division’s Money Laundering and Asset Recovery Section are leading the seizure action. The U.S. Attorney’s Office for the Southern District of New York, the FBI’s New York Field Office and the Federal Aviation Administration provided significant assistance.
U.S. Citizen Extradited from Costa Rica Pleads Guilty to Wire Fraud ChargesRead the Press Release
Earlier today, in federal court in Central Islip, David Butler, a United States citizen, pleaded guilty to wire fraud conspiracy in connection with a scheme to defraud investors in a form of investment known as “binary options.” Butler was arrested in April 2022 in Costa Rica and extradited to the United States on July 14, 2022. The guilty plea was held before United States District Judge Joanna Seybert. When sentenced, Butler faces up to 20 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the guilty plea.
“Butler’s guilty plea demonstrates that even when crimes are committed from thousands of miles beyond our country’s borders using the latest computer software, neither the foreign nature nor the sophistication of the scheme will shield fraudsters from being brought to justice in a U.S. courtroom,” stated United States Attorney Peace. “This Office is committed to protecting the investing public from financial scams wherever they occur.”
Mr. Peace thanked the Costa Rican government for its assistance with the arrest and extradition of the defendant.
“David Butler and his accomplices employed a complex, multi-million dollar con to deceive investors by using a manipulated ‘binary option’ system. While investors waited for a surefire return on their investment, Butler pocketed the money to guarantee his own future—until he was caught. Butler now understands that his only genuine guarantee is that he will now face the consequences of his criminal schemes,” said Thomas M. Fattorusso, Special Agent in Charge of IRS:CI in New York.
"As he admitted today, Mr. Butler defrauded his victims for his own personal gain. This case should serve as a reminder to all those who attempt to game our financial systems from afar that the FBI, along with our global law enforcement partners, will bring you back to the United States to face justice in our federal courts," stated Assistant Director-in-Charge Driscoll.
As set forth in court filings, between approximately January 2011 and October 2016, Butler and his co-conspirators operated binary options companies, including SpotFN, Binary FN and Janus Options (Binary Options Companies) from Glen Cove, New York, Costa Rica and Kosovo. The Binary Options Companies promised to pay investors, who were located throughout the United States, a predetermined profit based upon particular outcomes in the markets for securities, currencies and other investments. For example, the Binary Options Companies would offer to pay customers a predetermined profit if a particular security or currency was valued at a particular price on a particular day at a particular time.
To induce investments, Butler and his co-conspirators told investors, in telephone calls and emails, that the predetermined profits that the Binary Options Companies had promised them would be based upon the actual prices of securities, currencies and other investments at particular points in time. Unbeknownst to the investors, however, Butler and his co-conspirators used computer software that allowed the Binary Options Companies to manipulate data associated with the investors’ binary options so that the probability of investors earning a profit would favor the Binary Options Companies. At no time did Butler or any other employee of the Binary Options Companies inform the investors that the binary options that they had purchased from the Binary Options Companies could be manipulated to the investors’ disadvantage. As a result of their deception, Butler and his co-conspirators stole more than $2.9 million from investors.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace will play a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including wire fraud, such as the fraud that the defendant committed.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Bradley T. King is in charge of the prosecution. The Justice Department’s Office of International Affairs worked with law enforcement partners in Costa Rica to secure the arrest and extradition of Butler to the United States.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Bradley T. King is in charge of the prosecution. The Justice Department’s Office of International Affairs worked with law enforcement partners in Costa Rica to secure the arrest and extradition of Butler to the United States.
The Defendant:
DAVID BUTLER
Age: 52
San Jose, Costa Rica
Pittsburgh, KansasE.D.N.Y. Docket No. 18-CR-680 (JS)
U.S. Attorney Charges Former Rockland County Coach with Transporting Minors to Engage in Illegal Sexual ActivityRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of an Indictment charging VICTOR BYRNE, 56, with transporting two minors to engage in illegal sexual activity in 2006 and 2008. BYRNE was arrested this morning in Orlando, Florida and presented in Orlando federal court.
U.S. Attorney Damian Williams said: “Victor Byrne allegedly used his position as a diving coach to sexually exploit young athletes. This case illustrates that the passage of years will not prevent us from holding accountable those who prey on children.”
As alleged in the Indictment filed on August 17, 2022, in White Plains federal court and unsealed today and in statements made today at the presentment in Orlando federal court:[1]
In or about July 2006, VICTOR BYRNE, the defendant, knowingly transported a 16-year-old minor (“Victim-1”) from Cape Cod, Massachusetts to Rockland County, New York with the intent to engage in illegal sexual activity with Victim-1.
In or about February 2008, VICTOR BYRNE knowingly transported a 16-year-old minor (“Victim-2”) from New Jersey to Rockland County, New York with the intent to engage in illegal sexual activity with Victim-2.
From in or about 2001 until at least in or about 2009, BYRNE was a diving coach in Rockland County, New York who coached a team of competitive divers. Victim-1 and Victim-2 were divers for BYRNE. Victim-1 and Victim-2 are adults today, and they are law enforcement officers. Victim-1 is a police officer in New York. Victim-2 is a Special Agent with Homeland Security Investigations.
The defendant’s criminal conduct occurred repeatedly over a period of years: The defendant began abusing Victim-1 when she was about 14 years old. For Victim-2, the abuse began when she was 16.
Mr. Williams stated that the investigation is ongoing. Mr. Williams requests that any individuals who have information with respect to VICTOR BYRNE contact Homeland Security Investigations Tip Line (866) 347-2423.
* * *
BYRNE, 56, of Orlando, Florida, is charged with two counts of transporting a minor to engage in illegal sexual activity. Count One, which charges an offense that occurred in or about July 2006, carries a mandatory minimum sentence of five years in prison and a maximum sentence of 30 years in prison. Count Two, which charges an offense that occurred in or about February 2008, carries a mandatory minimum of 10 years in prison and a maximum sentence of life.
