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17 May 2022
Winner Man Sentenced for Failure to Register as Sex OffenderRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Winner, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on May 16, 2022, by Chief Judge Roberto A. Lange, U.S. District Court.
Arvin Brave Bird, age 53, was sentenced to 16 months in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Brave Bird was indicted by a federal grand jury on January 11, 2022. He pled guilty on February 24, 2022.
Brave Bird was convicted of Abusive Sexual Contact in April 2017. As a result of this conviction, he is required to register as a sex offender. On November 4, 2021, Brave Bird updated his registration to reflect that he was residing in Rapid City, South Dakota. In November 2021, Brave Bird was directed by his supervising probation officer to relocate to Yankton, South Dakota, for purposes of attending a treatment program. Brave Bird thereafter moved out of his Rapid City residence, but he did not report to treatment in Yankton and did not update his registration. An arrest warrant was subsequently issued and on December 16, 2021, Brave Bird was arrested at a residence in Winner.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Brave Bird was immediately turned over to the custody of the U.S. Marshals Service.
White River Man Sentenced for ArsonRead the Press Release
United States Attorney Alison J. Ramsdell announced that a White River, South Dakota, man convicted of Arson was sentenced on May 16, 2022, by Chief Judge Roberto A. Lange, U.S. District Court.
Gabriel Roubideaux, age 34, was sentenced to 26 months in federal prison, followed by three years of supervised release, $22,675 in restitution, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Roubideaux was indicted by a federal grand jury on June 8, 2021. He pled guilty on February 1, 2022.
The conviction stemmed from an incident that occurred in March 2021, in Mellette County, South Dakota. In the early morning hours of March 16, 2021, Roubideaux intentionally set fire to a shed that was next to an occupied residence in the Upper Swift Bear community. The shed subsequently collapsed against the residence, setting it on fire. Both the shed and the residence were destroyed in the fire.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Roubideaux was immediately turned over to the custody of the U.S. Marshals Service.
Waterloo Man Who Stole Semi-Automatic Rifle from Friend Sentenced to over Six Years in Federal PrisonRead the Press Release
A man who stole a friend’s firearm and sold it to a felon was sentenced May 16, 2022, to more than six years in federal prison.
Cole McNamara, age 28, from Waterloo, Iowa, received the prison term after a November 2, 2021 guilty plea to being a prohibited person in possession of a firearm.
In a plea agreement, McNamara admitted he was receiving treatment at a substance abuse facility in October 2020. He left the treatment facility and entered a friend’s home in Independence, Iowa, where he stole a semi-automatic rifle, among other items. McNamara was later apprehended at the Isle of Capri casino in possession of methamphetamine, his friend’s wallet, and titles to his friend’s vehicles. McNamara is prohibited from possessing firearms because he is a convicted felon, drug user, and was previously convicted of a misdemeanor crime of domestic violence. At sentencing, McNamara declared, “I am 100% guilty of this crime.” In reference to his previous convictions, the sentencing judge noted McNamara was a “one man crime wave.”
McNamara was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. McNamara was sentenced to 78 months’ imprisonment and fined $100. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
McNamara is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Liz Dupuich and investigated by the Independence Police Department in Independence, Iowa.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-cr-2069.
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Waterloo Drug Dealer Sentenced to Federal Prison for Possessing a FirearmRead the Press Release
A Waterloo man who illegally possessed a firearm as a drug user was sentenced May 16, 2022, to more than a year in federal prison.
Kierin Craig Johnson, age 24, from Waterloo, Iowa, received the prison term after an October 15, 2021 guilty plea to possession of a firearm by a drug user.
Information disclosed at sentencing showed that, in September and October 2019, Johnson posted several videos to social media showing him smoking marijuana and possessing a gun. Johnson also posted videos advertising the sale of marijuana. On October 18, 2019, law enforcement searched Johnson’s home, which he shared with his brother, and recovered evidence of marijuana distribution throughout the residence. While officers were searching, Johnson arrived home and officers seized a loaded handgun from a vehicle associated with Johnson. After his arrest, Johnson admitted to smoking marijuana for several years, and his urine specimen tested positive for marijuana and other substances.
Johnson was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Johnson was sentenced to 12 months’ and 1 day imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Johnson was released on the bond previously set and is to surrender to the United States Marshal on May 31, 2022.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The case was prosecuted by Assistant United States Attorney Dillan Edwards and investigated by the Waterloo Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-02045.
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Warren Man Sentenced to Sixteen Years in Prison for Enticement of a Minor to Engage in Sex, Possessing and Distributing Child PornographyRead the Press Release
PROVIDENCE, RI – A Warren man who admitted to enticing a minor female online to meet him at a local mall where he planned to dress her in a diaper and engage in illicit sexual activity, and who further admitted to possessing and distributing child pornography, was sentenced today to sixteen years in federal prison, announced United States Attorney Zachary A. Cunha.
Christopher Kinney, 47, previously admitted in court that in April 2018, he had a series of online communications with a person whom he believed to be a 14-year-old girl. The communications rapidly became sexually explicit, with Kinney expressing an interest in meeting the teenager at the Warwick Mall and then engaging in sexual activity in the mall or elsewhere. The person Kinney was communicating with was in fact a Rhode Island State Police Detective assigned to the Internet Crimes Against Children (ICAC) Task Force.
Kinney was subsequently arrested on April 26, 2018, when he travelled to the mall, believing he was going to meet the girl at the food court. A search of Kinney’s car resulted in the discovery of, diapers, condoms and various items that he had discussed using for sexual purposes during his prior chats. A cellphone seized from Kinney at the time of his arrest was found to contain 56 images of child pornography, as well as evidence that, on numerous occasions, he had electronically received and shared files of child pornography and images of children being harshly punished and/or beaten.
Kinney pled guilty in May 2018 to coercion and enticement of a minor, possession of child pornography, and distribution of child pornography. He was sentenced today by U.S. District Court Judge William E. Smith to 192 months in federal prison to be followed by lifetime supervised release. He was also ordered to pay $3,000 in restitution to a victim identified in the images found on his phone.
The case was prosecuted by Assistant U.S. Attorney Ronald R. Gendron.
The matter was investigated by the Rhode Island Internet Crimes Against Children Task Force, with the assistance of Homeland Security Investigations.
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Visa holder indicted trafficking cocaine through WTBRead the Press Release
LAREDO, Texas – A 31-year-old Mexican National who resided in Nuevo Laredo, Tamaulipas, has been charged with conspiracy to possess with intent to distribute more than five kilograms of cocaine, announced U.S. Attorney Jennifer B. Lowery.
Today, a federal grand jury returned the two-count indictment against Sergio Bustos-Cruz. He is expected to appear for his arraignment in the near future before U.S. Magistrate Judge Diana Song Quiroga.
Originally charged by criminal complaint, Bustos-Cruz allegedly attempted to drive through the World Trade Bridge in Laredo on April 21. Upon arrival, authorities referred him to secondary inspection where an X-ray can of his vehicle revealed anomalies within the roof of the tractor cab, according to the charges.
Upon further inspection, law enforcement allegedly discovered several bundles containing 11.62 kilograms of cocaine.
The charges further allege he in violation of the terms of his non-immigrant Visa and could face removal proceedings following his .
If convicted, Bustos-Cruz faces up to life in prison and a possible $10 million maximum fine.
Homeland Security Investigations conducted the investigation with the assistance of the Drug Enforcement Administration. Assistant U.S. Attorney Matthew Isaac is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
University of Maryland Shore Regional Health Agrees to Pay $296,870 to Settle Federal False Claims Act Allegations of Billing for Unsupervised Radiation Therapy and Diagnostic ServicesRead the Press Release
Baltimore, Maryland – The University of Maryland Shore Regional Health in Easton, Maryland (“Shore Health”), has agreed to pay the United States $296,870 to resolve allegations that it violated the federal False Claims Act by submitting false claims to the United States for radiation therapy and diagnostic services that lacked the required supervision from a physician.
The civil settlement was announced by United States Attorney for the District of Maryland Erek L. Barron and by Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services-Office of Inspector General.
“It is imperative that Medicare and other federal health care programs are protected from fraud because those programs are funded through taxpayer dollars,” said United States Attorney Erek L. Barron. “The United States Attorney’s Office will hold accountable those providers who defraud federal health care programs.”
“Providers who submit false claims to Medicare are undermining the integrity of federal health care programs,” said Special Agent in Charge Maureen Dixon, at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG is proud to work alongside our law enforcement partners to protect valuable taxpayer dollars from fraud.”
Shore Health is a part of the University of Maryland Medical System and primarily serves the needs of Maryland residents in Caroline, Dorchester, Queen Anne’s, Talbot, and Kent counties. According to the settlement agreement, from January 16, 2014 through July 5, 2018, Shore Health billed Medicare for radiation therapy and diagnostic services. During this time period, Medicare covered radiation therapy and diagnostic services furnished in an outpatient setting when rendered under the direct supervision of a physician. “Direct supervision” means that the physician must be immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed. At all relevant times, Shore Health had only one physician, John Mastandrea, M.D., available to supervise radiation therapy and diagnostic services. This settlement resolves allegations that on many occasions, Dr. Mastandrea was performing uninterruptible radiation oncology services at a separate location while unsupervised radiation therapy and diagnostic services were being performed at Shore Health.
This matter arose from a lawsuit filed by J. Phillip Sawyer, a former employee of Shore Health, under the whistleblower provision of the False Claims Act. The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government's recovery. The civil lawsuit is captioned United States ex rel. John Phillip Sawyer v. Shore Health System and John Mastandrea, 18-cv-02228-JKB (D. Md). As part of the settlement, Mr. Sawyer will receive $51,952.
The claims resolved by this settlement are allegations. The settlement is not an admission of liability by Shore Health nor a concession by the United States that its claims are not well founded.
United States Attorney Erek L. Barron commended the HHS-OIG for their work in this investigation. Mr. Barron thanked Assistant U.S. Attorney Vince Vaccarella, who handled this case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to report fraud, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/report-fraud.
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Two charged for smuggling over 100 people through Laredo checkpointsRead the Press Release
LAREDO, Texas – A Laredo federal grand jury has returned two separate and unrelated indictments which involve transporting and/or smuggling of large groups of undocumented aliens via tractor trailers, announced U.S. Attorney Jennifer B. Lowery.
David William McKeon, 67, Laredo, and Ramiro Leija-Urbina, 31, Nuevo Laredo, Mexico, are charged in a three and two-count indictment, respectively. They are both expected to appear for their arraignments before a U.S. Magistrate Judge in the near future.
Both were originally charged by criminal complaint and have remained in custody.
The first indictment alleges that on April 20, McKeon drove a tractor trailer to the Border Patrol (BP) checkpoint on Interstate Highway 35. During initial inspection, law enforcement heard noises coming from inside of the trailer, according to the charges. They opened the doors and allegedly discovered 124 non-U.S. citizens including two unaccompanied minors. The indictment alleges all were determined to be illegally present in the country.
McKeon had an expired commercial driver’s license and was to be paid for driving the vehicle to San Antonio, according to the charges.
A separate, but similar indictment against Leija-Urbina alleges he attempted to drive a tractor trailer though the Interstate Highway 35 BP checkpoint in Laredo. There, a K-9 allegedly alerted authorities to the presence of concealed humans, according to the charges.
Upon further inspection, law enforcement allegedly discovered 160 non-U.S. citizens in the trailer. All were determined to be illegally present in the United States, according to the charges.
Leija-Urbina is a also non-immigrant visa holder and could face removal proceedings if convicted.
McKeon is charged with human smuggling and faces up to 30 years in prison, while Leija-Urbina faces up to 10 years, upon conviction for illegally transporting undocumented aliens.
Both could also be ordered to pay up to $250,000 in fines.
Homeland Security Investigations conducted both investigations with assistance from BP. Assistant U.S. Attorney Brian Bajew and Matthew Isaac are prosecuting the McKeon and Leija-Urbina cases, respectively.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Two Philadelphia Men Facing Federal Charges After Botched Robbery of Northeast Philly Corner Store Results in Exchange of GunfireRead the Press Release
PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that Resean Lewis, 25, and William McIntyre, 27, both of Philadelphia, PA, were arrested and charged by Indictment with attempted Hobbs Act robbery, and carrying and discharging a firearm during and in relation to a crime of violence in connection with a shooting that occurred earlier this year when they attempted to rob a convenience store in Northeast Philadelphia. Both defendants made their initial appearances in federal court on these charges today and were detained pending trial.