The statutory mandatory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Following today’s presentment, Judge David Baker ordered that BYRNE be detained pending a hearing in Orland federal court scheduled for September 12, 2022.
Mr. Williams praised the efforts of Homeland Security Investigations, the U.S. Marshal Service, the U.S. Attorney’s Office for the Middle District of Florida, and the New York City Police Department Special Victims Unit assigned to the HSI Human Trafficking Task Force in connection with this investigation. He added that the investigation is ongoing.
The prosecution is being handled by the Office’s White Plains Division. Assistant United States Attorney Marcia S. Cohen is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
Two Middletown Residents Charged with Robbing People's United Banks at Stop & Shop SupermarketsRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, Special Agent in Charge David Sundberg of the New Haven Division of the Federal Bureau of Investigation, Middletown Police Chief Erik M. Costa, Glastonbury Police Chief Marshall Porter, Newington Police Chief Stephen Clark, and West Hartford Police Chief Vernon Riddick, Jr., today announced that GINO RIZZO, 28, and JALANIA PANTANO, 27, both of Middletown, were arrested yesterday on an indictment charging them with bank robbery offenses.
The FBI and several local police departments have been investigating multiple robberies that occurred this summer at People’s United Bank branches located in Stop & Shop supermarkets in Connecticut. The indictment alleges that Rizzo robbed People’s United Bank branches located in Stop & Shop supermarkets in Glastonbury on July 16 and in Newington on July 18, and that Rizzo and Pantano robbed a People’s United Bank branch located in a Stop & Shop in West Hartford on July 20.
The three-count indictment was returned by a grand jury in Bridgeport on August 17. Rizzo and Pantano appeared yesterday before U.S. Magistrate Judge Maria E. Garcia in New Haven and were ordered detained.
The charge of bank robbery carries a maximum term of imprisonment of 20 years.
U.S. Attorney Avery stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Middletown, Glastonbury, Newington and West Hartford Departments. The case is being prosecuted by Assistant U.S. Attorneys Stephanie T. Levick and Robert Dearington.
Two Men Sentenced to Prison for Participating in Nationwide Grandparent ScamRead the Press Release
Assistant U. S. Attorney Oleksandra “Sasha” Johnson (619) 546-9769
NEWS RELEASE SUMMARY – August 31, 2022
SAN DIEGO – Timothy Ingram of North Hollywood, California, and Joaquin Lopez of Hollywood, Florida, were sentenced in federal court today to significant prison terms - nine years and two years in prison, respectively - for their roles in a large-scale criminal enterprise that engaged in extortion and fraud to swindle about $2 million from more than 70 elderly victims across the nation. Ten elderly victims who resided in San Diego County lost over $300,000 to the fraud.
From November 1, 2019, until October 14, 2020, the members of the criminal enterprise targeted elderly Americans, contacting them by phone and feeding them phony stories that their grandchildren were in legal trouble and needed money to cover bail, pay medical expenses for car accident victims, or prevent additional charges from being filed. Members of the conspiracy and their associates obtained money from victims through in-person cash pick-ups, mail or commercial carriers, or wire transfers. Conspirators laundered the proceeds by transferring the funds or converting from fiat currency to cryptocurrency.
According to court documents, Timothy Ingram’s participation in the conspiracy was lengthy and substantial. For nearly a year, he ran a network of money mules who conducted cash pick-ups and received wire transfers from victims who believed they were sending money to help a grandchild or other close relative or friend. Ingram provided the mules with details about the victims, including addresses and names. He coordinated cash pick-ups by his mule network through encrypted messages, instructing the mules on when to approach the victims’ doors, what fake name and occupation to tell the victims, and where to deliver the cash proceeds.
Ingram organized the criminal activity of at least five other participants in California, including co-defendants Anajah Gifford and Jack Owuor. Although most of Ingram’s activity occurred in California, at times, he directed mules to travel out of state to execute the same scheme elsewhere. He also recruited mules to receive wire transfers of victim funds into their bank accounts and provided extensive instruction and supervision over how to withdraw the funds to avoid getting caught. On at least one occasion, Ingram conducted a cash pick-up himself, collecting $42,000 in person from a 76-year-old victim in Burbank, California. In addition to being sentenced to serve 108 months in custody, Ingram was ordered to forfeit $124,700 in proceeds that he personally received from the offense, and to pay $1,932,507.93 to the victims in restitution. Three California victims spoke at the sentencing hearing.
U.S. District Judge Cathy Ann Bencivengo described the scheme as long term, sophisticated, and one of the most evil manipulations she has ever encountered in her 17 years on the bench. The judge commented that the defendant stole not only the financial security of the victims but exploited their fear and trust.
As part of his plea agreement, defendant Joaquin Lopez admitted that he used bank accounts under his control to funnel victim proceeds for co-defendant Tracy Knowles. Lopez, a resident of Florida, was involved in the scheme from February 2020 until October 2020. His participation in the conspiracy was crucial: In exchange for a 20 percent cut, Lopez made bank accounts available to other scheme participants to receive wire transfers from victims and to disperse those proceeds. As part of his sentence, Lopez was ordered to forfeit $62,700 in proceeds he personally received from the offense. In sentencing Lopez, the judge said that one cannot go through life blindly laundering money for criminals without having consequences.
This case was investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was established in February 2021 and is believed to be the first comprehensive law enforcement effort for this purpose anywhere in the country. The case was prosecuted by the U.S. Attorney’s Office and the Department of Justice’s Consumer Protection Branch.
“These defendants were crucial members of a sophisticated criminal organization that shamelessly exploited the grandparents’ love for their grandchildren,” said U.S. Attorney Randy Grossman. “The long-lasting effects of this crime on our seniors and the community cannot be overstated. The victims were financially and emotionally devastated by callous people who thought only of enriching themselves. With the convictions and sentences imposed today, the government is securing justice for the victims who fell prey to this heartless crime.” Grossman thanked the prosecution team and investigators for their excellent work on this case.
“Today's sentencing of two key members of the criminal enterprise targeting our elderly population is a testament to the San Diego Elder Justice Task Force's continued commitment to bringing fraudsters to justice,” said Special Agent in Charge Stacey Moy of the FBI’s San Diego Field Office. “It is the FBI's mission to protect the American people and protecting our seniors from financial crimes is imperative to the well-being and safeguarding of our communities. The FBI, along with our law enforcement partners, will not stop until all the defendants are held accountable for their involvement in this complex organized crime.”
As of today, six of the eight defendants charged in the case have pleaded guilty. Two defendants are fugitives and remain at large.
DEFENDANTS Case Number 22cr2216-CAB
Tracy Adrine Knowles 30 Orlando, Florida
Fugitive
Adonis Alexis Butler Wong 30 Northbay Village, Florida
Fugitive
Timothy Ingram, aka Bleezy 30 North Hollywood, California
Sentenced today to 108 months in prison
Anajah Gifford 24 North Hollywood, California
In custody. Sentencing set for November 17, 2022
Lyda Harris 74 Laveen, Arizona
Released on bond. Sentencing set for November 17, 2022
Joaquin Lopez 46 Hollywood, Florida
Sentenced today to 24 months in prison
Jack Owuor 25 Paramount, California
Sentenced on August 17, 2022 to 46 months in prison
Tracy Glinton 35 Orlando, Florida
Released on bond. Sentencing set for November 17, 2022
SUMMARY OF CHARGES
Title 18, U.S.C., Sec. 1962(d) – Conspiracy to Conduct or Participate in an Enterprise
Through a Pattern of Racketeering Activity
Maximum penalty: Twenty years in prison and a fine of not more than the greater of twice the amount of gain or loss associated with the offense or $250,000
AGENCY
Department of Justice’s Consumer Protection Branch
San Diego Elder Justice Task Force, which includes:
San Diego FBI
San Diego County District Attorney’s Office
San Diego Police Department
San Diego Sheriff’s Department
Carlsbad Police Department
Oceanside Police Department
Escondido Police Department
Chula Vista Police Department
El Cajon Police Department
La Mesa Police Department
National City Police Department
Coronado Police Department
Two Defendants in ‘Grandparent Scam’ Network Sentenced for RICO Conspiracy Targeting Elderly AmericansRead the Press Release
Two defendants were sentenced today to substantial prison time for their participation in a large-scale “grandparent scam.”
According to court documents, Timothy Ingram aka “Bleezy,” 30, of North Hollywood, California; and Joaquin Lopez, 46, of Hollywood, Florida, were part of a network of individuals who, through extortion and fraud, induced elderly Americans across the United States to pay up to tens of thousands of dollars each to purportedly help their grandchild or other loved one. In spring 2022, Ingram and Lopez each pleaded guilty to one count of conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Today, the court sentenced Ingram to 108 months in prison and Lopez to 24 months in prison.
Members of the network contacted elderly Americans by telephone and impersonated a grandchild, other close relative or friend of the victim. They falsely convinced the victims that their relatives or friends were in legal trouble and needed money to pay for bail, for medical expenses for car accident victims, or to prevent additional charges from being filed. The defendants and their co-conspirators then received money from victims via various means, including in-person pickup, the mail, and wire transfer, and then laundered the proceeds, including through the use of cryptocurrency. Ingram, personally and through others, directed a network of money mules in California. Ingram personally picked up cash from victims and recruited others to participate in the scheme. Lopez also received wire transfers from numerous victims and funneled victim proceeds for co-defendant Tracy Knowles, who remains at large.
“The Department of Justice’s Consumer Protection Branch will continue to investigate and prosecute criminals who target elderly Americans and take advantage of their concern for loved ones,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are grateful to our partners at the U.S. Attorney’s Office for the Southern District of California and the FBI for their work to advance the department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”
“These defendants were crucial members of a sophisticated criminal organization that shamelessly exploited the grandparents’ love for their grandchildren,” said U.S. Attorney Randy Grossman for the Southern District of California. “The long-lasting effects of this crime on our seniors and the community cannot be overstated. The victims were financially and emotionally devastated by callous people who thought only of enriching themselves. With the convictions and sentences imposed today, the government is securing justice for the victims who fell prey to this heartless crime.”
“Today's sentencing of two key members of the criminal enterprise targeting our elderly population is a testament to the San Diego Elder Justice Task Force's continued commitment to bringing fraudsters to justice,” said Special Agent in Charge Stacey Moy of the FBI San Diego Field Office. “It is the FBI's mission to protect the American people and protecting our seniors from financial crimes is imperative to the well-being and safeguarding of our communities. The FBI, along with our law enforcement partners, will not stop until all the defendants are held accountable for their involvement in this complex organized crime.”
The FBI San Diego Field Office and the North County Resident Agency investigated the case with critical assistance from investigators of the San Diego County District Attorney’s Office.
Trial Attorneys Lauren M. Elfner and Wei Xiang of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Oleksandra Johnson for the Southern District of California prosecuted the case.
The department’s extensive and broad-based efforts to combat elder fraud seeks to halt the widespread losses seniors suffer from fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. ET. English, Spanish and other languages are available.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
Twin Falls Man Sentenced to over 11 Years for Possession of Child PornographyRead the Press Release
BOISE – Domingo Zapata, 28, of Twins Falls, was sentenced to 136 months in federal prison for possession of child pornography, U.S. Attorney Josh Hurwit announced today.
According to court records, in May of 2021, an undercover agent with Homeland Security Investigations (“HSI”) learned that Zapata was a member of an internet group dedicated to the posting and sharing of child pornography. On six occasions, the undercover agent saw Zapata post child pornography within the group, including videos depicting prepubescent children engaged in sexual act with adults. Pursuant to a search warrant authorized by a federal judge, HSI obtained the contents of Zapata’s internet account. Within the account, HSI located over 600 images of child pornography. HSI later obtained a search warrant to examine Zapata’s cellphone and located child pornography on the cellphone.