The Indictment alleges that on February 1, 2022, the defendants entered the Big A Market corner store on Torresdale Avenue in the Wissinoming section of the city just before 4:00 a.m., and attempted to rob the business. Lewis went behind the counter armed with what appeared to be a Tec9 style firearm and announced a robbery. McIntyre followed just behind Lewis, armed with a pistol that he pulled from his waistband. The store manager happened to have his dog with him in the store at the time. When the dog realized that Lewis had come back to the employee area, it jumped up and distracted Lewis, giving the store clerk a chance to draw a weapon that the store keeps for protection. The clerk then shot Lewis multiple times. McIntyre, who was standing right behind Lewis, immediately returned fire and struck the store clerk multiple times.
“When I announced the All Hands On Deck initiative over one year ago, I vowed that we would do all we could to stop the violent crime ravaging our city and support the Philadelphia Police Department in its work,” said U.S. Attorney Williams. “I also put criminals on notice that we were doubling down on our efforts to identify, arrest and charge them in the federal system for their crimes. The indictments of these defendants show that we have kept our word to focus on getting the most violent individuals off the street and behind bars.”
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 make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
If convicted, the defendants face a maximum possible sentence of life in prison, and a mandatory minimum of 10 years in prison.
The case was investigated by the Philadelphia Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and is being prosecuted by Assistant United States Attorney Robert E. Eckert.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Tucson Man Sentenced to 180 Months in PrisonRead the Press Release
FORT WAYNE- Eduardo A. Arguelles, Jr., age 20, of Tucson, Arizona, was sentenced by United States District Court Judge Holly A. Brady, on his plea of guilty to possession with intent to distribute cocaine, fentanyl, and heroin, maintaining a drug-involved premises and possession of a firearm in furtherance of a drug trafficking crime, announced United States Attorney Clifford D. Johnson.
Arguelles was sentenced to 180 months in prison followed by 5 years of supervised release.
According to documents in this case, in September 2021, a series of search warrants were executed on a Fort Wayne address at which Arguelles was staying and a storage locker he was renting. During service of the search warrant in the home, authorities found approximately one pound of fentanyl pills and 100 grams of heroin, along with guns, cash, and an apparent drug ledger. In Arguelles’s storage unit, law enforcement recovered approximately six kilograms of cocaine.
The case was investigated by the Drug Enforcement Administration with the assistance of Allen County Sheriff’s Department. This case was prosecuted by Assistant United States Attorney Sarah E. Nokes.
Todd County Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Todd County, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on May 16, 2022, by Chief Judge Roberto A. Lange, U.S. District Court.
Eugene Hollow Horn Bear, age 62, was sentenced to 24 months in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Hollow Horn Bear was indicted by a federal grand jury on July 14, 2021. He pled guilty on February 28, 2022.
Hollow Horn Bear was convicted of Assault with Intent to Commit Rape in April 1982 and Sexual Abuse of a Minor in August 1989. As a result of these convictions, he is required to register as a sex offender and to update his registration within three business days of relocation or changing employment. Between November 2, 2020, and April 23, 2021, Hollow Horn Bear failed to properly register as a sex offender and update his registration.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Abby Roesler prosecuted the case.
Hollow Horn Bear was immediately turned over to the custody of the U.S. Marshals Service.
Three Portfolio Managers and Allianz Global Investors U.S. Charged in Connection with Multibillion-Dollar Fraud SchemeRead the Press Release
Allianz Global Investors U.S. LLC Also Charged with Securities Fraud, Agrees to Plead Guilty
An indictment was unsealed today in the Southern District of New York charging Gregoire Tournant, the Chief Investment Officer and co-lead Portfolio Manager for a series of private investment funds managed by Allianz Global Investors U.S. LLC (AGI), with securities fraud, investment adviser fraud and obstruction of justice offenses in connection with a scheme to defraud investors. Those funds ultimately collapsed, leading to billions of dollars of investor losses. Tournant surrendered to Postal Inspectors in Denver, Colorado, this morning and is expected to be presented later today. The case has been assigned to U.S District Court Judge Laura Taylor Swain.
Also unsealed today are the guilty pleas of Trevor Taylor and Stephen Bond-Nelson in connection with their respective roles in the scheme. Taylor pleaded guilty pursuant to an information before U.S. District Judge Denise Cote on March 8. Bond-Nelson pled guilty pursuant to an information before U.S. District Judge Paul A. Engelmayer on March 3. Both are cooperating with the government.
“I previously warned that the Department of Justice would crack down on corporate crime, without regard to size, salary or other privilege,” said Deputy Attorney General Lisa O. Monaco. “For the second time in under a month, the Department has brought charges in connection with a sophisticated Wall Street scheme that cost victims billions of dollars. Other corporations should take note that the results here are driven in part by the fact that this company failed to self-report their crimes. The Department stands ready to keep bringing these kinds of charges to assure the public that no one is above the law.”
U.S. Attorney Damian Williams for the Southern District of New York and Inspector-in-Charge Daniel B. Brubaker of the New York Office of the U.S. Postal Inspection Service also announced today a plea agreement (the agreement) pursuant to which AGI will plead guilty to securities fraud in connection with this fraudulent scheme, and pay more than $3 billion in restitution to the victims of this fraud, pay a criminal fine of approximately $2.3 billion, and forfeit approximately $463 million to the government. The case has been assigned to U.S. District Judge Colleen McMahon. A conference has been scheduled for today at 3:00 p.m. before U.S. District Court Judge Loretta A. Preska, at which time AGI is expected to plead guilty to an information pursuant to the agreement.
“As alleged, Gregoire Tournant and his co-conspirators lied to investors and secretly exposed them to substantial risk in order to line their own pockets and those of their employer, AGI,” said U.S. Attorney Williams. “Pensions funds for so many retirees, religious organizations and essential workers – from laborers in Alaska, to teachers in Arkansas, to bus drivers and subway conductors here in New York City – invested with AGI because they were promised a relatively safe investment with strict risk controls. But AGI, the ‘master cop’ that Tournant claimed was watching over his shoulder, making sure that he adhered to his promises, was asleep on the beat. And when the storm came in March 2020, when the COVID-19 crash hit, these investors got soaked and lost billions. Today’s actions are further evidence that this office is not asleep on the beat and that with our law enforcement partners we will act swiftly to protect investors and bring white collar criminals to justice.”
“These individuals working under the name of Allianz Global Investors, an international management firm, allegedly took advantage of its global recognition when they devised a scheme to mislead investors leading to the loss of billions of dollars,” said Inspector-in-Charge Daniel B. Brubaker of the New York Office of the U.S. Postal Inspection Service. “Postal Inspectors will never let these schemes go unchecked and will vigorously investigate and pursue those who choose criminal behavior over honest business practices.”
According to the allegations in the indictment and the agreement unsealed today in Manhattan federal court:
Between 2014 and 2020, Gregoire Tournant, the defendant, was the Chief Investment Officer of a set of private funds at AGI known as the Structured Alpha Funds. These funds were marketed largely to institutional investors, including pension funds for workers all across America. As alleged, Tournant and his co-conspirators misled these investors into believing that the funds were protected from a sudden stock market crash with particular hedges. But in late 2015, as the cost of those promised hedges increased, Tournant decided to lie and secretly buy cheaper hedges that provided much less protection to investors. As alleged, Tournant and his co-conspirators also provided investors with altered documents that were sent to investors to hide the true riskiness of the funds’ investments, including that they were buying cheaper hedges.
In March 2020, following the onset of market dislocations brought on by the COVID-19 pandemic, the funds lost in excess of $7 billion in market value, including over $3.2 billion in principal, faced margin calls and redemption requests, and ultimately were shut down. More than 100 institutional investors, representing more than 100,000 individuals, were victims of this scheme. These institutional investors included, among others, pension funds for teachers in Arkansas, laborers in Alaska, bus drivers and subway conductors in New York City, as well as religious organizations, engineers, and other individuals, universities and charitable organizations across the United States.
The scheme alleged was an egregious, long-running and extensive fraud that went undetected for years. It occurred at a very profitable component of AGI – one that accounted for 25% of AGI’s revenue in recent years, which amounted to hundreds of millions of dollars. As alleged, one of the ways Tournant carried out the fraud was by marketing the fact that he worked for a well-respected financial institution, AGI, which is a part of the Allianz SE (Allianz) family. Allianz is one of the world’s largest financial services companies and one of the world’s largest insurance companies. Tournant touted the protections provided by the funds’ position within the global Allianz corporate structure, calling Allianz a “master cop” that would ensure that Tournant followed the risk guidelines promised to investors.
Despite Tournant’s claim that Allianz acted as a “master cop” looking over his shoulder, no one at AGI or Allianz was verifying that Tournant and his colleagues were actually adhering to the investment strategies promised to investors. No risk or compliance personnel at AGI verified, attempted to verify or were responsible for verifying that Tournant and his colleagues were purchasing hedging positions within the range that was represented to investors. Much of this historic fraud was made possible because AGI’s control environment was not designed to verify that Tournant and his co-conspirators were telling investors the truth. Because AGI, a registered investment adviser, failed to provide meaningful oversight, Tournant and his co-conspirators were able to deceive investors about the risks they were taking with their money.
In addition, as alleged, in the summer of 2020, after the onset of the pandemic and in order to cover up the fraudulent scheme, Tournant attempted to obstruct an investigation by the U.S. Securities and Exchange Commission (SEC) into the circumstances that led to the losses in March 2020.
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.
A chart containing the names, ages, residences, charges and maximum penalties for the defendants is attached.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
The U.S. Postal Inspection Service and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York investigated this case. The U.S. Securities and Exchange Commission filed a parallel civil action today.
This case is being handled by SDNY’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Margaret Graham, Gina Castellano, Nicholas Folly and Richard Cooper are in charge of the prosecution.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant
Age
Residence
Charges
Maximum Potential Sentence(s)
United States v. Gregoire Tournant, 22 Cr. 276 (LTS)
TOURNANT
55
Basalt, Colorado
Conspiracy to commit securities fraud, investment adviser fraud, and wire, 18 U.S.C. § 371 (Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)
Investment adviser fraud, 15 U.S.C. §§ 80b-6(4) & 80b-17, 17 C.F.R. § 275.206(4)-8 (Count Four)
Conspiracy to obstruct justice, 18 U.S.C. § 371 (Count Five)
5 years
20 years
5 years (on each count)
5 years
5 years
United States v. Trevor Taylor, 22 Cr. 149 (DLC)
TAYLOR
49
Miami, Florida
Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)
5 years
20 years
5 years
United States v. Stephen Bond-Nelson, 22 Cr. 137 (PAE)
BOND-NELSON
51
Berkeley Heights, New Jersey
Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)
Conspiracy to obstruct justice, 18 U.S.C. § 371 (Count Four)
5 years
20 years
5 years
5 years
United States v. Allianz Global Investors U.S. LLC
AGI US
Securities Fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
5 years’ probation
Three Portfolio Managers and Allianz Global Investors U.S. Charged in Connection with Multi-Billion Dollar Fraud SchemeRead the Press Release
Allianz Global Investors U.S. LLC Also Charged With Securities Fraud, Agrees to Plead Guilty
Damian Williams, the United States Attorney for the Southern District of New York, Lisa O. Monaco, the Deputy Attorney General of the United States, and Daniel B. Brubaker, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an indictment charging GREGOIRE TOURNANT, the Chief Investment Officer and co-lead Portfolio Manager for a series of private investment funds managed by Allianz Global Investors U.S. LLC (“AGI”), with conspiracy, securities fraud, investment adviser fraud, and obstruction of justice offenses in connection with a scheme to defraud investors. Those funds ultimately collapsed, leading to billions of dollars of investor losses. TOURNANT surrendered to Postal Inspectors in Denver, Colorado this morning and is expected to be presented later today. The case has been assigned to U.S District Judge Laura Taylor Swain.
Also unsealed today are the guilty pleas of TREVOR TAYLOR and STEPHEN BOND-NELSON in connection with their respective roles in the scheme. TAYLOR pled guilty pursuant to an Information before U.S. District Judge Denise Cote on March 8, 2022. BOND-NELSON pled guilty pursuant to an Information before U.S. District Judge Paul A. Engelmayer on March 3, 2022. Both are cooperating with the Government.
U.S. Attorney Williams, Deputy Attorney General Monaco, and Inspector-in-Charge Brubaker also announced today a plea agreement (the “Agreement”) pursuant to which AGI will plead guilty to securities fraud in connection with this fraudulent scheme, and pay more than $3 billion in restitution to the innocent victims of this fraud, pay a criminal fine of approximately $2.3 billion, and forfeit approximately $463 million to the Government. The case has been assigned to U.S. District Judge Colleen McMahon. A conference has been scheduled for today at 3:00 p.m. before U.S. District Judge Loretta A. Preska, Part I, at which time AGI is expected to plead guilty to an Information pursuant to the Agreement.
U.S. Attorney Damian Williams said: “As alleged, Gregoire Tournant and his co-conspirators lied to investors and secretly exposed them to substantial risk in order to line their own pockets and those of their employer, AGI. Pension funds for so many retirees, religious organizations, and essential workers – from laborers in Alaska, to teachers in Arkansas, to bus drivers and subway conductors here in New York City – invested with AGI because they were promised a relatively safe investment with strict risk controls. But AGI, the “master cop” that Tournant claimed was watching over his shoulder, making sure that he adhered to his promises, was asleep on the beat. And when the storm came in March 2020, when the COVID crash hit, these investors got soaked and lost billions. Today’s actions are further evidence that this office is not asleep on the beat and that with our law enforcement partners we will act swiftly to protect investors and bring white collar criminals to justice.”
Deputy Attorney General Lisa O. Monaco said: “I previously warned that the Department of Justice would crack down on corporate crime, without regard to size, salary, or other privilege. For the second time in under a month, the Department has brought charges in connection with a sophisticated Wall Street scheme that cost victims billions of dollars. Other corporations should take note that the results here are driven in part by the fact that this company failed to self-report their crimes. The Department stands ready to keep bringing these kinds of charges to assure the public that no one is above the law.”
USPIS Inspector-in-Charge Daniel B. Brubaker said: “These individuals working under the name of Allianz Global Investors, an international management firm, allegedly took advantage of its global recognition when they devised a scheme to mislead investors leading to the loss of billions of dollars. Postal Inspectors will never let these schemes go unchecked and will vigorously investigate and pursue those who choose criminal behavior over honest business practices.”
According to the allegations in the Indictment and the Agreement unsealed today in Manhattan federal court:[1]
Between 2014 and 2020, GREGOIRE TOURNANT, the defendant, was the Chief Investment Officer of a set of private funds at AGI known as the Structured Alpha Funds. These funds were marketed largely to institutional investors, including pension funds for workers all across America. As alleged, TOURNANT and his co-conspirators misled these investors into believing that the funds were protected from a sudden stock market crash with particular hedges. But in late 2015, as the cost of those promised hedges increased, TOURNANT decided to lie and secretly buy cheaper hedges that provided much less protection to investors. As alleged, TOURNANT and his co-conspirators also provided investors with altered documents that were sent to investors to hide the true riskiness of the funds’ investments, including that they were buying cheaper hedges.
In March 2020, following the onset of market dislocations brought on by the COVID-19 pandemic, the funds lost in excess of $7 billion in market value, including over $3.2 billion in principal, faced margin calls and redemption requests, and ultimately were shut down. More than 100 institutional investors, representing more than one hundred thousand individuals, were victims of this scheme. These institutional investors included, among others, pension funds for teachers in Arkansas, laborers in Alaska, bus drivers and subway conductors in New York City, as well as religious organizations, engineers, and other individuals, universities, and charitable organizations across the United States.
The scheme alleged was an egregious, long-running, and extensive fraud that went undetected for years. It occurred at a very profitable component of AGI – one that accounted for 25% of AGI’s revenue in recent years, which amounted to hundreds of millions of dollars. As alleged, one of the ways TOURNANT carried out the fraud was by marketing the fact that he worked for a well-respected financial institution, AGI, which is a part of the Allianz SE (“Allianz”) family. Allianz is one of the world’s largest financial services companies and one of the world’s largest insurance companies. TOURNANT touted the protections provided by the funds’ position within the global Allianz corporate structure, calling Allianz a “master cop” that would ensure that TOURNANT followed the risk guidelines promised to investors.
Despite TOURNANT’s claim that Allianz acted as a “master cop” looking over his shoulder, no one at AGI or Allianz was verifying that TOURNANT and his colleagues were actually adhering to the investment strategies promised to investors. No risk or compliance personnel at AGI verified, attempted to verify, or were responsible for verifying that TOURNANT and his colleagues were purchasing hedging positions within the range that was represented to investors. Much of this historic fraud was made possible because AGI’s control environment was not designed to verify that TOURNANT and his co-conspirators were telling investors the truth. Because AGI, a registered investment adviser, failed to provide meaningful oversight, TOURNANT and his co-conspirators were able to deceive investors about the risks they were taking with their money.
In addition, as alleged, in the summer of 2020, after the onset of the pandemic and in order to cover up the fraudulent scheme, TOURNANT attempted to obstruct an investigation by the U.S. Securities and Exchange Commission (the “SEC”) into the circumstances that led to the losses in March 2020.
* * *
A chart containing the names, ages, residences, charges, and maximum penalties for the defendants is attached.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding work of the USPIS and Special Agents of the United States Attorney’s Office. Mr. Williams further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Margaret Graham, Gina Castellano, Nicholas Folly, and Richard Cooper are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant
Age
Residence
Charges
Maximum Potential Sentence(s)
United States v. Gregoire Tournant, 22 Cr. 276 (LTS)
TOURNANT
55
Basalt, Colorado
Conspiracy to commit securities fraud, investment adviser fraud, and wire, 18 U.S.C. § 371
(Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff
(Count Two)
Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)
Investment adviser fraud, 15 U.S.C. §§ 80b-6(4) & 80b-17, 17 C.F.R. § 275.206(4)-8 (Count Four)
Conspiracy to obstruct justice, 18 U.S.C. § 371 (Count Five)
5 years
20 years
5 years (on each count)
5 years
5 years
United States v. Trevor Taylor, 22 Cr. 149 (DLC)
TAYLOR
49
Miami, Florida
Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)
5 years
20 years
5 years
United States v. Stephen Bond-Nelson, 22 Cr. 137 (PAE)
BOND-NELSON
51
Berkeley Heights, New Jersey
Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud, 18 U.S.C. § 371 (Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
Investment adviser fraud, 15 U.S.C. §§ 80b-6 & 80b-17 (Count Three)
Conspiracy to obstruct justice, 18 U.S.C. § 371
(Count Four)
5 years
20 years
5 years
5 years
United States v. Allianz Global Investors U.S. LLC, 22 Cr. 279 (CM)
AGI US
Securities Fraud, 15 U.S.C. §§ 78j(b) & 78ff (Count Two)
5 years’ probation
[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.
Suburban Chicago Man Sentenced to More Than Three Years in Federal Prison for Threatening Violence at 2021 Presidential InaugurationRead the Press Release
CHICAGO — A suburban Chicago man was sentenced today to more than three years in federal prison for sending a series of threatening phone calls to various members of the United States Congress and threatening to commit violence at the 2021 presidential inauguration in Washington, D.C.
U.S. District Judge Ronald A. Guzman sentenced LOUIS CAPRIOTTI, 47, of Chicago Heights, Ill., to 37 months in prison. Capriotti pleaded guilty last fall to a federal charge of transmitting a threat in interstate commerce. He has been in federal custody since his arrest on Jan. 12, 2021, and will receive credit for time already served.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The U.S. Secret Service and U.S. Capitol Police participated in the investigation. Assistant U.S. Attorneys James P. Durkin and William Dunne represented the government.
In a Dec. 29, 2020, voicemail for a U.S. House member, Capriotti stated that if certain individuals “think that Joe Biden is going to put his hand on the Bible and walk into that [expletive] White House on January 20th, they’re sadly [expletive] mistaken.” Capriotti further stated in the voicemail, “We will surround the [expletive] White House and we will kill any [expletive] Democrat that steps on the [expletive] lawn.”
Capriotti in November and December 2020 left other threatening messages on the voicemail systems of other members of Congress, during which he falsely stated that he was an active U.S. Marine and referred to certain members of Congress as “terrorists.”
“Capriotti’s crime was a serious offense,” Assistant U.S. Attorney James P. Durkin argued in the government’s sentencing memorandum. “Such threats must be taken seriously because they have real implications for the victims receiving them.”
Stotts City Man Sentenced to 24 Years for Shooting at Officer During High-Speed Chase, Meth TraffickingRead the Press Release
SPRINGFIELD, Mo. – A Stotts City, Mo., man was sentenced in federal court today for shooting at a police officer during a high-speed chase that began in Carthage, Mo., and for illegally possessing methamphetamine to distribute.
Raul A. Gonzalez Reyes, 35, was sentenced by U.S. District Judge M. Douglas Harpool to 24 years in federal prison without parole. The court granted the government’s request for an upward variance due to the egregiousness of Gonzalez Reyes’s criminal behavior.
On Nov. 17, 2021, Gonzalez Reyes pleaded guilty to one count of possessing methamphetamine with the intent to distribute and one count of discharging a firearm in furtherance of a drug-trafficking crime.
Gonzalez Reyes was arrested on Oct. 12, 2020, following a pursuit by law enforcement officers in which he shot at an officer before crashing his vehicle. According to court documents, Gonzalez Reyes also shot at a law enforcement officer earlier the same day but was able to elude the officer following a high-speed chase.
A Carthage Police Department sergeant attempted to conduct a traffic stop after Gonzalez Reyes committed several traffic violations while driving a Ford pick-up truck with a license plate registered to another vehicle. When the police sergeant activated his emergency lights and siren, Gonzalez Reyes began accelerating to a high rate of speed. The sergeant saw muzzle flashes and heard gunshots coming from the pickup towards his vehicle. According to court documents, Gonzalez Reyes later told investigators he continued shooting until the magazine fell out of the gun, and then he attempted to access a rifle with a scope. He intended to use all 32 rounds of 9mm ammunition. As Gonzalez Reyes continued shooting, the sergeant increased the distance between his vehicle and the pickup to await assistance from other officers.
As Gonzalez Reyes approached County Road 170 in Jasper County, Mo., he lost control of the pickup, which left the roadway and rolled. When Gonzalez Reyes refused orders to get out of his vehicle, he was placed in handcuffs and removed from the vehicle.
Officers searched the pickup and found a Heritage Rough Rider firearm, a Nomad American Tactical firearm, a Remington Arms firearm, a Mossberg firearm, a Savage firearm, a Stoeger firearm, and four baggies that contained a total of approximately 171.38 grams of pure methamphetamine.
This case was prosecuted by Assistant U.S. Attorney Josephine L. Stockard. It was investigated by the FBI, the Missouri State Highway Patrol, the Carthage, Mo., Police Department, and the Ozarks Drug Enforcement Team.
South Florida Tax Preparer Sentenced to 18 Months in Prison for Tax FraudRead the Press Release
Miami, Florida – Kasali Opabola, Jr., a Lake Worth, Florida tax preparer who failed to report his business income to the IRS, was sentenced yesterday to 18 months in federal prison and ordered to pay over $1.2 million in restitution.
Opabola, 41, was the sole officer and registered agent of FTP Tax Solutions, LLC, a company registered in Florida. Opabola grossly underreported his income from his business - FTP Tax Solutions, LLC, for tax years 2014 and 2015 and failed to file a 2016 income tax return. For those tax years, Opabola failed to pay approximately $1,289,293 in federal income taxes.
Opabola previously pled guilty to two counts of filing a false individual income tax return and one count of failure to file an individual income tax return.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida and Special Agent in Charge Matthew D. Line, IRS Criminal Investigation (IRS-CI), Miami Field Office, announced the sentence imposed by U.S. District Judge Kenneth A. Marra, who sits in West Palm Beach.
Assistant U. S. Attorney Robin Waugh prosecuted this case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case no. 21-cr-80042.
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Sixteen Defendants Arrested on Federal Drug Conspiracy Charges out of Chesterfield and Darlington CountiesRead the Press Release
Florence, South Carolina --- A joint team of federal, state, and local law enforcement officers have arrested 16 individuals who have all been charged in federal court for their roles in a conspiracy to distribute and possess with intent to distribute methamphetamine.
The following defendants have been arrested and arraigned on their respective charges related to their alleged roles in the drug conspiracy, and are charged with 500 grams or more of methamphetamine and face a potential penalty of 10 years to life imprisonment:
- Russell Maurice Moses, a/k/a “Hammer,” 33, of Lydia
- Jerry Glenn Brown, a/k/a “Glenn,” 51, of Hartsville
- Richard Bradley Caddell, a/k/a “Brad,” 31, of McBee
- Daniel Joseph Walters, a/k/a “Moonie,” 47, of Patrick
- Ricky Lee Johnson, Jr., a/k/a “Lee Champion,” 32, of Cheraw
- Ashley Lynn Griggs, 33, of Patrick
- Daniel Howard Dixon, a/k/a “DJ,” 27, of Bennettsville
- Russell Dwayne Gause, a/k/a “Rut,” 40, of Cheraw
- Walter Elliott Hodge, 39, of Chesterfield
- Don Edwards Jones, 41, of Hartsville
- Linda Dale Lett, a/k/a “Dale,” 40, of Patrick
- Bryan Drake Melton, a/k/a “Drake,” 38, of Cheraw
The following defendants are charged with 50 grams or more of methamphetamine and face a potential penalty of 5 years to 40 years imprisonment:
- Ryan Cody Roberts, a/k/a “Tune G,” 31, of McBee
- Crystal Renee Dixon, 36, of Darlington
- Jessica Ashley Melton, 36, of Hartsville
- Garrett Tyler Gainey, 29, of McBee
This case 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. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case was investigated by the Drug Enforcement Administration (DEA), Chesterfield County Sheriff’s Office, Darlington County Sheriff’s Office, Chesterfield Police Department, Hartsville Police Department, and the Florence County Sheriff’s Office. Assistant U.S. Attorney Lauren Hummel is prosecuting the case.