“This case shows our unyielding resolve to identify, arrest, and prosecute those involved in distributing child pornography,” said U.S Attorney Josh Hurwit. “I am grateful for the work of the ICAC (Internet Crimes Against Children) Task Force, which finds offenders who prey on the most vulnerable members of our society. ICAC’s success in protecting Idaho’s children arises from cooperation between local, state, and federal partners, and particularly in this case HSI, Twin Falls Police Department, and Twin Falls Prosecutor’s Office. This office and our law enforcement partners will continue our critical work to protect Idaho’s children.”
“Today’s sentence of over 11 years will ensure Mr. Zapata can no longer pilfer vile images that re-victimize children every time the ‘send’ button was pressed,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “HSI is a proud participant in the ICAC taskforce as this growing threat can only be addressed through a team approach.”
Chief United States District Judge David C. Nye also ordered Zapata to serve 10 years of supervised release following his prison sentence, to forfeit the cellphone that was used to commit the offense, and to pay $33,000 in restitution to the victims in the images he possessed. As a result of the conviction, Zapata will be required to register as a sex offender.
U.S. Attorney Hurwit, of the District of Idaho, commended the cooperative efforts of HSI, Idaho Internet Crimes Against Children Task Force, Twin Falls Police Department, and Twin Falls Prosecutor’s Office which led to charges.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. As part of Project Safe Childhood, the U.S. Attorney’s Office for the District of Idaho and the Idaho Attorney General’s Office partner to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Three Texas Men Plead Guilty to Bank Robbery ConspiracyRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces that Roderick Tyree Irvin (28), Christopher Merchant (22), and Hakeem Thomas (26), all of Houston, Texas have pleaded guilty to conspiracy to commit bank robbery and bank robbery. They each face a maximum penalty of 5 years in federal prison for the conspiracy offense, and up to, 20 years’ imprisonment for the bank robbery offense.
According to court documents, around 3:00 a.m. on July 29, 2021, the Hillsborough County Sheriff’s Office responded to a burglary at the SunTrust Bank located on Memorial Highway in Tampa. Investigators determined that suspects had attached chains to the Automatic Teller Machine (ATM) which was part of the SunTrust Bank building, and then attached those chains to a stolen pickup truck. The suspects then used the truck to attempt to pull the protective outer covering off the ATM machine to expose the cash held inside. The defendants were captured on surveillance video by the ATM.
Responding deputies found a stolen Ford pickup truck, with chains still attached to it, abandoned near the damaged ATM. They followed the trail and using a police helicopter, eventually located three suspects – Irvin, Merchant, and Thomas – hiding nearby in a getaway car. The car attempted to flee from deputies but became disabled when it hit a large rock. The three occupants bailed out of the car and ran away but were all arrested following a brief foot pursuit. Clothing items and other materials used in the ATM burglary were recovered from the car and the three suspects.
Around the same time, law enforcement learned of a similar burglary, an hour earlier, of an ATM which was part of the USF Federal Credit Union building located on E. Fletcher Avenue, in Temple Terrace. Like the SunTrust Bank ATM, the USF Credit Union ATM was first attacked by hand using crowbars, and then heavy chains attached to a pickup truck in an attempt to try and break open the cash vault inside the machine. Deputies also learned that the pickup recovered near the SunTrust Bank had been stolen from a Residence Inn hotel located around the corner from the USF Credit Union. The defendants were captured on surveillance video by that ATM as well.
During the arrest of Irvin, Mitchell, and Merchant, deputies located and seized several cellphones. A federal search warrant was executed on these phones and data was extracted and analyzed by the FBI. In addition to placing the three defendants in proximity to these burglaries, cellular records also placed them and other coconspirators at the scene of, or in the area of, multiple other similar ATM burglaries within the Middle District of Florida and elsewhere. The investigation determined that Irvin, Mitchell, and Merchant and his coconspirators would travel around the district and elsewhere, identify, and then target ATMs attached to Bank and Credit Union buildings. Coconspirators would steal a pickup truck near the Bank or Credit Union and attach heavy chains, which would be used to pull the protective outer covering off the ATM to expose the cash inside.
This case was investigated by the Federal Bureau of Investigation – Safe Streets Task Force, the Hillsborough County Sheriff’s Office, the Pinellas County Sheriff’s Office, the Tampa Police Department, and the Temple Terrace Police Department. It is being prosecuted by Assistant United States Attorney Craig Gestring.
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.
Texas Woman Sentenced to 25 Years in Prison for Conspiracy to Possess with Intent to Distribute MethamphetamineRead the Press Release
Hattiesburg, Miss. – A Texas woman was sentenced to 300 months in federal prison for conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Darren LaMarca and Special Agent in Charge Brad Byerley of the Drug Enforcement Administration.
According to court documents, in July of 2021, Melissa Muniz-Garcia, 45, of Falfurrias, Texas, conspired with another individual to distribute 5 kilograms of methamphetamine to a confidential source in Hattiesburg, Mississippi. The investigation revealed that Muniz-Garcia had also been involved in smuggling drugs in the Corpus Christi, Texas area. Muniz-Garcia was indicted by a federal grand jury and pled guilty on May 25, 2022.
In addition to the prison sentence, Muniz-Garcia was ordered to pay a $10,000 fine.
The case is the result of an extensive investigation, dubbed “Don’t Tell On Me Bro,” which began as an operation targeting illegal drug trafficking in the Hattiesburg, Mississippi area. “Don’t Tell On Me Bro” 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 Drug Enforcement Administration, Lamar County Sheriff’s Office, the Mississippi Bureau of Narcotics, Hattiesburg Police Department, Forrest County Sheriff’s, and Columbia Police Department. It was prosecuted by Assistant United States Attorney Keesha Middleton.
Texas Man Sentenced to Nearly 6 Years in Prison for Conspiracy to Possess with Intent to Distribute MethamphetamineRead the Press Release
Hattiesburg, Miss. – A Texas man was sentenced to 70 months in federal prison for conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Darren LaMarca and Special Agent in Charge Brad Byerley of the Drug Enforcement Administration.