U.S. Attorney Corey F. Ellis stated that all charges in the indictment are merely accusations and that defendants are presumed innocent unless and until proven guilty.
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Sisseton Man Sentenced to 85 Months in Federal Prison for Domestic Violence AssaultRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Sisseton, South Dakota, man convicted of assault of an intimate and dating partner by strangling, suffocating, or attempting to strangle or suffocate was sentenced on May 16, 2022, by U.S. District Judge Charles B. Kornmann.
Christopher J. Keeble, age 33, was sentenced to 85 months in federal prison, followed by three years of supervised release, and ordered to pay $100 to the Federal Crime Victims Fund. Keeble pled guilty on November 21, 2021.
On or about May 21, 2021, Keeble’s intimate and dating partner was at her home when Keeble arrived unannounced. Keeble asked her to come outside alone, to which she complied. When she came outside and was alone with Keeble, he immediately threatened her with harm if she screamed or yelled. Keeble then assaulted her by chocking her to a point of closely losing consciousness and by punching her in the face. As a result of the assault, the victim sustained bodily injuries. Keeble’s conduct was unprovoked and also violated a tribal court order of protections involving the same victim.
This case was investigated by the Federal Bureau of Investigation and Sisseton-Wahpeton Oyate Sioux Tribe’s Law Enforcement. Assistant U.S. Attorney Jeremy R. Jehangiri prosecuted the case.
Keeble was immediately returned to the custody of the U.S. Marshals Service to serve his sentence.
Seminole County Man Sentenced to 15 Years for Selling Fentanyl Analogue Causing A DeathRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced Timothy Leon Wilson, Jr. (25, Seminole County) to 15 years in federal prison. Wilson had pleaded guilty on December 15, 2021.
According to court documents, on April 4, 2017, Wilson sold an individual a mixture of furanyl fentanyl and heroin which caused the individual to overdose shortly after using the substance. Seminole County Fire Department immediately responded and rushed the victim to the hospital, but he died shortly after arriving. On the same day, law enforcement was able to set up a controlled purchase with Wilson for additional drugs. Wilson arrived at the controlled purchase location with more of the same substance that he had sold the victim earlier that day. Wilson also brought a loaded firearm with him and was arrested. He admitted to selling the drugs to the victim.
The Medical Examiner confirmed that the cause of death to the victim was a heroin and furnyl fentanyl overdose. Furanyl fentanyl is an analogue of fentanyl and is on Schedule I of the Drug Enforcement Administrations’ schedules of controlled substances.
This case was investigated by the Seminole County Sheriff’s Office and the Drug Enforcement Administration. It was prosecuted by Assistant United States Attorney John Gardella.
Rosebud Man Sentenced for Failure to Register as Sex OffenderRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rosebud, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on May 16, 2022, by Chief Judge Roberto A. Lange, U.S. District Court.
Edward Zane Roubideaux, Jr., age 31, was sentenced to 24 months in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Roubideaux was indicted by a federal grand jury on December 14, 2021. He pled guilty on February 10, 2022.
Roubideaux was convicted of Sexual Abuse of a Minor in November 2011. As a result of this conviction, he is required to register as a sex offender. On May 7, 2021, Roubideaux updated his sex offender registration to reflect that he was residing at an address in Sioux Falls. Roubideaux moved out of his registered address on June 30, 2021, and thereafter did not update his registration. On August 6, 2021, Roubideaux was arrested in Sioux Falls. Between July 3, 2021, and August 6, 2021, Roubideaux failed to properly resister as a sex offender and update his registration.
This case was investigated by the U.S. Marshals Service and the Sioux Falls Police Department. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Roubideaux was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced to Federal Prison for Possession of Stolen FirearmRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rapid City, South Dakota, man convicted of Possession of a Stolen Firearm was sentenced on May 16, 2022, by Judge Jeffrey L. Viken, U.S. District Court.
Hank Dubray, age 36, was sentenced to 14 months in federal prison, followed by three years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Dubray was indicted by a federal grand jury on September 18, 2018, and pleaded guilty on July 12, 2021. The conviction stems from Dubray knowingly possessing a stolen Ruger, model SR40, .40 caliber pistol with an obliterated serial number. The Ruger pistol was among the 24 firearms that were stolen by two other individuals from The Rooster sporting goods store in Rapid City in August 2018. During the investigation, 22 of the 24 stolen guns were recovered by law enforcement.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, South Dakota Division of Criminal Investigation, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Benjamin Patterson prosecuted the case.
Dubray was immediately remanded to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rapid City, South Dakota, man convicted of Involuntary Manslaughter was sentenced on May 16, 2022, by Chief Judge Roberto A. Lange, U.S. District Court.
Joshua Walking Eagle, age 32, was sentenced to 30 months in federal prison, followed by three years of supervised release, $7,215.50 in restitution, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Walking Eagle was indicted by a federal grand jury on September 9, 2020. He pled guilty on February 25, 2022.
The conviction stemmed from an incident that occurred on May 29, 2020, in Rosebud, South Dakota. On that date, a group of individuals that included Walking Eagle and the victim were consuming alcoholic beverages and socializing at a residence in Rosebud. A man driving by in a vehicle stopped in front of the residence and brandished a firearm at Walking Eagle. Walking Eagle and the victim approached the vehicle and confronted the driver. According to Walking Eagle, Walking Eagle struggled with the driver for control of the firearm and it discharged, striking the victim in the head and killing him.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case was investigated by the Federal Bureau of Investigation, the Rosebud Sioux Tribe Law Enforcement Services, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Walking Eagle was immediately turned over to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rapid City, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on May 16, 2022, by U.S. District Judge Karen E. Schreier.
Gregory Kent Davis, age 62, was sentenced to 17 months in federal prison, followed by five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Davis was indicted by a federal grand jury on December 7, 2021. He pled guilty on February 24, 2022.
The conviction stems from Davis failing to register as a sex offender as required by state law between June 22, 2021, and July 21, 2021. Davis left South Dakota on a bus for Pennsylvania without notifying officials in either location. He was apprehended a month later. Davis had previously been convicted of a sex offense in state court which requires him to register for 15 years from the time of his release.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Davis was immediately turned over to the custody of the U.S. Marshals Service.
Quebec Man Charged with Offering to Sell More Than 500,000 Stolen Gift Card Account Numbers over the InternetRead the Press Release
A federal grand jury recently returned a six-count indictment charging Richard Verret, age 40, of Quebec, Canada, with unauthorized solicitation of access devices and trafficking counterfeit access devices, the result of a multi-year investigation into Verret’s online criminal activity.
The indictment was filed under seal in Baton Rouge on March 22, 2022. On April 7, 2022, Verret was arrested at the Orlando International Airport after arriving in the United States from Canada. On April 8, 2022, Verret made his initial appearance in the United States District Court for the Middle District of Florida, where the court ordered him to remain in federal custody pending his appearance in the Middle District of Louisiana. On May 16, 2022, Verret made his first appearance in this district, where he remains in custody.
According to the indictment, Verret, also known as “Luxury187,” “Miami24k,” and other screen names, operated and controlled several websites, such as the “Lux Giftcards Shop” and “Miami’s Gift Card Shop,” through which he advertised the sale of gift cards for major restaurant chains, grocery stores, entertainment venues, and other retail business chains (collectively, the “businesses”). Many of the businesses whose gift cards were advertised on Verret’s websites had locations across Louisiana.
The indictment further alleges that Verret would obtain, by fraudulent methods and theft, large quantities of valid gift card account numbers. Because the account numbers could be loaded into mobile applications and scanned at store registers, used for online purchases, and/or re-programmed onto blank access devices, Verret and others could access the account balances and spend the funds without ever having actual, physical possession of the original, legitimate gift cards. Using various methods to conceal his identity and avoid detection, Verret would sell the account numbers over the internet, offering the numbers for sale at steep discounts. As the indictment alleges, Verret’s websites advertised that they offered gift cards to hundreds of different businesses and that the sites were adding more gift cards “every week.” As of late February 2022, one of the websites offered more than 550,000 gift cards to more than 500 different businesses. The total stored value of all of the fraudulently obtained accounts offered for sale was more than $22 million.
In connection with this case, the United States has seized two of the domain names used by Verret in furtherance of his criminal activity, “www.miami24k.com” and "www.miami.gift". Federal law enforcement officials recently served the domain registrars with federal seizure warrants directing the registrars to lock the domain names, and to display a banner notification that the domains have been temporarily seized, pending further proceedings.
This matter is being investigated by the U.S. Department of Homeland Security and the Louisiana Attorney General’s Office, and the investigation has received substantial assistance from the U.S. Department of Justice’s Office of International Affairs, the Royal Canadian Mounted Police, and the Quebec Police Department. The matter is being prosecuted by Assistant United States Attorneys Alan A. Stevens, who also serves as Senior Litigation Counsel, and Brad Casey.
*NOTE: An indictment is an accusation by a grand jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Postal Service Employee Sentenced for Fraudulent ClaimsRead the Press Release
KANSAS CITY, Mo. – A Lee’s Summit, Mo., woman was sentenced in federal court today for fraudulently claiming reimbursements for travel expenses for her work for the U.S. Postal Service.
Monique S. Koger-Little, 48, was sentenced by U.S. District Judge Stephen R. Bough to one year and three months in federal prison without parole. The court also ordered Koger-Little to pay $29,892 in restitution to the U.S. Postal Service.
On Nov. 15, 2021, Koger-Little pleaded guilty to one count of stealing government money. Koger-Little was employed by the U.S. Postal Service from 2010 through 2019. As an engagement ambassador, she frequently traveled throughout the United States. According to court documents, her scheme began almost immediately upon her promotion to this position.
Koger-Little admitted that she received reimbursements for fraudulent travel expenses by submitting false reimbursement requests. For example, she received reimbursements after falsely claiming higher hotel rates than she was actually charged, for corporate housing that she did not use, and for mileage for driving her personal vehicle, although that travel never actually occurred and she was on vacation at the time.
According to court documents, approximately 36 fraudulent travel vouchers were submitted over almost 12 months. Koger-Little’s conduct included having family members’ travel expenses and personal rent expenses paid through Postal Service travel vouchers. She submitted fraudulent travel vouchers and received reimbursement for airline tickets issued to her husband, mother, and children, and for her daughter’s boyfriend. Koger-Little paid for her and her relatives’ airline tickets for a trip to Fort Lauderdale, Florida, in July 2019 through the submission of fraudulent travel vouchers. Koger-Little included personal rent expenses in her fraudulent travel vouchers. The investigation repeatedly found travel vouchers submitted that included hotel costs with no corresponding charge to that hotel on her government travel card billing statement. However, there were matching charges associated with the apartment complex where her son lived.
Koger-Little resigned from the Postal Service on Nov. 1, 2019, when she became aware of the federal investigation. After repeatedly being asked to return her government-issued cell phone and laptop computer, they were mailed to her manager several weeks later. The cell phone had been wiped clean of its contents and the hard drive of the laptop had been removed.
This case was prosecuted by Special Assistant U.S. Attorney Bradley Cooper. It was investigated by the U.S. Postal Service, Office of Inspector General.
Pennsylvania Man Charged with $1.7 Million Paycheck Protection Program Loan Fraud SchemeRead the Press Release
NEWARK, N.J. – A Pennsylvania man was charged for his role in a scheme to fraudulently obtain over $1.7 million in federal Paycheck Protection Program (PPP) loans for himself and others, U.S. Attorney Philip R. Sellinger announced today.
Darryl Duanne Young, aka “Darryl Duanne Isom Young,” 59, of Kingston, Pennsylvania, is charged by complaint with one count of conspiracy to commit bank fraud, four counts of bank fraud, and two counts of money laundering. Young made his initial appearance by videoconference this afternoon before U.S. Magistrate Judge Cathy L. Waldor and was released on $150,000 unsecured bond.
According to documents filed in this case and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The law authorized up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
Young engaged in a scheme to illegally obtain, for himself and his conspirators, over $1.7 million in PPP loans through numerous misrepresentations to banks. Young submitted and directed others to submit fraudulent PPP loan applications. He submitted falsified tax documents and bank statements to a victim lender in support of PPP loan applications. He received over $230,000 in PPP loans for businesses he controlled and received a percentage of loan proceeds for assisting in submitting fraudulent applications on behalf of others.
The counts of conspiracy to commit bank fraud and bank fraud each carry a maximum penalty of 30 years in prison and a $1 million fine. The counts of money laundering each carry a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Stephen Donnelly; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Jason J. Molina in Newark, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form .
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Oshkosh Sex Offender Arrested for Attempting to Meet a 13 year-old for Sexual ActivityRead the Press Release
Richard G. Frohling, United States Attorney for the Eastern District of Wisconsin, announced that Kevin J. Mueller (age: 60) of Oshkosh, Wisconsin, was charged via a criminal complaint following his May 16, 2022, arrest by local and federal authorities. Mueller was arrested pursuant to Operation Kick Boxer, a collaborative effort involving the Milwaukee Division of the Federal Bureau of Investigation (FBI), the U.S. Attorney's Office for the Eastern District of Wisconsin, and the Winnebago County Sheriff's Office. https://go.usa.gov/xueyn.
According to the complaint and supporting affidavit, Mueller began exchanging instant messages in early May with an individual whom he believed to be the parent of a 13-year-old girl living in Oshkosh, Wisconsin. Mueller expressed repeated interest in engaging in sexual activity with the 13-year-old. Mueller also sent pornographic images of himself which he wanted to be shared with the child.
In actuality, Mueller was communicating with an undercover law enforcement agent working as a part of Operation Kick Boxer. Mueller was arrested upon his arrival at the prearranged meeting spot in Winnebago County. Mueller is required to register as a sexual offender based on a 1989 First Degree Sexual Assault conviction in Milwaukee County.
Mueller faces charges of using a computer to attempt to persuade, induce, or entice a minor to engage in unlawful sexual activity, in violation of Title 18, United States Code, Section 2422(b), and for doing so as a lifetime sexual offender registrant, in violation of Title 18, United States Code, Section 2260A. He faces a mandatory minimum sentence of 10 years and up to a lifetime of imprisonment if convicted of the enticement charge. His status as a sexual offender registrant requires an additional mandatory sentence of ten year’s imprisonment which must be served consecutive to the enticement charge.
A criminal complaint is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006, by the U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood, marshals, federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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For further information contact:
Public Information Officer Kenneth Gales
(414) 297-1700
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Ohio Woman Pleads Guilty to Violating the Lacey Act by Selling Marbled CrayfishRead the Press Release
An Ohio woman pleaded guilty to violating the Lacey Act for selling marbled crayfish (also known as self-cloning crayfish) in interstate commerce. Marbled crayfish were recently declared an injurious aquatic invasive species under Ohio law.
According to court documents, Allison Spaulding, 46, knowingly sold marbled crayfish, Procambarus virginalis, in interstate commerce in violation of Ohio law. The marbled crayfish is considered a serious threat to aquatic biodiversity because of its high reproductive rate and the need for only one individual to start a population.
The Ohio Division of Wildlife added the marbled crayfish to the injurious aquatic invasive species list for Ohio in January 2020. Between August 2020 and June 2021, Spaulding sold marbled crayfish in 96 different transactions to buyers in 36 states for approximately $2,812.
“The Department of Justice is committed to preventing the spread of invasive species,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Marbled crayfish pose a unique threat to America’s freshwater ecosystems and the defendant’s sales had the potential to introduce this dangerous species throughout the country. Such conduct will be prosecuted and punished.”
Spaulding pleaded guilty to a Lacey Act violation. She is scheduled to be sentenced in the coming months and faces a maximum penalty of one year in prison and up to $100,000 fine. A federal district court judge will determine any sentencing after considering the U.S. Sentencing Guidelines and other statutory factors.
The Ohio Division of Wildlife, in cooperation with the U.S. Fish and Wildlife Service, are investigating the case.
Trial Attorney Adam Cullman of the Justice Department’s Environment and Natural Resources Division, Environmental Crimes Section, and Ohio Assistant Attorney General Sally Smetzer Montell are prosecuting the case.
Learn more about the marbled crayfish and why it is an injurious aquatic invasive species at https://ohiodnr.gov/static/documents/wildlife/fish-management/OSU_AIS_FieldGuide_Web.pdf.
Nicaraguan Man Who Used a Fraudulent Social Security Card and Permanent Resident Card Convicted after Jury TrialRead the Press Release
A man who used false identification documents and someone else’s social security number was convicted by a jury today after a two-day trial in federal court in Cedar Rapids.
Fernando Moreno-Moreno, age 42, a citizen of Nicaragua illegally present in the United States and residing in Postville, Iowa, was convicted of one count of unlawful use of identification documents and one count of misuse of a social security number. The verdict was returned this afternoon following about one hour of jury deliberations.
The evidence at trial showed that Moreno-Moreno illegally entered the United States in November 2021, and after being released by immigration authorities, traveled to Iowa looking for work. Despite being told that he could not work in the United States without authorization, Moreno-Moreno used an alias name and a Social Security number assigned to another person when completing employment paperwork in January 2022 at a business in West Union, Iowa. Specifically, Moreno-Moreno presented the company with a fraudulent Lawful Permanent Resident card, also known as a “green card,” bearing the alias name and an Alien Registration number, to prove his authorization to work in the United States. The Alien Registration number on the green card was not assigned to anyone and was invalid. He also presented a Social Security card bearing his alias name but containing the social security number assigned to another person when completing state and federal tax forms. Moreno-Moreno admitted at trial that he used the alias when employed at the company between January and March 2022 but denied knowingly using another person’s identification documents.
Sentencing before United States District Court Judge C.J. Williams will be set after a presentence report is prepared. Moreno-Moreno remains in custody of the United States Marshal pending sentencing. Moreno-Moreno faces a possible maximum sentence of 15 years’ imprisonment, a $500,000 fine, and six years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Daniel C. Tvedt and was investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22-CR-2010.
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New Orleans Man Sentenced for His Role in a Federal Drug ConspiracyRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on May 12, 2022, DEMARCO FORD, age 65, a resident of New Orleans, Louisiana was sentenced after pleading guilty to a two-count superseding bill of information. In Count 1, FORD was charged with conspiracy to distribute and possess with the intent to distribute 500 grams or more of a mixture or substance containing a detectable amount of cocaine hydrochloride in violation of Title 21, United States Code, Sections 841(a)(1), (b)(1)(B), and 846. In Count 2, FORD was charged with use of communication facilities to further a drug trafficking crime in violation of Title 21, United States Code, Section 843(b).
According to court documents, FORD conspired with other members of a drug trafficking organization to distribute and possess with the intent to distribute crack cocaine. Additionally, FORD used a communication facility, the telephone, during the commission of a drug trafficking crime.
For Count 1, FORD received a term of imprisonment of 18 months, a period of supervised release of 3 years, and a mandatory special assessment fee of $100.00. For Count 2, FORD was sentenced to term of imprisonment of 18 months, a period of supervised release of 1 year, and a mandatory special assessment fee of $100.00. All terms of imprisonment and supervised release are to run concurrently.
The case was investigated by the Drug Enforcement Administration and Jefferson Parish Sheriff’s Office. This case was prosecuted by Brittany Reed, André Jones, and Melissa Bücher of the U.S. Attorney’s Office.
Mountain View Man Pleads Guilty to Murder in National ParkRead the Press Release
SPRINGFIELD, Mo. – A Mountain View, Mo., man has pleaded guilty in federal court to murdering his estranged wife during an argument when they met in a national park.
Dylan J. Hanger, 30, pleaded guilty before U.S. District Judge M. Douglas Harpool on May 10, 2022, to one count of murder in the second degree.
Hanger admitted that he met his estranged wife, Brittany Gorman, at the Buck Hollow Access Area, along the Jacks Fork River, within the Ozark National Scenic Riverways in Texas County, Mo., on May 20, 2020. An argument ensued, during which Hanger stabbed Gorman several times in the chest, which caused her death.
Under federal statutes, Hanger is subject to a sentence of up to life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Josephine L. Stockard. It was investigated by the Texas County, Mo., Sheriff’s Department, the National Park Service Investigative Services Branch, and the Missouri State Highway Patrol.
Mother and Daughter Team Charged in COVID-19 Related, Jailhouse Unemployment Insurance FraudRead the Press Release
FRESNO, Calif. — An indictment was unsealed today charging Makiah Miles, 29, of Compton, and Apryl Weston, 50, of Santa Maria, with conspiracy to commit mail fraud and identity theft for submitting fraudulent unemployment insurance claims to the California Employment Development Department (EDD) in the names of inmates, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Miles is an inmate at the Central California Women’s Facility in Chowchilla and Weston is her mother. From June through December 2020, they took advantage of changes made to the EDD’s eligibility criteria in response to the COVID-19 pandemic and submitted the fraudulent claims. Specifically, Miles obtained other inmates’ names, dates of birth, and social security numbers and sent that information to Weston to submit claims in those inmates’ identities as well as her own identity. The underlying applications contained several misrepresentations, including that Miles and the other inmates had been self-employed as accountants, beauty culturists, child care providers, cosmetologists, hairdressers, and other occupations, and that they recently became unemployed because of the COVID-19 pandemic. The claims were worth over $550,000. The defendants used the money to purchase handbags, jewelry, and televisions, among other items.
This case is the product of an investigation by the Federal Bureau of Investigation, the California Department of Corrections and Rehabilitation’s Investigative Services Unit, and the EDD. Assistant U.S. Attorney Joseph Barton is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 20 years in prison and $250,000 fine for the conspiracy charge and a mandatory, two-year consecutive sentence and additional $250,000 for the aggravated identity theft charges. Any sentence, however, will 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.
Monmouth County Man Admits Making Threatening Communications and Calling in False Bomb ThreatsRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted making threatening telephone and email communications to New Jersey state officials, judges, law enforcement officers, and attorneys, and phoning in false bomb threats to local and state government offices, a police department, two law firms and a commercial establishment, U.S. Attorney Philip R. Sellinger announced.
Eric G. Hafner, 31, formerly of Monmouth County, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp to one count of making threating communications in interstate or foreign commerce with intent to extort, one count of making threatening communications in interstate or foreign commerce, and one count of conveying false information concerning the use of an explosive device.
According to documents filed in this case and statements made in court:
Between July 2016 and May 2018, while residing outside the United States, Hafner communicated threats to numerous individuals located in and around Monmouth County and elsewhere. The victims were elected officials, judges, police officers, attorneys, and their families. Hafner sought to extort $350,000 from some of his victims. During this time period, Hafner also made false bomb threats to an elected official’s office, a county courthouse, a police department, two law firms, and a commercial establishment.
The count of making threating communications in interstate or foreign commerce with intent to extort carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The count of conveying false information concerning the use of an explosive device carries a maximum potential penalty of 10 years in prison and a $250,000 fine. The count of making threatening communications in interstate or foreign commerce carries a maximum penalty of five years in prison and a $250,000 fine. Hafner’s sentencing is scheduled for Sept. 21, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Acting Special Agent in Charge Michael Messenger, with the investigation leading to today’s guilty plea. He also thanked detectives of the Monmouth County Prosecutor’s Office; officers of the Monmouth County Sheriff’s Office; New Jersey State Police; the Bradley Beach Police Department; Fairhaven Police Department; Aberdeen Police Department; the Hazlet Police Department; Shrewsbury Police Department; the Red Bank Police Department; the Freehold Township Police Department; the Middletown Police Department; the Neptune Township Police Department; the Oceanport Police Department; the Deal Police Department; and the Manasquan Police Department for their assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Ian D. Brater and R. Joseph Gribko of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Midlothian Woman Pleads Guilty to $1.2 M COVID-19 Fraud SchemeRead the Press Release
RICHMOND, Va. – A Midlothian woman pleaded guilty today to defrauding the Pandemic Unemployment Assistance (PUA) Program, the Paycheck Protection Program (PPP), and the Economic Injury Disaster Loan (EIDL) program, using victims’ personal identifying information that she obtained from her state government employment.
According to court documents, in the first of three fraud schemes, from May 2020 to August 2021, Sadie Mitchell, 30, with the assistance of her co-conspirator, executed a scheme to defraud the Virginia Employment Commission by filing at least 20 fraudulent unemployment applications using the personal identifying information of inmates. Among the false information included in these applications were false physical addresses, false last employers, and a false certification that the inmates were ready, willing, and able to work in the event employment became available. The conspirators further defrauded the Virginia Employment Commission by filing at least 30 fraudulent applications in the names of other individuals whose personal identifying information was obtained, in part, by Mitchell querying a government database she had access to as an employee of the Virginia Motor Vehicle Dealer Board. Through this fraud scheme, the conspirators obtained approximately $1 million in PUA and Unemployment Insurance benefits.