According to court documents, in July of 2021, Mark Anthony Arellano, 40, of Falfurrias, Texas, conspired with another individual to distribute 5 kilograms of methamphetamine to a confidential source in Hattiesburg, Mississippi. The investigation revealed that Arellano had also been involved in smuggling drugs in the Corpus Christi, Texas area. Arellano was indicted by a federal grand jury and pled guilty on May 18, 2022.
In addition to the prison sentence, Arellano was ordered to pay a $3,000 fine.
The case is the result of an extensive investigation, dubbed “Don’t Tell On Me Bro,” which began as an operation targeting illegal drug trafficking in the Hattiesburg, Mississippi area. “Don’t Tell On Me Bro” 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 Drug Enforcement Administration, Lamar County Sheriff’s Office, the Mississippi Bureau of Narcotics, Hattiesburg Police Department, Forrest County Sheriff’s, and Columbia Police Department. It was prosecuted by Assistant United States Attorney Keesha Middleton.
Texas Man Sentenced to 3 Years in Prison for Conspiracy to Possess with Intent to Distribute MethamphetamineRead the Press Release
Hattiesburg, Miss. – A Texas man was sentenced to 36 months in federal prison for conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Darren LaMarca and Special Agent in Charge Brad Byerley of the Drug Enforcement Administration.
According to court documents, on December 5, 2020, Jesus Humberto Ferdin, 32, of Laredo, Texas, and a co-defendant traveled to Hattiesburg, Mississippi, to enforce payment of $16,000 for the previously delivered 2 kilograms of methamphetamine. The co-defendant arrived wearing a bullet proof vest and carrying a stolen firearm.
In addition to the prison sentence, Ferdin was ordered to pay a $3,000 fine.
The case is the result of an extensive investigation, dubbed “Don’t Tell on Me Bro,” which began as an operation targeting illegal drug trafficking in the Hattiesburg, Mississippi area. “Don’t Tell On Me Bro” 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 Drug Enforcement Administration, Lamar County Sheriff’s Office, the Mississippi Bureau of Narcotics, Hattiesburg Police Department, Forrest County Sheriff’s, and Columbia Police Department. It was prosecuted by Assistant United States Attorney Keesha Middleton.
South L.A. Man Arrested on Indictment Alleging He Recruited Teenage Girl for Commercial Sex Work Advertised on InternetRead the Press Release
LOS ANGELES – A South Los Angeles man was arrested today on a five-count federal indictment alleging he recruited a 15-year-old girl for whom he acted as a “pimp” and advertised on the internet for commercial sex work.
Donavin Dwayne Bradford, 31, was arraigned this afternoon in United States District Court in downtown Los Angeles. He is charged with one count of conspiracy to commit sex trafficking of a minor, one count of sex trafficking of a minor, two counts of sexual exploitation of a child for the purpose of producing a sexually explicit visual depiction, and one count of possession of child pornography.
Bradford pleaded not guilty, was ordered jailed without bond, and an October 25 trial date was scheduled.
According to the indictment that a grand jury returned on August 11, from the summer of 2021 to February 2022, Bradford conspired with Layla Kalani Valdivia, 23, of Ventura, to cause the minor victim to be used for commercial sex acts. Bradford allegedly recruited the victim to work for him as a commercial sex worker. As the victim’s “pimp,” Bradford expected the girl to earn him $1,000 per night and, in exchange, he provided her with clothes and a place to stay, the indictment alleges.
Bradford and Valdivia allegedly advertised the girl for commercial sex work on various websites, and customers who responded to the ads were directed to various hotels and motels where they engaged in commercial sex acts with the victim. Sometimes the minor victim would be required to perform sex acts with Valdivia and a sex client together. Customers allegedly paid Bradford for dates with the victim or she would be required to give Bradford or Valdivia some of her earnings.
The indictment alleges that Bradford assaulted the victim when she tried to stop working for him on two separate occasions. Bradford allegedly also filmed himself engaging in sex acts with the victim.
Valdivia, who also is in federal custody, pleaded not guilty on August 22 to one count of conspiracy and one count of sex trafficking of a minor. An October 18 trial date has been scheduled for her.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Bradford would face a mandatory minimum sentence of 15 years in federal prison, Valdivia would face a mandatory minimum sentence of 10 years in federal prison, and both defendants would face statutory maximum sentences of life imprisonment.
“Operation Cross Country”, an FBI-led nationwide effort which ran from August 4 to August 14, focused on identifying and locating victims of sex trafficking and investigating and arresting individuals and criminal enterprises involved in both child sex trafficking and human trafficking. With the support of local partners, FBI Los Angeles identified and located nine potential human trafficking victims, including five adolescents.
The FBI Los Angeles Field Office and the FBI Los Angeles Child Exploitation and Human Trafficking Task Force coordinated with multiple law enforcement partners and thanks them for their participation and assistance, including: the Los Angeles Police Department; the Inglewood Police Department; the Pomona Police Department; the Los Angeles County Sheriff’s Department; the Ventura County Sheriff’s Office; the Santa Maria Police Department; and the Los Angeles County Department of Children and Family Services.
Assistant United States Attorney Chelsea Norell of the Violent and Organized Crime Section is prosecuting this case.
Learn more about Operation Cross Country XII here.
South Carolina Man Sentenced for Unlawful Distribution of Anabolic Steroids and Unapproved Steroid-like DrugsRead the Press Release
The owner of a South Carolina supplement company was sentenced last week to one day and one year of imprisonment for manufacturing and shipping unapproved drugs and anabolic steroids.
John F. Cochcroft, 37, of Lexington, South Carolina, pleaded guilty on May 25, to one count of introduction of a new drug into interstate commerce with the intent to defraud and mislead and one count of manufacturing and possessing with the intent to distribute and distributing anabolic steroids. As part of the plea agreement, Cochcroft agreed to pay a forfeiture money judgment of $200,000 related to proceeds from his sales of illicit products. U.S. District Judge James P. Jones of the Western District of Virginia imposed the sentence.