Additionally, from June 2020 to June 2021, Mitchell devised and executed a scheme to defraud the PPP and EIDL programs. The defendant submitted 5 PPP applications to a financial institution, each containing false statements, false representations, or false certifications. For instance, these applications contained false and fabricated gross figures and false certifications that the businesses were in operation on February 15, 2020. The defendant further executed a scheme to defraud the EIDL program, which was intended to give forgivable loans to small businesses. Mitchell submitted several fraudulent EIDL applications to the Small Business Administration for businesses that had no customers, employees, or business activity, and in those applications, she made false statements, representations, and false certifications.
Mitchell pleaded guilty to conspiracy to commit mail fraud and wire fraud and is scheduled to be sentenced on August 23. She faces a maximum penalty of 30 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Greg L. Torbenson, Acting Inspector in Charge of the U.S. Postal Inspection Service’s Washington Division; Troy Springer, Acting Special Agent in Charge of the Washington, DC Regional Office, U.S. Department of Labor, Office of Inspector General; and Joseph V. Cuffari, Inspector General for the Department of Homeland Security, made the announcement after U.S. Magistrate Judge Mark R. Colombell accepted the plea.
Significant assistance was provided by the Virginia Department of Motor Vehicle, Virginia Employment Commission and the Virginia Department of Corrections.
Assistant U.S. Attorneys Kashan K. Pathan and Carla Jordan-Detamore are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:22-cr-44.
Michigan man indicted on meth chargesRead the Press Release
CLARKSBURG, WEST VIRGINIA – Bacarre H. Curtis, of Eastpointe, Michigan, was indicted today on drug and firearms charges, United States Attorney William Ihlenfeld announced.
Curtis, also known as “TJ,” 21, was indicted on one count of “Conspiracy to Distribute Fifty Grams or More of Methamphetamine,” three counts of “Distribution of Fifty Grams or More of Methamphetamine,” one count of “Possession with Intent to Fifty Grams or More of Distribute Methamphetamine,” and one count of “Possession of Firearm During and in Relation to a Drug Trafficking Crime.” Curtis is accused of trafficking more than 50 grams of methamphetamine, also known as “crystal” and “ice,” while carrying a 9mm Glock pistol in January 2022 in Harrison County.
Curtis faces up to 20 years of incarceration and a fine of up to $1,000,000 for the conspiracy charge, faces at least 10 years and up to life for each of the remaining drug charges, and faces at least five years and up to life incarceration for the firearms charge. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Christopher L. Baer is prosecuting the case on behalf of the government. The Greater Harrison Drug Task Force, a HIDTA-funded initiative; the DEA; ATF; and the Harrison County Sheriff’s Office investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Mexican Nationals Sentenced for Methamphetamine Trafficking in Stanislaus CountyRead the Press Release
FRESNO, Calif. — Antonio Ochoa Mejia, 50, a Mexican national residing in Hughson, was sentenced today by U.S. District Judge Dale A. Drozd to 10 years in prison for conspiracy to distribute and possess with intent to distribute methamphetamine, U.S. Attorney Phillip A. Talbert announced.
Co-defendant Jorge Armando Gonzalez Martinez, 41, a Mexican national residing in Hughson, was previously sentenced to four years and six months in prison and co-defendant Ramon Ortega, 36, a Mexican national residing in Willows, was sentenced to three years and two months in prison.
According to court documents, on April 18, 2019, Mejia and Ortega sold 1 kilogram of methamphetamine for $4,500 during an undercover transaction in Empire. On May 14, 2019, Mejia sold 2 kilograms of methamphetamine during an undercover transaction in Ceres. On May 30, 2019, Mejia and Martinez were arrested in Ceres after attempting to deliver 10 kilograms of methamphetamine during an undercover transaction.
This case was the product of an investigation by the Federal Bureau of Investigation and the San Joaquin Metropolitan Narcotics Task Force. Assistant U.S. Attorney Jessica A. Massey prosecuted the case.
Mejia and Ortega are currently in federal custody. Martinez has been ordered to surrender to the Bureau of Prisons on July 7, 2022.
Mexican Man Sentenced to 72 Months for Identity Theft and Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that MARTIN CORTEZ-BALDERAS (“CORTEZ”), age 39, a citizen of Mexico, was sentenced today after previously pleading guilty to Identity Theft and Violations of the Federal Gun Control Act.
According to court documents, in November 2020, law enforcement agents received information that CORTEZ may be in the country illegally and using identification information belonging to another person. As agents were preparing to execute a search warrant on November 9, 2020, they observed CORTEZ exit his residence and enter his vehicle. A traffic stop was performed and a search warrant was obtained for the vehicle. This search yielded a Ruger Model P97DC, .45 caliber semi-automatic pistol, and four rounds of .45 caliber Winchester ammunition. Records also determined that CORTEZ was a convicted felon, prohibited from possessing a firearm and ammunition. In 2004, CORTEZ was convicted in United States District Court for the Southern District of Texas, of Importing 24.30 Kilograms of Marijuana into the United States.
During a search of his residence, a Louisiana Identification card was found in the name of another person, which CORTEZ represented to be his own. The renewal of the card required CORTEZ to attest via electronic signature that he was in fact the person that he claimed to be by using that person’s name and date of birth. The electronic renewal was transmitted in interstate commerce to the Louisiana Department of Public Safety, and violated Louisiana’s Forgery statute.
U.S. District Court Judge Jay C. Zainey sentenced CORTEZ to 72 months in the custody of the Bureau of Prisons, to be followed by three (3) years of supervised release. He was also ordered to pay a $200 special assessment fee. Following the completion of his sentence, CORTEZ will be surrendered to the custody of U.S. Immigration and Custom Enforcement for removal proceedings.
This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney Evans praised the work of Immigration and Customs Enforcement, Enforcement and Removal Operations, the Jefferson Parish Sheriff’s Office, and the New Orleans Police Department in investigating this matter. Assistant United States Attorney Jon Maestri was in charge of the prosecution.
Methamphetamine Trafficker Is Sentenced to More Than 19 Years in Federal PrisonRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Frank D. Whitney sentenced Timothy Wayne Bates, 51, of Dallas, N.C., to 235 months in prison and five years of supervised release for trafficking methamphetamine, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
According to filed documents and court proceedings, in August 2020, Bates possessed methamphetamine on three occasions. On August 5, 2020, law enforcement encountered Bates at the parking lot of a hotel in Gaston County, where Bates was found to be in possession of methamphetamine and a firearm. On the same day, law enforcement also recovered additional methamphetamine and $3,500 in cash Bates had attempted to discard near the hotel. On August 14, 2020, law enforcement conducted a traffic stop of the vehicle Bates was driving. Over the course of the stop, law enforcement seized methamphetamine and over $4,000 in cash. Then on August 19, 2020, law enforcement arrested Bates at a hotel in Pineville, North Carolina, after recovering methamphetamine and more than $1,900 in cash.
On June 17, 2021, Bates pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and three counts of possession with intent to distribute methamphetamine. At today’s sentencing hearing, Bates’s sentence was enhanced due to his multiple prior convictions of felony Breaking and Entering, Embezzlement, Grand Larceny, Possession of Methamphetamine, Receiving Stolen Goods, and Possession with Intent to Distribute Methamphetamine.
This case is the result of the Organized Crime Drug Enforcement Task Force (OCDETF) operation, which has led to the federal prosecution of more than 60 individuals for drug trafficking. Law enforcement have also seized more than 87 kilograms of narcotics, including over 24 kilograms of fentanyl, 66 firearms, more than $385,000 in cash, and over $800,000 in other property.
OCDETF identifies, disrupts, and dismantles criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
In making today’s announcement, U.S. Attorney King commended the Drug Enforcement Administration, Homeland Security Investigations, the Huntersville Police Department, the Gastonia Police Department, and the Dallas Police Department for their coordination and investigation of the case.
Assistant United States Attorney Steven Kaufman, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Massachusetts Woman Sentenced to 10 Years for Methamphetamine Trafficking ChargesRead the Press Release
BANGOR, Maine: A Brighton, Massachusetts woman was sentenced in federal court today for conspiracy to distribute and possess with the intent to distribute methamphetamine, U.S. Attorney Darcie N. McElwee announced.
U.S. District Judge Lance E. Walker sentenced Kimberly Tompkins, 52, to 10 years in prison and five years of supervised release. Tompkins pleaded guilty in November 2021.
According to court records, between January 2017 and August 2018, Tompkins and other members of the conspiracy distributed large quantities of methamphetamine in northern Maine. Tompkins coordinated multi-pound shipments of methamphetamine from Arizona to conspirators who distributed it in Aroostook County. Tompkins also sent thousands of dollars in cash to the out-of-state source to supply the drug trafficking enterprise.
The U.S. Drug Enforcement Administration and the Maine Drug Enforcement Agency investigated the case.
Organized Crime Drug Enforcement Task Forces: This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
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Massachusetts Woman Sentenced to 10 Years for Methamphetamine Trafficking ChargesRead the Press Release
BANGOR, Maine: A Brighton, Massachusetts woman was sentenced in federal court today for conspiracy to distribute and possess with the intent to distribute methamphetamine, U.S. Attorney Darcie N. McElwee announced.
U.S. District Judge Lance E. Walker sentenced Kimberly Tompkins, 52, to 10 years in prison and five years of supervised release. Tompkins pleaded guilty in November 2021.
According to court records, between January 2017 and August 2018, Tompkins and other members of the conspiracy distributed large quantities of methamphetamine in northern Maine. Tompkins coordinated multi-pound shipments of methamphetamine from Arizona to conspirators who distributed it in Aroostook County. Tompkins also sent thousands of dollars in cash to the out-of-state source to supply the drug trafficking enterprise.
The U.S. Drug Enforcement Administration and the Maine Drug Enforcement Agency investigated the case.
Organized Crime Drug Enforcement Task Forces: This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Man Pleads Guilty to Sexually Assaulting Woman on the Warm Springs Indian ReservationRead the Press Release
PORTLAND, Ore.—A Warm Springs, Oregon man pleaded guilty today for sexually assaulting a woman on the Warm Springs Indian Reservation.
Jerome Albert Stanley, Jr., 27, pleaded guilty to one count of abusive sexual contact.
According to court documents, on August 9, 2020, after being warned not to do so, Stanley entered a bedroom occupied by an adult woman in a residence on the Warm Springs Indian Reservation and sexually assaulted the woman. Later, during a recorded call with the victim, Stanley admitted to the abusive sexual contact and acknowledged it should not have happened.
On September 15, 2021, a federal grand jury in Portland returned a four-count indictment charging Stanley with sexual abuse of an incapable victim and aggravated sexual abuse by force. Prior to pleading guilty, on May 11, 2022, Stanley was charged by superseding criminal information with abusive sexual contact.
Stanley faces a maximum sentence of two years in prison, a $250,000 fine and five years’ supervised release. He will be sentenced on August 8, 2022 before U.S. District Court Judge Michael W. Mosman.
As part of the plea agreement, Stanley will pay restitution to his victim as identified by the government and ordered by the court at sentencing. He must also register as a sex offender.
U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated by the FBI and the Warm Springs Tribal Police Department. Assistant U.S. Attorneys Pamela Paaso and Erin Greenawald are prosecuting the case.
Sexual assault is a serious violent crime frequently hidden from public view. Many survivors suffer in silence, afraid to seek help or not knowing where to turn. The traumatic effects of sexual violence also extend beyond the abused person, impacting family members and communities.
If you or someone you know are in immediate danger, please call 911.
If you need assistance or know someone who needs help, please contact the National Sexual Assault Hotline by calling 1-800-656-4673 or visiting online.rainn.org to chat online. Trained staff members are available 24/7 year-round. Many communities throughout the country have also developed support networks to assist survivors in the process of recovery.
The StrongHearts Native Helpline offers culturally specific support and advocacy for American Indian and Alaska Native survivors of domestic and sexual violence. Please call 1-844-762-8483 or visit www.strongheartshelpline.org for more information.
MS-13 Gang Member Pleads Guilty to Three Murders on Long IslandRead the Press Release
Earlier today, in federal court in Central Islip, Jhonny Contreras, a member of the Brentwood Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty in federal court in Central Islip to racketeering and related firearms charges in connection with his participation in the May 26, 2013 murder of Derrick Mayes, the May 28, 2013 murder of Keenan Russell, and the November 19, 2015 murder of Cesar Rivera-Vasquez. The proceeding was held before United States District Judge Gary R. Brown.
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 Rodney K. Harrison, Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.
"With today’s guilty plea, the defendant has admitted to participating in a murderous rampage that was senseless and demonstrated a total disregard for human life by hunting down victims based on an offending article of clothing or a tattoo. His heinous acts were motivated by a twisted desire to increase his status within the MS-13 gang. This case underscores the resolve of this Office and the Long Island Gang Task Force to bring the MS-13 to justice for their crimes against our communities,” stated United States Attorney Peace. “We offer our sympathy to the victims’ families and loved ones who join the tragic community of those devastated by gun violence, and hope today’s plea will bring some measure of closure on their path to healing.”
“These murders are a grim reminder of the violence and lack of regard for human life that MS-13 exudes - killing innocent people simply because they are wearing a certain color or are believed to be from a rival gang,” stated SCPD Commissioner Harrison said. “With today’s guilty plea, Suffolk County is undoubtedly a safer place and I commend the Eastern District of New York and the members of the Long Island Task Force for their tireless efforts ridding communities of gang violence.”
According to court filings and statements by the defendant at the guilty plea proceeding, Contreras participated in the murders of Derrick Mayes and Keenan Russell over the Memorial Day weekend in 2013. On May 26, 2013, Contreras and another MS-13 member armed themselves with a .25 caliber handgun and 20-gauge shotgun and drove around Central Islip in a stolen minivan looking for rival gang members to kill. While on Wilson Boulevard, Contreras and his co-conspirator observed Mayes, an African-American man, who they did not know and wrongly assumed to be a member of the Bloods street gang because he was wearing an article of red clothing. The MS-13 members approached Mayes, shot him multiple times, killing him. The following night, Contreras and several other MS-13 members, who were armed with the same .25 caliber handgun and 20-gauge shotgun, as well as a 9mm handgun, again drove around Central Islip in the stolen minivan and other vehicles, looking for rival gang members to kill, and observed several African-Americans, including Russell, outside of a house party on Acorn Street. The MS-13 members approached Russell, who they did not know and again mistakenly assumed to be a member of the Bloods, opened fire with the weapons, killing him. Later, the MS-13 members learned that the minivan had been linked to the murders and they agreed to destroy it. Contreras and several other gang members drove the minivan to a wooded area in Ronkonkoma, wiped it down to remove any fingerprints, doused it with gasoline, and set it on fire.
In addition, Contreras admitted during his guilty plea today to participating in the murder of Cesar Rivera-Vasquez on November 19, 2015, in Babylon. Rivera-Vasquez was murdered by Contreras and other MS-13 members because they suspected him of belonging to a rival Mexican gang, Raza Loca. On the night of the murder, Contreras and his co-conspirators saw Rivera-Vasquez at a deli located close to the Babylon Long Island Railroad station. Contreras and the other MS-13 members convinced the victim to leave with them to smoke marijuana and brought him to an isolated area behind a nearby baseball field. The gang members, who were armed with knives and a baseball bat, told the victim to take off his shirt so they could observe a tattoo they believed signified the victim’s membership in the rival gang. After observing the tattoo, Contreras and the other MS-13 members attacked Rivera-Vasquez, beating him with the bat and stabbing him repeatedly with knives before one of the co-conspirators took one of the knives and cut his throat. After Rivera-Vasquez was dead, the MS-13 members buried his body near a large mound of dirt, and Rivera-Vasquez’s body was not discovered until April 2018. When sentenced, Contreras faces a maximum sentence of life in prison.
Today’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent, transnational criminal organization. The MS-13’s leadership is based in El Salvador, Honduras, Guatemala and Mexico, but the gang has thousands of members across the United States. With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 60 murders in the Eastern District of New York, resulting in the convictions of dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, which is comprised of agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution.
The Defendant:JHONNY CONTRERAS
Age: 28
Brentwood, New YorkE.D.N.Y. Docket No. 16-CR-403 (GRB)
Luna County inmates sentenced for assaulting corrections officersRead the Press Release
ALBUQUERQUE, N.M. – Jacob Merkel, 23, and Victor Sanchez, 25, were sentenced in federal court on May 16 after pleading guilty to assault upon a person assisting federal officers involving physical contact.
Merkel, who pleaded guilty on Feb. 7, was sentenced to one year and three months in prison, with nine months consecutive to his prior sentence of 13 years and 10 months for robbery and discharge of a firearm. Sanchez, who pleaded guilty on Feb. 9, was sentenced to one year and nine months in prison, with 12 months to run consecutive to his prior eight-year sentence for being a felon in possession of a firearm.
According to the plea agreements and other court records, on Feb. 17, 2021, co-defendant Johnny Black, 36, became angry with corrections staff and started arguing with them. When staff attempted to escort him out of the pod, Black struck an officer, starting an altercation that other inmates joined. Sanchez saw the altercation and joined Black in striking the officer. As the altercation continued, Merkel grabbed another officer and punched him in the face. After Merkel and the officer went to the ground, Merkel got back up and continued the altercation. At that time, a fourth co-defendant, Henry Felix emerged from the crowd and attacked the second officer from behind, striking him in the head and body.
Black pleaded guilty on Feb. 22, and Felix on Feb. 4. Black and Felix are awaiting sentencing, which has not been scheduled.
The U.S. Marshals Service and Luna County Corrections Officers investigated this case. Assistant United States Attorney Nicholas J. Marshall is prosecuting the case.
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Kalispell couple admit crimes in scheme to steal mail and use personal information found in mail to defraud businessesRead the Press Release
MISSOULA — A Kalispell couple accused in a scheme to steal mail in Lincoln and Flathead counties and of using personal information found in the stolen mail to shop at numerous businesses admitted to charges, U.S. Attorney Leif M. Johnson said today.
Jennifer Don Smith, 37, pleaded guilty today to wire fraud and aggravated identity theft. Co-defendant Michael Thomas Kullberg, 34, Smith’s husband, pleaded guilty to theft of mail, wire fraud and aggravated identity theft on May12. Smith and Kullberg face a maximum of 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud count and a mandatory two years in prison, consecutive to any other punishment, a $250,000 fine and one year of supervised release on the aggravated identity theft count.
U.S. District Judge Susan P. Watters presided at Smith’s hearing. U.S. District Judge Donald W. Molloy presided at Kullberg’s hearing. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing was set for Sept. 7 for both Smith and Kullberg. Both Smith and Kullberg were detained pending further proceedings.
The government alleged in court documents that on March 21 and 27, 2020, hundreds of residents throughout Eureka had their mail stolen. Over the next few days, discarded mail was recovered in roadways, ditches and other public areas. On April 4, 2020, law enforcement received many new reports of mail stolen from the Marion, Kila and Libby areas and again subsequently recovered large amounts of mail dumped along the roadway. Dozens of residents reported the loss of packages, letters, bills, outgoing checks and personal identifying information.
The government further alleged that on April 6, 2020, John Doe 1 reported that Bank of America had contacted him regarding a slew of charges on a new credit card it had mailed him in Eureka. Doe 1 never received the card. Bank of America provided a list of transactions showing the card had been used 14 times from March 22 to April 6 at various businesses in Eureka and Kalispell. Some of the sales were declined, but seven were approved and totaled $815 in unauthorized charges. In addition, the Town Pump in Eureka provided surveillance images from March 22, 2020 for one of the fraudulent transactions, which depicted Kullberg tendering the card. Other images from April 6, 2020, showed Smith using the stolen card. Pictures provided by Stein’s Eureka Market showed Smith twice attempting to purchase items with Doe 1’s card.
Kullberg, the government alleged, had recently been released from custody on a felony conviction and was wearing a GPS tracking device. The Lincoln County Sheriff’s Office obtained location data and determined Kullberg travelled along the same routes where the mail was stolen during the nights of March 21, 27 and April 4, 2020. The data further indicated Kullberg was at the Eureka Town Pump when Doe 1’s card was used and at Stein’s Eureka Market when Smith tendered the card. Kullberg also was at other locations in Kalispell, including ExxonMobil, Home Depot, Target and Albertsons when the card was presented.
In May 2020, law enforcement received a report that John Doe 2 and Jane Doe 1 had a joint credit card from Citibank stolen from their mailbox in Eureka. Kullberg’s GPS coordinates reflect that he was in that area on March 27, 2020. The Citibank card was used on March 28, 2020 at multiple Kalispell locations, including Target, Home Depot, Walmart, Lowes, Conoco, Harbor Freight and the Dollar Tree. Kullberg’s GPS data reflects he was at each of those businesses on March 28. The total amount of unauthorized charges was $1,352.
Kullberg later denied to law enforcement that he stole any mail or used anyone else’s credit card without permission. When asked why his GPS placed him at the scene of the thefts when they occurred, Kullberg explained he was driving around fighting with Smith in his car.
Assistant U.S. Attorney Karla E. Painter is prosecuting the case, which was investigated by the Lincoln County Sheriff’s Office, Eureka Police Department, Montana Probation and parole and U.S. Postal Inspection Service.
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Justice Department Sues to Compel a U.S. Businessperson to Register Under the Foreign Agents Registration ActRead the Press Release
The Department of Justice today filed a civil enforcement action in the U.S. District Court for the District of Columbia, seeking to compel Stephen A. Wynn, a U.S. businessperson and hotelier who previously served as the CEO of Wynn Resorts, to register under the Foreign Agents Registration Act (FARA) as the agent of the People’s Republic of China (PRC) and a senior official of the PRC’s Ministry of Public Security (MPS). Wynn was advised to register as an agent by the department but declined to do so.
“The filing of this suit – the first affirmative civil lawsuit under FARA in more than three decades – demonstrates the department’s commitment to ensuring transparency in our democratic system,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Where a foreign government uses an American as its agent to influence policy decisions in the United States, FARA gives the American people a right to know.”
According to the complaint, from at least June 2017 through at least August 2017, Wynn contacted the then-President and members of his administration to convey the PRC’s request to cancel the visa or otherwise remove from the United States a Chinese businessperson who left China in 2014, was later charged with corruption by the PRC and sought political asylum in the United States. Wynn engaged in these efforts at the request of Sun Lijun, then-Vice Minister of the MPS. Wynn conveyed the request directly to the then-President over dinner and by phone, and he had multiple discussions with the then-President and senior officials at the White House and National Security Council about organizing a meeting with Sun and other PRC government officials.
During the time that he engaged in this conduct, Wynn’s company owned and operated casinos in Macau, a special administrative region in the PRC. The department alleges that Wynn acted at the request of the PRC out of a desire to protect his business interests in Macau.
This enforcement action is being handled by the Counterintelligence and Export Control Section of the National Security Division. Trial Attorney Nathan Swinton is litigating the case.
Justice Department Secures Settlement in Sexual Harassment Lawsuit Against Iowa LandlordRead the Press Release
The Justice Department announced today that it has secured an agreement to resolve a lawsuit alleging that Davenport, Iowa, landlord Juan Goitia violated the Fair Housing Act by sexually harassing female tenants. The settlement also resolves claims against 908 Bridge Cooperative which, along with Goitia, owned the properties where the harassment occurred.
Under the consent order, which still must be approved by the U.S. District Court for the Southern District of Iowa, defendants are required to pay $135,000 to compensate individuals harmed by the harassment and pay a civil penalty to the United States. The consent order also:
- prohibits Goitia from continuing to manage rental housing;
- requires Goitia to retain an independent property manager to manage any rental properties he owns now or in the future; and
- requires defendants to obtain fair housing training and implement comprehensive non-discrimination policies and complaint procedures to prevent sexual harassment at their properties in the future.
“Sexual harassment by housing providers is an illegal and egregious abuse of power that deprives tenants of their right to be safe and secure in their homes,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The Justice Department is committed to protecting the rights of vulnerable tenants subjected to sexual harassment and will continue to hold landlords accountable and obtain relief for survivors.”
The lawsuit, filed in 2020, alleged that since at least 2010, Goitia subjected female tenants to harassment that included making unwelcome sexual comments and advances, touching tenants’ bodies without their consent, entering the homes of female tenants without their consent and without prior notice, and taking adverse actions against tenants who resisted his sexual overtures or complained about the harassment.
This case was litigated by attorneys in the department’s Civil Rights Division and the Civil Division of the U.S. Attorney’s Office for the Southern District of Iowa. The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorneys’ Offices across the country. The goal of the department’s initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. Since launching the initiative in October 2017, the Department of Justice has filed 23 lawsuits alleging sexual harassment in housing and recovered over $9.6 million for victims of such harassment.
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals may report sexual harassment or other forms of housing discrimination by calling the Justice Department’s Housing Discrimination Tip Line at 1-833-591-0291, or submitting a report online. Individuals may also report such discrimination by contacting HUD at 1-800-669-9777 or by filing a complaint online.
Justice Department Hosts Violent Crime SummitRead the Press Release
The Department of Justice today kicked off a two-day national summit on reducing violence and strengthening communities. The summit convenes more than 500 prosecutors, federal and local law enforcement officials, and community partners working under the auspices of Project Safe Neighborhoods (PSN) and the National Public Safety Partnership, two department-led initiatives that balance enforcement efforts with community engagement.