In pleading guilty, Cochcroft admitted that he operated businesses that marketed products as “dietary supplements” to the body-building and fitness communities to increase muscle mass. He admitted that some of these products contained osterine, a type of synthetic steroid known as a Selective Androgen Receptor Modulator (SARM). The FDA has warned against the use of SARMs, including stating in a 2017 warning letter to another firm that SARMs have been linked to life-threatening reactions like liver toxicity, and that they have the potential to increase the risk of heart attack and stroke.
“Workout supplements containing anabolic steroids and unapproved steroid-like drugs can be dangerous,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to work closely with the FDA to prosecute those who seek profit at the expense of public safety.”
“Cochcroft and his company placed public health at risk by unlawfully distributing unapproved drugs that have been linked to life-threatening conditions,” U.S. Attorney Christopher R. Kavanaugh said today. “Marketing and distributing unapproved drugs is not only dangerous, but a federal crime.”
“The FDA oversees the production and sale of prescription drugs to ensure that they are safe and effective. Criminals who attempt to sell medicines outside of FDA’s oversight put consumers’ health at risk,” said Special Agent in Charge George A. Scavdis, Special Agent in Charge, FDA Office of Criminal Investigations Metro Washington Field Office. “Our office will continue to pursue and bring to justice those who endanger the public’s health.”
According to court filings, Cochcroft took steps to mislead and defraud the government and consumers in the sale of these products, including using multiple addresses with fictitious business names, working with Chinese suppliers to mislabel drug products as foodstuff items, and knowingly failing to seek approval for the products. During its investigation, the government seized various products containing anabolic steroids from Cochcroft’s business. Anabolic steroids are Schedule III controlled substances under the Controlled Substances Act , Schedule III(e) and have been linked to life-threatening reactions and side effects.
The FDA’s Office of Criminal Investigations investigated the case.
Assistant U.S. Attorney Randy Ramseyer o for the Western District of Virginia and Trial Attorney Speare Hodges of the Department of Justice Civil Division’s Consumer Protection Branch prosecuted the case.
Smithfield Man Convicted of Distributing Fentanyl Analogue That Led to Death – Faces Minimum of 20 Years in PrisonRead the Press Release
ELIZABETH CITY, N.C. – A Smithfield man was convicted by a jury today for distributing a mixture and substance containing cyclopropyl fentanyl where death resulted. Shamel Nesbitt, 32, faces a minimum of 20 years in prison for this crime, and could receive a life sentence. Nesbitt’s sentencing is scheduled for November.
“The drug dealers and criminal networks lacing fentanyl into their supply are on notice. We will bring charges and prosecute you to the fullest extent of the law. When your criminal activity leads to death, you can face up to life in prison,” said U.S. Attorney Michael Easley.
According to court documents and other information presented in court, Nesbitt was investigated in November 2017 by the Johnston County Sheriff’s Office for the distribution of cyclopropyl fentanyl, a fentanyl analogue, where death resulted. The investigation began on November 19, 2017, after Lucas Urbina, 20, was rushed to the hospital by several friends after using a controlled substance and overdosing. A second friend of Urbina’s also suffered an overdose from using the same substance. At that time, hospital staff were able to resuscitate both Urbina and his friend. Urbina’s friend regained consciousness and became stable after a short period of time. He left the hospital and was approached by law enforcement when he was attempting to get into a vehicle. He was searched and law enforcement discovered he had a bag of suspected narcotics along with two syringes.
While Urbina was revived, he never regained consciousness. Urbina died on November 22, 2017.
Sample of Urbina’s blood taken upon admission to the hospital were sent to the toxicology section of the Office of the Chief Medical Examiner to see what substances were present. Test results showed a lethal level of cyclopropyl fentanyl. Urbina also had low levels of morphine and clonazepam in his blood. Urbina’s death was ruled an accidental overdose.
The bag of suspected narcotics that was found on Urbina’s friend immediately following the overdose was tested at the DEA Lab. It was found to contain a mixture of heroin, cyclopropyl fentanyl, benzoyl fentanyl and caffeine.
Law enforcement immediately began investigating to determine who distributed the narcotics to Urbina and his friends. Text messages and dialed phone numbers showed Urbina was reaching out to someone listed as “Mista” in his phone. Officers were able to quickly link the number to Shamel Nesbitt who had given it to law enforcement as his number when he was cited for a traffic violation a few months earlier. Law enforcement officers were able to access Urbina’s Facebook account and saw he was communicating with another Facebook user with a name of “Chris Nesbitt.” In the Facebook messages between Urbina and Nesbitt, it was clear Urbina was attempting to buy drugs from Nesbitt. Officers got a search warrant for Nesbitt’s Facebook page. They noticed pictures posted by “Chris Nesbitt” were of Shamel Nesbitt. Multiple messages on Nesbitt’s Facebook page reference him by the nickname “Mista.” Law enforcement received a search warrant for Nesbitt’s home and found heroin packaging material, nitrile gloves and marijuana.
Nesbitt made statements to law enforcement that he saw Urbina that day but didn’t sell him any narcotics.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after the trial was concluded. U.S. District Judge Terrence W. Boyle presided over the trial. The Smithfield Police Department and the Johnston County Sheriff’s Office investigated the case and Assistant U.S. Attorney Charity Wilson and Brandon Boykin prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-cr-00226-BO.
Ship Chief Engineer Sentenced to Prison for Discharging Oily Waste in U.S. Waters and Obstructing the Coast Guard's InvestigationRead the Press Release
WASHINGTON – Kirill Kompaniets, the Chief Engineer of a foreign flagged vessel, was sentenced to prison for deliberately discharging approximately 10,000 gallons of oil-contaminated bilge water overboard in U.S. waters off the coast of New Orleans last year, and obstructing justice. The illegal conduct was first reported to the Coast Guard by a crew member via social media. The Honorable Nannette Jolivette Brown sentenced Kompaniets to serve a year and a day in prison, pay a $5,000 fine and $200 special assessment and serve six months of supervised release.
Repair operations to correct a problem with the discharge of clean ballast water resulted in engine room flooding. After the leak was controlled, Chief Engineer Kompanietes and a subordinate engineer dumped the oily bilge water overboard while the ship was at an anchorage near the Southwest Passage off the Louisiana coast. The ship’s required pollution prevention devices – an oily-water separator and oil content monitor – were not used, and the discharge was not recorded in the Oil Record Book, a required ship log.
Kompaniets was also charged with obstruction of justice based on various efforts to conceal the illegal discharge. In a joint factual statement filed in Court with his guilty plea, Kompaniets admitted to the following acts of obstruction of justice: (1) making false statements to the Coast Guard that concealed the cause and nature of a hazardous condition, and concealing that the engine room of the vessel had flooded and that oil-contaminated bilge water had been discharged overboard; (2) destroying the computer alarm printouts for the period of the illegal discharge that were sought by the Coast Guard; (3) holding meetings with subordinate crew members and directing them to make false statements to the Coast Guard; (4) making a false Oil Record Book that failed to disclose the illegal discharge; (5) directing subordinate engine room employees to delete all evidence from their cell phones in anticipation of the Coast Guard inspection; and (6) preparing a retaliatory document accusing the whistleblower of poor performance as part of an effort to discredit him.
“The intentional pollution of U.S. waters and the deliberate cover-up are serious criminal offenses that will not be tolerated,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Prosecutions such as this one should send a clear message to those that would violate the law and endanger our precious natural resources.”
“The defendant in this case deliberately disregarded procedures designed to protect the environment from contaminants and then attempted to hide his actions,” said U.S. Attorney Duane A. Evans for the Eastern District of Louisiana. “Today’s announcement emphasizes that both our office and our federal partners are committed to holding accountable all parties whose criminality jeopardizes our environment and places the public and the ecosystem at risk.”
The criminal prosecution is being handled by Assistant U.S. Attorney G. Dall Kammer for the Eastern District of Louisiana and Senior Litigation Counsel Richard A. Udell of the Environment and Natural Resources Division’s Environmental Crimes Section, with assistance provided by District 8 of the U.S. Coast Guard and the Coast Guard Criminal Investigative Service. The investigation is continuing.
Ship Chief Engineer Sentenced to Prison for Discharging Oily Waste in U.S. Waters and Obstructing the Coast Guard’s InvestigationRead the Press Release
Kirill Kompaniets, the Chief Engineer of a foreign flagged vessel, was sentenced to prison for deliberately discharging approximately 10,000 gallons of oil-contaminated bilge water overboard in U.S. waters off the coast of New Orleans last year, and for obstructing justice. The illegal conduct was first reported to the Coast Guard by a crew member via social media. The Honorable Nannette Jolivette Brown sentenced Kompaniets to serve a year and a day in prison, pay a $5,000 fine and $200 special assessment and serve six months of supervised release.
Repair operations to correct a problem with the discharge of clean ballast water resulted in engine room flooding. After the leak was controlled, Chief Engineer Kompanietes and a subordinate engineer dumped the oily bilge water overboard while the ship was at an anchorage near the Southwest Passage off the Louisiana coast. The ship’s required pollution prevention devices – an oily-water separator and oil content monitor – were not used, and the discharge was not recorded in the Oil Record Book, a required ship log.
Kompaniets was also charged with obstruction of justice based on various efforts to conceal the illegal discharge. In a joint factual statement filed in Court with his guilty plea, Kompaniets admitted to the following acts of obstruction of justice: (1) making false statements to the Coast Guard that concealed the cause and nature of a hazardous condition, and concealing that the engine room of the vessel had flooded and that oil-contaminated bilge water had been discharged overboard; (2) destroying the computer alarm printouts for the period of the illegal discharge that were sought by the Coast Guard; (3) holding meetings with subordinate crew members and directing them to make false statements to the Coast Guard; (4) making a false Oil Record Book that failed to disclose the illegal discharge; (5) directing subordinate engine room employees to delete all evidence from their cell phones in anticipation of the Coast Guard inspection; and (6) preparing a retaliatory document accusing the whistleblower of poor performance as part of an effort to discredit him.
“The intentional pollution of U.S. waters and the deliberate cover-up are serious criminal offenses that will not be tolerated,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Prosecutions such as this one should send a clear message to those that would violate the law and endanger our precious natural resources.”
“The defendant in this case deliberately disregarded procedures designed to protect the environment from contaminants and then attempted to hide his actions,” said U.S. Attorney Duane A. Evans for the Eastern District of Louisiana. “Today’s announcement emphasizes that both our office and our federal partners are committed to holding accountable all parties whose criminality jeopardizes our environment and places the public and the ecosystem at risk.”
The criminal prosecution is being handled by Assistant U.S. Attorney G. Dall Kammer for the Eastern District of Louisiana and Senior Litigation Counsel Richard A. Udell of the Environment and Natural Resources Division’s Environmental Crimes Section, with assistance provided by District 8 of the U.S. Coast Guard and the Coast Guard Criminal Investigative Service. The investigation is continuing.
San Diego Corporate and Securities Attorney Indicted for Securities Fraud, Assisting Planned Pump-and-Dump SchemeRead the Press Release
Assistant U. S. Attorney Aaron P. Arnzen (619) 546-8384
NEWS RELEASE SUMMARY – August 31, 2022
SAN DIEGO – San Diego-based corporate and securities attorney Andrew Coldicutt is charged in a federal grand jury indictment with securities fraud in connection with a pump-and-dump scheme.
Coldicutt made his first appearance in federal court on Friday, August 26, 2022.
According to the allegations in the indictment, Coldicutt worked with other individuals from 2017 through 2019 to prepare and execute a pump-and-dump stock fraud scheme. Coldicutt thought the individuals with whom he was working were associated with a shady hedge fund. In reality, he was working with undercover FBI agents and sources gathering evidence against Coldicutt, the indictment said.