“The Justice Department’s strategy to disrupt violent crime is based on partnership: partnership among federal law enforcement agencies assisting in the fight against violent crime; partnership with the local communities facing the harm that violent crime causes them; and partnership with the state, local, Tribal, and territorial law enforcement agencies protecting those local communities every day,” said Attorney General Merrick B. Garland. “Over the next two days, this summit will bring together our indispensable community and law enforcement partners from across the country to share best practices on disrupting violent crime and strengthen our coordinated efforts to keep our communities and our country safe.”
The Department of Justice is hosting the virtual summit amid increased gun violence affecting communities across the country. A report issued last week by the Centers for Disease Control and Prevention found that the rate of firearm murders rose 35% from 2019 to 2020. Counties with the highest poverty levels had four-and-a-half times the firearm homicide rate as counties with the lowest poverty levels.
Project Safe Neighborhoods (PSN) is a nationwide initiative coordinated by U.S. Attorneys’ Offices that brings together federal, state, local, and Tribal law enforcement officials, prosecutors, community leaders and other stakeholders to identify and address the most pressing violent crime problems in communities. Its fundamental goal is to reduce violent crime, not simply to increase the number of arrests or prosecutions. In May 2021, the Department launched a Comprehensive Strategy for Reducing Violent Crime that articulates four core principles of PSN: 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 of our efforts.
U.S. Attorneys’ Offices across the country have enhanced their violent crime reduction efforts to ensure alignment with the Department’s strategy. They are collaborating with law enforcement agencies and community organizations to pinpoint the drivers of violence in their districts and working together to develop community-based, data-driven solutions. The Bureau of Justice Assistance, a division of the Department’s Office of Justice Programs, is making almost $18 million in PSN funding available to communities this year.
The Justice Department also announced its intention to select five additional jurisdictions to participate in the National Public Safety Partnership (PSP). PSP provides training, technical assistance and other resources from the department’s enforcement and grantmaking components to address community violent crime challenges. More than 50 cities have participated in the effort.
President Biden outlined his Administration’s approach to tackling violent crime during a February trip to New York City, where he discussed measures for holding accountable those who commit gun crimes and announced major investments in violence reduction efforts, community violence intervention programs, and services designed to help formerly incarcerated individuals make a successful return to their communities. “We have an opportunity to come together and fulfill the first responsibility of government and our democracy: to keep each other safe,” he said.
Joining the Attorney General during the summit are Deputy Attorney General Lisa O. Monaco, Associate Attorney General Vanita Gupta, Office of Justice Programs Principal Deputy Assistant Attorney General Amy L. Solomon, Criminal Division Assistant Attorney General Kenneth A. Polite, Jr., Director of the Executive Office of U.S. Attorneys Monty Wilkinson and Bureau of Justice Assistance Director Karhlton F. Moore. The summit is organized by the Bureau of Justice Assistance.
Justice Department Files False Claims Act Complaint Against Medical Device Manufacturer and its Owner for Training Providers to Improperly Reuse Disposable ItemsRead the Press Release
The United States has filed a lawsuit against The Prometheus Group (Prometheus), a New Hampshire manufacturer of pelvic muscle therapeutic systems and related rectal probes, and Richard Poore, its president and sole owner. The complaint, filed in the U.S. District Court for the Western District of Michigan, alleges that the defendants violated the False Claims Act by causing health care providers to bill Medicare for services in which the providers improperly re-used single-user rectal sensors and single-use catheters on multiple patients. The United States alleges that the reuse of these devices on multiple patients unnecessarily exposed vulnerable Medicare beneficiaries to the risks of serious bacterial, fungal and viral infections.
“Providers and suppliers who participate in federal health care programs are expected to maintain the highest standards of patient care,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will hold parties accountable for causing the use of unsafe procedures that may put patients’ health at risk.”
“The Medicare Program is designed to serve an already-vulnerable population,” said U.S. Attorney Mark Totten for the Western District of Michigan. “Device manufacturers must not train providers who bill Medicare for services to use devices in a way that fails to protect patient health.”
“By encouraging the improper reuse of medical devices for financial gain, this manufacturer significantly endangered the health and safety of patients,” said Special Agent in Charge Mario Pinto with the Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “HHS-OIG is committed to working with our law enforcement partners to hold accountable any medical device manufacturers who exploit federal health care programs and threaten the health and safety of beneficiaries.”
Prometheus manufactures and sells device systems for use in pelvic muscle rehabilitation (PMR), a non-surgical therapy to eliminate or reduce symptoms of pelvic floor disorders, including urinary and fecal incontinence. Specifically, Prometheus has manufactured and marketed the Pathway CTS 2000 Pelvic Floor Training System and the Morpheus System. Both systems required the use of a rectal pressure probe that is inserted into a patient’s rectum during therapy. Prometheus manufactured its own sensor for use with the Pathway System and encouraged its customers to use another company’s anorectal manometry catheter with the Morpheus System.
The U.S. Food and Drug Administration (FDA) cleared the Prometheus rectal pressure sensor to be used as a single-user device and the anorectal manometry catheter to be used as a single-use device. For example, the instructions for use identify the rectal pressure sensor as “a potential bio-hazard” and state: “This sensor is restricted for single person use only. Use by another person is strictly prohibited by Federal Regulations.” Similarly, the anorectal manometry catheter was cleared by the FDA as a disposable single-use device, with packaging that states: “Do not re-use.”
According to the United States’ complaint, the defendants knew of these restrictions, but for years encouraged and instructed health care providers to reuse the rectal pressure sensors and anorectal manometry catheters on multiple patients, using a glove or condom to cover the probes, as a way to reduce the overhead costs associated with Prometheus’s systems. This reuse, which exposed patients to unnecessary risk of infections, was not reasonable or necessary, and thus was ineligible for Medicare coverage. In addition to the safety risks, Prometheus allegedly made no attempt to determine if the probes worked effectively when re-used under those conditions.
The lawsuit is captioned United States v. The Prometheus Group., et al., No. 1:22-CV-446 (W.D. Mich.), and is being handled by the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the Western District of Michigan. Lead counsel are Senior Trial Counsel Jay D. Majors and Assistant U.S. Attorney Andrew J. Hull. Investigative support is being provided by HHS-OIG, FDA and FBI.
The claims asserted in the United States’ complaint are allegations only, and there has been no determination of liability.
Justice Department Files False Claims Act Complaint Against Medical Device Manufacturer and Its Owner for Training Providers to Improperly Reuse Disposable ItemsRead the Press Release
GRAND RAPIDS, MICHIGAN – The United States has filed a lawsuit against The Prometheus Group (Prometheus), a New Hampshire manufacturer of pelvic muscle therapeutic systems and related rectal probes, and Richard Poore, its president and sole owner. The complaint, filed in the U.S. District Court for the Western District of Michigan, alleges that the defendants violated the False Claims Act by causing health care providers to bill Medicare for services in which the providers improperly re-used single-user rectal sensors and single-use catheters on multiple patients. The United States alleges that the reuse of these devices on multiple patients unnecessarily exposed vulnerable Medicare beneficiaries to the risks of serious bacterial, fungal and viral infections.
“Providers and suppliers who participate in federal health care programs are expected to maintain the highest standards of patient care,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will hold parties accountable for causing the use of unsafe procedures that may put patients’ health at risk.”
“The Medicare Program is designed to serve an already-vulnerable population,” said Mark Totten, United States Attorney for the Western District of Michigan. “Device manufacturers must not train providers who bill Medicare for services to use devices in a way that fails to protect patient health.”
“By encouraging the improper reuse of medical devices for financial gain, this manufacturer significantly endangered the health and safety of patients,” said Special Agent in Charge Mario Pinto with the Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “HHS-OIG is committed to working with our law enforcement partners to hold accountable any medical device manufacturers who exploit Federal health care programs and threaten the health and safety of beneficiaries.”
Prometheus manufactures and sells device systems for use in pelvic muscle rehabilitation (PMR), a non-surgical therapy to eliminate or reduce symptoms of pelvic floor disorders, including urinary and fecal incontinence. Specifically, Prometheus has manufactured and marketed the Pathway CTS 2000 Pelvic Floor Training System and the Morpheus System. Both systems required the use of a rectal pressure probe that is inserted into a patient’s rectum during therapy. Prometheus manufactured its own sensor for use with the Pathway System and encouraged its customers to use another company’s anorectal manometry catheter with the Morpheus System.
The U.S. Food and Drug Administration (FDA) cleared the Prometheus rectal pressure sensor to be used as a single-user device and the anorectal manometry catheter to be used as a single-use device. For example, the instructions for use identify the rectal pressure sensor as “a potential bio-hazard” and state: “This sensor is restricted for single person use only. Use by another person is strictly prohibited by Federal Regulations.” Similarly, the anorectal manometry catheter was cleared by the FDA as a disposable single-use device, with packaging that states: “Do not re-use.”
According to the United States’ complaint, the defendants knew of these restrictions, but for years encouraged and instructed health care providers to reuse the rectal pressure sensors and anorectal manometry catheters on multiple patients, using a glove or condom to cover the probes, as a way to reduce the overhead costs associated with Prometheus’s systems. This reuse, which exposed patients to unnecessary risk of infections, was not reasonable or necessary, and thus was ineligible for Medicare coverage. In addition to the safety risks, Prometheus allegedly made no attempt to determine if the probes worked effectively when re-used under those conditions.
The lawsuit is captioned United States v. The Prometheus Group., et al., No. 1:22-CV-446 (W.D. Mich.) and is being handled by the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the Western District of Michigan. Lead counsel are Senior Trial Counsel Jay D. Majors and Assistant U.S. Attorney Andrew J. Hull. Investigative support is being provided by the Department of Health and Human Services, Office of Inspector General, the FDA, and the FBI.
The claims asserted in the United States’ complaint are allegations only, and there has been no determination of liability.
Justice Department Announces Publication of the First Volume of the National Firearms in Commerce and Trafficking AssessmentRead the Press Release
The Justice Department today announced the publication of the first volume of the National Firearms in Commerce and Trafficking Assessment (NFCTA), a four-part, comprehensive examination of commerce in firearms and the diversion of firearms to illegal markets.
“Last year, I directed ATF to undertake its first comprehensive study of criminal gun trafficking in over two decades,” said Attorney General Merrick Garland. “The first volume published today provides critical, data-driven insights on firearms commerce and technology trends that will inform our efforts to understand and disrupt gun trafficking networks. We will continue to work alongside our partners to provide valuable lessons that will help agents, prosecutors, and policymakers tackle modern criminal gun trafficking enterprises.”
“We can only address the current rise in violence if we have the best available information and use the most effective tools and research to fuel our efforts” said Deputy Attorney General Lisa O. Monaco. “This report is an important step in that direction. The Department will continue to gather the data necessary to tailor our approach at the most significant drivers of gun violence and take shooters off the streets.”
In April 2021, as part of the department’s strategy to combat the rise in violent crime, President Biden and Attorney General Garland directed the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to issue a comprehensive report on firearms commerce and trafficking. Volume I of the NFCTA, issued today, is a broad overview of firearms commerce in the United States, covering data from 2000 to 2020.
Volume I presents and analyzes data collected by ATF and other federal agencies related to the manufacture, exportation, and importation of firearms. Between 2000 and 2020, the number of Gun Control Act (GCA) firearms and National Firearms Act (NFA) weapons that were domestically manufactured, exported by U.S. manufacturers, or imported into the U.S. increased by 187%, 240% and 350% respectively. The report highlights trends in firearm commerce, noting that – for example – over the last decade, the pistol has become the dominant firearm type manufactured and imported into the U.S., and the number of short-barreled rifles manufactured annually has increased 24,080% between 2000 and 2020.
Volume I also analyzes the past 20 years of technological developments affecting firearms commerce. One of the most significant developments in this period has been the proliferation of privately made firearms (PMFs). Since the early 2000s, advances in firearm manufacturing and design, combined with the ready online availability of the parts and information necessary to assemble PMFs, have made it easier for unlicensed persons to make a firearm at home without any records or a background check. These PMFs lack identifying markings, and often have no associated recordkeeping, making it difficult for law enforcement to know how many are made and distributed into commerce. The data available, however, makes it clear that criminals are actively making, using, and distributing PMFs both domestically and internationally. The number of suspected PMFs recovered by law enforcement and subsequently traced by ATF increased 1,000% between 2016 and 2021. To curb the proliferation of PMFs, the Department announced a new rule that updates the regulatory definitions for firearms and clarifies that background checks are required for buy-build-shoot firearms kits that are sold commercially.
To produce the NFCTA, the ATF assembled a team of subject experts from ATF, as well as from academic and related fields. Although ATF issues a variety of public and law enforcement reports and bulletins regarding firearm commerce, trafficking, and related issues every year, it has not undertaken a joint academic study on the scale of the NFCTA in more than 20 years.