To carry out his role in the scheme, Coldicutt created a sham company and a business model – which supposedly focused on backyard fruit harvesting - and prepared and filed registration statements with the SEC for an initial public offering of the company’s stock. According to the indictment, the registration statements contained false and misleading information about the company, its business plans, and the people who owned and controlled the company.
“Corporate lawyers and other gatekeepers in the securities industry occupy a position of trust and confidence,” said U.S. Attorney Randy Grossman. “This investigation and indictment signal the United States’ commitment to protecting the integrity of the stock market, and the innocent investors who are victimized by penny stock fraud schemes.” Grossman thanked the prosecution team for their excellent work on this case.
“Attorney Coldicutt occupied a position of trust. He allegedly betrayed that trust when he chose to ignore the laws and ethical rules of conduct he swore to uphold by attempting to commit stock fraud,” said Stacey Moy, Special Agent in Charge of the FBI's San Diego Division. “These types of pump-and-dump schemes hurt not only local investors, but investors across the United States. The FBI will continue to protect the integrity of the stock market and investors impacted by fraud schemes such as this.”
The United States acknowledges the assistance and cooperation of the Securities and Exchange Commission.
DEFENDANT Case Number 22cr1881-JO
Andrew Coldicutt (42 years old) San Diego, California
SUMMARY OF CHARGES
Title 15, U.S.C., Sec. 77q, 77x – Securities Fraud; Title 15, U.S.C., Sec. 77g, 77x – False Securities Registration Statements; Title 18, U.S.C., Sec. 1343 – Wire Fraud; Title 18, U.S.C., Sec. 981(a)(1)(C) and Title 28, U.S.C., Sec. 2461(c) – Criminal Forfeiture
Maximum penalty: Twenty years in prison and a fine of not more than the greater of twice the amount of gain or loss associated with the offense or $250,000
AGENCIES
Federal Bureau of Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Rochester Felon Indicted for Federal Firearm ViolationRead the Press Release
MINNEAPOLIS – A federal grand jury returned an indictment against a Rochester man for possession of a firearm as a felon, announced U.S. Attorney Andrew M. Luger.
According to court documents on May 25, 2022, Marcus Anthony Jackson, also known as Homicide, 49, was found in possession of a Taurus G2C 9MM pistol. Because Jackson has multiple prior felony convictions in Olmsted, Hennepin, and Ramsey Counties, he is prohibited under federal law from possessing firearms or ammunition at any time.
Jackson is charged with one count of possessing a firearm as a felon. He made his initial appearance in U.S. District Court today, before Magistrate Judge Tony N. Leung.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rochester Police Department.
Assistant U.S. Attorney Matthew S. Ebert is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Robber of St. Peters liquor store sentenced to 12 years in prisonRead the Press Release
ST. LOUIS – U.S. District Judge Rodney W. Sippel on Wednesday sentenced a man who robbed a liquor store in St. Peters, Missouri to 12 years in prison.
Bobby Andre, of Northwoods, robbed the Cool Spot Liquor store in St. Peters of about $143 on July 31, 2018 at gunpoint, using a blue cloth rag to hide his face. Andre dropped the rag before leaving the store.
DNA from the rag matched Andre’s DNA profile, which was in both Missouri and federal databases due to Andre’s prior criminal convictions.
Andre, now 44, of Northwoods, pleaded guilty in January to a robbery charge and a charge of brandishing a firearm during a crime of violence.
The case was investigated by the FBI and the St. Peters Police Department.
Red Lake Man Sentenced to 239 Months in Prison for RapeRead the Press Release
ST. PAUL, Minn. – A Red Lake man was sentenced to 239 months in prison followed by 10 years of supervised release for aggravated sexual assault, announced United States Attorney Andrew M. Luger.
According to court documents, on November 7, 2020, Paul John Sayers, 30, stopped his truck beside Victim A who was walking on the road. Sayers offered Victim A a ride but instead of taking Victim A to her destination, Sayers drove her to a camper located on a property near a Hemp shop where Sayers worked. When Victim A resisted Sayers’s sexual advances, he hit and strangled Victim A until she passed out. Sayers then raped Victim A. Victim A left the camper after the rape and began walking 20 miles back into town. As part of his guilty plea, Sayers also admitted to unlawful sexual contact with another person.
Sayers pleaded guilty on April 20, 2022, to one count of aggravated sexual assault. He was sentenced yesterday in U.S. District Court by Judge Eric C. Tostrud.
This case was the result of an investigation conducted by the FBI, the Red Lake Tribal Police Department, and the Bureau of Criminal Apprehension.
Assistant U.S. Attorney Emily Polachek prosecuted the case.
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Rankin County Woman Found Guilty of Conspiring to Falsify Business and Income RecordsRead the Press Release
Jackson, Miss. – A Pearl woman was found guilty by a federal jury on Wednesday, August 24, 2022, of conspiring to falsify business and income records with the intent to obstruct a federal investigation, announced U.S. Attorney Darren LaMarca and Special Agent in Charge Brad Byerley of the Drug Enforcement Administration.
According to court documents, in December of 2017, Esther Bennett, 49, and co-defendant, Kristy Dier, were intercepted on communications discussing ways to legitimize drug proceeds seized by law enforcement from Kristy Dier. Bennett constructed a false ledger, claiming the seized money was from hair care services that were never provided. After Bennett prepared the ledger, she provided it to Dier, who in turn filed the ledger, along with a Petition to Contest Forfeiture, with the Hinds County Clerk’s office in an attempt to recover the funds.
Bennett will be sentenced on November 29, 2022. She faces a maximum penalty of five years in prison. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case is the result of an extensive investigation, dubbed “Drama Queen,” which began as an operation targeting illegal drug trafficking in the central Mississippi area. “Drama Queen” 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 Drug Enforcement Administration, Hinds County Sheriff’s Department, and the Richland Police Department. It was prosecuted by Assistant United States Attorneys Keesha Middleton and Glenda Haynes.